Document:

artec_ex1022.htm

EXHIBIT 10.22
 
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS DEBENTURE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
 
ARTEC GLOBAL MEDIA, INC.
 
SENIOR SECURED, CONVERTIBLE, REDEEMABLE DEBENTURE
 
	Dated as of: May 31, 2015	Principal Amount: $33,333.33

	Effective Date: December 24, 2015
	
	Maturity Date: December 24, 2016
	

 
This SENIOR SECURED, CONVERTIBLE REDEEMABLE DEBENTURE (the "Debenture") is issued, dated as of May 31, 2015 and effective as of December 24, 2015 (the "Effective Date"), by ARTEC GLOBAL MEDIA, INC., a corporation incorporated under the laws of the State of Nevada (the "Company"), to TCA GLOBAL CREDIT MASTER FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands (together with its permitted successors and assigns, the "Holder") pursuant to exemptions from registration under the Securities Act of 1933, as amended. This Debenture is one of the "Fee Debentures" referenced in and issued in connection with that certain Securities Purchase Agreement, dated as of the date hereof, by and between the Company and the Holder (the "Purchase Agreement"). This Debenture is being issued in consideration of advisory services fully rendered by the Holder as of the date hereof. All capitalized terms used in this Debenture and not otherwise defined herein shall have the meanings assigned to them in the Purchase Agreement.
 
ARTICLE I
 
Section 1.01 Principal. For value received, the Company hereby promises to pay to the order of the Holder, by no later than December 24, 2016 (the "Maturity Date"), in immediately available and lawful money of the United States of America, Thirty Thousand Three Hundred Thirty-Three and 33/100 United States Dollars ($33,333.33).
 
Section 1.02 Optional Redemption Prior to Maturity. The Company, at its option, shall have the right to redeem this Debenture in full and for cash, at any time prior to the Maturity Date, with three (3) business days advance written notice (the "Redemption Notice") to the Holder. The amount required to redeem this Debenture in full pursuant to this Section 1.02 shall be equal to: (i) the aggregate principal amount then outstanding under this Debenture; plus (ii) all other costs, fees and charges due and payable hereunder or under any other "Transaction Documents" (as hereinafter defined) (collectively, the "Redemption Amount"). The Company shall deliver the Redemption Amount to the Holder on the third (3rd) business day after the date of the Redemption Notice.
 
	 
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Section 1.03 Mandatory Redemption at Maturity. On the Maturity Date, the Company shall redeem this Debenture for the Redemption Amount, which Redemption Amount shall be due and payable to the Holder by no later than 2:00 P.M., EST, on the Maturity Date.
 
Section 1.04 Payments.
 
(1) Payments. The Company shall be obligated to pay any outstanding amount owed under and pursuant to this Debenture in one payment on the Maturity Date. In the event such day is not a Business Day, then said payment shall be due on the first Business Day thereafter occurring. 
 
(2) Interest Calculations. In the Event of Default, interest shall be calculated on the basis of a 360-day year, and shall accrue daily on the outstanding principal amount outstanding from time to time for the actual number of days elapsed, commencing upon the occurrence and continuation of an Event of Default until payment in full of the outstanding principal, together with all accrued and unpaid interest and other amounts which may become due hereunder.
 
(3) Payment Application. All payments received and actually collected by Holder hereunder shall be applied first to any costs and expenses due or incurred hereunder or under any other Transaction Documents, and last to reduce the outstanding principal balance of this Debenture.
 
(4) Late Fee. If all or any portion of the payments of principal or other charges due hereunder are not received by the Holder within five (5) business days of the date such payment is due, then the Company shall pay to the Holder a late charge (in addition to any other remedies that Holder may have) equal to five percent (5%) of each such unpaid payment or sum. Any payments returned to Holder for any reason must be covered by wire transfer of immediately available funds to an account designated by Holder, plus a $100.00 administrative fee charge. Holder shall have no responsibility or liability for payments purportedly made hereunder but not actually received by Holder; and the Company shall not be discharged from the obligation to make such payments due to loss of same in the mails or due to any other excuse or justification ultimately involving facts where such payments were not actually received by Holder.
 
Section 1.05. Manner of Payments. All sums payable to the order of Holder hereunder shall be payable by ACH transfer of lawful dollars of the United States of America to the ACH instructions set forth below, or at such place as Holder, from time to time, may designate in writing. ACH Instructions for all sums due and payable hereunder are as follows: 
 
	Bank Name: 
	Bank of America

	Bank Address: 
	100 W. 33rd Street, New York, NY 10001

	Beneficiary Account Name: 
	TCA Fund Mgmt Group

	Beneficiary Account Number: 
	898052439174

	ACH Transfer/Routing Number: 
	063100277

	SWIFT: 
	BOFAUS3N

 
	 
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ARTICLE II
 
Section 2.01 Secured Nature of Debenture. This Debenture is being issued in connection with the Purchase Agreement. The indebtedness evidenced by this Debenture is also secured by all of the assets and property of the Company and various other instruments and documents referred to in the Purchase Agreement as the "Transaction Documents". All of the agreements, conditions, covenants, provisions, representations, warranties and stipulations contained in any of the Transaction Documents which are to be kept and performed by the Company are hereby made a part of this Debenture to the same extent and with the same force and effect as if they were fully set forth herein, and the Company covenants and agrees to keep and perform them, or cause them to be kept or performed, strictly in accordance with their terms.
 
ARTICLE III
 
Section 3.01 Events of Default. The occurrence of any of the following events shall constitute an "Event of Default" hereunder: (i) the Company shall fail to pay any principal or other charges due under this Debenture or any other Transaction Documents on the date when any such payment shall be due and payable; (ii) the Company makes an assignment for the benefit of creditors; (iii) any order or decree is rendered by a court which appoints or requires the appointment of a receiver, liquidator or trustee for the Company, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (iv) any order or decree is rendered by a court adjudicating the Company insolvent, and the order or decree is not vacated within thirty (30) days from the date of entry thereof; (v) the Company files a petition in bankruptcy under the provisions of any bankruptcy law or any insolvency act; (vi) the Company admits, in writing, its inability to pay its debts as they become due; (vii) a proceeding or petition in bankruptcy is filed against the Company and such proceeding or petition is not dismissed within thirty (30) days from the date it is filed; (viii) the Company files a petition or answer seeking reorganization or arrangement under the bankruptcy laws or any law or statute of the United States or any other foreign country or state; (ix) any written warranty, representation, certificate or statement of the Company and/or Guarantors in this Debenture, the Purchase Agreement or any other Transaction Document or any other agreement with Holder shall be false or misleading in any material respect when made or deemed made; and (x) the Company shall fail to perform, comply with or abide by any of the stipulations, agreements, conditions and/or covenants contained in this Debenture, the Purchase Agreement or any of the other Transaction Documents on the part of the Company to be performed complied with or abided by, and such failure continues or remains uncured for ten (10) days following written notice from the Holder to the Company.
 
Section 3.02 Remedies. Upon the occurrence of an Event of Default that is not timely cured within an applicable cure period hereunder, the interest on this Debenture shall immediately accrue at an interest rate equal to twenty-two percent (22%) per annum or the maximum interest rate allowable by law, and, in addition to all other rights or remedies the Holder may have, at law or in equity, the Holder may, in its sole discretion, accelerate full repayment of all principal amounts outstanding hereunder, together with all attorneys' fees, paralegals' fees and costs and expenses incurred by the Holder in collecting or enforcing payment hereof (whether such fees, costs or expenses are incurred in negotiations, all trial and appellate levels, administrative proceedings, bankruptcy proceedings or otherwise), and together with all other sums due by the Company hereunder and under the Transaction Documents, all without any relief whatsoever from any valuation or appraisement laws, and payment thereof may be enforced and recovered in whole or in part at any time by one or more of the remedies provided to the Holder at law, in equity, or under this Debenture or any of the other Transaction Documents. In connection with the Holder's rights hereunder upon an Event of Default, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately enforce any and all of its rights and remedies hereunder and all other remedies available to it in equity or under applicable law.
 
	 
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ARTICLE IV
 
Section 4.01 Usury Savings Clause. Notwithstanding any provision in this Debenture or the other Transaction Documents to the contrary, the total liability for payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions, or other sums which may at any time be deemed to be interest, shall not exceed the limit imposed by the usury laws of the jurisdiction governing this Debenture or any other applicable law. In the event the total liability of payments of interest and payments in the nature of interest, including, without limitation, all charges, fees, exactions or other sums which may at any time be deemed to be interest, shall, for any reason whatsoever, result in an effective rate of interest, which for any month or other interest payment period exceeds the limit imposed by the usury laws of the jurisdiction governing this Debenture, all sums in excess of those lawfully collectible as interest for the period in question shall, without further agreement or notice by, between, or to any party hereto, be applied to the reduction of the outstanding principal balance due hereunder immediately upon receipt of such sums by the Holder hereof, with the same force and effect as though the Company had specifically designated such excess sums to be so applied to the reduction of the principal balance then outstanding, and the Holder hereof had agreed to accept such sums as a penalty-free payment of principal; provided, however, that the Holder may, at any time and from time to time, elect, by notice in writing to the Company, to waive, reduce, or limit the collection of any sums in excess of those lawfully collectible as interest, rather than accept such sums as a prepayment of the principal balance then outstanding. It is the intention of the parties that the Company does not intend or expect to pay, nor does the Holder intend or expect to charge or collect any interest under this Debenture greater than the highest non-usurious rate of interest which may be charged under applicable law.
 
ARTICLE V
 
Section 5.01 No Exemption. The Company hereby waives and releases all benefit that might accrue to the Company by virtue of any present or future laws exempting any property that may serve as security for this Debenture, or any other property, real or personal, or any part of the proceeds arising from any sale of any such property, from attachment, levy, or sale under execution, exemption from civil process, or extension of time for payment; and the Company agrees that any property that may be levied upon pursuant to a judgment obtained by virtue hereof, on any writ of execution issued thereon, may be sold upon any such writ in whole or in part in any order or manner desired by Holder.
 
Section 5.02 Exercise of Remedies. The remedies of the Holder as provided herein and in any of the other Transaction Documents shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof.
 
Section 5.03 Waivers. The Company and all others who are, or may become liable for the payment hereof: (i) severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest of this Debenture or any other Transaction Documents, and all other notices in connection with the delivery, acceptance, performance, default, or enforcement of the payment of this Debenture and the other Transaction Documents, except as specifically provided in this Debenture or any other Transaction Document; (ii) expressly consent to all extensions of time, renewals or postponements of time of payment of this Debenture and any other Transaction Documents from time to time prior to or after the maturity of this Debenture without notice, consent or further consideration to any of the foregoing; (iii) expressly agree that the Holder shall not be required first to institute any suit, or to exhaust its remedies against the Company or any other person or party to become liable hereunder or against any collateral that may secure this Debenture in order to enforce the payment of this Debenture; and (iv) expressly agree that, notwithstanding the occurrence of any of the foregoing (except the express written release by the Holder of any such person), the undersigned shall be and remain, directly and primarily liable for all sums due under this Debenture.
  
Section 5.04 No Waiver. Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by Holder, and then only to the extent specifically set forth in the writing. A waiver on one event shall not be construed as continuing or as a bar to or waiver of any right or remedy to a subsequent event.
 
	 
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ARTICLE VI
 
Section 6.01 Notice. Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Debenture must be in writing and in each case properly addressed to the party to receive the same in accordance with the information below, and will be deemed to have been delivered: (i) if mailed by certified mail, return receipt requested, postage prepaid and properly addressed to the address below, then three (3) business days after deposit of same in a regularly maintained U.S. Mail receptacle; or (ii) if mailed by Federal Express, UPS or other nationally recognized overnight courier service, next business morning delivery, then one (1) business day after deposit of same in a regularly maintained receptacle of such overnight courier; or (iii) if hand delivered, then upon hand delivery thereof to the address indicated on or prior to 5:00 p.m ., EST, on a business day. Any notice hand delivered after 5:00 p.m., EST, shall be deemed delivered on the following business day. Notwithstanding the foregoing, notice, consents, waivers or other communications referred to in this Debenture may be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered only when the sending party has confirmed (by reply e-mail or some other form of written confirmation from the receiving party) that the notice has been received by the other party. The addresses and facsimile numbers for such communications shall be as set forth below, unless such address or information is changed by a notice conforming to the requirements hereof.
 
	If to the Company:
	Artec Global Media, Inc.

		249 South Highway 101, #324

		Solana Beach, CA 92075

		Attn: Mr. Caleb W. Wickman

		E-Mail:wolf@artecglobalmedia.com

		
	With a copy to:
	Westerman Ball Ederer Miller Zucker & Sharfstein LLP

	(which shall not constitute notice)
	1201 RXR Plaza

		Uniondale, NY 11556

		Attn: Alan C. Ederer, Esq.

		Email:aederer@westermanllp.com

	If to the Holder:
	
		TCA Global Credit Master Fund, LP 

		3960 Howard Hughes Parkway, Suite 500

		Las Vegas, NV 89196

		Attn: Mr. Robert Press

		E-Mail: bpress@tcaglobalfund.com

		
	With a copy to:
	Lucosky Brookman LLP

	(which shall not constitute notice)
	101 Wood Avenue South, 5th Floor 

		Woodbridge, NJ 08830

		Attn: Seth A. Brookman, Esq. 

		E-Mail: sbrookman@lucbro.com

 
	 
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Section 6.02 Governing Law and Venue. The Company and Holder each irrevocably agrees that any dispute arising under, relating to, or in connection with, directly or indirectly, this Debenture or related to any matter which is the subject of or incidental to this Debenture (whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida. This provision is intended to be a "mandatory" forum selection clause and governed by and interpreted consistent with Florida law. The Company and Holder each hereby consents to the exclusive jurisdiction and venue of any state or federal court having its situs in said county, and each waives any objection based on forum non conveniens. The Company hereby waives personal service of any and all process and consent that all such service of process may be made by certified mail, return receipt requested, directed to the Company, as set forth herein in the manner provided by applicable statute, law, rule of court or otherwise. Except for the foregoing mandatory forum selection clause, all terms and provisions hereof and the rights and obligations of the Company and Holder hereunder shall be governed, construed and interpreted in accordance with the laws of the State of Nevada, without reference to conflict of laws principles.
 
Section 6.03 Severability. In the event any one or more of the provisions of this Debenture shall for any reason be held to be invalid, illegal, or unenforceable, in whole or in part, in any respect, or in the event that any one or more of the provisions of this Debenture operates or would prospectively operate to invalidate this Debenture, then and in any of those events, only such provision or provisions shall be deemed null and void and shall not affect any other provision of this Debenture. The remaining provisions of this Debenture shall remain operative and in full force and effect and shall in no way be affected, prejudiced, or disturbed thereby.
 
Section 6.04 Entire Agreement and Amendments. This Debenture, together with the other Transaction Documents represents the entire agreement between the parties hereto with respect to the subject matter hereof and thereof, and there are no representations, warranties or commitments, except as set forth herein and therein. This Debenture may be amended only by an instrument in writing executed by the parties hereto.
 
Section 6.05 Binding Effect. This Debenture shall be binding upon the Company and the successors and assigns of the Company and shall inure to the benefit of the Holder and the successors and assigns of the Holder.
 
Section 6.06 Assignment. The Holder may from time to time sell or assign, in whole or in part, or grant participations in, this Debenture and/or the obligations evidenced hereby without the consent of the Company. The holder of any such sale, assignment or participation, if the applicable agreement between Holder and such holder o provides, shall be: (i) entitled to all of the rights obligations and benefits of Holder (to the extent of such holder's interest or participation); and (ii) deemed to hold and may exercise the rights of setoff or banker's lien with respect to any and all obligations of such holder to the Company (to the extent of such holder s interest or participation), in each case as fully as though the Company was directly indebted to such holder. Holder may in its discretion give notice to the Company of such sale, assignment or participation; however, the failure to give such notice shall not affect any of Holder's or such holder's rights hereunder.
 
	 
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Section 6.07 Lost or Mutilated Debenture. If this Debenture shall be mutilated, lost, stolen or destroyed the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Debenture or in lieu of or in substitution for a lost, stolen or destroyed Debenture a new Debenture for the principal amount of this Debenture so mutilated, lost stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Debenture, and of the ownership hereof, reasonably satisfactory to the Company.
 
Section 6.08 WAIVER OF JURY TRIAL. THE COMPANY HEREBY KNOWINGLY, VOLUNTARILY, INTENTIONALLY AND IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION BASED ON THIS DEBENTURE, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS DEBENTURE OR ANY OTHER TRANSACTION DOCUMENTS, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF OR BETWEEN ANY PARTY HERETO, AND THE COMPANY AGREES AND CONSENTS TO THE GRANTING TO HOLDER OF RELIEF FROM ANY STAY ORDER WHICH MIGHT BE ENTERED BY ANY COURT AGAINST HOLDER AND TO ASSIST HOLDER IN OBTAINING SUCH RELIEF. THIS PROVISION IS A MATERIAL INDUCEMENT FOR HOLDER ACCEPTING THIS DEBENTURE FROM THE COMPANY. THE COMPANY'S REASONABLE RELIANCE UPON SUCH INDUCEMENT I HEREBY ACKNOWLEDGED.
 
Section 6.09 NON-US STATUS. THE HOLDER IS A NON-US PERSON AS THAT TERM IS DEFINED IN THE UNITED STATES INTERNAL REVENUE CODE. IT IS HEREBY AGREED AND UNDERSTOOD THAT THE OBLIGATIONS HEREUNDER MAY BE SOLD ONLY TO NON-U.S. PERSONS. ANY U.S. PERSON WHO HOLDS THIS OBLIGATION WILL BE SUBJECT TO LIMITATIONS UNDER THE UNITED STATES INCOME TAX LAW. BY ACCEPTING THIS OBLIGATION, THE HOLDER REPRESENTS AND WARRANT THAT IT IS NOT A UNITED STATES PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(8)(4) OF THE INTERNAL REVENUE CODE AND REGULATIONS THEREUNDER) AND THAT IT IS NOT ACTING FOR OR ON BEHALF OF A UNITED STATE PERSON (OTHER THAN AN EXEMPT RECIPIENT DESCRIBED IN SEC. 6049(B)(4) OF THE INTERNAL REVENUE CODE AND THE REGULATIONS THEREUNDER).
 
ARTICLE VII
 
Section 7.01 Conversion of Debenture. At any time and from time to time while this Debenture is outstanding on or after the Closing Date, upon the occurrence of an Event of Default at the sole option of the Holder, this Debenture may be, convertible into shares of the Company's common stock, $0.001 par value per share (the "Common Stock") in accordance with the terms and conditions set forth in this Article VII.
 
	 
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(1) Voluntary Conversion. At any time while this Debenture is outstanding on or after the Closing Date, at the sole option of the Holder upon the occurrence of an Event of Default, the Holder may convert all or any portion of the outstanding principal and any other sums due and payable hereunder or under any of the other Transaction Documents (such total amount, the "Conversion Amount") into shares of Common Stock of the Company (the "Conversion Shares") in an amount of shares equal to: (i) the Conversion Amount (the numerator); divided by (ii) ninety percent (90%) of the lowest of the average daily volume weighted average price of the Company's Common Stock during the five (5) trading days immediately prior to the Conversion Date (as defined below), as indicated in the conversion notice (in the form attached hereto as Exhibit "A" the "Conversion Notice") (the denominator) (the "Conversion Price"). The Holder shall submit a Conversion Notice indicating the amount of the Debenture being converted and the number of Conversion Shares issuable upon such conversion, and where the Conversion Shares should be delivered.
 
(2) The Holder's Conversion Limitations. The Company shall not affect any conversion of this Debenture, and the Holder shall not have the right to convert any portion of this Debenture, to the extent that after giving effect to the conversion set forth on the Conversion Notice submitted by the Holder, the Holder (together with the Holder's affiliates (as defined herein) and any Persons acting as a group together with the Holder or any of the Holder's affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined herein). To ensure compliance with this restriction, prior to delivery of any Conversion Notice, the Holder shall have the right to request that the Company provide to the Holder a written statement of the percentage ownership of the Company's Common Stock that would by beneficially owned by the Holder and its affiliates in the Company if the Holder converted such portion of this Debenture then intended to be converted by Holder. The Company shall, within two (2) business days of such request, provide Holder with the requested information in a written statement, and the Holder shall be entitled to rely on such written statement from the Company in issuing its Conversion Notice and ensuring that its ownership of the Company's Common Stock is not in excess of the Beneficial Ownership Limitation. The restriction described in this Section may be waived by Holder, in whole or in part, upon notice from the Holder to the Company. For purposes of this Debenture, the "Beneficial Ownership Limitation" shall be 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Debenture. The limitations contained in this Section shall apply to any successor holder of this Debenture. For purposes of this Debenture, "Person" means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization or a government or any department or agency thereof.
 
(3) Mechanics of Conversion. The conversion of this Debenture shall be conducted in the following manner:
 
(a) Holder's Delivery Requirements. To convert this Debenture into shares of Common Stock on any date set forth in the Conversion Notice by the Holder (the "Conversion Date"), the Holder shall transmit by facsimile or electronic mail (or otherwise deliver) a copy of the fully executed Conversion Notice to the Company (or, under certain circumstances as set forth below, by delivery of the Conversion Notice to the Company's transfer agent).
 
	 
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(b) Company's Response. Upon receipt by the Company of a copy of a Conversion Notice, the Company shall as soon as practicable, but in no event later than two (2) Business Days after receipt of such Conversion Notice, send, via facsimile or electronic mail (or otherwise deliver) a confirmation of receipt of such Conversion Notice (the "Conversion Confirmation") to the Holder indicating that the Company will process such Conversion Notice in accordance with the terms herein. In the event the Company fails to issue its Conversion Confirmation within said two (2) Business Day time period, the Holder shall have the absolute and irrevocable right and authority to deliver the fully executed Conversion Notice to the Company's transfer agent, and pursuant to the terms of the Purchase Agreement, the Company's transfer agent shall issue the applicable Conversion Shares to Holder as hereby provided. Within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Company fails to issue the Conversion Confirmation), provided that the Company's transfer agent is participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, the Company shall cause the transfer agent to (or, if for any reason the Company fails to instruct or cause its transfer agent to so act, then pursuant to the Purchase Agreement, the Holder may request and require the Company's transfer agent to) electronically transmit the applicable Conversion Shares to which the Holder shall be entitled by crediting the account of the Holder's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system, and provide proof satisfactory to the Holder of such delivery. In the event that the Company's transfer agent is not participating in the DTC FAST program and is not otherwise DWAC eligible (or in the event the Holder otherwise requests), within five (5) Business Days after the date of the Conversion Confirmation (or the date of the Conversion Notice, if the Company fails to issue the Conversion Confirmation), the Company shall instruct and cause its transfer agent to (or, if for any reason the Company fails to instruct or cause its transfer agent to so act, then pursuant to the Purchase Agreement, the Holder may request and require the Company's transfer agent to) issue and surrender to a nationally recognized overnight courier for delivery to the address specified in the Conversion Notice, a certificate, registered in the name of the Holder or its nominee, for the number of Conversion Shares to which the Holder shall be entitled. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture, plus all other sums due hereunder, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable Conversion Amount. The Holder and the Company shall maintain records showing the principal amount(s) converted and the date of such conversion(s). The Holder, and any assignee by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof.
 
(c) Record Holder. The Person(s) entitled to receive the shares of Common Stock issuable upon a conversion of this Debenture shall be treated for all purposes as the record holder(s) of such shares of Common Stock as of the Conversion Date.
 
(d) Failure to Deliver Certificates. If in the case of any Conversion Notice, the certificate or certificates are not delivered to or as directed by the Holder by the date required hereby, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion Notice, in which event the Company shall promptly return to the Holder any original Debenture delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates representing the principal amount of this Debenture unsuccessfully tendered for conversion to the Company.
 
	 
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(e) Obligation Absolute; Partial Liquidated Damages. The Company's obligations to issue and deliver the Conversion Shares upon conversion of this Debenture in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or entity or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person or entity of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person or entity, and irrespective of any other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion Shares; provided, however, that such delivery shall not operate as a waiver by the Company of any such action the Company may have against the Holder . In the event the Holder of this Debenture shall elect to convert any or all of the outstanding principal amount hereof in accordance with the terms of this Debenture, the Company may not refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining and or enjoining conversion of all or part of this Debenture shall have been sought and obtained, and the Company posts a surety bond for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Debenture being converted, which is subject to the injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and the proceeds of which shall be payable to such Holder to the extent it obtains judgment. In the absence of such injunction, the Company shall issue Conversion Shares upon a properly noticed conversion. If the Company fails for any reason to deliver to the Holder such certificate or certificates representing Conversion Shares pursuant to timing and delivery requirements of this Debenture, the Company shall pay to such Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $1.00 per day for each day after the date by which such certificates should have been delivered until such certificates are delivered. Nothing herein shall limit a Holder's right to pursue actual damages or declare an Event of Default pursuant to this Debenture or any agreement securing the indebtedness under this Debenture for the Company's failure to deliver Conversion Shares within the period specified herein and such Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable law. Nothing herein shall prevent the Holder from having the Conversion Shares issued directly by the Company's transfer agent in accordance with the Purchase Agreement, in the event for any reason the Company fails to issue or deliver, or cause its transfer agent to issue and deliver, the Conversion Shares to the Holder upon exercise of Holder's conversion rights hereunder.
 
(f) Transfer Taxes. The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes, or any other issuance or transfer fees of any nature or kind that may be payable in respect of the issue or delivery of such certificates, any such taxes or fees, if payable, to be paid by the Company.
 
(4) Reservation of Common Stock. The Company shall take all action necessary to at all times have authorized, and reserved for the purpose of issuance, five (5) times such number of shares of Common Stock as shall be necessary to effect the full conversion of the Debenture in accordance with its terms (the "Share Reserve"). If upon receipt of a conversion notice from the Holder, the Share Reserve is insufficient to effect the full conversion of the Debenture then outstanding, the Company shall increase the Share Reserve accordingly. If the Company does not have sufficient authorized and unissued shares of Common Stock available to increase the Share Reserve, the Company shall cause its authorized and unissued shares to be increased within forty-five (45) days to an amount of shares equal to three (3) times the Conversion Shares. The Company's management shall recommend to the shareholders to vote in favor of increasing the number of shares of Common Stock authorized.
 
	 
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(5) Make-Whole Rights. Upon liquidation by the Holder of Conversion Shares issued pursuant to a Conversion Notice, provided that the Holder realizes a net amount from such liquidation equal to less than the Conversion Amount specified in the relevant Conversion Notice (such net realized amount, the "Realized Amount"), the Company shall issue to the Holder additional shares of the Company's Common Stock equal to: (i) the Conversion Amount specified in the relevant Conversion Notice; minus (ii) the Realized Amount, as evidenced by a reconciliation statement from the Holder (a "Sale Reconciliation") showing the Realized Amount from the sale of the Conversion Shares; divided by (iii) the average volume weighted average price of the Company's Common Stock during the five (5) Business Days immediately prior to the date upon which the Holder delivers notice (the "Make-Whole Notice") to the Company that such additional shares are requested by the Holder (the "Make-Whole Stock Price") (such number of additional shares to be issued, the "Make-Whole Shares"). Upon receiving the Make-Whole Notice and Sale Reconciliation evidencing the number of Make-Whole Shares requested, the Company shall instruct its transfer agent to issue certificates representing the Make-Whole Shares, which Make-Whole Shares shall be issued and delivered in the same manner and within the same time frames as set forth herein. The Make-Whole Shares, when issued, shall be deemed to be validly issued, fully paid, and non-assessable shares of the Company's Common Stock. Following the sale of the Make-Whole Shares by the Holder: (i) in the event that the Holder receives net proceeds from such sale which, when added to the Realized Amount from the prior relevant Conversion Notice, is less than the Conversion Amount specified in the relevant Conversion Notice, the Holder shall deliver an additional Make-Whole Notice to the Company following the procedures provided previously in this paragraph, and such procedures and the delivery of Make-Whole Notices and issuance of Make-Whole Shares shall continue until the Conversion Amount has been fully satisfied; and (ii) in the event that the Holder received net proceeds from the sale of Make-Whole Shares in excess of the Conversion Amount specified in the relevant Conversion Notice, such excess amount shall be applied to satisfy any and all amounts owed hereunder in excess of the Conversion Amount specified in the relevant Conversion Notice.
 
(6) Adjustments to Conversion Price.
 
(a) Stock Dividends and Stock Splits. If the Company, at any time while this Debenture is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions payable in shares of Common Stock on outstanding shares of Common Stock, (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issues, in the event of a reclassification of shares of Common Stock, any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction, the numerator of which shall be the number of shares of Common Stock (excluding any treasury shares of the Company) outstanding immediately before such event, and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination, or re-classification.
 
	 
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(b) Fundamental Transaction. If, at any time while this Debenture is outstanding: (i) the Company effects any merger or consolidation of the Company with or into another Person, (ii) the Company effects any sale of all or substantially all of its assets in one transaction or a series of related transactions, (iii) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (iv) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"),then upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to such Fundamental Transaction, the holder of one (1) share of Common Stock (the "Alternate Consideration").For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new note consistent with the foregoing provisions and evidencing the Holder's right to convert such note into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this Section and insuring that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction.
 
(c) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Debenture, the Company shall promptly deliver to Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
 
(d) Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Debenture, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Company's records, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating: (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined, or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. The Holder is entitled to convert this Debenture during the 10-day period commencing on the date of such notice through the effective date of the event triggering such notice.
 
[signature page follows]
 
	 
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IN WITNESS WHEREOF with the intent to be legally bound hereby, the Company has executed this Senior Secured, Convertible, Redeemable Debenture as of the date first written above.
 
 
	 
	ARTEC GLOBAL MEDIA, INC.	 

	 	  	 	 
		By:		 

	 
	Name:
	Caleb W. Wickman	 

	 
	Title:
	President	 

    	STATE OF ________________ 
	)

		) SS.

	COUNTY OF ______________ 
	)

 
The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Caleb W. Wickman, President of Artec Global Media, Inc., a Nevada corporation, who is personally known to me to be the same person whose name is subscribed to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.
 
GIVEN under my hand and notarial seal this _____ day of ________________, 20____.
 
	 	 		 
			Notary Public
	 

			 	
	 
	 
	My Commission Expires:
	 

	 
	 
		 

	 
	 
	 
	 

 
	 
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EXHIBIT A
 
NOTICE OF CONVERSION
 
The undersigned hereby elects to convert principal under the Senior Secured, Convertible, Redeemable Debenture (the "Debenture") issued by Artec Global Media, Inc., a corporation incorporated under the laws of the State of Nevada (the "Company"), into shares of common stock, par value $0.001 per share (the "Common Shares"), of the Company in accordance with the conditions of the Debenture, as of the date written below.
 
Based solely on information provided by the Company to Holder, the undersigned represents and warrants to the Company that its ownership of the Common Shares does not exceed the Beneficial Ownership Limitation as defined in the Debenture.
 
	Conversion Calculations
		
	 Effective Date of Conversion:		
	Principal Amount to be Converted: 
		
	Number of Common Shares to be Issued:
		

    	 
	[HOLDER]	 

	 	  	 	 
		By		 

	 
	Name: 
		 

	 
	Title: 
		 

	 
	Address: 
	 
	 

				
				

 
 
14artec_ex1023.htm

EXHIBIT 10.23
 
COMMITTED EQUITY FACILITY AGREEMENT
 
This Committed Equity Facility Agreement (the "Agreement") is dated as of May 31, 2015 and effective as of December 24, 2015 (the "Effective Date"), by and between TCA GLOBAL CREDIT MASTER FUND, LP, a limited partnership organized and existing under the laws of the Cayman Islands (the "Investor") and ARTEC GLOBAL MEDIA, INC., a corporation incorporated under the laws of the State of Nevada (the "Company").
 
RECITALS
 
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to the Investor, from time to time as provided herein, and the Investor shall purchase from the Company, up to Five Million and No/100 United States Dollars (US$5,000,000) of the Company's common stock, $0.001 par value per share (the "Common Stock");
 
WHEREAS, such investments will be made in reliance upon the provisions of Regulation D ("Regulation D") of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the "Securities Act"), or upon such other exemption from the registration requirements of the Securities Act as may be available with respect to any or all of the transactions to be entered into hereunder; and
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants of the parties hereinafter expressed and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, each intending to be legally bound, agree as follows:
 
ARTICLE I
CERTAIN DEFINITIONS
 
For purposes of this Agreement, except as otherwise expressly provided or otherwise defined elsewhere in this Agreement, or unless the context otherwise requires, the capitalized terms in this Agreement shall have the meanings assigned to them in this Article as follows:
 
1.1 "Advance" shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.
 
1.2 "Advance Fee" shall mean an amount in United States funds equal to five percent (5%) of the gross amount of each Advance.
 
1.3 "Advance Notice" shall mean a written notice in the form of Exhibit "A" attached hereto, executed by an officer of the Company and delivered to the Investor and setting forth the Advance amount that the Company requests from the Investor.
 
	 
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1.4 "Advance Notice Date" shall mean each date the Company delivers (in accordance with Section 2.1 of the Agreement) to the Investor an Advance Notice requiring the Investor to advance funds to the Company, subject to the terms of this Agreement.
 
1.5 "Affiliate" shall have the meaning set forth in Rule 405 of the Securities Act.
 
1.6 "Agreement" shall have the meaning set forth in the preamble paragraph hereto.
 
1.7 "By-Laws" shall have the meaning set forth in Section 4.4.
 
1.8 "Certificate of Incorporation" shall have the meaning set forth in Section 4.4.
 
1.9 "Claims" shall have the meaning set forth in Section 5.1.
 
1.10 "Clearing Date" shall mean the date on which the Estimated Advance Shares have been deposited into the Investor's brokerage account and the Investor's broker has confirmed with the Investor that such Estimated Advance Shares have cleared into Investor's brokerage account and the Investor may execute trades of such Estimated Advance Shares.
 
1.11 "Closing" shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.2.
 
1.12 "Closing Date" shall have the meaning set forth in Section 2.2(a).
 
1.13 "Commitment Amount" shall mean the aggregate amount of up to Five Million and No/100 United States Dollars (US$5,000,000) which the Investor has agreed to provide to the Company in order to purchase the Shares pursuant to the terms and conditions of this Agreement.
 
1.14 "Commitment Period" shall mean the period commencing on the Effective Date, and expiring upon the termination of this Agreement in accordance with Section 10.2.
 
1.15 "Common Stock" shall have the meaning set forth in the recitals of this Agreement.
 
1.16 "Company" shall have the meaning set forth in the preamble paragraph hereto.
 
1.17 "Company Indemnitees" shall have the meaning set forth in Section 5.2.
 
1.18 "Condition Satisfaction Date" shall have the meaning set forth in Article VII.
 
1.19 "Consolidation Event" shall have the meaning set forth in Section 6.8.
 
	 
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1.20 "Effective Date" shall have the meaning set forth in the preamble paragraph hereto.
 
1.21 "Environmental Laws" shall have the meaning set forth in Section 4.9.
 
1.22 "Estimated Advance Shares" shall have the meaning set forth in Section 2.1(c).
 
1.23 "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
1.24 "Exchange Cap" shall have the meaning set forth in Section 2.1(d).
 
1.25 "Indemnified Liabilities" shall have the meaning set forth in Section 5.1.
 
1.26 "Indemnitee" shall have the meaning set forth in Section 5.3.
 
1.27 "Indemnitor" shall have the meaning set forth in Section 5.3.
 
1.28 "Investor" shall have the meaning set forth in the preamble paragraph hereto.
 
1.29 "Investor Indemnitees" shall have the meaning set forth in Section 5.1.
 
1.30 "Knowledge" shall mean the actual or constructive knowledge of the applicable party.
 
1.31 "Market Price" shall mean, with respect to each Advance Notice, the lowest VWAP of the Common Stock on the applicable Advance Notice Date.
 
1.32 "Material Adverse Effect" shall mean any condition, circumstance, or situation that has resulted in, or would reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement or the transactions contemplated herein; (ii) a material adverse effect on the results of operations, assets, business or condition (financial or otherwise) of the Company, taken as a whole; or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under this Agreement.
 
1.33 "Maximum Advance Amount" shall mean, for each Advance Notice, no more than fifteen percent (15%) of the average daily volume of shares of Common Stock traded during the immediately preceding five (5) consecutive Trading Days applicable to the relevant Advance Notice.
 
	 
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1.34 "Ownership Limitation" shall have the meaning set forth in Section 2.1(a).
 
1.35 "Par Value Payment" shall have the meaning set forth in Section 2.1(c).
 
1.36 "Person" shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.
 
1.37 "Principal Market" shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital Market, the OTC Bulletin Board, the OTC Markets, the NYSE Euronext or the New York Stock Exchange, whichever is at the time the principal trading exchange or market for the Common Stock.
 
1.38 "Purchase Price" shall mean, with respect to each Advance Notice, ninety percent (90%) of the net aggregate sales proceeds received by Investor from the sale of Estimated Advance Shares during an applicable Selling Period, less any fees, including the Advance Fee, which may be due and payable to Investor in connection with each Advance Notice.
 
1.39 "Registrable Securities" shall mean: (i) the Shares; and (ii) any securities issued or issuable with respect to the Shares by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registrable Securities, once issued such securities shall cease to be Registrable Securities when: (a) the Registration Statement has been declared effective by the SEC and such Registrable Securities have been disposed of pursuant to the Registration Statement; (b) such Registrable Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 (or any similar provision then in force) under the Securities Act ("Rule 144") are met; or (c) in the opinion of counsel to the Company such Registrable Securities may permanently be sold without registration or without any time, volume or manner of sale limitations pursuant to Rule 144. 
 
1.40 "Registration Limitation" shall have the meaning set forth in Section 2.1(a). 
 
1.41 "Registration Rights Agreement" shall mean the Registration Rights Agreement dated the date hereof, regarding the filing of the Registration Statement for the resale of the Registrable Securities, entered into between the Company and the Investor.
 
1.42 "Registration Statement" shall mean a registration statement on Form S-1 or Form S-3 or on such other form promulgated by the SEC for which the Company then qualifies and which counsel for the Company shall deem appropriate, and which form shall be available for the registration of the resale by the Investor of the Registrable Securities under the Securities Act.
 
	 
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1.43 "Regulation D" shall have the meaning set forth in the recitals of this Agreement.
 
1.44 "SEC" shall mean the United States Securities and Exchange Commission.
 
1.45 "SEC Documents" shall have the meaning set forth in Section 4.1.
 
1.46 "Securities Act" shall have the meaning set forth in the recitals of this Agreement.
 
1.47 "Selling Period" shall mean the five (5) consecutive Trading Days immediately following the Clearing Date associated with the applicable Advance Notice.
 
1.48 "Settlement Document" shall have the meaning set forth in Section 2.2(a).
 
1.49 "Shares" shall mean the shares of Common Stock to be issued from time to time hereunder pursuant to Advances, and shall include any Estimated Advance Shares issued and delivered under this Agreement from time to time.
 
1.50 "Trading Day" shall mean any day during which the Principal Market shall be open for business.
 
1.51 "VWAP" means, for any Trading Day, the daily volume weighted average price of the Common Stock for such date on the Principal Market as reported by Bloomberg L.P. (based on a Trading Day from 9:00 a.m. (New York City time) to 4:02 p.m. (New York City time)).
 
ARTICLE II
ADVANCES
 
2.1 Advances; Mechanics. Subject to the terms and conditions of this Agreement (including, without limitation, the conditions of Article VII hereof), the Company, at its sole and exclusive option, may issue and sell to the Investor, and the Investor shall purchase from the Company, shares of Common Stock on the following terms:
 
	 
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(a) Advance Notice. At any time during the Commitment Period, the Company may require the Investor to purchase shares of Common Stock by delivering an Advance Notice to the Investor, subject to the conditions set forth in Article VII; provided, however, that: (i) the amount for each Advance as designated by the Company in the applicable Advance Notice shall not be more than the Maximum Advance Amount; (ii) the aggregate amount of the Advances pursuant to this Agreement shall not exceed the Commitment Amount; (iii) in no event shall the number of Shares issuable to the Investor pursuant to an Advance cause the aggregate number of Shares beneficially owned (as calculated pursuant to Section 13(d) of the Exchange Act) by the Investor and its Affiliates to exceed 4.99% of the then outstanding Common Stock (the "Ownership Limitation"); (iv) if the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Commitment Period, in no event shall the number of shares of Common Stock issuable to the Investor pursuant to an Advance Notice cause the aggregate number of shares of Common Stock that would be issued pursuant to this Agreement, together with all shares of Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted, to exceed the Exchange Cap; and (v) in no event shall the aggregate offering price or number of Shares, as the case may be, exceed the aggregate offering price or number of Shares, as the case may be, available for issuance under the Registration Statement (the "Registration Limitation"). In connection with each Advance Notice delivered by the Company, if any portion of the applicable Advance, or the Shares issuable to Investor pursuant to such Advance, would result in any of the limitations set forth in this Section 2.1(a) to be exceeded, such portion of such Advance shall be void ab initio and automatically be deemed to be withdrawn by the Company with no further action required by the Company or the Investor, and the amount of proceeds ultimately due to the Company under such Advance shall be reduced accordingly. Upon the written or oral request of the Investor, the Company shall confirm orally or in writing to the Investor, within two (2) Trading Days of such request, the number of shares of Common Stock then issued and outstanding, or any other information the Investor may request, so that the Investor may properly analyze and make the determinations required to insure that none of the limitations set forth in this Section 2.1(a) shall ever be exceeded.
 
(b) Date of Delivery of Advance Notice. Advance Notices shall be delivered in accordance with the instructions set forth on the bottom of Exhibit "A". An Advance Notice shall be deemed delivered on: (i) the Trading Day it is received by the Investor, if such Advance Notice is received prior to 5:00 pm, Eastern Time; or (ii) the immediately succeeding Trading Day if such Advance Notice is received by Investor after 5:00 pm, Eastern Time, on a Trading Day or at any time on a day which is not a Trading Day. No Advance Notice may be deemed delivered on a day that is not a Trading Day, or if positive receipt of such Advance Notice is not acknowledged by the Investor. Unless the parties agree in writing otherwise, there shall be a minimum of five (5) Trading Days between a Closing Date and a subsequent Advance Notice Date. Delivery of an Advance Notice by the Company shall be deemed a representation and confirmation from the Company for the benefit of Investor that: (x) the Company has obtained all permits and qualifications, if any, required for the issuance and transfer of the Shares applicable to such Advance, or shall have the availability of exemptions therefrom; (y) the sale and issuance of such Shares shall be legally permitted by all laws and regulations to which the Company is subject; and (z) all conditions to an Advance under Article VII have been fully satisfied in all material respects as of each Condition Satisfaction Date.
 
	 
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(c) Delivery of Estimated Advance Shares. On an Advance Notice Date, the Company shall deliver to the Investor's brokerage account (pursuant to instructions provided by the Investor) a number of Shares equal to: (x) the dollar amount of the Advance indicated in the applicable Advance Notice (the numerator); divided by (y) the Market Price (the denominator); multiplied by (z) two hundred percent (200%) (the "Estimated Advance Shares"). In lieu of delivering physical certificates representing the Estimated Advance Shares issuable in accordance with this Section 2.1(c), and provided that the Company's transfer agent is then participating in the Depository Trust Company ("DTC") Fast Automated Securities Transfer ("FAST") program, upon request of the Investor, the Company shall cause the Company's transfer agent to electronically transmit the applicable Estimated Advance Shares by crediting the account of the Investor's prime broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system, and provide proof satisfactory to the Investor of such delivery. No fractional shares shall be issued, and any fractional amounts shall be rounded to the next highest whole number of Shares. Any certificates evidencing Shares delivered pursuant hereto shall be free of restrictive legends. The Company acknowledges that a Closing may be delayed if Estimated Advance Shares are sent via physical delivery in certificate form. The Company understands that if for any reason shares of its Common Stock are not able to be delivered electronically, then significant transaction delays may occur, impacting the ability of transfer agents, brokers, counterparties and intermediaries to deliver and clear shares promptly. This may ultimately delay any applicable Advance Notice Date, Clearing Date, and Closing Date related to an Advance Notice. Furthermore, the Company understands that additional costs may be associated with the delivery of shares of its Common Stock when issued and/or delivered in certificate form and acknowledges that any related reasonable fees will be borne by the Company in full. Upon request, the Investor shall deliver to the Company such evidence of any of said reasonable fees as may be requested by the Company. The Company shall pay any reasonable payments incurred under this Section in immediately available funds upon demand. On the Trading Day immediately following the Clearing Date applicable to the then applicable Advance Notice, the Investor shall acknowledge consideration by allocating funds in the Investor's brokerage account in an amount equal to the par value of the Estimated Advance Shares ("Par Value Payment"), which Par Value Payment shall be held in the Investor's brokerage account for the duration of the Selling Period and adjusted at the Closing as hereinafter set forth. Under no circumstances shall the Par Value Payment exceed the amount of the Advance specified in the Advance Notice and no Advance Notice shall be delivered to the Investor if the Company's Common Stock is trading at or below its par value. The Company acknowledges and agrees that, notwithstanding anything contained in this Agreement to the contrary, the Investor may sell Shares of the Company's Common Stock relating to a particular Advance Notice, including, without limitation, all of the Estimated Advance Shares in the Investor's brokerage account on the Clearing Date with respect to such Advance Notice, at any time after the Advance Notice is received by the Investor. If the amount of Estimated Advance Shares due to be delivered to the Investor pursuant to a particular Advance Notice would result in the Investor exceeding the Ownership Limitation, then the amount of the Advance requested in the Advance Notice shall be automatically reduced and the Estimated Advance Shares shall be automatically reduced to an amount that would allow for delivery by the Company to Investor of Estimated Advance Shares for the full two hundred percent (200%) contemplated hereby, without exceeding the Ownership Limitation (such new Share amount, if applicable, shall replace the amount of "Estimated Advance Shares" determined above).
 
(d) Exchange Cap. If the Common Stock is listed or quoted on The Nasdaq Stock Market or any other U.S. national securities exchange during the Commitment Period, the Company shall not issue or sell any shares of Common Stock pursuant to this Agreement, and the Investor shall not purchase or acquire any shares of Common Stock pursuant to this Agreement, to the extent that after giving effect thereto, the aggregate number of all shares of Common Stock that would be issued pursuant to this Agreement, together with all shares of Common Stock issued pursuant to any transactions that may be aggregated with the transactions contemplated by this Agreement under applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted, would exceed the maximum number of shares of Common Stock that the Company may issue pursuant to this Agreement and the transactions contemplated hereby without: (i) breaching the Company's obligations under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted; or (ii) obtaining stockholder approval under the applicable rules of The Nasdaq Stock Market or any other Principal Market on which the Common Stock may be listed or quoted (the "Exchange Cap"). In such a circumstance, any portion of the applicable Advance, or the Shares issuable to Investor pursuant to such Advance, that would exceed the Exchange Cap to be exceeded shall be void ab initio and automatically be deemed to be withdrawn by the Company with no further action required by the Company or the Investor, unless and until the Company elects to solicit stockholder approval of the transactions contemplated by this Agreement and the stockholders of the Company have in fact approved the transactions contemplated by this Agreement in accordance with the applicable rules and regulations of The Nasdaq Stock Market, any other Principal Market on which the Common Stock may be listed or quoted, and the Certificate of Incorporation and Bylaws of the Company.
 
	 
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2.2 Closings. The Closing of a request for an Advance shall occur on the "Closing Date" (as hereinafter defined). Each Closing shall take place on a Closing Date in accordance with the procedures set forth below. In connection with each Closing, the Company and the Investor shall fulfill each of its obligations as set forth below:
 
(a) Settlement Document and Delivery of Share Proceeds. Subject to the terms and conditions of this Agreement, the Investor shall promptly notify the Company in writing (which notification may be by e-mail) of the occurrence of the Clearing Date associated with an Advance Notice. The Selling Period with respect to such Advance Notice shall begin on the first (1st) Trading Day immediately following the applicable Clearing Date. During the Selling Period, the Investor shall use its good faith efforts to sell Estimated Advance Shares in an amount that would generate net sales proceeds of up to the Advance amount requested in the applicable Advance Notice, subject to then existing market circumstances and conditions and volume limitations resulting therefrom. The Company acknowledges and agrees that the Investor shall have no liability of any nature or kind in connection with the number of Estimated Advance Shares sold or which Investor elects to sell or may be able to sell during the Selling Period. In no event shall Investor sell Estimated Advance Shares during an applicable Selling Period which generate net sales proceeds in excess of the Advance amount requested in the applicable Advance Notice. At the end of the Selling Period for any applicable Advance Notice and upon the completion of the settlement of all trades that occurred during the applicable Selling Period, the Investor shall deliver to the Company a written document (each a "Settlement Document") setting forth: (i) the number of Estimated Advance Shares originally delivered to the Investor or the Investor's brokerage account under the applicable Advance Notice; (ii) the aggregate number of such Estimated Advance Shares sold during the Selling Period (as supported by a reconciliation and/or brokerage account statement) applicable to such Advance Notice; (iii) the average per-share price obtained by the Investor from the sale of the Estimated Advance Shares, (iv) the commissions and fees associsted therewith, and (v) the net sales proceeds received by Investor from the sale of such Estimated Advance Shares sold during the Selling Period applicable to such Advance Notice. The Settlement Document shall be in the form attached hereto as Exhibit "B". Within one (1) Trading Day after delivery of the Settlement Document for an applicable Advance Notice (each, a "Closing Date"), the Investor shall transfer and deliver to the Company, by wire transfer of immediately available funds to an account designated in writing by the Company: (y) the Purchase Price for the applicable Advance Notice; less (z) any Par Value Payment previously made to the Company. In the event that the Investor is no longer able, due to time constraints beyond its control, to perform a wire on any particular Trading Day, then the wire will be promptly executed on the next following Trading Day. To the extent the Purchase Price for any applicable Advance Notice is less than the amount of the Advance requested by the Company for such applicable Advance Notice, such applicable Advance Notice shall be automatically deemed to be modified and revised as of each Closing Date to an Advance amount equal to the Purchase Price. 
 
(b) Excess Estimated Advance Shares. If the number of Estimated Advance Shares initially delivered to the Investor for an applicable Advance Notice pursuant to Section 2.1(c) is greater than the aggregate number of Shares sold by the Investor for such applicable Advance Notice, then the Investor shall deliver to the Company any excess Estimated Advance Shares associated with such requested Advance, unless the parties mutually agree for the Investor to retain such excess Estimated Advance Shares to apply to the next requested Advance. Any excess Estimated Advance Shares retained by the Investor pursuant to the immediately preceding sentence shall only be applied by Investor to the next requested Advance, if any, and shall not be sold by the Investor for any other purpose.
 
(c) Additional Documents. On or prior to each Closing Date, each of the Company and the Investor shall deliver to the other all documents, instruments and writings required to be delivered by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein. 
 
	 
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(d) Outstanding Fees or Payments. To the extent the Company has not paid any fees, expenses, or other amounts due to the Investor in accordance with this Agreement, then the amount of such fees, expenses, or other amounts due may be withheld by the Investor from the Purchase Price applicable to any Advance Notice and used to pay for any such fees, expenses or other amounts due. If in the event that on a Closing Date the amount of the requested Advance has been reduced to a dollar amount that does not exceed the initial Par Value Payment made by the Investor, then that difference, up to the full Par Value Payment, will be required to be returned and paid by the Company to the Investor on the next following Trading Day via wire transfer, if applicable. If there are any fees, expenses, costs, or other amounts (including any portion of the Par Value Payment per the immediately preceding sentence) which are due by the Company to Investor in accordance with this Agreement, no subsequent Advance Notice(s) may be deemed delivered and the Investor has no obligation to accept subsequent Advance Notice(s) if any such fees, expenses, costs, or other amounts (including any portion of the Par Value Payment per the immediately preceding sentence) are then outstanding and due to the Investor in accordance with this Agreement. Notwithstanding anything contained herein to the contrary, without the express written consent of the Company (which consent may have been provided by the Company prior to the date hereof), the Investor shall not withhold from the Purchase Price applicable to any Advance Notice any fees, expenses, interest, principal or any other amount whatsoever which may be otherwise owed to the Investor by the Company pursuant to any other agreement. The Investor hereby acknowledges and agrees that the existence of any outstanding obligations owed under any other agreement are entirely separate and distinct from the obligations owed under the Agreement and the Registration Rights Agreement.
 
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF INVESTOR
 
Investor hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the Effective Date:
 
3.1 Organization and Authorization. The Investor is duly organized, validly existing and in good standing under the laws of the Cayman Islands and has all requisite power and authority to purchase and hold the Shares. The decision to invest and the execution and delivery of this Agreement by such Investor, the performance by such Investor of its obligations hereunder and the consummation by such Investor of the transactions contemplated hereby have been duly authorized and requires no other proceedings on the part of the Investor. The undersigned has the right, power and authority to execute and deliver this Agreement and all other instruments on behalf of the Investor. This Agreement has been duly executed and delivered by the Investor and, assuming the execution and delivery hereof and acceptance thereof by the Company, will constitute the legal, valid and binding obligations of the Investor, enforceable against the Investor in accordance with its terms.
 
3.2 Evaluation of Risks. The Investor has such knowledge and experience in financial, tax and business matters as to be capable of evaluating the merits and risks of, and bearing the economic risks entailed by, an investment in the Company and of protecting its interests in connection with this transaction. It recognizes that its investment in the Company involves a high degree of risk. 
 
	 
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3.3 Investment Purpose. The securities are being purchased by the Investor for its own account, and for investment purposes. The Investor agrees not to assign or in any way transfer the Investor's rights to the securities or any interest therein and acknowledges that the Company will not recognize any purported assignment or transfer except in accordance with applicable Federal and state securities laws. No other person has or will have a direct or indirect beneficial interest in the securities. The Investor agrees not to sell, hypothecate or otherwise transfer the Investor's securities unless the securities are registered under Federal and applicable state securities laws or unless, in the opinion of counsel satisfactory to the Company, an exemption from such laws is available.
 
3.4 Investor Status. The Investor is an "Accredited Investor" as that term is defined in Rule 501(a)(3) of Regulation D of the Securities Act.
 
3.5 No Legal Advice From the Company. The Investor acknowledges that it had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of the Company's representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.
 
3.6 Not an Affiliate. The Investor is not an officer, director or a Person that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with the Company or any Affiliate of the Company.
 
3.7 Trading Activities. The Investor's trading activities with respect to the Company's Common Stock shall be in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of the Principal Market on which the Common Stock is listed or traded. Neither the Investor nor its Affiliates has an open short position in the Common Stock, and the Investor agrees that it shall not, and that it will cause its Affiliates not to engage in any short sales of the Common Stock during the Commitment Period; provided that the Company acknowledges and agrees that upon receipt of an Advance Notice the Investor has the right to sell the Shares to be issued to the Investor pursuant to the Advance Notice prior to receiving such Shares, subject to the limitations set forth in this Section. 
 
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
 
Except as stated below, on the disclosure schedules attached hereto, if any, the Company hereby represents and warrants to the Investor that the following are true and correct as of the Effective Date:
 
	 
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4.1 SEC Documents; Financial Statements. The Common Stock is registered pursuant to Section 12(g) of the Exchange Act, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, and the Company has timely filed all reports, schedules, forms, statements and other documents required to be filed by it with the SEC under the Exchange Act (all of the foregoing filed within the two (2) years preceding the Effective Date or such period as the Company was required to file them or amended after the Effective Date, and all exhibits included therein and financial statements and schedules thereto and documents incorporated by reference therein, being hereinafter referred to as the "SEC Documents"). The Company is current with its filing obligations under the Exchange Act. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act and the rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles, consistently applied, during the periods involved (except: (i) as may be otherwise indicated in such financial statements or the notes thereto; or (ii) in the case of unaudited interim statements, to the extent they may exclude footnotes or may be condensed or summary statements) and fairly present the financial position of the Company as of the dates thereof and the results of its operations and cash flows for the periods then ended (subject, in the case of unaudited statements, to normal year-end audit adjustments). No other information provided by or on behalf of the Company to the Investor which is not included in the SEC Documents contains any untrue statement of a material fact or omits to state any material fact necessary in order to make the statements therein, in the light of the circumstance under which they are or were made, not misleading. The Company was never a shell company as defined under Rule 405 of the Exchange Act.
 
4.2 Organization and Qualification. The Company is duly incorporated, validly existing and in good standing under the laws of the jurisdiction of its incorporation and has all requisite corporate power to own its properties and to carry on its business as now being conducted. Each of the Company and its subsidiaries is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect.
 
4.3 Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and authority to enter into and perform this Agreement and any related agreements, in accordance with the terms hereof and thereof; (ii) the execution and delivery of this Agreement and any related agreements by the Company and the consummation by it of the transactions contemplated hereby and thereby, have been duly authorized by the Company's Board of Directors and no further consent or authorization is required by the Company, its Board of Directors or its stockholders; (iii) this Agreement and any related agreements have been duly executed and delivered by the Company; (iv) this Agreement and assuming the execution and delivery thereof and acceptance by the Investor, any related agreements, constitute the valid and binding obligations of the Company enforceable against the Company in accordance with their terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.
 
	 
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4.4 Capitalization. The authorized capital stock of the Company consists of seven hundred sixty million (760,000,000) shares, of which seven hundred fifty million (750,000,000) shares are designated as Common Stock, and ten million (10,000,000) shares are designated as preferred stock, par value $0.001 ("Preferred Stock"). The Company has 10,255,626 shares of Common Stock issued and outstanding as of September 10, 2015 and no shares of Preferred Stock issued and outstanding as of the Effective Date. All of such outstanding shares have been validly issued and are fully paid and nonassessable. The Common Stock is currently quoted by the OTC Markets on the Pink Sheets under the trading symbol "ACTL." Except as set forth in Schedule 4.4 attached hereto, no shares of Common Stock are subject to preemptive rights or any other similar rights or any liens or encumbrances suffered or permitted by the Company. Except as set forth in Schedule 4.4 attached hereto, as of the date hereof: (i) there are no outstanding options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries, or contracts, commitments, understandings or arrangements by which the Company or any of its subsidiaries is or may become bound to issue additional shares of capital stock of the Company or any of its subsidiaries, or options, warrants, scrip, rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into, any shares of capital stock of the Company or any of its subsidiaries; (ii) there are no outstanding debt securities; (iii) there are no outstanding registration statements; (iv) there are no agreements or arrangements under which the Company or any of its subsidiaries is obligated to register the sale of any of their securities under the Securities Act (except pursuant to this Agreement); and (v)there are no securities or instruments containing anti-dilution or similar provisions that will be triggered by this Agreement or any related agreement or the consummation of the transactions described herein or therein. The Company has furnished or made available to the Investor true and correct copies of the Company's Certificate of Incorporation, as amended and as in effect on the date hereof (the "Certificate of Incorporation"), and the Company's By-laws, as in effect on the date hereof (the "By-laws"), and the terms of all securities convertible into or exercisable for Common Stock and the material rights of the holders thereof in respect thereto.
 
4.5 No Conflict. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby will not: (i) result in a violation of the Certificate of Incorporation or By-laws; or (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 material agreement, indenture or instrument to which the Company or any of its subsidiaries is a party, or result in a violation of any material law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations and the rules and regulations of the Principal Market on which the Common Stock is quoted) applicable to the Company or any of its subsidiaries or by which any material property or asset of the Company is bound or affected and which would cause a Material Adverse Effect. Except as disclosed in the SEC Documents, neither the Company nor its subsidiaries is in violation of any term of or in default under its Certificate of Incorporation or By-laws or their organizational charter or by-laws, respectively, or any material contract, agreement, mortgage, indebtedness, indenture, instrument, judgment, decree or order or any statute, rule or regulation applicable to the Company or its subsidiaries that would cause a Material Adverse Effect. The business of the Company and its subsidiaries is not being conducted in violation of any material law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as required under the Securities Act and any applicable state securities laws, the Company is not required to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under or contemplated by this Agreement in accordance with the terms hereof or thereof. All consents, authorization, orders, filings and registrations which the Company is required to make or obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof. The Company and its subsidiaries are not aware of any fact or circumstance which might give rise to any of the foregoing.
 
	 
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4.6 No Default. The Company is not in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any indenture, mortgage, deed of trust or other material instrument or agreement to which it is a party or by which it is or its property is bound, and neither the execution, nor the delivery by the Company, nor the performance by the Company of its obligations under this Agreement or any of the exhibits or attachments hereto, will conflict with or result in the breach or violation of any of the terms or provisions of, or constitute a default or result in the creation or imposition of any lien or charge on any assets or properties of the Company, under its Certificate of Incorporation, By-Laws, any material indenture, mortgage, deed of trust or other material agreement applicable to the Company or instrument to which the Company is a party or by which it is bound, or any statute, or any decree, judgment, order, rules or regulation of any court or governmental agency or body having jurisdiction over the Company or its properties, in each case which default, lien or charge is likely to cause a Material Adverse Effect.
 
4.7 Intellectual Property Rights. The Company and its subsidiaries own or possess adequate rights or licenses to use all material trademarks, trade names, service marks, service mark registrations, service names, patents, patent rights, copyrights, inventions, licenses, approvals, governmental authorizations, trade secrets and rights necessary to conduct their respective businesses as now conducted. The Company and its subsidiaries do not have any knowledge of any infringement by the Company or its subsidiaries of trademark, trade name rights, patents, patent rights, copyrights, inventions, licenses, service names, service marks, service mark registrations, trade secret or other similar rights of others, and, to the Knowledge of the Company, there is no claim, action or proceeding being made or brought against, or to the Company's Knowledge, being threatened against the Company or its subsidiaries, regarding trademark, trade name, patents, patent rights, invention, copyright, license, service names, service marks, service mark registrations, trade secret or other infringement; and the Company is not aware of any facts or circumstances which might give rise to any of the foregoing.
 
4.8 Employee Relations. Neither the Company nor any of its subsidiaries is involved in any labor dispute nor, to the Knowledge of the Company or any of its subsidiaries, is any such dispute threatened. None of the Company's or its subsidiaries' employees is a member of a union and the Company and its subsidiaries believe that their relations with their employees are good.
 
4.9 Environmental Laws. The Company and its subsidiaries are: (i) in compliance with any and all applicable material foreign, federal, state and local laws and regulations relating to the protection of human health and safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants ("Environmental Laws"); (ii) have received all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval, in each case except where such noncompliance or nonreceipt would not, individually or in the aggregate, have a Material Adverse Effect.
 
4.10 Title. Except as set forth in the SEC Documents, the Company has good and marketable title to its properties and material assets owned by it, free and clear of any pledge, lien, security interest, encumbrance, claim or equitable interest, other than such as are not material to the business of the Company. Any real property and facilities held under lease by the Company and its subsidiaries are held by them under valid, subsisting and enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of such property and buildings by the Company and its subsidiaries.
 
4.11 Insurance. The Company and each of its subsidiaries are insured by insurers of recognized financial responsibility against such business and product losses and risks and in such amounts as management of the Company believes to be prudent and customary for similarly situated companies in the businesses in which the Company and its subsidiaries are engaged. The Company does not have any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.    
	 
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     4.12 Regulatory Permits. The Company and its subsidiaries possess all material certificates, authorizations and permits issued by the appropriate federal, state or foreign regulatory authorities necessary to conduct their respective businesses, and neither the Company nor any such subsidiary has received any notice of proceedings relating to the revocation or modification of any such certificate, authorization or permit.
 
4.13 Internal Accounting Controls. The Company and each of its subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. 
 
4.14 No Material Adverse Breaches, etc. Except as set forth in the SEC Documents, neither the Company nor any of its subsidiaries is subject to any charter, corporate or other legal restriction, or any judgment, decree, order, rule or regulation which, in the judgment of the Company's officers, has or is expected in the future to have a Material Adverse Effect on the Company or its subsidiaries, taken as a whole.
 
4.15 Absence of Litigation. Except as set forth in the SEC Documents, there is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending against or affecting the Company, the Common Stock or any of the Company's subsidiaries, wherein an unfavorable decision, ruling or finding would have a Material Adverse Effect.
 
4.16 Subsidiaries. Except as disclosed in the SEC Documents, the Company does not presently own or control, directly or indirectly, any interest in any other Person.
 
4.17 Tax Status. Except as disclosed in the SEC Documents, the Company and each of its subsidiaries has made or filed all foreign, federal and state income and all other tax returns, reports and declarations required by any jurisdiction to which it is subject and (unless and only to the extent that the Company and each of its subsidiaries has set aside on its books provisions reasonably adequate for the payment of all unpaid and unreported taxes) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations, except those being contested in good faith, and the Company and its subsidiaries have set aside on their respective books provision reasonably adequate for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
 
4.18 Certain Transactions. Except as set forth in the SEC Documents, none of the officers, directors, or employees of the Company is presently a party to any transaction with the Company (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the Knowledge of the Company, any corporation, partnership, trust or other entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner.
 
	 
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4.19 The Shares. The Shares have been duly authorized and, when issued, delivered and paid for pursuant to this Agreement, will be validly issued and fully paid and non-assessable, free and clear of all liens, claims and encumbrances of any nature or kind, and will be issued in compliance with all applicable United States federal and state securities laws. The capital stock of the Company, including the Common Stock, shall conform in all material respects to the description thereof to be contained in the Registration Statement. Neither the stockholders of the Company, nor any other Person, have any preemptive rights or rights of first refusal with respect to the Shares or other rights to purchase or receive any of the Shares. Except as set forth in Schedule 4.4 attached hereto, no Person has the right, contractual or otherwise, to cause the Company to issue to it, or register pursuant to the Securities Act, any shares of capital stock or other securities or assets of the Company upon the issuance or sale of the Shares. The Company is not obligated to offer the Shares on a right of first refusal basis or otherwise to any third parties including, without limitation, to current or former shareholders of the Company, underwriters, brokers, or agents.
 
4.20 Dilution. The Company is aware and acknowledges that issuance of the Shares could cause dilution to existing shareholders and could significantly increase the outstanding number of shares of Common Stock.
 
4.21 Acknowledgment Regarding Investor's Purchase of Shares. The Company acknowledges and agrees that the Investor is acting solely in the capacity of an arm's length investor with respect to this Agreement and the transactions contemplated hereunder. The Company further acknowledges that the Investor is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereunder and any advice given by the Investor or any of its representatives or agents in connection with this Agreement and the transactions contemplated hereunder is merely incidental to the Investor's purchase of the Shares hereunder. The Company is aware and acknowledges that it may not be able to request Advances under this Agreement until a Registration Statement becomes effective, and only in compliance with the rules of the Principal Market. The Company further is aware and acknowledges that any fees paid or shares issued pursuant to Section 12.4 hereunder shall be earned as of the Effective Date and are not refundable or returnable under any circumstances.
 
ARTICLE V
INDEMNIFICATION
 
The Investor and the Company covenant to the other the following with respect to itself:
 
	 
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5.1 Indemnification by the Company. In consideration of the Investor's execution and delivery of this Agreement, and in addition to all of the Company's other obligations under this Agreement, the Company shall, and does hereby agree to, defend, protect, indemnify and hold harmless the Investor, and all of the Investor's affiliates and subsidiaries, and each Person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the officers, directors, partners, members, employees and agents of each of them (collectively, the "Investor Indemnitees"), from and against any and all actions, causes of action, suits, claims, demands, threats and proceedings (collectively, the "Claims"), and the Company agrees to reimburse the Investor Indemnitees, or any of them, for any and all losses, costs, penalties, fees, liabilities, obligations, judgments, expenses, and damages, including, without limitation, reasonable attorneys' fees, paralegals' fees and other costs, expenses and disbursements reasonably incurred by the Investor Indemnities, or any of them, in connection with investigating, defending or settling any such Claims, including such expenses incurred throughout all trial and appellate levels and administrative and bankruptcy proceedings (collectively, the "Indemnified Liabilities"), suffered or incurred by the Investor Indemnitees, or any of them, as a result of, or arising out of, or relating to: (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arising out of or which are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that the Company will not be liable in any such case to the extent that any such Indemnified Liabilities arise out of or are based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Company in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; (c) any breach of any covenant, agreement or obligation of the Company contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; and (d) any Claim brought or made against the Investor Indemnitees, or any of them, not arising out of any action or inaction of an Investor Indemnitee, and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto or thereto by any of the Investor Indemnitees. To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.
 
5.2 Indemnification by Investor. In consideration of the Company's execution and delivery of this Agreement, and in addition to all of the Investor's other obligations under this Agreement, the Investor shall, and does hereby agree to, defend, protect, indemnify and hold harmless the Company, and all of the Company's subsidiaries, and each Person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, and the officers, directors, partners, members, employees and agents of each of them (collectively, the "Company Indemnitees"), from and against any and all Claims, and the Investor agrees to reimburse the Company Indemnitees, or any of them, for any and all Indemnified Liabilities, suffered or incurred by the Company Indemnitees, or any of them, as a result of, or arising out of, or relating to: (a) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement for the registration of the Shares as originally filed or in any amendment thereof, or in any related prospectus, or in any amendment thereof or supplement thereto, or arising out of or which are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, but only to the extent that any such untrue statement or alleged untrue statement or omission or alleged omission was in connection with information furnished to the Company by Investor specifically for inclusion therein; provided, however, that the Investor will not be liable in any such case to the extent that any such Indemnified Liabilities arise out of or are based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein by the Company other than in reliance upon and in conformity with written information furnished to the Company by or on behalf of the Investor specifically for inclusion therein; (b) any misrepresentation or breach of any representation or warranty made by the Investor in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; (c) any breach of any covenant, agreement or obligation of the Investor contained in this Agreement or any other certificate, instrument or document contemplated hereby or thereby; and (d) any Claim brought or made against the Company Indemnitees, or any of them, not arising out of any action or inaction of a Company Indemnitee, and arising out of or resulting from the execution, delivery, performance or enforcement of this Agreement or any other instrument, document or agreement executed pursuant hereto or thereto by any of the Company Indemnitees. To the extent that the foregoing undertaking by the Investor may be unenforceable for any reason, the Investor shall make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities, which is permissible under applicable law.
 
	 
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5.3 Notice of Claim. For purposes of this Article V, a party that is subject to a Claim and entitled to indemnification hereunder is sometimes hereinafter referred to as the "Indemnitee," and the party having the obligation to indemnify the other is sometimes hereinafter referred to as the "Indemnitor." Promptly after receipt by an Indemnitee of notice of the commencement of any Claim involving an Indemnified Liability, such Indemnitee shall, if an Indemnified Liability in respect thereof is to be made against any Indemnitor, deliver to the Indemnitor a written notice of the commencement thereof; provided, however, that the failure to so notify the Indemnitor: (i) will not relieve the Indemnitor of liability under this Article V, unless and to the extent the Indemnitor did not otherwise learn of such Claim and such failure results in the forfeiture by the Indemnitor of substantial rights and defenses; and (ii) will not, in any event, relieve the Indemnitor from any obligations to the Indemnitee, other than those indemnity obligations provided in this Article V. In the case of parties indemnified pursuant to Section 5.1 above, counsel to the Indemnitee shall be selected by the Company, and, in the case of parties indemnified pursuant to Section 5.2 above, counsel to the Indemnitee shall be selected by the Investor. An Indemnitor may participate, at its own expense, in the defense of any such Claim; provided, however, that counsel to the Indemnitor shall not (except with the consent of the Indemnitee) also be counsel to the Indemnitee. In no event shall the Indemnitor be liable for fees and expenses of more than one counsel (in addition to any local counsel) separate from their own counsel for all Indemnitees in connection with any one action or separate but similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances. The Indemnitee shall cooperate fully with the Indemnitor in connection with any negotiation or defense of any Claim, and the Indemnitee shall furnish to the Indemnitor all information reasonably available to the Indemnitee which relates to such Claim. The Indemnitor shall keep the Indemnitee fully apprised at all times as to the status of the defense or any settlement negotiations with respect thereto. An Indemnitor will not, without the prior written consent of the Indemnitee, settle or compromise or consent to the entry of any judgment with respect to any pending or threatened Claim in respect of which indemnification or contribution may be sought under this Agreement (whether or not the Indemnitees are actual or potential parties to such Claim) unless: (i) such settlement, compromise or consent includes an unconditional release of each Indemnitee from all liability arising out of such Claim; and (ii) such settlement, compromise or consent does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any Indemnitee. Following indemnification as provided for hereunder, the Indemnitor shall be subrogated to all rights of the Indemnitee with respect to all third parties, firms or corporations relating to the matter for which indemnification has been made.
 
5.4 Contribution. In the event that the indemnity provided in Section 5.1 or Section 5.2 is unavailable to or insufficient to hold harmless an Indemnitee for any reason, the Company and the Investor, as applicable, severally agree to contribute to the aggregate Indemnified Liabilities to which the Company and the Investor may be subject, as applicable, in such proportion as is appropriate to reflect the relative benefits received by the Company on the one hand and by the Investor on the other from transactions contemplated by this Agreement. If the allocation provided by the immediately preceding sentence is unavailable for any reason, the Company and the Investor severally shall contribute in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the Company on the one hand and of the Investor on the other in connection with the statements or omissions which resulted in such Indemnified Liabilities as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total proceeds from the offering (net of underwriting discounts and commissions but before deducting expenses) received by it, and benefits received by the Investor shall be deemed to be equal to the total discounts and fees received by the Investor. Relative fault shall be determined by reference to, among other things, whether any untrue or any alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information provided by the Company on the one hand or the Investor on the other, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such untrue statement or omission. The Company and the Investor agree that it would not be just and equitable if contribution were determined by pro rata allocation or any other method of allocation which does not take account of the equitable considerations referred to above. The aggregate amount of Indemnified Liabilities incurred by an Indemnitee and referred to above in this Article V shall be deemed to include any legal or other expenses reasonably incurred by such Indemnitee in investigating, preparing or defending against any litigation, or any investigation or proceeding by any governmental agency or body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue statement or omission or alleged omission. Notwithstanding the provisions of this Section 5.4, the Investor shall not be required to contribute any amount in excess of the amount by which the Purchase Price for Shares actually purchased pursuant to this Agreement exceeds the amount of any damages which the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Article V, each Person who controls the Investor within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act and each director, officer, employee and agent of the Investor shall have the same rights to contribution as the Investor, and each Person who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, each officer of the Company who shall have signed the Registration Statement and each director of the Company shall have the same rights to contribution as the Company, subject in each case to the applicable terms and conditions of this Section 5.4.
 
	 
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5.5 Remedies. The remedies provided for in this Article V are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnitee.
 
5.6 Survival. The obligations of the parties to indemnify or make contribution under this Article V shall survive termination of this Agreement.
 
ARTICLE VI
COVENANTS OF THE COMPANY
 
6.1 Registration Rights. The Company shall cause the Registration Rights Agreement to remain in full force and effect and the Company shall comply in all material respects with the terms thereof.
 
6.2 Listing of Common Stock. The Company shall maintain the Common Stock's authorization for quotation on a Principal Market, including the OTC Markets.
 
6.3 Exchange Act Registration. The Company will cause its Common Stock to continue to be registered under the Exchange Act, will file in a timely manner all reports and other documents required of it as a reporting company under the Exchange Act and will not take any action or file any document (whether or not permitted by Exchange Act or the rules thereunder) to terminate or suspend such registration or to terminate or suspend its reporting and filing obligations under said Exchange Act.
 
6.4 Transfer Agent Instructions. Not later than two (2) business days after each Advance Notice Date and prior to each Closing and resale of the Common Stock by the Investor, the Company will deliver instructions to its transfer agent to issue shares of Common Stock free of restrictive legends.
 
6.5 Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company.
 
	 
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6.6 Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company will immediately notify the Investor upon its becoming aware of the occurrence of any of the following events in respect of a Registration Statement or related prospectus relating to an offering of Registrable Securities: (i) receipt of any request for additional information by the SEC or any other Federal or state governmental authority, during the period of effectiveness of the Registration Statement, for amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other Federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the happening of any event that makes any statement made in the Registration Statement or related prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires the making of any changes in the Registration Statement, related prospectus or such other documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; and (v) the Company's reasonable determination that a post-effective amendment to the Registration Statement would be appropriate, in which event the Company will promptly make available to the Investor any such supplement or amendment to the Registration Statement and related prospectus. The Company shall not deliver to the Investor any Advance Notice during the continuation of any of the foregoing events.
 
6.7 Expectations Regarding Advance Notices. Within ten (10) days after the commencement of each calendar quarter occurring subsequent to the commencement of the Commitment Period, the Company must notify the Investor, in writing, as to its reasonable expectations as to the dollar amount it intends to raise during such calendar quarter, if any, through the issuance of Advance Notices. Such notification shall constitute only the Company's good faith estimate and shall in no way obligate the Company to raise such amount, or any amount, or otherwise limit its ability to deliver Advance Notices. 
 
6.8 Consolidation; Merger. The Company shall not, at any time after the Effective Date, effect any merger or consolidation of the Company with or into, or a transfer of all or substantially all the assets of the Company to, another entity (a "Consolidation Event"), unless the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligation to deliver to the Investor such shares of stock and/or securities as the Investor is entitled to receive pursuant to this Agreement.
 
6.9 Issuance of the Company's Common Stock. The sale of the shares of Common Stock by the Company to the Investor hereunder shall be made in accordance with the provisions and requirements of the Securities Act and Regulation D and any applicable state securities law.
 
6.10 Expenses. The Company, whether or not the transactions contemplated hereunder are consummated or this Agreement is terminated, will pay all expenses incident to the performance of its obligations hereunder, including, without limitation: (i) the preparation, printing and filing of the Registration Statement and each amendment and supplement thereto, of each related prospectus and of each amendment and supplement thereto; (ii) the preparation, issuance and delivery of any Shares issued pursuant to this Agreement; (iii) all fees and disbursements of the Company's counsel, accountants and other advisors; (iv) the qualification of the Shares under securities laws in accordance with the provisions of this Agreement, including filing fees in connection therewith; (v) the fees and expenses incurred in connection with the listing or qualification of the Shares for trading on the Principal Market; or (vi) filing fees of the SEC, the Principal Market and any other regulatory or governmental body or authority.
 
	 
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6.11 Compliance with Laws. The Company will not, directly or indirectly, take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company or which caused or resulted in, or which would in the future reasonably be expected to cause or result in, stabilization or manipulation of the price of any security of the Company.
 
6.12 Opinion of Counsel. Prior to the date of the first Advance Notice, the Investor shall have received an opinion letter from counsel to the Company reasonably acceptable to the Investor, containing, at a minimum, the opinions set forth in Exhibit "C" attached hereto.
 
6.13 Review of Public Disclosures. To the Knowledge of the Company, none of the public disclosures made by the Company, including, without limitation, press releases, investor relations materials, and scripts of analysts meetings and calls will contain any untrue statements of material fact, nor will they omit to state any material fact required to be stated therein necessary to make the statements made in light of the circumstances under which they were made, not misleading.
 
6.14 Opinion of Counsel Concerning Resales. Provided that the Investor's resale of Common Stock received pursuant to this Agreement may be freely sold by the Investor either pursuant to an effective Registration Statement, in accordance with Rule 144, or otherwise, the Company shall obtain for the Investor, at the Company's expense, any and all opinions of counsel which may be required by the Company's transfer agent to issue such shares free of restrictive legends, or to remove legends from such shares. 
 
6.15 Sales. Without the written consent of the Investor, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any shares of Common Stock (other than the Shares offered pursuant to the provisions of this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire Common Stock, during the period beginning on the 5th Trading Day immediately prior to an Advance Notice Date and ending on the 2nd Trading Day immediately following the corresponding Closing Date.
 
6.16 Insider Trading. Notwithstanding any other provision of this Agreement, the Company shall not deliver an Advance Notice during any period in which the Investor is in possession of material non-public information.
 
ARTICLE VII
CONDITIONS FOR ADVANCE AND CONDITIONS FOR CLOSING
 
The right of the Company to deliver an Advance Notice and the obligations of the Investor hereunder to acquire Shares and pay for Shares of the Company's Common Stock is subject to the satisfaction by the Company, on each Advance Notice Date and on each Closing Date (a "Condition Satisfaction Date"), of each of the following conditions:
 
	 
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7.1 Accuracy of the Company's Representations and Warranties. The representations and warranties of the Company shall be true and correct in all material respects.
 
7.2 Registration of the Common Stock with the SEC. The Company shall have filed with the SEC a Registration Statement with respect to the resale of the Registrable Securities in accordance with the terms of the Registration Rights Agreement. As set forth in the Registration Rights Agreement, the Registration Statement shall have been declared effective by the SEC and shall remain effective on each Condition Satisfaction Date, and: (i) neither the Company nor the Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to the Registration Statement, or that the SEC otherwise has suspended or withdrawn the effectiveness of the Registration Statement, either temporarily or permanently, or intends or has threatened to do so (unless the SEC's concerns have been addressed and the Investor is satisfied, in its sole discretion, that the SEC no longer is considering or intends to take such action); and (ii) no other suspension of the use or withdrawal of the effectiveness of the Registration Statement or related prospectus shall exist. The Registration Statement must have been declared effective by the SEC prior to the first Advance Notice Date.
 
7.3 Authority. The Company shall have obtained all permits and qualifications required by any applicable state for the offer and sale of the Shares, or shall have the availability of exemptions therefrom. The sale and issuance of the Shares shall be legally permitted by all laws and regulations to which the Company is subject.
 
7.4 No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the SEC or any other federal or state governmental, administrative or self regulatory authority during the period of effectiveness of the Registration Statement, the response to which would require any amendments or supplements to the Registration Statement or related prospectus; (ii) the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; (iv) the occurrence of any event that makes any statement made in the Registration Statement or related prospectus, or any document incorporated or deemed to be incorporated therein by reference, untrue in any material respect or that requires the making of any changes in the Registration Statement, related Prospectus or documents so that, in the case of the Registration Statement, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and that in the case of the related prospectus, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under and as of the date which they were made, not misleading; and (v) the Company's reasonable determination that a post-effective amendment to the Registration Statement would be required. 
 
7.5 Fundamental Changes. There shall not exist any fundamental changes to the information set forth in the Registration Statement, as it may then be amended, which would require the Company to file a post-effective amendment to the Registration Statement.
 
7.6 Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement, or any other agreements between the Company and Investor, to be performed, satisfied or complied with by the Company at or prior to each Condition Satisfaction Date.
 
	 
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7.7 No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits or directly and adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that management of the Company believes will have a Material Adverse Effect.
 
7.8 No Suspension of Trading in or Delisting of Common Stock. The Common Stock is trading on a Principal Market and all of the Shares issuable pursuant to such Advance Notice will be listed or quoted for trading on such Principal Market and the Investor believes, in good faith, that trading of the Common Stock on a Principal Market will continue uninterrupted for the foreseeable future. The issuance of Shares with respect to the applicable Advance Notice will not violate the shareholder approval requirements of the Principal Market. The Company shall not have received any notice threatening the continued listing of the Common Stock on the Principal Market.
 
7.9 Authorized. There shall be a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Shares issuable pursuant to such Advance Notice.
 
7.10 Executed Advance Notice. The Investor shall have received the Advance Notice executed by an officer of the Company and the representations contained in such Advance Notice shall be true and correct as of each Condition Satisfaction Date.
 
7.11 Consecutive Advance Notices. Except with respect to the first Advance Notice, the Company shall have delivered all Shares relating to all prior Advances.
 
7.12 No Material Adverse Effect. No event shall have occurred which could reasonably be expected to have a Material Adverse Effect.
 
7.13 Adverse Effect of Price or Volume. No event shall have occurred that would have a material adverse effect on the price or trading volume of the Company's Common Stock, or the Investor's ability to sell Shares in the Principal Trading Market in the manner intended by this Agreement, as determined by Investor in its sole discretion.
 
7.14 Documents to be Delivered by the Company. Prior to the Effective Date, the Company shall have delivered or cause to be delivered to Investor the following documents, each of which must be satisfactory to Investor and Investor's counsel in form, substance and execution:
 
	 
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(a) Search Results. Copies of UCC search reports, issued by the Secretary of State of the state of incorporation of the Company and its subsidiaries, dated such a date as is reasonably acceptable to Investor, listing all effective financing statements which name the Company and its subsidiaries, under their present name and any previous names, as debtors, together with copies of such financing statements; and
 
(b) Certificates of Good Standing. Copies of certificates of good standing with respect to the Company and its subsidiaries, issued by the Secretary of State of the state of incorporation of the Company and its subsidiaries, dated such a date as is reasonably acceptable to Investor, evidencing the good standing thereof.
 
ARTICLE VIII
DUE DILIGENCE REVIEW; NON-DISCLOSURE OF NON-PUBLIC INFORMATION
 
8.1 Due Diligence Review. Prior to the filing of the Registration Statement, the Company shall make available for inspection and review by the Investor, advisors to and representatives of the Investor and any underwriter participating in any disposition of the Registrable Securities on behalf of the Investor pursuant to the Registration Statement, any such Registration Statement or amendment or supplement thereto, or any blue sky, NASD, FINRA, or other filing, all financial and other records, all SEC Documents and other filings with the SEC, and all other corporate documents and properties of the Company as may be reasonably necessary or required by the Investor and any such advisors, representatives and underwriters, and cause the Company's officers, directors and employees to supply all such information requested by the Investor or any such representative, advisor or underwriter in connection with such Registration Statement (including, without limitation, in response to all questions and other inquiries reasonably made or submitted by any of them), prior to and from time to time after the filing and effectiveness of the Registration Statement, for the sole purpose of enabling the Investor and such representatives, advisors and underwriters and their respective accountants and attorneys to conduct initial and ongoing due diligence with respect to the Company and the accuracy of the Registration Statement.
 
8.2 Company Non-Public Information. 
 
(a) Nothing herein shall require the Company to disclose non-public information to the Investor or its advisors or representatives, unless prior to disclosure of such information, the Company identifies such information as being non-public information and provides the Investor, such advisors and representatives with the opportunity to accept or refuse to accept such non-public information for review. The Company may, as a condition to disclosing any non-public information hereunder, require the Investor and its advisors and representatives to enter into a confidentiality agreement in form reasonably satisfactory to the Company and the Investor. Notwithstanding anything contained in this Agreement or the Registration Rights Agreement to the contrary, the Company shall not deliver material, non-public information to the Investor during the time when an Advance Notice is outstanding.
 
	 
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(b) The Company represents that it does not disseminate non-public information in violation of the Exchange Act or Securities Act to any investors who purchase stock in the Company in a public offering, to money managers or to securities analysts, provided, however, that notwithstanding anything herein to the contrary, the Company will immediately notify the advisors and representatives of the Investor and, if any, underwriters, of any event or the existence of any circumstance (without any obligation to disclose the specific event or circumstance) of which it becomes aware, constituting non-public information (whether or not requested of the Company specifically or generally during the course of due diligence by such persons or entities), which, if not disclosed in the prospectus included in the Registration Statement would cause such prospectus to include a material misstatement or to omit a material fact required to be stated therein in order to make the statements therein, in light of the circumstances in which they were made, not misleading. Nothing contained in this Article VIII shall be construed to mean that such persons or entities other than the Investor (without the written consent of the Investor prior to disclosure of such information) may not obtain non-public information in the course of conducting due diligence in accordance with the terms of this Agreement and nothing herein shall prevent any such persons or entities from notifying the Company of their opinion that based on such due diligence by such persons or entities, that the Registration Statement contains an untrue statement of material fact or omits a material fact required to be stated in the Registration Statement or necessary to make the statements contained therein, in light of the circumstances in which they were made, not misleading.
 
ARTICLE IX
CHOICE OF LAW/JURISDICTION
 
9.1 MANDATORY FORUM SELECTION. Any dispute arising under, relating to, or in connection with the Agreement or related to any matter which is the subject of or incidental to the Agreement (whether or not such claim is based upon breach of contract or tort) shall be subject to the exclusive jurisdiction and venue of the state and/or federal courts located in Broward County, Florida. This provision is intended to be a "mandatory" forum selection clause and governed by and interpreted consistent with Florida law.
 
9.2 Governing Law. Except in the case of the Mandatory Forum Selection clause described above, this Agreement shall be delivered and accepted in and shall be deemed to be contracts made under and governed by the internal laws of the State of Nevada, and for all purposes shall be construed in accordance with the laws of the State of Nevada, without giving effect to the choice of law provisions.
 
ARTICLE X
ASSIGNMENT; TERMINATION
 
10.1 Assignment. Neither this Agreement nor any rights of the parties hereto may be assigned or delegated to any other Person.
 
	 
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10.2 Termination. 
 
(a) This Agreement and the obligations of Investor to make Advances hereunder shall terminate on the earlier to occur of: (i) the date which is twelve (12) months after the Registration Statement is declared effective; or (ii) the date which is six (6) months after the "Scheduled Effective Deadline" (as such term is defined in the Registration Rights Agreement), if the Registration Statement has not been declared effective by such date.
 
(a) This Agreement and the obligation of the Investor to make an Advance to the Company pursuant to this Agreement shall terminate permanently (including with respect to a Closing that has not yet occurred) in the event that: (i) there shall occur any stop order or suspension of the effectiveness of the Registration Statement for an aggregate of fifty (50) Trading Days, other than due to the acts of the Investor, during the Commitment Period (provided, however, that this termination provision shall not apply to any period commencing upon the filing of a post-effective amendment to such Registration Statement and ending upon the date on which such post-effective amendment is declared effective by the SEC); or (ii) the Company shall at any time fail to comply with any of the terms, covenants or provisions of this Agreement or the Registration Rights Agreement on the part of the Company to comply with, and such failure is not cured within twenty (20) days after receipt of written notice from the Investor.
 
(b) Nothing in this Section 10.2 shall be deemed to release the Company from any liability for any breach under this Agreement, or to impair the rights of the Investor to compel specific performance by the Company of its obligations under this Agreement or the Registration Rights Agreement. The indemnification provisions contained in Article V shall survive termination hereunder.
 
ARTICLE XI
NOTICES
 
Any notices, consents, waivers, or other communications required or permitted to be given under the terms of this Agreement must be in writing and in each case properly addressed to the party to receive the same in accordance with the information below, and will be deemed to have been delivered: (i) if mailed by Federal Express, UPS or other nationally recognized overnight courier service, next business morning delivery, then one (1) business day after deposit of same in a regularly maintained receptacle of such overnight courier; or (ii) if hand delivered, then upon hand delivery thereof to the address indicated on or prior to 5:00 p.m., EST, on a Trading Day. Any notice hand delivered after 5:00 p.m., EST, shall be deemed delivered on the following Trading Day. Notwithstanding the foregoing, notice, consents, waivers or other communications referred to in this Agreement may be sent by facsimile, e-mail, or other method of delivery, but shall be deemed to have been delivered only when the sending party has confirmed (by reply e-mail or some other form of written confirmation from the receiving party) that the notice has been received by the other party. The addresses and facsimile numbers for such communications, except for Advance Notices which shall be delivered in accordance with Section 2.1 hereof, shall be:
 
	 
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	If to the Company, to:
	Artec Global Media, Inc.

		249 South Highway 101, #324

		Solana Beach, CA 92075

		Attention:
	Caleb W. Wickman

		E-Mail: wolf@artecglobalmedia.com 

		 
	With a copy to:
	Westerman Ball Ederer Miller Zucker & Sharfstein LLP

	(shall not constitute notice)
	1201 RXR Plaza

		Uniondale, NY 11556

		Attention:
	Alan C. Ederer, Esq.

		E-Mail: 
	aederer@westermanllp.com

		 
	If to the Investor:
	TCA Global Credit Master Fund, LP

		3960 Howard Hughes Parkway, Suite 500

		Las Vegas, NV 89169

		Attention:
	Robert Press

		E-Mail: bpress@tcaglobalfund.com

		 
	With a copy to:
	Lucosky Brookman LLP

	(shall not constitute notice)
	101 Wood Avenue South, 5th Floor

		Iselin, New Jersey 08830

		Attention
	Seth Brookman, Esq.

		E-Mail:
	sbrookman@lucbro.com

 
	 
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ARTICLE XII
MISCELLANEOUS
 
12.1 Execution; Counterparts. This Agreement may be executed in one or more counterparts, all of which taken together shall be deemed and considered one and the same Agreement, and same shall become effective when counterparts have been signed by each party and each party has delivered its signed counterpart to the other party. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format file or other similar format file, such signature shall be deemed an original for all purposes and shall create a valid and binding obligation of the party executing same with the same force and effect as if such facsimile or ".pdf" signature page was an original thereof.
 
12.2 Entire Agreement; Amendments. This Agreement, together with the Exhibits incorporated by reference herein and the Registration Rights Agreement, supersedes all other prior oral or written agreements between the Investor, the Company, their affiliates and Persons acting on their behalf with respect to the matters discussed herein, and this Agreement, and the instruments referenced herein, including the Registration Rights Agreement, 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, the Investor makes no 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.
 
12.3 Reporting Entity for the Common Stock. The reporting entity relied upon for the determination of the trading price or trading volume of the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg, L.P. or any successor thereto. The written mutual consent of the Investor and the Company shall be required to employ any other reporting entity.
 
12.4 Advance Fee. On each Closing, the Company shall pay to the Investor the Advance Fee with respect to the applicable Advance made hereunder, which Advance Fee shall be deducted by Investor out of the gross proceeds of the applicable Advance.
 
12.5 Brokerage. Each of the parties hereto represents that it has had no dealings in connection with this transaction with any finder or broker who will demand payment of any fee or commission from the other party. The Company on the one hand, and the Investor, on the other hand, agree to indemnify the other against and hold the other harmless from any and all liabilities to any person claiming brokerage commissions or finder's fees on account of services purported to have been rendered on behalf of the indemnifying party in connection with this Agreement or the transactions contemplated hereby.
 
12.6 Confidentiality. If for any reason the transactions contemplated by this Agreement are not consummated, each of the parties hereto shall keep confidential any information obtained from any other party (except information publicly available or in such party's domain prior to the Effective Date, and except as required by court order) and shall promptly return to the other parties all schedules, documents, instruments, work papers or other written information without retaining copies thereof, previously furnished by it as a result of this Agreement or in connection herein.
 
[signature pages follow]
 
	 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the Effective Date.
 
	 
	COMPANY:	 

		 	
		ARTEC GLOBAL MEDIA, INC.
	
	 	   	 	 
		By:		 

	 
	Name:
	Caleb W. Wickman
	 

	 
	Title:
	President
	 

       	STATE OF ________________ 
	)

	 	) SS.

	COUNTY OF ______________
	)

    
The undersigned, a Notary Public in and for the said County, in the State aforesaid, DO HEREBY CERTIFY that Caleb W. Wickman, President of Artec Global Media, Inc., a Nevada corporation, who is personally known to me to be the same person whose name is subscribed to the foregoing, appeared before me this day in person and acknowledged that he/she signed and delivered the said instrument as his/her own free and voluntary act and as the free and voluntary act of said corporation, for the uses and purposes therein set forth.
 
GIVEN under my hand and notarial seal this _____ day of ________________, 20____.
  
				 

	 
	 
	Notary Public
	 

			 	
	 
	 
	My Commission Expires:
	 

			 	
				

 
	 
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	INVESTOR:	 

		 	
		TCA GLOBAL CREDIT MASTER FUND, LP
	
		 	 	
		By:	TCA Global Credit Fund GP, Ltd., 
	
	 	  	its general partner	 
		 		
		By:		 

	 
	Name: 
	Robert Press 	 

	 
	Title:
	Director	 

 
 
 
 
 
	 
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EXHIBIT "A"
 
FORM OF ADVANCE NOTICE
 
[ARTEC GLOBAL MEDIA, INC. LETTERHEAD]
 
The undersigned, ________________________, hereby certifies, with respect to the sale of shares of Common Stock of Artec Global Media, Inc. (the "Company") issuable in connection with this Advance Notice, which Advance Notice is being delivered pursuant to the Committed Equity Facility Agreement between the Company and TCA Global Credit Master Fund, LP dated as of May 31, 2015 and effective as ofNovember [●], 2015 (the "Agreement"), as follows:
 
1. The undersigned is the duly elected _______________________ of the Company.
 
2. There are no fundamental or material changes to the information set forth in the Registration Statement which would require the Company to file a post-effective amendment to the Registration Statement.
 
3. The Company has performed all of the covenants and agreements to be performed by the Company under the Agreement, and the Company has complied in all material respects with all obligations and conditions contained in the Agreement on or prior to the Advance Notice Date, and the Company shall continue to perform and comply with all covenants and agreements to be performed by the Company through the applicable Closing Date. All conditions under the Agreement to the delivery of this Advance Notice are satisfied as of the date hereof. Since the date of the Company's last financial statements, there has been no Material Adverse Change.
 
4. The undersigned hereby represents, warrants and covenants that it has made all filings ("SEC Filings") required to be made by it pursuant to applicable securities laws (including, without limitation, all filings required under the Securities Exchange Act of 1934). All SEC Filings and other public disclosures made by the Company, including, without limitation, all press releases, analysts meetings, calls, etc. (collectively, the "Public Disclosures"), have been reviewed and approved for release by the Company's attorneys or general counsel and, if containing financial information, the Company's independent certified public accountants. None of the Company's Public Disclosures contain any untrue statement of a material fact, or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
 
	 
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5. The dollar amount of the Advance requested by this Advance Notice is $ ______________.
 
6. The Estimated Advance Shares (determined in accordance with the first sentence of Section 2.1(c) of the Agreement) issuable in connection with the Advance Notice is ________ Shares. 
 
7. 4.99% of the outstanding Common Stock of the Company as of the date hereof is _____________.
 
8. The sale of the number of Shares issuable in connecton with this Advance Notice does not exceed the Ownership Limitation, the Registration Limitation, the Maximum Advance Amount or the Commitment Amount.
 
The undersigned has executed this Advance Notice as of the _____ day of _____________, 20___.
 
 
ARTEC GLOBAL MEDIA, INC.
 
By: _____________________________
Name: ___________________________
Title: ____________________________
 
________________________________________________________________
 
Please deliver this Advance Notice by mail, e-mail or facsimile with a follow up phone call to: 
 
____________________________
____________________________
____________________________
____________________________
 
	 
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  EXHIBIT "B"     
FORM OF SETTLEMENT DOCUMENT
 
Via E-Mail and Facsimile
Artec Global Media, Inc.
Attn: CEO
Fax: _________________
E-Mail: _______________
 
Below please find the settlement information with respect to the Advance Notice dated: ___________
 
	1.
	Number of Estimated Advance Shares originally delivered to the Investor or the Investor's brokerage account
		
		 		
	2.
	Aggregate number of such Estimated Advance Shares sold during the Selling Period 
		
		 		
	3.
	Average per-share sale price
		
		 		
	4.
	Commissions and fees
		
	 	 		
	5.
	Net sales proceeds received by Investor from the sale of such Estimated Advance Shares sold during the Selling Period 
	$
	

  
	 
	 
	Sincerely,
	 

			  	
	 
	 
	TCA Global Credit Master Fund, LP
	 

 
Approved by:
 
ARTEC GLOBAL MEDIA, INC.
 
By:________________________ 
Name:______________________
Title:_______________________
 
	 
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  EXHIBIT "C"     
REQUIRED OPINIONS
 
1. The Company is a corporation validly existing and in good standing under the laws of Nevada, with corporate power and authority to own, lease and operate its properties and to conduct its business as described in the Company's latest Form 10-K or 10-Q (or similar form for filing a quarterly or annual report) filed by the Company under the Securities Exchange Act of 1934, as amended, (the "Exchange Act") and the rules and regulations of the SEC thereunder (the "Public Filings") and to enter into and perform its obligations under the Committed Equity Facility Agreement (the "Agreement"). The Company is also duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted by it as described in the Public Filings makes such qualification necessary.
 
2. The Company has the requisite corporate power and authority to enter into and perform its obligations under the Agreement and to issue the Shares in accordance with their terms. The execution and delivery of the Agreement by the Company and the consummation by it of the transactions contemplated thereby have been duly authorized by all necessary corporate action, and no further consent or authorization of the Company or its Board of Directors or stockholders is required. The Agreement, and each document executed or delivered in connection therewith, has each been duly executed and delivered, and the Agreement, and each document executed or delivered in connection therewith, each constitutes valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as my be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of creditors' rights and remedies.
 
3. The Shares are duly authorized and, upon issuance in accordance with the terms of the Agreement, will be duly and validly issued, fully paid and non-assessable, free of any liens, encumbrances and preemptive or similar rights contained, to our Knowledge, in any agreement filed by the Company as an exhibit to the Company's Public Filings.
 
4. The execution, delivery and performance of the Agreement by the Company will not: (i) result in a violation of the Company's Certificate of Incorporation or By-Laws; (ii) conflict with, or constitute a default (or an event that 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 or, indenture by which the Company or any of its assets or properties is bound, including, without limitation, any agreement or document filed by the Company as an exhibit to the Company's Public Filings; or (iii) to our Knowledge, result in a violation of any foreign, federal, state or local law, rule or regulation, order, judgment or decree applicable to the Company.
 
5. To our Knowledge, and other then as set forth in the Public Filings, there are no legal or governmental proceedings pending to which the Company is a party or of which any property or assets of the Company is subject which is required to be disclosed in any Public Filings.
 
	 
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Schedule 4.4
 
Capitalization
 
(i)
 
Secured Convertible Promissory Note (in the original principal amount of $225,000.00), dated January 7, 2015, issued by Artec Global Media, Inc. ("Artec") to Typenex Co-Investment, LLC ("Typenex"), provides Typenex with certain rights, as set forth therein, to convert the outstanding balance of this Secured Convertible Promissory Note into Common Stock of Artec
 
Warrant #1 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Warrant #2 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Warrant #3 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Warrant #4 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Warrant #5 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Warrant #6 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015, provides Typenex with certain rights to purchase Common Stock of Artec
 
Convertible Note (in the original principal amount of $250,000.00), dated December 4, 2014, issued by Artec to Vista Capital Investments, LLC ("Vista"), provides Vista with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Note into Common Stock of Artec
 
Convertible Redeemable Note (in the original principal amount of $52,500.00), dated October 30, 2014, issued by Artec to Adar Bays, LLC ("Adar"), provides Adar with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Redeemable Note into Common Stock of Artec
 
Convertible Redeemable Note (in the original principal amount of $55,125.00), dated October 30, 2014, issued by Artec to LG Capital Funding, LLC ("LG"), provides LG with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Redeemable Note into Common Stock of Artec
 
	 
	34

	

	 

 
Convertible Redeemable Note (in the original principal amount of $55,125.00), dated January 30, 2015, issued by Artec to LG, provides LG with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Redeemable Note into Common Stock of Artec
 
Convertible Note (in the original principal amount of $250,000.00), dated November 12, 2014, issued by Artec to JMJ Financial ("JMJ"), provides JMJ with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Note into Common Stock of Artec
 
Convertible Promissory Note (in the original principal amount of $69,000.00), dated June 8, 2015, issued by Artec to Vis Vires Group, Inc. ("Vis Vires"), provides Vis Vires with certain rights, as set forth therein, to convert the outstanding balance of this Convertible Promissory Note into Common Stock of Artec
 
(ii)
 
Secured Convertible Promissory Note (in the original principal amount of $225,000.00), dated January 7, 2015, issued by Artec to Typenex
 
Convertible Note (in the original principal amount of $250,000.00), dated December 4, 2014, issued by Artec to Vista 
 
Convertible Redeemable Note (in the original principal amount of $52,500.00), dated October 30, 2014, issued by Artec to Adar 
 
Convertible Redeemable Note (in the original principal amount of $55,125.00), dated October 30, 2014, issued by Artec to LG
 
Convertible Redeemable Note (in the original principal amount of $55,125.00), dated January 30, 2015, issued by Artec to LG
 
Convertible Note (in the original principal amount of $250,000.00), dated November 12, 2014, issued by Artec to JMJ
 
Convertible Promissory Note (in the original principal amount of $69,000.00), dated June 8, 2015, issued by Artec to Vis Vires
 
(iv)
 
Each of the following notes contains a piggyback registration rights provision that applies with respect to the shares issuable upon conversion of such note:
 
Convertible Note (in the original principal amount of $250,000.00), dated December 4, 2014, issued by Artec to Vista (see Section 5 of the Convertible Note)
 
	 
	35

	

	 

 
Convertible Note (in the original principal amount of $250,000.00), dated November 12, 2014, issued by Artec to JMJ (see Section 5 of the Convertible Note)
 
Each of the following agreements contain a provision requiring Artec to promptly secure the listing of the shares issuable upon conversion of the related note(s) upon each national securities exchange or automated quotation system, if any, upon which shares of common stock of Artec are then listed:
 
Securities Purchase Agreement, dated as of October 30, 2014, between Artec and Adar (see Section 4.b of the Securities Purchase Agreement)
 
Securities Purchase Agreement, dated as of October 30, 2014, between Artec and LG (see Section 4.b. of the Securities Purchase Agreement)
 
Securities Purchase Agreement, dated as of June 8, 2015, between Artec and Vis Vires (see Section 4.h)
 
(v)
 
The following instruments contain anti-dilution or similar provisions that may be triggered by the consummation of transactions contemplated by this Agreement or related agreements:
 
Secured Convertible Promissory Note (in the original principal amount of $225,000.00), dated January 7, 2015, issued by Artec to Typenex
 
Warrant #1 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
 
Warrant #2 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
 
Warrant #3 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
  
Warrant #4 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
 
Warrant #5 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
 
Warrant #6 to Purchase Shares of Common Stock, issued by Artec to Typenex on January 7, 2015
 
Convertible Note (in the original principal amount of $250,000.00), dated December 4, 2014, issued by Artec to Vista
 
Convertible Promissory Note (in the original principal amount of $69,000.00), dated June 8, 2015, issued by Artec to Vis Vires
 
 
36

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