Document:

TInS NOTE HAS NOT BEEN REGISTERED UNDER TIIE SECURITIES ACT OF 1933, AS AMENDED, OR UNDER TIm SECURITIES LAWS OF ANY STATE, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXC~T IN OO:Ml\LIANOr 'WlTII, OR

MISSISSIPPI GAMING CORPORATION

SECURED PROMISSORY NOTE

 

Amount: $250,000.00                                   Issue Date:  August 25, 2016 

Mississippi Gaming Corporation,  a Delaware corporation (the “Company”), for value received, hereby promises to pay to Gregory A. Harrison (the "Holder"), the principal amount of $90,000 with interest at fourteen percent (14%) per annum, with interest accruing effective August 1, 2016.

Mississippi Gaming Corporation, a Delaware corporation (the “Company”), for value received, also hereby promises to pay to the following seven lenders (Holders) the aggregate principal amount of $47,500 as follows: Gregory A. Harrison ($10,000), Deborah A. Vitale ($7,500), John St. Peter and Marilyn C. St. Peter ($7,500), Pamela Jo Stevens and Carl D. Stevens ($10,000), Wendie L. Wachtel ($5,000), Bonnie K. Wachtel ($2,500), and Elliott C. Lepler & Marcia L. Lepler, Trustees FBO The Lepler Family Trust UA DEC 26, 2000 ($5,000), with interest at eight per cent (8%) per annum, with interest accruing effective 2016. A full year of interest will accrue and be payable for any calendar year in which any portion of the principal or interest remains unpaid with respect to the $47,500 principal of this Note. Gregory A. Harrison will serve as Lien Agent for the seven Holders with respect to the $47,500 principal and interest due thereon. In the event of his death or incapacity, John St. Peter will serve as Lien Agent for the seven Holders with respect to the $47,500 principal and interest due thereon.

This Note is being issued to secure amounts advanced by the foregoing lenders to Diamondhead Casino Corporation in 2016, to pay taxes due on Mississippi Gaming Corporation's Diamondhead, Mississippi  property and for auditing, accounting, and other expenses incurred by Diamondhead Casino Corporation for the benefit of Mississippi Gaming Corporation. This Note is also being issued to secure interest payments due on amounts advanced by the foregoing lenders.

ARTICLE 1

DEFINITIONS

SECTION 1.1.  Definitions.  The terms defined in this Article whenever used in this Note shall have the respective meanings hereinafter specified.  

“Applicable Laws” means any and all applicable foreign, federal, state and local statutes, laws, regulations, ordinances, policies, and rules or common law (whether now existing or hereafter enacted or promulgated), of any and all governmental authorities, agencies, departments, commissions, boards, courts, or instrumentalities of the United States, any state of the United States, any other nation, or any political subdivision of the United States, any state of the United States or any other nation, and all applicable judicial and administrative, regulatory or judicial decrees, judgments and orders, including common law rules and determinations. 

 

 “Deed of Trust” means that certain Deed of Trust for the benefit of the Holders securing the Property and made to secure the obligations hereunder and thereunder.

 “Event of Default” shall have the meaning set forth in Section 5.1.  

 “Final Maturity Date” means the fourth year anniversary of the Issue Date of this Note, which date may be extended with the written consent of the Holder or Holders, which consent may be withheld for any reason or no reason whatsoever.  

 “Holder” or “Holders” means the person named above or any Person who shall thereafter become a record holder of this Note as provided in Article 2 hereof.  

  “Issue Date” means the issue date of this Note as stated above. 

   “Note” means this Promissory Note as amended, modified or restated. 

  “Property” means the real property known as 7051 Interstate 10, Diamondhead, Mississippi.

   “Person” means an individual, corporation, partnership, limited liability company, association, trust, joint venture, unincorporated organization or any government, governmental department or agency or political subdivision thereof.  

ARTICLE 2

MATURITY; INTEREST PAYMENTS; SECURITY

 SECTION 2.1.  Final Maturity.  On the Final Maturity Date, the Company shall retire this Note by paying to the Holder in cash an amount equal to the principal amount due under the Note reduced by any principal payments made on the Note.  

 SECTION 2.2.  Interest Payments.  On the Final Maturity Date, the Company shall retire this Note by paying to the Holder in cash an amount equal to the interest due under the Note reduced by any interest payments made on the Note.  

SECTION 2.3.  Security.  The Company is securing its obligations to pay the principal of this Note and interest due thereon by executing and recording a Deed of Trust. In the event of a conflict between the provisions of the Deed of Trust and this Note, the provisions of the Deed of Trust shall govern. 

 

 SECTION 2.4.  Loss, Theft. Destruction of Note.  Upon receipt of evidence satisfactory to the Company of the loss, theft, destruction or mutilation of this Note and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security reasonably satisfactory to the Company or, in the case of any such mutilation, upon surrender and cancellation of this Note, the Company will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Note, a new Note of like tenor and unpaid principal amount dated as of the date hereof. This Note shall be held and owned upon the express condition that the provisions of this Section 2.4 are exclusive with respect to the replacement of a mutilated, destroyed, lost or stolen Note and shall preclude any and all other rights and remedies notwithstanding any law or statute existing or hereafter enacted to the contrary with respect to the replacement of negotiable instruments or other securities without their surrender.  

 SECTION 2.5.  Who Deemed Absolute Owner.  The Company shall deem the Person or Persons in whose name the Note shall be registered in the Notes and Debenture Register of the Company to be, and shall treat such Person or Persons as, the absolute owner of the Note (whether or not the Note shall be overdue) for the purpose of receiving payment of or on account of the principal of the Note and for all other purposes, and the Company shall not be required to give effect to any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid. This Note shall be registered in the Notes and Debenture Register under the Holder's name. 

 SECTION 2.6.  Prepayment.  This Note may be prepaid in whole or in part and is expected to be paid prior to its maturity date. 

ARTICLE 3

STATUS; RESTRICTIONS ON TRANSFER

 SECTION 3.1.  Status of Note.  This Note is a direct, general and unconditional obligation of the Company, and constitutes a valid and legally binding obligation of the Company, enforceable in accordance with its terms subject, as to enforcement, to bankruptcy, insolvency, reorganization and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity. 

SECTION 3.2.  Restrictions on Transferability.  This Note may not be transferred, assigned, pledged, or hypothecated.

ARTICLE 4

COVENANTS

 In addition to the other covenants and agreements of the Company set forth in this Note, the Company covenants and agrees that so long as this Note shall be outstanding:  

 SECTION 4.1.  Payment of Note.  The Company will punctually, according to the terms hereof, (a) pay or cause to be paid all amounts due under this Note.  

 

 SECTION 4.2.  Notice of Default.  If any one or more events occur which constitute or which, with the giving of notice or the lapse of time or both, would constitute an Event of Default or if the Holder shall demand payment or take any other action permitted upon the occurrence of any such Event of Default, the Company will forthwith give notice to the Holder, specifying the nature and status of the Event of Default or other event or of such demand or action, as the case may be.  

SECTION 4.4.  Compliance with Laws.  The Company will comply in all material respects with all Applicable Laws, except where the necessity of compliance therewith is contested in good faith by appropriate proceedings. 

ARTICLE 5

REMEDIES

 SECTION 5.1.  Events of Default.  “Event of Default” wherever used herein means any one of the following events:  

(a) Default in the due and punctual payment of the principal of, or any other amount owing in respect of this Note when and as the same shall become due and payable;  

(c) Default in the performance or observance of any covenant or agreement of the Company in this Note (other than a covenant or agreement a default in the performance of which is specifically provided for elsewhere in this Section), and the continuance of such default for a period of thirty (30) days after there has been given to the Company by the Holder a written notice specifying such default and requiring it to be remedied;  

(d) The entry of a decree or order by a court having jurisdiction adjudging the Company as bankrupt or insolvent; or approving as properly filed a petition seeking reorganization, arrangement, adjustment or composition of or in respect of the Company under the Federal Bankruptcy Code or any other applicable federal or state law, or appointing a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Company or of any substantial part of its property, or ordering the winding-up or liquidation of its affairs, and the continuance of any such decree or order unstayed and in effect for a period of 60 calendar days;  

(e) The institution by the Company of proceedings to be adjudicated as bankrupt or insolvent, or the consent by it to the institution of bankruptcy or insolvency proceedings against it, or the filing by it of a petition or answer or consent seeking reorganization or relief under the Federal Bankruptcy Code or any other applicable federal or state law, or the consent by it to the filing of any such petition or to the appointment of a receiver, liquidator, assignee, trustee or sequestrator (or other similar official) of the Company or of any substantial part of its property, or the making by it of an assignment for the benefit of creditors;  

 

(f) the Company seeks the appointment of a statutory manager or proposes in writing or makes a general assignment or an arrangement or composition with or for the benefit of its creditors or any group or class thereof or files a petition for suspension of payments or other relief of debtors or a moratorium or statutory management is agreed or declared in respect of or affecting all or any material part of the indebtedness of the Company, or (ii) the Company ceases or threatens in writing to cease to carry on all or any material part of the business, if any, carried on by the Company and as a result of such cessation or threat of cessation, the Company will not be able to perform or comply with its payment obligations under this Note; or 

(g) It becomes unlawful for the Company to perform or comply with its obligations under this Note.  

 SECTION 5.2.  Effects of Default.  If an Event of Default occurs and is continuing, then and in every such case the Holder may declare the Note to be due and payable immediately, by a notice in writing to the Company, and upon any such declaration, the Company shall pay to the Holder the outstanding principal amount of the Note.  

 SECTION 5.3.  Remedies Not Waived.  No course of dealing between the Company and the Holder or any delay in exercising any rights hereunder shall operate as a waiver by the Holder.  

ARTICLE 6

MISCELLANEOUS

 SECTION 6.1.  Register.  The Company shall keep at its principal office a register in which the Company shall provide for the registration of this Note.   

SECTION 6.2.  Withholding.  To the extent required by applicable law, the Company may withhold amounts for or on account of any taxes imposed or levied by or on behalf of any taxing authority in the United States having jurisdiction over the Company from any payments made pursuant to this Note. 

 SECTION 6.3.  Notice.  Where this Note provides for notice of any event, such notice shall be given (unless otherwise herein expressly provided) in writing and either (i) delivered personally, (ii) sent by certified, registered or express mail, postage prepaid or (iii) sent by facsimile or other electronic transmission, and shall be deemed given when so delivered personally, sent by facsimile or other electronic transmission (confirmed in writing) or mailed. Notices shall be addressed, if to Holder, to the address of Holder appearing in the Note register referred to in Section 6.1 or, if to the Company, to its principal office. However, to the extent any notice required pursuant to this Note is also furnished to stockholders of the Company, the Company will furnish to Holder all such notices and materials as and when and in the same manner in which such notices and materials are furnished to its stockholders. 

SECTION 6.4  Governing Law.  This Note shall be governed by, and construed in accordance with, the laws of the State of Delaware (without giving effect to any conflicts or choice of law provisions that would cause the application of the domestic substantive laws of any other jurisdiction). 

 

SECTION 6.5  Forum.  The Holder and the Company hereby agree that any dispute which may arise out of this Note shall be adjudicated before a court of competent jurisdiction in the State of Delaware and they hereby submit to the exclusive jurisdiction of the courts of the State of Delaware, as well as to the jurisdiction of all courts to which an appeal may be taken from such courts, with respect to any action or legal proceeding commenced by either of them and hereby irrevocably waive any objection they now or hereafter may have respecting the venue of any such action or proceeding brought in such a court or respecting the fact that such court is an inconvenient forum.

 SECTION 6.6.  Headings.  The headings of the Articles and Sections of this Note are inserted for convenience only and do not constitute a part of this Note.  

 SECTION 6.7  Amendments.  Any provision of this Note  may be amended, modified or waived if and only if the Holder of this Note has consented in writing to such amendment, modification or waiver of any such provision of this Note.  

 SECTION 6.8.  No Recourse Against Others.  The obligations of the Company under this Note are solely obligations of the Company and no officer, director, employee or stockholder shall be liable for any failure by the Company to pay amounts on this Note when due or perform any other obligation.  

 IN WITNESS WHEREOF, the Company has caused this Note to be signed by its duly authorized representative effective on the date hereinabove written.  

 

	 

	 

	 

	MISSISSIPPI GAMING CORPORATION

	 

	 

	 

	 

	 

	 

	 

	By: /s/ Deborah A. Vitale

	 

	 

	 

	 

	Deborah A. Vitale

	 

	 

	President

	 

	 

	 

	 

	 

	 

	 

	By: /s/ Benjamin Harrell

	 

	 

	Title: Vice presidentSEC Connect

 

Exhibit 10.2

 

SECURITIES PURCHASE AGREEMENT

 

SECURITIES PURCHASE
AGREEMENT (this “Agreement”), dated as of December
7, 2016, by and among MEDITE Cancer Diagnostics, Inc., a Delaware
corporation, with headquarters located at 4203 SW 34th Street, Orlando,
Florida 32811 (the “Company”), and each buyer
identified on Schedule
I, as the same may be updated from time to time in
accordance with this Agreement (which buyer, including its
successors and assigns, a “Buyer” and collectively, the
“Buyers”).

 

WHEREAS:

 

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

 

B.           Buyers
desire to purchase and the Company desires to issue and sell, upon
the terms and conditions set forth in this Agreement, a minimum of
$250,000 (the “Minimum
Offering Amount”) and a maximum of $3,000,000 (the
“Maximum Offering Amount”) of the
Company’s common stock, par value $0.001 (the “Shares”), at a price of
$0.50 per share.

 

C.           Each
Buyer wishes to purchase, upon the terms and conditions stated in
this Agreement, such principal amount of Shares as set forth on
each Buyer’s signature pages hereto; and

 

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

 

1. PURCHASE
AND SALE OF SHARES.

 

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

 

b. Form
of Payment. On the Closing Date (as defined below), (i) each
Buyer shall pay the purchase price for the Shares 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 set forth in the Subscription Agreement
attached hereto as Exhibit B, against delivery of the Shares, and
(ii) the Company shall deliver such Shares, including the
underlying the securities, to such Buyer, against delivery of such
Purchase Price.

 

c. Closing
Date. Subject to receipt of the Minimum Offering Amount and
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 Shares pursuant to this Agreement (the
“Closing Date”)
shall be on or before 12:00 noon, Eastern Standard Time on December
14, 2016 or such other mutually agreed upon time; provided however,
that such date can be further extended for up to 60 days, until
February 12, 2017, by mutual agreement of the Company if the
Maximum Offering Amount has not yet been sold. 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. Following receipt of the Minimum Offering Amount and
prior to the Closing Date, the Company may hold multiple closings
until it has received the Maximum Offering Amount and each such
closing shall be considered as a “Closing” for purposes
of this Agreement.

 

 

 

 

 

2. BUYERS’
REPRESENTATIONS AND WARRANTIES. Each Buyer severally (and
not jointly) represents and warrants to the Company solely as to
such Buyer that:

 

a. Investment
Purpose. As of the date hereof, the Buyer is purchasing the
Shares 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.

 

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 Shares 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 Shares.

 

d. 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
Shares.

 

e. Transfer
or Re-sale. The Buyer understands that (i) the sale or
re-sale of the Shares 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 Shares are sold
pursuant to an effective registration statement under the 1933 Act,
(b) the Buyer shall have delivered to the Company 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 Shares 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 Shares 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 Shares only
in accordance with this Section 2(e) and who is an Accredited
Investor, (d) the Shares 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 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 Shares 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
Shares 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
Shares under the 1933 Act or any state securities laws or to comply
with the terms and conditions of any exemption thereunder.
Notwithstanding the foregoing or anything else contained herein to
the contrary, the Shares may be pledged as collateral in connection
with a bona
fide margin account
or other lending arrangement.

 

f. Legends.
The Buyer understands that the Shares, until such time as such
Shares have been registered under the 1933 Act or otherwise may be
sold pursuant to Rule 144, that the 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
Shares):

 

“THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE
“SECURITIES”) HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER
THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR
THE COMPANY SHALL HAVE RECEIVED AN
OPINION OF COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE
SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE
SECURITIES LAWS IS NOT REQUIRED.”

 

 

 

 

The
legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Shares upon
which it is stamped, if, unless otherwise required by applicable
state securities laws, (a) such Shares are registered for sale
under an effective registration statement filed under the 1933 Act,
or (b) such holder provides the Company with an opinion of counsel,
in form, substance and scope customary for opinions of counsel in
comparable transactions, to the effect that a public sale or
transfer of such Shares 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 or (c) such holder provides the
Company with reasonable assurances that such Shares can be sold
pursuant to Rule 144 or Regulation S. The Buyer agrees to sell all
Shares, including those represented by a certificate(s) from which
the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any.

 

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

 

h. Residency.
The Buyer is a resident of the jurisdiction set forth in such
Buyer’s Investor Information.

 

i. Brokers.
The Buyer acknowledges that the Company may, in its sole
discretion, engage a broker dealer registered with FINRA, as a
placement agent in connection with the sale of the Shares (the
“Placement
Agent”). The Placement Agent shall be entitled to a
cash fee of up to seven (7.5%) percent of the gross proceeds.
Warrants may also be issued to the Placement Agent upon terms
mutually agreed upon by the Company and the Placement
Agent.

 

3. REPRESENTATIONS
AND WARRANTIES OF THE COMPANY. The Company represents and
warrants to each Buyer that:

 

a. Organization
and Qualification. The Company and each of its Subsidiaries,
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. “Subsidiary” shall mean
any corporation or other entity of which at least a majority of the
securities or other ownership interests having ordinary voting
power (absolutely or contingently) for the election of directors or
other persons performing similar functions are at the time owned
directly or indirectly by the Company and/or any of its other
Subsidiaries.

 

b. Authorization;
Enforcement. The Company has all requisite corporate power
and authority to enter into and perform this
Agreement.

 

c. Capitalization.
The capitalization of the Company is as set forth on Schedule 3(c) attached hereto.
The Company presently has 35,000,000 shares of Common Stock
authorized, of which 21,269,307 are
issued and outstanding as of August 25, 2016.

 

d. Issuance
of Shares. The Shares are duly authorized and reserved for
issuance.

 

e. Acknowledgment
of Dilution. The Company understands and acknowledges the
potentially dilutive effect to the Common Stock upon the issuance
of the Shares.

 

f. Bad
Actor Representation.
None of the Company, any of its predecessors, any affiliated
issuer, any director, executive officer, other officer of the
Company participating in the offering, any beneficial owner of 20%
or more of the Company’s outstanding voting equity
securities, calculated on the basis of voting power, nor any
promoter (as that term is defined in Rule 405 under the Securities
Act) connected with the Company in any capacity at the time of sale
(each, an “Issuer Covered Person” and, together,
“Issuer Covered Persons”) is subject to any of the
“Bad Actor” disqualifications described in Rule
506(d)(1)(i) to (viii) under the Securities Act (a
“Disqualification Event”), except for a
Disqualification Event covered by Rule 506(d)(2) or (d)(3). The
Company has exercised reasonable care to determine whether any
Issuer Covered Person is subject to a Disqualification
Event.

 

 

 

 

 

g. Litigation.
There is no action, suit, proceeding, or investigation (including
without limitation any suit, proceeding, or investigation involving
the prior employment of any of the Company’s employees, their
use in connection with the Company’s business of any
information or techniques allegedly proprietary to any of their
former employers, or their obligations under any agreements with
prior employers) pending or, to the best of the Company’s
knowledge, currently threatened before any court, administrative
agency, or other governmental body. The Company is not a party or
subject to, and none of its assets is bound by, the provisions of
any order, writ, injunction, judgment, or decree of any court or
government agency or instrumentality. There is no action, suit, or
proceeding by the Company currently pending or that the Company
intends to initiate.

 

h. Disclosure.
Except as set forth on Schedule 3(h), the Company has
fully provided each Buyer with all the information that such Buyer
has requested for deciding whether to purchase the Shares and all
material information that the Company believes is reasonably
necessary to enable a reasonable Buyer to make such decision.
Neither this Agreement, nor any other agreements, statements or
certificates made or delivered to Buyer in connection herewith or
therewith contains any untrue statement of a material fact or, when
taken together, omits to state a material fact necessary to make
the statements herein or therein, in light of the circumstances
under which they were made, not misleading.

 

i. Shell
Company Status.
During the previous twelve (12) months, the Company has not been a
shell as such term is defined in Rule 144(i) under the Securities
Act.

 

j. Commission
Documents, Financial Statements. The Company has filed all reports,
schedules, forms, statements and other documents required to be
filed by it with the Commission pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended
(the “Exchange
Act”), including material filed pursuant to Section
13(a) or 15(d) of the Exchange Act (all of the foregoing including
filings incorporated by reference therein being referred to herein
as the “Commission
Documents”). The Company has not provided to the
Buyers any material non-public information or other information
which, according to applicable law, rule or regulation, was
required to have been disclosed publicly by the Company but which
has not been so disclosed, other than (i) with respect to the
transactions contemplated by this Agreement, or (ii) pursuant to a
non-disclosure or confidentiality agreement signed by the Buyers.
At the time of the respective filings, the Commission Documents
complied in all material respects with the requirements of the
Exchange Act and the rules and regulations of the Commission
promulgated thereunder and other federal, state and local laws,
rules and regulations applicable to such documents. As of their
respective filing dates, none of the Commission Documents contained
any untrue statement of a material fact; and none 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. The financial statements of
the Company included in the Commission Documents (the
“Financial
Statements”) comply as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules
and regulations with respect thereto. The Financial Statements have
been prepared in accordance with United States generally accepted
accounting principles (“GAAP”) applied on a
consistent basis during the periods involved (except (i) as may be
otherwise indicated in the Financial Statements or the notes
thereto or (ii) in the case of unaudited interim statements, to the
extent they may not include footnotes or may be condensed or
summary statements), and fairly present in all material respects
the consolidated financial position of the Company as of the dates
thereof and the results of operations and cash flows for the
periods then ended (subject, in the case of unaudited statements,
to normal year-end audit adjustments)

 

k. No
Material Adverse Effect. Since December 31, 2015, neither
the Company, nor any Subsidiary has experienced or suffered any
Material Adverse Effect. For the purposes of this Agreement,
“Material Adverse
Effect” means any of (i) a material and adverse effect
on the legality, validity or enforceability of this Agreement, the
Registration Rights Agreement (attached hereto as Exhibit “A”), the Investor
Information (as defined below), all exhibits thereto and hereto and
any other documents or agreements executed in connection with the
transactions contemplated hereunder (collectively, the
“Transaction
Documents”), (ii) a material adverse effect on the
business, operations, properties, or financial condition of the
Company, its Subsidiaries, individually, or in the aggregate and/or
any condition, circumstance, or situation that would prohibit or
otherwise materially interfere with the ability of the Company to
perform any of its obligations under this Agreement or the other
Transaction Documents in any material respect or (iii) an adverse
impairment to the Company’s ability to perform on a timely
basis its obligations under this Agreement or the other Transaction
Document.

 

 

 

 

 

l. No
Undisclosed Liabilities. Other than as disclosed on
Schedule 3(l) or
set forth in the Commission Documents, to the knowledge of the
Company, neither the Company, nor any Subsidiary has any
liabilities, obligations, claims or losses (whether liquidated or
unliquidated, secured or unsecured, absolute, accrued, contingent
or otherwise) other than those incurred in the ordinary course of
the Company’s and any Subsidiary’s respective
businesses since December 31, 2015 and those which, individually or
in the aggregate, do not have a Material Adverse Effect on the
Company and any Subsidiary.

 

m. No
Undisclosed Events or Circumstances. To the Company’s
knowledge, no event or circumstance has occurred or exists with
respect to the Company or any Subsidiary or their respective
businesses, properties, operations or financial condition, 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.

 

n. Indebtedness.
Other than as set forth on Schedule 3(n), the Financial
Statements set forth all outstanding Indebtedness of the Company,
or for which the Company, or any Subsidiary have commitments as of
the date of the Financial Statements or any subsequent period that
would require disclosure. For the purposes of this Agreement,
“Indebtedness” shall mean
(a) any liabilities for borrowed money or amounts owed (other than
trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent
obligations in respect of Indebtedness of others, whether or not
the same should be reflected in the Company’s consolidated
balance sheet (or the Shares thereto), except guaranties by
endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c)
the present value of any lease payments due under leases required
to be capitalized in accordance with GAAP. Neither the Company, nor
any Subsidiary is in default with respect to any Indebtedness
which, individually or in the aggregate, would have a Material
Adverse Effect.

 

o. Title
to Assets. Except as set forth on Schedule 3(o),the Company has
good and marketable title in fee simple to all real property owned
by it and good and marketable title in all personal property owned
by it that is material to the business of the Company, in each case
free and clear of all Liens, except for (i) Liens as do not
materially affect the value of such property and do not materially
interfere with the use made and proposed to be made of such
property by the Company and (ii) Liens for the payment of federal,
state or other taxes, for which appropriate reserves have been made
therefore in accordance with GAAP and, the payment of which is
neither delinquent nor subject to penalties (liens referenced in
subsection (i) and (ii) above are collectively referred to as
"Permitted Liens"). Any real property and facilities held under
lease by the Company are held by it under valid, subsisting and
enforceable leases with which the Company is in
compliance.

 

p. Actions
Pending. Except as disclosed in the Commission Documents or
on Schedule 3(p),
there is no action, suit, claim, investigation, arbitration,
alternate dispute resolution proceeding or any other proceeding
pending or, to the knowledge of the Company, threatened against or
involving the Company, any Subsidiary (i) which questions the
validity of this Agreement or any of the other Transaction
Documents or the transactions contemplated hereby or thereby or any
action taken or to be taken pursuant hereto or thereto or (ii)
involving any of their respective properties or assets. To the
knowledge of the Company, there are no outstanding orders,
judgments, injunctions, awards or decrees of any court, arbitrator
or governmental or regulatory body against the Company or any
Subsidiary or any of their respective executive officers or
directors in their capacities as such.

 

q. Compliance
with Law. The Company and its Subsidiaries have all material
franchises, permits, licenses, consents and other governmental or
regulatory authorizations and approvals necessary for the conduct
of their respective business as now being conducted by it unless
the failure to possess such franchises, permits, licenses, consents
and other governmental or regulatory authorizations and approvals,
individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect.

 

 

 

 

 

r. Compliance.
Except as set forth in the in Schedule 3(r), the Company: (i)
is not in default under or in violation of (and no event has
occurred that has not been waived that, with notice or lapse of
time or both, would result in a default by the Company), nor has
the Company received notice of a claim that it is in default under
or that it is in violation of, any indenture, loan or credit
agreement or any other agreement or instrument to which it is a
party or by which it or any of its properties is bound (whether or
not such default or violation has been waived), (ii) is in
violation of any judgment, decree or order of any court, arbitrator
or other governmental authority or (iii) is or has been in
violation of any statute, rule, ordinance or regulation of any
governmental authority, including without limitation all foreign,
federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and
safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material
Adverse Effect.

 

s. No
Violation.
The business of the Company and any Subsidiary is not being
conducted in violation of any federal, state, local or foreign
governmental laws, or rules, regulations and ordinances of any
governmental entity, except for possible violations which
singularly or in the aggregate could not reasonably be expected to
have a Material Adverse Effect. The Company is not required under
federal, state, local or foreign law, rule or regulation to obtain
any consent, authorization or order of, or make any filing or
registration with, any court or governmental agency in order for it
to execute, deliver or perform any of its obligations under the
Transaction Documents, or issue and sell the Shares in accordance
with the terms hereof or thereof (other than (x) any consent,
authorization or order that has been obtained as of the date
hereof, (y) any filing or registration that has been made as of the
date hereof or (z) any filings which may be required to be made by
the Company with the Commission or state securities administrators
subsequent to the Closing).

 

t. No
Conflicts. The execution, delivery and performance of this
Agreement and the Transaction Documents by the Company and the
consummation by the Company of the transactions contemplated herein
and therein do not and will not (i) violate any provision of the
Articles or Bylaws, (ii) conflict with, or constitute a default (or
an event which with notice or lapse of time or both would become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
mortgage, deed of trust, indenture, note, bond, license, lease
agreement, instrument or obligation to which the Company or any
Subsidiary is a party or by which it or its properties or assets
are bound, (iii) create or impose a lien, mortgage, security
interest, pledge, charge or encumbrance (collectively,
“Lien”)
of any nature on any property of the Company or any Subsidiary
under any agreement or any commitment to which the Company or any
Subsidiary is a party or by which the Company, or any Subsidiary is
bound or by which any of its respective properties or assets are
bound, or (iv) result in a violation of any federal, state, local
or foreign statute, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations)
applicable to the Company or any Subsidiary or by which any
property or asset of the Company, or any Subsidiary are bound or
affected, provided,
however, that,
excluded from the foregoing in all cases are such conflicts,
defaults, terminations, amendments, accelerations, cancellations
and violations as would not, individually or in the aggregate, have
a Material Adverse Effect.

 

u. Taxes.
Other than as set forth on Schedule 3(u), each of the
Company and any Subsidiary, to the extent its applicable, has
accurately prepared and filed all federal, state and other tax
returns required by law to be filed by it, has paid or made
provisions for the payment of all taxes shown to be due other than
payment being contested and all additional assessments, and
adequate provisions have been and are reflected in the consolidated
financial statements of the Company for all current taxes and other
charges to which the Company, or any Subsidiary, if any, is subject
and which are not currently due and payable. None of the federal
income tax returns of the Company have been audited by the Internal
Revenue Service. The Company has no knowledge of any additional
assessments, adjustments or contingent tax liability (whether
federal, state or foreign) of any nature whatsoever, whether
pending or threatened against the Company or any Subsidiary for any
period, nor of any basis for any such assessment, adjustment or
contingency.

 

v. Intellectual
Property. Each of the Company and any Subsidiary, owns or
has the lawful right to use all patents, trademarks, domain names
(whether or not registered) and any patentable improvements or
copyrightable derivative works thereof, websites and intellectual
property rights relating thereto, service marks, trade names,
copyrights, licenses and authorizations, if any, and all rights
with respect to the foregoing, if any, which are necessary for the
conduct of their respective business as now conducted without any
conflict with the rights of others, except where the failure to so
own or possess would not have a Material Adverse
Effect.

 

 

 

 

 

w. Books
and Records Internal Accounting Controls. Except as may have
otherwise been disclosed in the Commission Documents, the books and
records of the Company, and any Subsidiary accurately reflect in
all material respects the information relating to the business of
the Company and any Subsidiary, the location and collection of
their assets, and the nature of all transactions giving rise to the
obligations or accounts receivable of the Company, or any
Subsidiary. Except as disclosed in the Commission Documents, the
Company and any Subsidiary maintain a system of internal accounting
controls sufficient, in the judgment of the Company, 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 GAAP
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 actions are taken with respect to any
differences.

 

x. Material
Agreements. Any and all written or oral contracts,
instruments, agreements, commitments, obligations, plans or
arrangements, the Company and any Subsidiary is a party to, that a
copy of which would be required to be filed with the Commission as
an exhibit to a registration statement (collectively, the
“Material
Agreements”) if the Company or any Subsidiary were
registering securities under the Securities Act has previously been
publicly filed with the Commission in the Commission Documents.
Each of the Company and any Subsidiary has in all material respects
performed all the obligations required to be performed by them to
date under the foregoing agreements, have received no notice of
default and are not in default under any Material Agreement now in
effect the result of which would cause a Material Adverse
Effect.

 

y. Transactions
with Affiliates. Except as set forth in the Financial
Statements or in the Commission Documents or on Schedule 3(y), there are no
loans, leases, agreements, contracts, royalty agreements,
management contracts or arrangements or other continuing
transactions between (a) the Company, or any Subsidiary on the one
hand, and (b) on the other hand, any officer, employee, consultant
or director of the Company or any Subsidiary, or any person owning
more than 10% capital stock of the Company, or any Subsidiary, or
any member of the immediate family of such officer, employee,
consultant, director or stockholder or any corporation or other
entity controlled by such officer, employee, consultant, director
or stockholder, or a member of the immediate family of such
officer, employee, consultant, director or stockholder

 

z. Private
Placement and Solicitation. Assuming the accuracy of the
Buyers’ representations and warranties set forth in Section
2, no registration under the Securities Act is required for the
offer and sale of the Shares by the Company to the Buyers as
contemplated hereby. Based in part on the accuracy of the
representations of the Buyers in Section 2, and subject to timely
applicable Form D filings pursuant to Regulation D of the
Securities Act with the Commission and pursuant to applicable state
securities laws, the offer, sale and issuance of the Securities to
be issued pursuant to and in conformity with the terms of this
Agreement, will be issued in compliance with all applicable federal
and state securities laws. Neither the Company nor any of its
affiliates, nor any person acting on its or their behalf, has
engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D under the Securities Act) in
connection with the offer or sale of any of the
Shares.

 

aa. Governmental
Approvals. Except for the filing of any notice prior or
subsequent to the Closing Date that may be required under
applicable state and/or federal securities laws (which if required,
shall be filed on a timely basis), including the filing of a Form
D, no authorization, consent, approval, license, exemption of,
filing or registration with any court or governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, is or will be necessary for, or in connection with, the
execution or delivery of the Shares, or for the performance by the
Company of its obligations under this Agreement and the Transaction
Documents.

 

bb. Employees.
Except as disclosed on Schedule 3(bb), neither the
Company nor any Subsidiary has any collective bargaining
arrangements covering any of its employees. Schedule 3(bb) sets forth a
list of the employment contracts, agreements regarding proprietary
information, non-competition agreements, non-solicitation
agreements, confidentiality agreement, or any other similar
contract or restrictive covenant, relating to the right of any
officer, employee or consultant to be employed or engaged by the
Company. Since December 31, 2015, no officer, consultant or key
employee of the Company or any Subsidiary whose termination, either
individually or in the aggregate, would have a Material Adverse
Effect, has terminated or, to the knowledge of the Company, has any
present intention of terminating his or her employment or
engagement with the Company or any Subsidiary.

 

 

 

 

 

4. COVENANTS.

 

a. Registration
Rights. The Company
shall file a registration statement on Form S-1 registering for
resale the Shares as per the terms of the Registration Rights
Agreement (the “Registration
Statement”).

 

b. 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.

 

c. Blue
Sky Laws. The Company shall, on or before the Closing Date,
take such action as the Company shall reasonably determine is
necessary to qualify the Shares for sale to the Buyers 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 each
Buyer on or prior to the Closing Date.

 

d. Use
of Proceeds. The
Company shall use the proceeds from the sale of the Shares for
general working capital purposes and repayment of up to $500,000
for the Bridge Financing, and shall not, directly or indirectly,
use such proceeds for any distribution or dividend to any
shareholder of the Company.

 

e. Securities
Compliance. The Company shall notify the Commission in
accordance with its rules and regulations, of the transactions
contemplated by this Agreement and the Transaction Documents,
including filing a Form D with respect to the Shares, as required
under Regulation D and applicable “blue sky” laws if
such Shares are offered pursuant to Rule 506 of Regulation D and
shall take all other necessary action and proceedings as may be
required and permitted by applicable law, rule and regulation, for
the legal and valid issuance of the Shares to the Buyers or
subsequent holders.

 

f. Liquidation.
Subject to the terms of the Transaction Documents, the Company
covenants that it will take such further action as the Buyers may
reasonably request, all to the extent required from time to time to
enable the Buyers to sell the Shares without registration under the
Securities Act within the limitation of the exemptions provided by
Rule 144 promulgated under the Securities Act, as
amended.

 

g. Keeping
of Records and Books of Account. The Company shall keep and
cause each Subsidiary to keep adequate records and books of
account, in which complete entries will be made in accordance with
GAAP consistently applied, reflecting all financial transactions of
the Company and its Subsidiaries, and in which, for each fiscal
year, all proper reserves for depreciation, depletion,
obsolescence, amortization, taxes, bad debts and other purposes in
connection with its business shall be made.

 

h. Amendments.
The Company
will not and will not permit any Subsidiary to amend, modify or
waive any term or provision of its certificate of formation,
limited liability company agreement, certificate of incorporation,
by-laws, partnership agreement or other applicable documents
relating to its formation or governance, or any shareholders
agreement, other than amendments, modifications and waivers that
are not materially adverse in any respect to the Buyers and of
which the Buyers have received at least five (5) Business
Days’ prior written notice.

 

i. Other
Agreements. The Company shall not and shall cause its
Subsidiaries, enter into any agreement the terms of which would
restrict or impair the ability of the Company to perform its
obligations under this Agreement and the Transaction
Document.

 

j. Disposition
of Assets. So long as any Shares remains outstanding,
neither the Company, nor any of its Subsidiaries shall sell,
transfer or otherwise dispose of any of its material properties,
assets and rights including, without limitation, its technology and
intellectual property, to any person except for (i) sales to
customers in the ordinary course of business (ii) sales or
transfers between the Company, the Subsidiaries (iii) disposition
of obsolete or worn out technology or equipment or (iiv) otherwise
with the prior written consent of the holders of a majority of the
Shares then outstanding (the “Majority
Holders”).

 

 

 

 

 

k. Reporting
Status. So long as a Buyer beneficially owns any of the
Shares, the Company shall timely file all reports required to be
filed with the Commission pursuant to the Exchange Act, and the
Company shall not terminate its status as an issuer required to
file reports under the Exchange Act even if the Exchange Act or the
rules and regulations thereunder would permit such
termination.

 

l. Disclosure
of Transaction. The Company shall file with the Commission,
a Current Report on Form 8-K describing the material terms of the
transactions contemplated hereby and all material non-public
information disclosed to the Buyers prior to the filing as soon as
practicable after the Closing but in no event later than 5:30 P.M.
(EDT) on the fourth Business Day following the Closing. In the
event that the Company is unable to disclose specific non-public
information in the Form 8-K, the Company shall include such
information in its Form 10-Q for the interim period during which
the Closing contemplated hereby occurs. “Business Day” means any
day during which the NASDAQ (or other principal
exchange) shall be open for trading.

 

m. Sarbanes-Oxley
Act. The Company shall be in compliance with the applicable
provisions of the Sarbanes-Oxley Act of 2002, and the rules and
regulations promulgated thereunder, as required under such
Act.

 

n. No
Integrated Offerings. The Company shall not make any offers
or sales of any security (other than the securities being offered
or sold hereunder) under circumstances that would require
registration of the securities being offered or sold hereunder
under the Securities Act.

 

5. INDEMNITY.

 

a. General
Indemnity. The Company agrees to indemnify and hold harmless
the Buyers (and their respective directors, officers, managers,
partners, members, shareholders, affiliates, agents, successors and
assigns) from and against any and all losses, liabilities,
deficiencies, costs, damages and expenses (including, without
limitation, reasonable attorneys’ fees, charges and
disbursements) incurred by the Buyers as a result of any material
breach of the material representations, warranties or covenants
made by the Company herein. Each Buyer severally but not jointly
agrees to indemnify and hold harmless the Company and its
directors, officers, affiliates, agents, successors and assigns
from and against any and all losses, liabilities, deficiencies,
costs, damages and expenses (including, without limitation,
reasonable attorneys’ fees, charges and disbursements)
incurred by the Company as a result of any breach of the
representations, warranties or covenants made by such Buyer herein.
The maximum aggregate liability of each Buyer pursuant to its
indemnification obligations under this Section 5 shall not exceed
the portion of the Purchase Price paid by such Buyer hereunder. In
no event shall any “Indemnified Party” (as defined
below) be entitled to recover consequential or punitive damages
resulting from a breach or violation of this
Agreement.

 

 

 

 

 

b. Indemnification
Procedure. Any party entitled to indemnification under this
Section 5 (an “Indemnified Party”) will
give written notice to the indemnifying party of any matters giving
rise to a claim for indemnification; provided, that the failure of
any party entitled to indemnification hereunder to give notice as
provided herein shall not relieve the indemnifying party of its
obligations under this Section 5 except to the extent that the
indemnifying party is actually prejudiced by such failure to give
notice. In case any action, proceeding or claim is brought against
an Indemnified Party in respect of which indemnification is sought
hereunder, the indemnifying party shall be entitled to participate
in and, unless in the reasonable judgment of the Indemnified Party
a conflict of interest between it and the indemnifying party may
exist with respect of such action, proceeding or claim, to assume
the defense thereof with counsel reasonably satisfactory to the
Indemnified Party. In the event that the indemnifying party advises
an Indemnified Party that it will contest such a claim for
indemnification hereunder, or fails, within thirty (30) days of
receipt of any indemnification notice to notify, in writing, such
person of its election to defend, settle or compromise, at its sole
cost and expense, any action, proceeding or claim (or discontinues
its defense at any time after it commences such defense), then the
Indemnified Party may, at its option, defend, settle or otherwise
compromise or pay such action or claim. In any event, unless and
until the indemnifying party elects in writing to assume and does
so assume the defense of any such claim, proceeding or action, the
Indemnified Party’s costs and expenses arising out of the
defense, settlement or compromise of any such action, claim or
proceeding shall be losses subject to indemnification hereunder.
The Indemnified Party shall cooperate fully with the indemnifying
party in connection with any negotiation or defense of any such
action or claim by the indemnifying party and shall furnish to the
indemnifying party all information reasonably available to the
Indemnified Party which relates to such action or claim. The
indemnifying party shall keep the Indemnified Party fully apprised
at all times as to the status of the defense or any settlement
negotiations with respect thereto. If the indemnifying party elects
to defend any such action or claim, then the Indemnified Party
shall be entitled to participate in such defense with counsel of
its choice at its sole cost and expense. The indemnifying party
shall not be liable for any settlement of any action, claim or
proceeding effected without its prior written consent, provided, however, that the indemnifying
party shall be liable for any settlement if the indemnifying party
is advised of the settlement but fails to respond to the settlement
within thirty (30) days of receipt of such notification.
Notwithstanding anything in this Section 5 to the contrary, the
indemnifying party shall not, without the Indemnified Party’s
prior written consent, settle or compromise any claim or consent to
entry of any judgment in respect thereof which imposes any future
obligation on the Indemnified Party or which does not include, as
an unconditional term thereof, the giving by the claimant or the
plaintiff to the Indemnified Party of a release from all liability
in respect of such claim. The indemnity agreements contained herein
shall be in addition to (a) any cause of action or similar rights
of the Indemnified Party against the indemnifying party or others,
and (b) any liabilities the indemnifying party may be subject to
pursuant to the law.

 

6. CONDITIONS
TO THE COMPANY’S OBLIGATION TO SELL. The obligation of
the Company hereunder to issue and sell the Shares to a 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
applicable Buyer shall have executed this Agreement and the
Investor Information, as hereinafter defined. “Investor Information”
means all of the information each of the Buyers provide on the
accredited investor certification and investor profile included
after the Signature Page to this Agreement and the Subscription
Agreement attached hereto as Exhibit B.

 

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

 

c. The
representations and warranties of the applicable 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 applicable 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 applicable 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.

 

       
      e. The Company shall have received
the Minimum Offering Amount in the escrow account maintained by
Wilmington Trust Company for purposes of this Offering on or prior
to the Closing Date.

 

CONDITIONS TO EACH
BUYER’S OBLIGATION TO PURCHASE. The obligation of each
Buyer hereunder to purchase the Shares 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 such
Buyer’s sole benefit and may be waived by such Buyer at any
time in its sole discretion:

 

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

 

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

 

g. 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.

 

h. 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.

 

i. No
event shall have occurred which could reasonably be expected to
have a Material Adverse Effect on the Company.

 

j. No
stop order or suspension of trading shall have been imposed by the
Commission or any other governmental or regulatory body having
jurisdiction over the Company or the Trading Market(s) where the
Common Stock is listed or quoted, with respect to public trading in
the Common Stock.

 

7. GOVERNING
LAW; MISCELLANEOUS.

 

a. Governing
Law. THIS AGREEMENT SHALL BE ENFORCED, GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN
SUCH STATE, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS.
THE PARTIES HERETO HEREBY SUBMIT TO THE EXCLUSIVE JURISDICTION OF
THE UNITED STATES FEDERAL COURTS LOCATED IN DOVER, DELAWARE WITH
RESPECT TO ANY DISPUTE ARISING UNDER THIS AGREEMENT, THE AGREEMENTS
ENTERED INTO IN CONNECTION HEREWITH OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY. BOTH PARTIES IRREVOCABLY WAIVE THE
DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH SUIT OR
PROCEEDING. BOTH PARTIES FURTHER AGREE THAT SERVICE OF PROCESS UPON
A PARTY MAILED BY FIRST CLASS MAIL SHALL BE DEEMED IN EVERY RESPECT
EFFECTIVE SERVICE OF PROCESS UPON THE PARTY IN ANY SUCH SUIT OR
PROCEEDING. NOTHING HEREIN SHALL AFFECT EITHER PARTY’S RIGHT
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. BOTH PARTIES
AGREE THAT A FINAL NON-APPEALABLE JUDGMENT IN ANY SUCH SUIT OR
PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER
JURISDICTIONS BY SUIT ON SUCH JUDGMENT OR IN ANY OTHER LAWFUL
MANNER. THE PARTY WHICH DOES NOT PREVAIL IN ANY DISPUTE ARISING
UNDER THIS AGREEMENT SHALL BE RESPONSIBLE FOR ALL FEES AND
EXPENSES, INCLUDING ATTORNEYS’ FEES, INCURRED BY THE
PREVAILING PARTY IN CONNECTION WITH SUCH DISPUTE.

 

 

 

 

 

b. Counterparts;
Signatures by Facsimile. 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. This Agreement, once
executed by a party, may be delivered to the other party hereto by
facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement.

 

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 party to be charged with
enforcement.

 

f. Notices.
Any notices required or permitted to be given under the terms of
this Agreement shall be sent by certified or registered mail
(return receipt requested) or delivered personally or by courier
(including a recognized overnight delivery service) or by facsimile
or electronic mail and shall be effective five days after being
placed in the mail, if mailed by regular United States mail, or
upon receipt, if delivered personally or by courier (including a
recognized overnight delivery service) or by facsimile, or upon
confirmed receipt if delivered via electronic mail, in each case
addressed to a party. The addresses for such communications shall
be:

 

	

If to the Company, to:

	

MEDITE Cancer Diagnostics, Inc.

	
 

	

4203 SW 34th
Street

	
 

	

Orlando, FL 32811

	
 

	

Attention: David E. Patterson

	
 

	

Telephone: (407) 996-9630

	
 

	
 

 

	

With a copy to:

	

William
D. O'Neal

	
 

	

Email:
wdoneal@outlook.com

	
 

	

Telephone: (480) 409-1146

	
 

	
 

 

If to the Buyer(s), to the address set forth on the signature
page. 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 any 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), any Buyer may assign its rights hereunder to any
person that purchases Shares in a private transaction from a 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. Signature
Page. It is hereby agreed that the execution by a Buyer of
this Agreement, in the place set forth herein, will constitute
agreement to be bound by the terms and conditions hereof. It is
hereby agreed by the parties hereby that the execution by the Buyer
of this Agreement, in the place set forth herein below, will be
deemed and constitute the agreement by the Purchaser to be bound by
all of the terms and conditions hereof, as well as by the
Registration Rights Agreement and all of the other documents
constituting the Transaction Documents and will be deemed and
constitute the execution by the Buyer of all such Transaction
Documents without requiring the Buyer’s separate signature on
any of such Transaction Documents.

 

 

 

 

 

IN
WITNESS WHEREOF, the parties hereto have caused this Securities
Purchase Agreement to be duly executed by their respective
authorized signatories as of the date first indicated
above.

 

Buyer
hereby elects to purchase a total of $  of Shares at $.50 per
Share.

 

 

Date
(NOTE: To be completed by the Buyer):   , 2016

 

If the
Buyer is an INDIVIDUAL, and if purchased as JOINT TENANTS,
as

TENANTS
IN COMMON, or as COMMUNITY PROPERTY:

 

 

	
 

	
Print
Name(s)

	
 

	
Social
Security Number(s)

	
 

	
 

	
  

	
 

	
  

	
 

	
 

	
  

	
 

	
  

	
 

	
 

	
Signature(s)
of Buyer(s)

	
 

	
Signature

	
 

	
 

	
  
 

	
 

	
  
 

	
 

	
 

	
  
 

	
 

	
  
 

	
 

	
 

	
Date

	
 

	
Address

	
 

 

If the
Buyer is a PARTNERSHIP, CORPORATION, LIMITED LIABILITY COMPANY or
TRUST:

 

 

	
 

	
Name
of Partnership, Corporation,
Limited Liability
Company or Trust

	
 

	
Federal
Taxpayer Identification Number

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
By:
      
                                                                               

	
 

	
 

	
 

	
 

	
Name:

	
 

	
State
of Organization

	
 

	
 

	
Title:

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
Date

	
 

	
Address

	
 

 

AGREED
AND ACCEPTED:

 

MEDITE
CANCER DIAGNOSTICS, INC.

 

 

	
By:

	
Date:
_________________

	
 

	
Name: David E.
Patterson

Title:
Chief Executive Officer

	
 

	
 

 

 

 

 

 

SCHEDULE I

 

SCHEDULE
OF BUYERS

	

BUYER

	

Purchase
Price/Amount of Note

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

	
 

 

 

 

 

 

Schedules to Securities Purchase Agreement

Schedule 3 (c)

 

Please
see the attached schedule detailing 27,244,959 shares fully diluted
outstanding after

conversion
of preferred stock series B, C, and E and issuance of $3 million in
equity at $0.50 per

share.

 

 

	
 

	
 
 

 

	
 
Total

 

	
 
Percentage

 

	
Shares
Outstanding @ 6/30/2016

	
 
 

 

	
  21,269,307 

	
  78.07%

	
 
 

 

	
    

	
    

	
Conversion
of Preferred Stock:

	
 
 

 

	
    

	
    

	
   Preferred
B

	
  1307 

	
    

	
    

	
   Preferred
C

	
  621 

	
    

	
    

	
   Preferred
E

	
  889 

	
    

	
    

	
 

	
    

	
  2,817 

	
    

	
Issuance
of 3 million shares

	
    

	
  3,000,000 

	
  11.01%

	
 

	
    

	
    

	
    

	
Potential
Conversion of Bridge Loan:

	
    

	
    

	
    

	
  Amount
outstanding

	
 $650,000 

	
    

	
    

	
  Conversion
rate

	
 $0.80 

	
    

	
    

	
 

	
    

	
  812,500 

	
  2.98%

	
 

 100% Warrant coverage on Bridge Loan@ $.80

 

	
  650,000 

	
  2.39%

	
  Employee
Warrants

	
    

	
  585 

	
  0.00%

	
 

 50% Warrant Coverage - Commission Offering

 

	
  1,500,000 

	
  5.51%

	
  Tripoint
Fee- Bridge Offering

	
    

	
  9,750 

	
  0.04%

	
 

	
    

	
    

	
    

	
Total
Proforma Shares Fully Diluted

	
    

	
  27,244,959 

	
  100.00%

	
 

	
    

	
    

	
    

	
Total
Authorized

	
    

	
  35,000,000 

	
    

	
 

	
    

	
    

	
    

	
Potential
Shares to be issued

	
    

	
  5,975,652 

	
    

	
Amount
Currently Outstanding

	
    

	
  21,269,307 

	
    

	
Percentage
Dilution

	
    

	
  28.10%

	
    

 

 

 

 

Schedule 3 (h) Disclosure

All
disclosures are contained in accordance with Securities Exchange
Commission (SEC) reporting regulations and USA Generally Accepted
Accounting Principles for the 6/30/16 financial statements filed
with the SEC.

 

Schedule 3 (l) – No Undisclosed Liabilities

All
material existing and expected liabilities are disclosed in
accordance with Securities Exchange Commission (SEC) reporting
regulations and USA Generally Accepted Accounting Principles for
the 6/30/16 financial statements filed with the SEC.

 

Schedule 3 (n) – Indebtedness

All
material debt of $3.539 million is disclosed in accordance with
Securities Exchange Commission (SEC) reporting regulations and USA
Generally Accepted Accounting Principles for the 6/30/16 financial
statements, note 5 filed with the SEC.

 

Schedule (o) – Title to Assets

The
various American and German corporations have title to all assets,
$1.906 million which are disclosed in accordance with Securities
Exchange Commission (SEC) reporting regulations and USA Generally
Accepted Accounting Principles for the 6/30/16 financial
statements, note 4 filed with the SEC. Some of these assets are
either mortgaged or collateralized by various lenders related to
the indebtedness of the company.

 

Schedule (p) – Actions Pending

All
contingencies which are disclosed in accordance with Securities
Exchange Commission (SEC) reporting regulations and USA Generally
Accepted Accounting Principles for the 6/30/16 financial
statements, note 9 filed with the SEC.

 

Compliance 3(r)- Compliance

Medite
Cancer Diagnostics, Inc. believes it is in compliance with
regulations promulgated by the various USA and European
governmental agencies applicable to Medite’s business and
operations.

 

Schedule 3(u) Taxes

All tax
receivables and liabilities have been disclosed in accordance with
Securities Exchange Commission (SEC) reporting regulations and USA
Generally Accepted Accounting Principles for the 6/30/16 financial
statements.

 

Schedule 3 (w) Books and Records Internal Accounting
Controls

In
accordance with Item 9 A of the Report 10k filed with the SEC in
May 2015 for fiscal 12/31/14, as amended on 2/25/16 (the
“10K”), management believes the conditions have not
changed through December 31, 2015.

 

Schedule (y) Transaction with Affiliates

All
transactions with affiliates have been disclosed in accordance with
Securities Exchange Commission (SEC) reporting regulations and USA
Generally Accepted Accounting Principles for the 6/30/16 financial
statements.

 

Schedule 3 (bb) – Employees

All
paid and accrued employee wage and benefits have been disclosed in
accordance with Securities Exchange Commission (SEC) reporting
regulations and USA Generally Accepted Accounting Principles for
the 6/30/16 financial statements.

 

 

 

 

 

EXHIBIT
A

FORM OF
REGISTRATION RIGHTS AGREEMENT

 

 

 

 

 

 

 

 

EXHIBIT
B

FORM OF
SUBSCRIPTION AGREEMENT

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