Document:

EXHIBIT 10.5

 

EXECUTION VERSION

 

 

 

 

SERVICING SUPPLEMENT

 

 

to the

 

 

AMENDED AND RESTATED SERVICING AGREEMENT

 

 

dated as of December 1, 2006

 

 

among

 

 

FORD MOTOR CREDIT COMPANY LLC,
  as Servicer for the Collateral Specified Interests

and the 2014-B Reference Pool and as Lender,

 

 

CAB EAST HOLDINGS, LLC,
 CAB WEST HOLDINGS CORPORATION, and
 FCALM HOLDINGS CORPORATION,
 as Holders of the Collateral Specified Interest Certificates

 

 

and

 

 

HTD LEASING LLC,
 as Collateral Agent

 

 

Dated as of July 1, 2014

 

 

 

 

 

TABLE OF CONTENTS

 

	
ARTICLE I USAGE AND   DEFINITIONS
    	
1
    
	
Section 1.1.
    	
Usage and Definitions
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II DESIGNATION
    	
2
    
	
Section 2.1.
    	
Designation
    	
2
    
	
 
    	
 
    	
 
    
	
ARTICLE III THE SERVICER
    	
2
    
	
Section 3.1.
    	
Appointment of Servicer
    	
2
    
	
Section 3.2.
    	
Representations of the Servicer
    	
2
    
	
Section 3.3.
    	
Representations and Warranties About the Leases and the   Leased Vehicles
    	
2
    
	
Section 3.4.
    	
Liability of the Servicer; Indemnities
    	
5
    
	
Section 3.5.
    	
Purchase on Breach
    	
5
    
	
Section 3.6.
    	
Collection of Payments
    	
6
    
	
Section 3.7.
    	
Servicer May Own Exchange Note and Notes
    	
7
    
	
Section 3.8.
    	
Fees and Expenses
    	
7
    
	
Section 3.9.
    	
Termination
    	
7
    
	
 
    	
 
    	
 
    
	
ARTICLE IV ACCOUNTS,   COLLECTIONS AND APPLICATION OF FUNDS
    	
8
    
	
Section 4.1.
    	
Bank Accounts
    	
8
    
	
Section 4.2.
    	
Deposits and Payments
    	
9
    
	
Section 4.3.
    	
Advances
    	
10
    
	
Section 4.4.
    	
Repayment of Advances
    	
11
    
	
Section 4.5.
    	
Trust Distribution Account
    	
11
    
	
Section 4.6.
    	
Reserve Deposits and Withdrawals
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE V TERMINATION
    	
11
    
	
Section 5.1.
    	
Clean-Up Call
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE VI REPORTS AND   NOTICES
    	
12
    
	
Section 6.1.
    	
Monthly Investor Reports
    	
12
    
	
Section 6.2.
    	
Notices and Certificates Received by or Delivered by the   Servicer Under the Servicing Agreement
    	
12
    
	
Section 6.3.
    	
Notice of Servicer Event of Default
    	
12
    
	
Section 6.4.
    	
Annual Statement of Compliance
    	
12
    
	
Section 6.5.
    	
Compliance with Obligations under Sarbanes-Oxley Act
    	
13
    
	
Section 6.6.
    	
Report on Assessment of Compliance with Servicing Criteria   and Attestation
    	
13
    
	
Section 6.7.
    	
Delivery of Tax Related Information
    	
13
    
	
Section 6.8.
    	
Termination of Reporting Obligation
    	
13
    
	
Section 6.9.
    	
Authorized Persons of Servicer
    	
14
    
	
Section 6.10.
    	
Execution of Securities and Exchange Commission Filings
    	
14
    
	
 
    	
 
    	
 
    
	
ARTICLE VII MISCELLANEOUS
    	
14
    
	
Section 7.1.
    	
Amendments
    	
14
    

 

i

 

	
Section 7.2.
    	
Third-Party Beneficiaries of the Servicing Agreement and   this Servicing Supplement
    	
14
    
	
Section 7.3.
    	
No Petition
    	
14
    
	
Section 7.4.
    	
GOVERNING LAW
    	
15
    
	
Section 7.5.
    	
Submission to Jurisdiction
    	
15
    
	
Section 7.6.
    	
WAIVER OF JURY TRIAL
    	
15
    
	
Section 7.7.
    	
Severability
    	
15
    
	
Section 7.8.
    	
Headings
    	
15
    
	
Section 7.9.
    	
Conflict with Servicing Agreement
    	
15
    
	
Section 7.10.
    	
Counterparts
    	
15
    
	
 
    	
 
    	
 
    
	
Exhibit A
    	
Schedule   of Collateral Leases and Collateral Leased Vehicles in 2014-B Reference Pool
    	
EA-1
    
	
Exhibit B
    	
Form of   Monthly Investor Report
    	
EB-1
    
				

 

ii

 

SERVICING SUPPLEMENT, dated as of July 1, 2014 (this “Servicing Supplement”), to the Amended and Restated Servicing Agreement, dated as of December 1, 2006 (the “Servicing Agreement”), among (i) FORD MOTOR CREDIT COMPANY LLC, a Delaware limited liability company (“Ford Credit”), as servicer for the Collateral Specified Interests and the 2014-B Reference Pool (in such capacity, the “Servicer”) and as Lender under the Credit and Security Agreement (in such capacity, the “Lender”), (ii) CAB EAST HOLDINGS, LLC, a Delaware limited liability company, CAB WEST HOLDINGS CORPORATION, a Delaware corporation and FCALM HOLDINGS CORPORATION, a Delaware corporation (together, the “Holding Companies” and each, a “Holding Company”), as Holders of the Collateral Specified Interest Certificates and (iii) HTD Leasing LLC, as collateral agent (in such capacity, the “Collateral Agent”).

 

BACKGROUND

 

Section 2.3 of the Servicing Agreement provides that in connection with the issuance of an Exchange Note under the Credit and Security Agreement (as defined below) and the Exchange Note Supplement (as defined below), the Servicer, the Lender, the Collateral Agent and each Holding Company may enter into a supplement to the Servicing Agreement setting forth the specific rights and duties of the Servicer and the other agreements and undertakings for the administration and servicing of the 2014-B Reference Pool and the 2014-B Exchange Note.

 

The Series 2014-B Exchange Note will be issued and the 2014-B Reference Pool will be designated, each under the Credit and Security Agreement and the Exchange Note Supplement.

 

The parties wish to enter into this Servicing Supplement to set forth the additional duties required of the Servicer for the 2014-B Reference Pool and the 2014-B Exchange Note.

 

ARTICLE I
 USAGE AND DEFINITIONS

 

Section 1.1.                                 Usage and Definitions.  Capitalized terms used but not otherwise defined in this Servicing Supplement are defined in Appendix 1 to the Exchange Note Supplement to the Credit and Security Agreement (as defined below), dated as of July 1, 2014 (the “Exchange Note Supplement”), among CAB East LLC (“CAB East”), as a Borrower, CAB West LLC (“CAB West”), as a Borrower, and FCALM, LLC (“FCALM” and, together with CAB East and CAB West, the “Titling Companies”), as a Borrower, U.S. Bank National Association (“U.S. Bank”), as Administrative Agent, the Collateral Agent, and Ford Credit, as Lender and Servicer.  Capitalized terms used but not otherwise defined in this Servicing Supplement or in Appendix 1 to the Exchange Note Supplement are defined in Appendix A to the Amended and Restated Credit and Security Agreement, dated as of December 1, 2006 (the “Credit and Security Agreement”), among the Titling Companies, as Borrowers, U.S. Bank, as Administrative Agent, HTD, as Collateral Agent and Ford Credit, as Lender and Servicer, or, if not defined in Appendix A, are defined in the related Titling Company Agreement.  Appendix 1 and Appendix A also contain rules of usage applicable to this Servicing Supplement and are incorporated by reference into this Servicing Supplement.

 

 

ARTICLE II
 DESIGNATION

 

Section 2.1.                                 Designation.  The parties designate the Collateral Leases and Collateral Leased Vehicles listed on Exhibit A to be the “2014-B Reference Pool” and each Collateral Lease and Collateral Leased Vehicle included in the 2014-B Reference Pool to be a “Lease” and a “Leased Vehicle,” respectively.

 

ARTICLE III
 THE SERVICER

 

Section 3.1.                                 Appointment of Servicer.  Each party acknowledges and agrees that the Servicer under the Servicing Agreement will also act as Servicer under this Servicing Supplement of the 2014-B Reference Pool and the 2014-B Exchange Note and will also act as agent of any Holding Company, as Holder of the related Collateral Specified Interest Certificate in the management and control of the Leases and Leased Vehicles and for all other purposes set forth in this Servicing Supplement and the Servicing Agreement.  Ford Credit accepts those appointments.

 

Section 3.2.                                 Representations of the Servicer.  The Servicer has made the representations set forth in Section 3.2 of the Servicing Agreement on which the Lender, the Holding Companies and the Collateral Agent have relied, and the 2014-B Exchange Noteholder, in acquiring the 2014-B Exchange Note, will rely.  Those representations are remade as of the Exchange Note Issuance Date and will survive the sale, transfer, assignment and conveyance of the 2014-B Exchange Note to the 2014-B Exchange Noteholder, the Depositor and the Issuer and the pledge of the 2014-B Exchange Note to the Indenture Trustee under the Indenture.  The Servicer additionally represents and warrants to the Depositor and the Issuer as of the date of this Servicing Supplement that no selection procedures believed to be adverse to the 2014-B Exchange Noteholder have been utilized in selecting the Leases and Leased Vehicles included in the 2014-B Reference Pool from other leases and leased vehicles that meet the criteria specified in Section 3.3.

 

Section 3.3.                                 Representations and Warranties About the Leases and the Leased Vehicles.  The Servicer represents and warrants to the Depositor and the Issuer as of the date of this Servicing Supplement and the 2014-B Closing Date (except as otherwise specified), which representations and warranties (i) the 2014-B Exchange Noteholder, the Depositor and the Issuer have relied on in acquiring the 2014-B Exchange Note and (ii) will survive the sale of the 2014-B Exchange Note to the 2014-B Exchange Noteholder, the Depositor and the Issuer and the pledge of the 2014-B Exchange Note to the Indenture Trustee under the Indenture:

 

(a)                                 New Vehicle.  Each Leased Vehicle was a new car, light truck or utility vehicle at the beginning of the related Lease; provided, that a Leased Vehicle that has never been titled and has not been driven more than 6,000 miles will be deemed to be a new vehicle for purposes of this representation and warranty.

 

(b)                                 Certificate of Title.  Each Leased Vehicle was titled in accordance with the related Titling Company Agreement and in a manner acceptable to the relevant Governmental Authority, or the Servicer has commenced procedures that will result in that title.

 

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(c)                                  Security Interest in Lease and Leased Vehicle.  The Collateral Agent has a security interest in each Lease and Leased Vehicle which was validly created and is a perfected, first priority security interest, and is noted as lienholder on the certificate of title for each Leased Vehicle, or the Servicer has commenced procedures that will result in the perfection of a first priority security interest in the related Leased Vehicle, including by notation of the lien on the certificate of title.

 

(d)                                 Interest in Lease and Leased Vehicle.  Each Lease was entered into by a Dealer located in the United States, as lessor, and a Lessee with a garaging location in an Eligible State, as lessee, and all of the Dealer’s right, title and interest in the Lease and the related Leased Vehicle was validly assigned to a Titling Company qualified to hold the Leased Vehicle.

 

(e)                                  Origination of Leases.  Each Lease was originated by a Dealer in the ordinary course of its business and has been fully executed by the parties to the Lease and at the time of its origination, substantially complied with the Servicer’s Credit and Collection Policy.

 

(f)                                   Total Payments.  Each Lease (other than an Advance Payment Plan Lease) provides for Total Payments that include Base Payments.

 

(g)                                  Compliance with Law.  Each Lease complied in all material respects at the time it was originated, and as of the date of this Servicing Supplement will comply in all material respects, with all requirements of federal, State and local laws.

 

(h)                                 Consents, Licenses, Approvals and Authorizations.  All material consents, licenses, approvals or authorizations of, or registrations or declarations with, any Governmental Authority required to be obtained, effected or given by the Dealer that originated a Lease or the related Titling Company in connection with (i) the origination of the Lease, (ii) the execution, delivery and performance by the Dealer of the Lease and (iii) the acquisition and ownership by the related Titling Company of the Lease and the related Leased Vehicle, had been duly obtained, effected or given and were in full force and effect as of the date of origination or acquisition and remained in full force and effect.

 

(i)                                     Binding Obligation.  Each Lease is on a form contract that includes rights and remedies allowing the holder to enforce the obligation and realize on the Leased Vehicle and represents the legal, valid and binding payment obligation of the related Lessee, enforceable in all material respects by the holder of the Lease, except as may be limited by bankruptcy, insolvency, reorganization or other laws relating to the enforcement of creditors’ rights or by general equitable principles and consumer protection laws.

 

(j)                                    No Government Lessee.  No Lease is an obligation of the United States or any State or local government or from any agency, department, or instrumentality or political subdivision of the United States or any State or local government.

 

(k)                                 No Commercial Lease.  No Lease is a commercial lease contract, master lease contract or fleet vehicle lease contract; provided, that no Lease that is a retail lease contract will breach this representation solely because the related Lessee is a commercial lessee or the Leased Vehicle will be used for commercial purposes.

 

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(l)                                     Leases in Force.  As of the Cutoff Date, no Lease (i) is a Terminating Lease or a Closed Lease or (ii) has been satisfied, subordinated, rescinded, cancelled or terminated, in whole or in part.

 

(m)                             No Waiver or Amendments.  No material provision of a Lease (other than the assessment of a security deposit or a Payment Extension Fee or the payment of any other amount that, on collection, would constitute an Additional Amount, or a default relating to failure by the related Lessee to pay any such amount) has been affirmatively waived or amended, except amendments and modifications that are contained in the Lease Files.

 

(n)                                 No Extensions.  As of the Cutoff Date, no extensions other than Payment Extensions not exceeding three months in the aggregate under any Lease have been granted.

 

(o)                                 No Defenses.  To the Servicer’s knowledge, no right of rescission, setoff, counterclaim or defense has been asserted or threatened for any Lease.

 

(p)                                 No Delinquency or Default.  Except for payments that are not more than 30 days delinquent as of the Cutoff Date, no payment defaults (determined in accordance with the Credit and Collection Policy) exist.

 

(q)                                 Insurance.  Each Lease requires the lessee to obtain physical damage and liability insurance covering the related Leased Vehicle.

 

(r)                                    Title.  The applicable Titling Company has good title, or the Servicer has commenced procedures that will result in good title, to each Lease and each Leased Vehicle, free and clear of any Liens other than Permitted Liens.

 

(s)                                   Valid Assignment.  No Lease was originated in, or is subject to the laws of, any jurisdiction under which the sale and assignment of the Lease or the related Leased Vehicle to the Titling Company would be unlawful, void, or voidable.  Each Lease is fully assignable and no Dealer has entered into any agreement with any Lessee that prohibits, restricts or conditions the assignment of any portion of a Lease.

 

(t)                                    Chattel Paper.  Each Lease constitutes either “tangible chattel paper” or “electronic chattel paper” within the meaning of Section 9-102(a) of the UCC and there is only one original authenticated copy of each.

 

(u)                                 Maturity of Leases.  Each Lease has an original Scheduled Lease End Date of no greater than 48 months from its Lease Date.

 

(v)                                 Peace of Mind.  No Lease that is an Advance Payment Plan Lease has been identified by the Servicer as qualifying for the benefits of its “Peace of Mind” program for Lessees who were at least 62 years of age at Lease inception and who die during the term of the related Lease.

 

(w)                               No Bankruptcy Proceeding.  As of the Cutoff Date, the Servicer has not received actual notice that the Lessee on any Lease is a debtor in a bankruptcy proceeding.

 

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(x)                                 No Allocation to Other Specified Interest.  No Lease or Leased Vehicle has been allocated to any Specified Interest other than a Collateral Specified Interest.

 

(y)                                 Valid Security Interest.  The Collateral Agent has a valid security interest, or the Servicer has commenced procedures that will result in a valid security interest, in the Collateral Leases and the Collateral Leased Vehicles and all proceeds thereof.

 

(z)                                  Information about Leases.  The information on the schedule of Collateral Leases and Collateral Leased Vehicles attached as Exhibit A is true and correct in all material respects as of the Cutoff Date.

 

Section 3.4.                                 Liability of the Servicer; Indemnities.

 

(a)                                 The Servicer will indemnify, defend and hold harmless each Titling Company, the Holders of the Collateral Specified Interest Certificates, the Administrative Agent, the Collateral Agent, the Lender, the Indenture Trustee and the 2014-B Exchange Noteholder (each, for this Section 3.4(a), an “Indemnified Person”) in accordance with Section 3.3 of the Servicing Agreement as well as from and against any and all costs, expenses, losses, damages, claims and liabilities, arising out of the Servicer’s willful misconduct, bad faith or negligence.

 

(b)                                 The Servicer will indemnify, defend and hold harmless the Issuer, the Collateral Agent, the Administrative Agent, the Owner Trustee and the Indenture Trustee, as applicable, and their respective officers, directors, employees and agents (each, for this Section 3.4(b), an “Indemnified Person”) from and against any and all costs, expenses, losses, damages, claims and liabilities arising out of, or incurred in connection with, the acceptance of or performance by the Servicer of the trusts and duties contained in this Servicing Supplement, except to the extent that the cost, expense, loss, damage, claim or liability:  (i) is due to the willful misconduct, bad faith or negligence of the Indemnified Person, (ii) in the case of the Owner Trustee, arises from the Owner Trustee’s breach of any of its representations or warranties set forth in the Trust Agreement or (iii) in the case of the Indenture Trustee, arises from the Indenture Trustee’s breach of any of its representations and warranties set forth in the Indenture.

 

(c)                                  In addition to the Indemnified Parties included in the Servicing Agreement, the Servicer will indemnify the Issuer, the Owner Trustee and the Indenture Trustee as “Indemnified Parties” under Sections 3.3(b), (c) and (d) of the Servicing Agreement.

 

Section 3.5.                                 Purchase on Breach.

 

(a)                                 Deposit of Administrative Reallocation Amount.

 

(i)             If a Responsible Person of the Servicer has actual knowledge, or receives notice from the 2014-B Exchange Noteholder or the Indenture Trustee, of a breach of (A) a representation or warranty set forth in Section 3.3 of this Servicing Supplement, (B) the covenant set forth in Section 3.8(b) of the Servicing Agreement, (C) the covenant set forth in Section 3.6 of this Servicing Supplement or (D) the covenant set forth in Section 6.7 of the Servicing Agreement, in each case, that materially and adversely affects any Lease and Leased Vehicle, the Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount of each such Lease and Leased

 

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Vehicle as of the last day of the second Collection Period following the Collection Period in which the Servicer obtained actual knowledge, or was notified, of the breach (or, at the Servicer’s option, the end of the first Collection Period following the Collection Period in which the Servicer obtained actual knowledge, or was notified, of the breach) unless, by that last day the breach has been cured in all material respects.

 

(ii)          The Servicer may deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount of any Lease and Leased Vehicle if the Servicer determines, in its sole discretion, that, as a result of a receivables systems error or receivables systems limitation or for any other reason, the Servicer is unable to service the Lease and Leased Vehicle in accordance with the Servicing Agreement or this Servicing Supplement.  The Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount of any Lease (and with the related Leased Vehicle) that is an Advance Payment Plan Lease if the Servicer determines that the Lease qualifies for the benefit of its “Peace of Mind” program.

 

(iii)       So long as Ford Credit remains the Servicer, the Servicer will deposit in the Exchange Note Collection Account an amount equal to the Administrative Reallocation Amount of any Lease and Leased Vehicle if the Servicer is notified that the Leased Vehicle is no longer owned by a Titling Company.

 

(iv)      The Servicer will deposit the Administrative Reallocation Amount of any Lease and related Leased Vehicle that the Servicer is removing from the 2014-B Reference Pool in accordance with this Section 3.5(a) in the Exchange Note Collection Account on the Business Day preceding the Payment Date (or, with satisfaction of the Rating Agency Condition, on the Payment Date) related to the Collection Period during which the purchase occurs.

 

(b)                                 Reallocation Sole Remedy for Breach.  Except as provided in Section 3.3, the sole remedy of the Collateral Agent, the 2014-B Exchange Noteholder, the Indenture Trustee and the holders of the Notes for a breach of the representations and warranties contained in Section 3.3 is as set forth in Section 3.5(a).

 

(c)                                  Reallocation of Purchased Leases and Leased Vehicles.  On the deposit of the Administrative Reallocation Amount for any Lease and Leased Vehicle under Section 3.5(a), the Lease and Leased Vehicle will be reallocated to the Revolving Facility Pool at the direction of the Servicer and will no longer be included in the 2014-B Reference Pool.

 

Section 3.6.                                 Collection of Payments.  The Servicer may grant extensions, waivers, rebates, modifications or adjustments on to any Collateral Lease, except that if, after the Cutoff Date, the Servicer (a) modifies the amount of the Base Payment due on any Lease or (b) grants a Payment Extension or Term Extension that extends any Lease past the Final Scheduled Payment Date for the most junior Class of Notes, the Servicer will reallocate the Lease and the related Leased Vehicle to the Revolving Facility Pool in accordance with Section 3.5, except, in either case, to the extent that any such modification is required by law or court order.

 

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Section 3.7.                                 Servicer May Own Exchange Note and Notes.  The Servicer, and any Affiliate of the Servicer, may, in its individual or any other capacity, become the owner or pledgee of the 2014-B Exchange Note and/or the Notes with the same rights as it would have if it were not the Servicer or an Affiliate thereof, except as otherwise provided in the Servicing Agreement, this Servicing Supplement, the Credit and Security Agreement and the Indenture.  Except as set forth in the Servicing Agreement, this Servicing Supplement or in the other 2014-B Basic Documents, Notes so owned by or pledged to the Servicer or the Affiliate will have an equal and proportionate benefit under the Servicing Agreement and this Servicing Supplement.

 

Section 3.8.                                 Fees and Expenses.

 

(a)                                 Reference Pool Servicing Fee.

 

(i)                                     The “Reference Pool Servicing Fee” will, for a Collection Period, be an amount equal to the sum of (A) the product of: (1) one-twelfth of 1.00%; times (2) the Pool Balance as of the last day of the preceding Collection Period (or the Cutoff Date for the first month) plus (B) the portion of the Reference Pool Servicing Fee for the immediately preceding Collection Period, if any, that was not paid on the related Payment Date.

 

(ii)                                  The Reference Pool Servicing Fee will be payable solely from, and the right of the Servicer to receive the Reference Pool Servicing Fee will be limited in recourse to, the Collections and other amounts applied to the payment of that fee under the Exchange Note Supplement.

 

(b)                                 Investment Earnings.  As provided in Section 4.2, the Servicer will be entitled to receive investment earnings on funds in the Bank Accounts as additional compensation for the performance of its duties under this Servicing Supplement, and losses, if any, and investment expenses resulting from the investment of funds in the Bank Accounts will be charged to the Servicer.

 

(c)                                  Additional Amounts.  As additional compensation for the performance of its duties under the Servicing Agreement and this Servicing Supplement and as reimbursement for expenses incurred in connection with its performance, the Servicer will be entitled to retain for its own account all Additional Amounts (or to withdraw and retain any Additional Amounts that nevertheless have been deposited in the Exchange Note Collection Account).  All Additional Amounts are the property of the Servicer.

 

Section 3.9.                                 Termination.  This Servicing Supplement will be terminated in the event that the Servicing Agreement is terminated in accordance therewith and may also be terminated at the option of the Servicer or the Holding Companies at any time following the payment in full of the 2014-B Exchange Note; provided, that the rights and obligations of the parties to this Servicing Supplement under Section 3.4 will survive any such termination.

 

7

 

ARTICLE IV
 ACCOUNTS, COLLECTIONS AND APPLICATION OF FUNDS

 

Section 4.1.                                 Bank Accounts

 

(a)                                 Establishment of Bank Accounts.  On or before the Exchange Note Issuance Date, the Servicer will establish four segregated trust accounts, each in the name of the Indenture Trustee at a Qualified Institution or a Qualified Trust Institution, to be designated as:

 

(i)             “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2014-B” that will be designated as the “Exchange Note Collection Account;”

 

(ii)          “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2014-B” that will be designated as the “Collection Account;”

 

(iii)       “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2014-B” that will be designated as the “Principal Payment Account;” and

 

(iv)      “The Bank of New York Mellon, as Indenture Trustee, as secured party for Ford Credit Auto Lease Trust 2014-B” that will be designated as the “Reserve Account.”

 

Initially, the Exchange Note Collection Account will be account number 521991, the Collection Account will be account number 521992, the Principal Payment Account will be account number 521993 and the Reserve Account will be account number 521994 and each will include any successor or replacement accounts.

 

(b)                                 Control of the Bank Accounts.  Each of the Bank Accounts for the 2014-B Reference Pool will be under the sole dominion and control of the Indenture Trustee, as secured party for the benefit of the 2014-B Secured Parties, so long as the Bank Accounts remain subject to the Lien of the Indenture; provided, that, (i) following the payment in full of the Notes and the release of the Bank Accounts from the Lien of the Indenture, the Exchange Note Collection Account will be under the sole dominion and control of the Collateral Agent and (ii) following the payment in full of the 2014-B Exchange Note, the Exchange Note Collection Account will be under the sole dominion and control of the Borrowers.  However, the Servicer may make deposits to or request the Indenture Trustee (or, after the Note Balance of the Notes has been reduced to zero, the Collateral Agent, and following the payment in full of the 2014-B Exchange Note, the Borrowers) to make deposits to or withdrawals from the Exchange Note Collection Account in accordance with the Exchange Note Supplement, the Credit and Security Agreement, the Servicing Agreement and this Servicing Supplement.  All monies deposited in the Exchange Note Collection Account under the Exchange Note Supplement, the Credit and Security Agreement, the Servicing Agreement or this Servicing Supplement will be held (i) until the Note Balance of the Notes has been reduced to zero and the Bank Accounts have been released from the Lien under the Indenture, by the Indenture Trustee, (ii) until the payment in full of the 2014-B Exchange Note, by the Collateral Agent and (iii) following the payment in full of the 2014-B Exchange Note, by or on behalf of the Borrowers, and in each case will be applied only on the terms and conditions of the 2014-B Basic Documents, as applicable.  The authority of the Servicer to make deposits to the

 

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Bank Accounts is revocable at any time (i) by the Indenture Trustee until the Note Balance of the Notes has been reduced to zero, (ii) then, by the Collateral Agent until the payment in full of the 2014-B Exchange Note and (iii) then, by the Borrowers.

 

(c)                                  Agreement with Depository Institution.  The Bank Accounts will only be established at a Qualified Institution or Qualified Trust Institution that complies with the requirements set forth in Section 5.2(d) of the Servicing Agreement.

 

Section 4.2.                                 Deposits and Payments.

 

(a)                                 If Ford Credit’s short term unsecured debt is rated at least “F1” or better by Fitch and “A-1” or better by Standard & Poor’s (this rating requirement, the “Monthly Remittance Required Ratings”), Ford Credit may remit 2014-B Collections on the Business Day preceding each Payment Date, or with satisfaction of the Rating Agency Condition, on each Payment Date.

 

(b)                                 If Ford Credit’s short term unsecured debt is not rated at least equal to the Monthly Remittance Required Ratings or a Servicer Event of Default occurs, the Servicer will remit to the Exchange Note Collection Account:

 

(i)                                     on the Exchange Note Issuance Date, an amount equal to the sum of (A) the Cutoff Date Payahead Amount and (B) all Active Lease Proceeds, Terminating Lease Proceeds and Closed Lease Proceeds (in each case excluding Recoveries) that are Posted during the period from and including the Cutoff Date to and including the second Business Day preceding the 2014-B Closing Date;

 

(ii)                                  following the Exchange Note Issuance Date, an amount equal to all Active Lease Proceeds, Terminating Lease Proceeds and Closed Lease Proceeds (in each case excluding Recoveries) within two Business Days after the Posting Date for those amounts (including any such amounts Posted on the Business Day preceding the Exchange Note Issuance Date and on the Exchange Note Issuance Date); and

 

(iii)                               all Administrative Reallocation Amounts, Active Lease Advances, Payment Extension Fees and Recoveries received in any Collection Period no later than the Business Day preceding the following Payment Date or, with satisfaction of the Rating Agency Condition, the following Payment Date.

 

(c)                                  Pending deposit in the Exchange Note Collection Account, the Servicer is not required to segregate 2014-B Collections or Payaheads from its own funds.

 

(d)                                 So long as Ford Credit remains the Servicer, Ford Credit, as Servicer, may make the deposits required by Section 4.2(a) net of:

 

(i)             Reference Pool Servicing Fees to be distributed under Section 3.8(a) to the Servicer for that Collection Period; and

 

(ii)          Advance Reimbursement Amounts that the Servicer is permitted to retain under Section 4.3(b).

 

9

 

Section 4.3.                                 Advances.

 

(a)                                 Advances by the Servicer.  The Servicer will make an advance for each Active Lease other than an Advance Payment Plan Lease and each Collection Period if, for the Lease and the Collection Period, the scheduled Base Payment exceeds the sum of (A) Active Lease Proceeds (which may be positive or negative) plus (B) the Payahead Draw, by depositing the amount of the excess (equal to the Active Lease Advance) in the Exchange Note Collection Account on the Business Day preceding the Payment Date immediately following the Collection Period or, with satisfaction of the Rating Agency Condition, on that Payment Date.  However, the Servicer will be required to make Active Lease Advances only to the extent that the Servicer, in its sole discretion, determines that the advances will be recoverable from subsequent 2014-B Collections (whether relating to the Lease and Leased Vehicle or any other Lease or Leased Vehicle) in the manner described in Section 4.3(b).

 

(b)                                 Reimbursement for Outstanding Advances.  During each Collection Period, the Servicer will be reimbursed for any outstanding Advance Balance of a Lease for the preceding Collection Period (or, for the first Collection Period, as of the Cutoff Date) by retaining the following amounts in the following order of priority (the amount so due on any Lease and any Collection Period, the “Advance Reimbursement Amount”):

 

(i)                                     first, if the Lease is an Active Lease during the Collection Period, an amount equal to the lesser of (A) the sum of (1) Active Lease Proceeds, plus (2) the Administrative Reallocation Amount (if any), minus (3) the scheduled Base Payment, in each case for the Lease and the Collection Period and (B) the Advance Balance;

 

(ii)                                  second, if the Lease is a Terminating Lease or a Closed Lease during the Collection Period, an amount equal to the lesser of (A) the sum of (1) the Terminating Lease Proceeds, plus (2) the Closed Lease Proceeds, plus (3) the Administrative Reallocation Amount (if any), in each case for the Lease and the Collection Period and (B) the Advance Balance; and

 

(iii)                               third, on and after the Collection Period that includes the Closed Date for the Lease, an amount equal to the lesser of:

 

(A)                               the sum of all Active Lease Proceeds, Terminating Lease Proceeds, Closed Lease Proceeds and Administrative Reallocation Amounts (in each case not relating to the Lease) for the Collection Period; and

 

(B)                               the excess, if any, of (1) the Advance Balance over (2) the amount retained by the Servicer under Section 4.3(b)(ii) for the current Collection Period.

 

The Servicer may instruct the Indenture Trustee, for so long as the Notes are Outstanding, and then, the Collateral Agent, to withdraw from the Exchange Note Collection Account and pay to the Servicer any amounts that the Servicer is entitled to retain under this Section 4.3(b) to the extent those amounts have been deposited in the Exchange Note Collection Account.  The Indenture Trustee or the Collateral Agent, as applicable, may, but is not required to, request from

 

10

 

the Servicer reasonable documentation (which may be provided by reference to the Servicer’s books and records) in connection with any such withdrawal instruction.

 

Section 4.4.                                 Repayment of Advances.  If a successor Servicer is appointed under the Servicing Agreement, the predecessor Servicer will be entitled to receive reimbursement for the Advance Balances outstanding on the date of termination of the predecessor Servicer in the manner specified in Section 4.3(b).  Any Advance Reimbursement Amount for any Lease will be applied (a) first to the Advance Balances outstanding on the date of termination of the predecessor Servicer and (b) second, to the remaining portion, if any, of the Advance Balances.

 

Section 4.5.                                 Trust Distribution Account.  The Depositor may cause the Owner Trustee to establish and maintain a segregated trust account in the name “U.S. Bank Trust National Association as Owner Trustee,” that is designated as the “Trust Distribution Account” and will promptly notify the Owner Trustee and the Indenture Trustee after the establishment of the Trust Distribution Account.  The Trust Distribution Account will be under the sole dominion and control of the Owner Trustee, except that the Indenture Trustee may make deposits to the Trust Distribution Account in accordance with the 2014-B Basic Documents.  All deposits to and withdrawals from the Trust Distribution Account will be made in accordance with the Indenture and the Trust Agreement.

 

Section 4.6.                                 Reserve Deposits and Withdrawals.

 

(a)                                 On the 2014-B Closing Date, the Depositor will deposit, or cause to be deposited, the Required Reserve Amount in the Reserve Account from the net proceeds of the sale of the Notes.

 

(b)                                 At least two Business Days before each Payment Date, the Servicer will calculate the Reserve Account Draw Amount for that Payment Date and will instruct the Indenture Trustee to withdraw such amount from the Reserve Account and apply it in accordance with Section 5.1 of the Exchange Note Supplement.

 

(c)                                  At least two Business Days before each Payment Date, the Servicer will instruct the Indenture Trustee (based on the most recent Monthly Investor Report) to make the withdrawals, deposits, distributions and payments required to be made on that Payment Date under Section 5.1 of the Exchange Note Supplement and Section 8.2 of the Indenture.

 

ARTICLE V
 TERMINATION

 

Section 5.1.                                 Clean-Up Call.

 

(a)                                 If the Note Balance is equal to or less than 5% of the initial aggregate Note Balance on the last day of any Collection Period, the Servicer has the option to purchase the 2014-B Exchange Note in whole but not in part.  The Servicer may exercise its option to purchase the 2014-B Exchange Note by (i) notifying the Collateral Agent, the Borrowers, the Owner Trustee, the Administrative Agent, the Indenture Trustee and the Rating Agencies at least ten days prior to the Payment Date related to the Collection Period (which Payment Date will be the Exchange Note Purchase Date) and (ii) depositing in the Exchange Note Collection Account an amount equal to

 

11

 

the Exchange Note Purchase Price in immediately available funds by 10:00 a.m. (New York City time) on the Business Day preceding the Exchange Note Purchase Date (or, with satisfaction of the Rating Agency Condition, on the Exchange Note Purchase Date).  Notwithstanding the foregoing, the Servicer will not be permitted to purchase the 2014-B Exchange Note unless the Exchange Note Purchase Price, together with amounts in the Collection Account, is greater than or equal to the sum of (A) the Note Redemption Price for the Notes and (B) all fees and expenses of the Issuer, including all amounts due to the Indenture Trustee under the Indenture.

 

(b)                                 For so long as the Servicer and the Lender under the Credit and Security Agreement are the same entity, on purchase of the 2014-B Exchange Note by the Servicer under Section 5.1(a), the Servicer may, by notice to the Borrowers, the Lender, the Collateral Agent and the Administrative Agent, request that the 2014-B Exchange Note be cancelled and the Leases and related Leased Vehicles be reallocated to the Revolving Facility Pool.

 

ARTICLE VI
 REPORTS AND NOTICES

 

Section 6.1.                                 Monthly Investor Reports.  At least two Business Days before each Payment Date, the Servicer will deliver to the Owner Trustee, the Indenture Trustee, the Note Paying Agent, the Depositor and, if requested, the Rating Agencies, a servicing report substantially in the form of Exhibit B (the “Monthly Investor Report”) for the preceding Collection Period and that Payment Date.  A Responsible Person of the Servicer will certify that the information in the Monthly Investor Report is accurate in all material respects.

 

Section 6.2.                                 Notices and Certificates Received by or Delivered by the Servicer Under the Servicing Agreement.  The Servicer will deliver any notice or certificate received by it or delivered by it under the Servicing Agreement to the Owner Trustee and the Indenture Trustee within five Business Days of receipt or delivery by the Servicer.

 

Section 6.3.                                 Notice of Servicer Event of Default.  The Servicer will notify the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency of any Facility Servicer Event of Default or Exchange Note Servicer Event of Default or any event that with the giving of notice or lapse of time, or both, would become a Facility Servicer Event of Default or Exchange Note Servicer Event of Default, no later than five Business Days after a Responsible Person of the Servicer obtains actual knowledge of the event.

 

Section 6.4.                                 Annual Statement of Compliance.  To the extent required by Regulation AB, the Servicer will deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency within 90 days after the end of each year beginning with the year after the 2014-B Closing Date, an Officer’s Certificate, dated as of December 31 of the preceding year, signed by a Responsible Person of the Servicer to the effect that (i) a review of the Servicer’s activities during the preceding year (or, in the case of the first certificate, the portion of the preceding year since the 2014-B Closing Date) and of its performance under this Agreement has been made under the Responsible Person’s supervision and (ii) to the Responsible Person’s knowledge, based on the review, the Servicer has fulfilled in all material respects all of its obligations under this Agreement throughout the preceding year (or applicable portion of the preceding year), or, if there has been a failure to fulfill any such obligation in any material respect, specifically identifying each failure

 

12

 

known to the Responsible Person and the nature and status of the failure.  The Officer’s Certificate referred to in this Section 6.4 is deemed to be the Officer’s Certificate required under Section 9.3 of the Servicing Agreement.  A copy of the Officer’s Certificate referred to in this Section 6.4 may be obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the Indenture Trustee at its Corporate Trust Office.

 

Section 6.5.                                 Compliance with Obligations under Sarbanes-Oxley Act.  If directed by the Indenture Administrator, the Servicer will prepare, execute and deliver all certificates or other documents required to be delivered by the Issuer under the Sarbanes-Oxley Act of 2002.

 

Section 6.6.                                 Report on Assessment of Compliance with Servicing Criteria and Attestation.  The Servicer will:

 

(i)                                     deliver to the Depositor, the Owner Trustee, the Indenture Trustee and each Rating Agency, a report, dated as of December 31 of the preceding year, on its assessment of compliance with the minimum servicing criteria during the preceding year, including disclosure of any identified material instance of non-compliance identified by the Servicer, as specified by Rule 13a-18 and 15d-18 of the Exchange Act and Item 1122 of Regulation AB; and

 

(ii)                                  cause a firm of registered public accountants that is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act to deliver an attestation report that satisfies the requirements of Rule 13a-18 or Rule 15d-18 under the Exchange Act and Item 1122 of Regulation AB, as applicable, on the assessment of compliance with servicing criteria for the prior  year.  The attestation report will be addressed to the board of directors of the Servicer and the Servicer will deliver copies to the Issuer, the Owner Trustee, the Depositor and the Indenture Trustee.  The attestation will be in accordance with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the Exchange Act.  The firm may render other services to the Servicer, the Depositor or Ford Credit, but the firm must indicate in each attestation report that it is qualified and independent within the meaning of Rule 2-01 of Regulation S-X under the Securities Act.

 

The reports referred to in this Section 6.6 will be delivered within 90 days after the end of each year, beginning in the year after the 2014-B Closing Date.  A copy of the reports referred to in this Section 6.6 may be obtained by any Noteholder or Person certifying it is a Note Owner by a request in writing to the Indenture Trustee at its Corporate Trust Office.

 

Section 6.7.                                 Delivery of Tax Related Information.  To the extent required by law, the Servicer will deliver to the Owner Trustee for distribution to the holder of the Residual Interest information for the preparation of the holder’s federal and State income tax returns.

 

Section 6.8.                                 Termination of Reporting Obligation.  The Servicer’s obligation to deliver or cause the delivery of reports under this Article VI, other than tax reports under Section 6.7, will terminate on the payment in full of the Notes, including by redemption in whole as contemplated by Section 10.1 of the Indenture.

 

13

 

Section 6.9.                                 Authorized Persons of Servicer.  On or prior to the 2014-B Closing Date, the Servicer will provide notice to the Indenture Trustee and the Owner Trustee specifying (a) each Person who will be authorized to provide instructions and directions to the Indenture Trustee and the Owner Trustee on behalf of the Servicer and (b) each Person who is a Responsible Person of the Servicer, which Persons may be changed from time to time by notice to the Indenture Trustee and the Owner Trustee.

 

Section 6.10.                          Execution of Securities and Exchange Commission Filings.  To the extent permitted by law, the Servicer is authorized to execute and, at the request of the Issuer (or the Administrator on its behalf), will execute, on behalf of the Issuer, any Securities and Exchange Commission filings required to be filed by the Issuer under Section 7.3 of the Indenture.

 

ARTICLE VII
 MISCELLANEOUS

 

Section 7.1.                                 Amendments.

 

(a)                                 This Servicing Supplement may be amended in accordance with Section 10.1 of the Servicing Agreement; provided, however, that the Indenture Trustee will provide or withhold consent to any proposed amendment to this Servicing Supplement or the Servicing Agreement that materially affects the rights or obligations of the Servicer of the Collateral Specified Interests and the 2014-B Reference Pool, only as directed by the Noteholders of Notes evidencing not less than a majority of the Note Balance of the Controlling Class.

 

(b)                                 Promptly on the execution of any such amendment, (i) the Servicer will deliver a copy of the amendment to the Indenture Trustee and each of the Rating Agencies and (ii) the Indenture Trustee will notify each holder of a Note of the substance of the amendment.

 

Section 7.2.                                 Third-Party Beneficiaries of the Servicing Agreement and this Servicing Supplement.  The Servicing Agreement and this Servicing Supplement will inure to the benefit of and be binding on the parties to this Servicing Supplement and their assigns (including the Holders of the Collateral Specified Interest Certificates as assignees of the Holding Companies) as well as any 2014-B Exchange Noteholder, the Owner Trustee and the Indenture Trustee.

 

Section 7.3.                                 No Petition.  Each party to this Servicing Supplement covenants that for a period of one year and one day (or, if longer, any applicable preference period) after payment in full of the Notes, all Exchange Notes, and all distributions to all Holders of Certificates and all holders of any other Securities (as defined in the related Titling Company Agreement) the payments on which are derived in any material part from amounts received on any Titling Company Assets (as defined in the applicable Titling Company Agreements), it will not institute against, or join any Person in instituting against, the Issuer, the Depositor, any Holding Company, any Titling Company, or the Holders of the Collateral Specified Interest Certificates any bankruptcy, reorganization, arrangement, insolvency or liquidation proceedings, or other proceedings under any United States federal or state bankruptcy or similar law and agrees it will not file, cooperate with or encourage others to file a bankruptcy petition against the Issuer, the Depositor, any Holding Company, any Titling Company or the Holders of the Collateral Specified

 

14

 

Interest Certificates during the same period.  This Section 7.3 will survive the termination of this Servicing Supplement.

 

Section 7.4.                                 GOVERNING LAW.  THIS SERVICING SUPPLEMENT WILL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK INCLUDING SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATION LAWS OF THE STATE OF NEW YORK, BUT OTHERWISE WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

Section 7.5.                                 Submission to Jurisdiction.  Each party to this Servicing Supplement submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York State Court sitting in New York, New York for purposes of all legal proceedings arising out of or relating to this Servicing Supplement or the transactions contemplated by this Servicing Supplement or by the other 2014-B Basic Documents.  Each party to this Servicing Supplement irrevocably waives, to the fullest extent it may do so, any objection that it may have now or after the date of this Servicing Supplement to the laying of the venue of any legal proceedings arising out of or relating to this Servicing Supplement or the transactions contemplated by this Servicing Supplement or by the other 2014-B Basic Documents brought in one of those courts and any claim that one of those courts is an inconvenient forum.

 

Section 7.6.                                 WAIVER OF JURY TRIAL.  EACH PARTY TO THIS SERVICING SUPPLEMENT IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS SERVICING SUPPLEMENT, THE INDENTURE OR ANY OTHER 2014-B BASIC DOCUMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS SERVICING SUPPLEMENT, THE INDENTURE OR ANY OTHER 2014-B BASIC DOCUMENT.

 

Section 7.7.                                 Severability.  If any one or more of the covenants, agreements, provisions or terms of this Servicing Supplement is held invalid, illegal or unenforceable, then those covenants, agreements, provisions or terms will be deemed severable from the remaining covenants, agreements, provisions or terms of this Servicing Supplement and will in no way affect the validity, legality or enforceability of the other provisions of this Servicing Supplement.

 

Section 7.8.                                 Headings.  The various headings in this Servicing Supplement are included for convenience only and will not affect the meaning or interpretation of any provision of this Servicing Supplement.

 

Section 7.9.                                 Conflict with Servicing Agreement.  In the event of any conflict between this Servicing Supplement (or any portion thereof) and the Servicing Agreement, this Servicing Supplement will prevail.

 

Section 7.10.                          Counterparts.  This Servicing Supplement may be executed in any number of counterparts, each of which will be an original, and all of which will together constitute one and the same instrument.

 

[Remainder of Page Intentionally Left Blank]

 

15

 

EXECUTED BY:

 

	
 
    	
FORD   MOTOR CREDIT COMPANY LLC,
    
	
 
    	
 
    	
as   Servicer for the Collateral Specified Interests and the 2014-B Reference Pool   and as Lender
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Samuel P. Smith
    
	
 
    	
 
    	
Name:
    	
Samuel   P. Smith
    
	
 
    	
 
    	
Title:
    	
Assistant   Treasurer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CAB   EAST HOLDINGS, LLC,
    
	
 
    	
 
    	
acting   for its Series of limited liability company interests designated as the   “Collateral Series,” as Holder of a Collateral Specified Interest Certificate
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Susan J. Thomas
    
	
 
    	
 
    	
Name:
    	
Susan   J. Thomas
    
	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
CAB   WEST HOLDINGS CORPORATION,
    
	
 
    	
 
    	
acting   for its Series of limited liability company interests designated as the   “Collateral Series,” as Holder of a Collateral Specified Interest Certificate
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Susan J. Thomas
    
	
 
    	
 
    	
Name:
    	
Susan   J. Thomas
    
	
 
    	
 
    	
Title:
    	
Secretary
    

 

[Signature Page to Servicing Supplement]

 

 

	
 
    	
 
    	
 
    	
FCALM   HOLDINGS CORPORATION,
    
	
 
    	
 
    	
 
    	
 
    	
acting   for its Series of limited liability company interests designated as the   “Collateral Series,” as Holder of a Collateral Specified Interest Certificate
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   Susan J. Thomas
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    	
Susan   J. Thomas
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    	
Secretary
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
HTD   LEASING LLC,
    
	
 
    	
 
    	
 
    	
 
    	
as   Collateral Agent
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/   Melissa A. Rosal
    
	
 
    	
 
    	
 
    	
 
    	
Name:
    	
Melissa   A. Rosal
    
	
 
    	
 
    	
 
    	
 
    	
Title:
    	
Vice   President
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
AGREED AND ACCEPTED BY:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
U.S. BANK NATIONAL ASSOCIATION,
    	
 
    	
 
    	
 
    
	
 
    	
as   Titling Company Registrar with
    	
 
    	
 
    	
 
    
	
 
    	
respect   to each of the Titling Companies,
    	
 
    	
 
    	
 
    
	
 
    	
on   behalf of the Titling Companies
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   Melissa A. Rosal
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Melissa   A. Rosal
    	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Vice   President
    	
 
    	
 
    	
 
    

 

[Signature Page to Servicing Supplement]

 

 

	
AGREED AND ACCEPTED FOR
    	
 
    
	
 
    	
PURPOSES OF SECTION 7.1(a) BY:
    	
 
    
	
 
    	
 
    
	
FORD CREDIT AUTO LEASE TRUST 2014-B
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
U.S.   Bank Trust National Association,
    	
 
    
	
 
    	
not   in its individual capacity but solely as
    	
 
    
	
 
    	
Owner   Trustee of Ford Credit Auto Lease
    	
 
    
	
 
    	
Trust   2014-B
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Annette Morgan
    	
 
    
	
 
    	
Name:
    	
Annette   Morgan
    	
 
    
	
 
    	
Title:
    	
Assistant   Vice President
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
THE BANK OF NEW YORK MELLON,
    	
 
    
	
 
    	
not   in its individual capacity but solely as
    	
 
    
	
 
    	
Indenture   Trustee
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/   Esther Antoine
    	
 
    
	
 
    	
Name:
    	
Esther   Antoine
    	
 
    
	
 
    	
Title:
    	
Vice   President
    	
 
    

 

[Signature Page to the Servicing Supplement]

 

 

Exhibit A

 

Schedule of Collateral Leases and Collateral Leased Vehicles in 2014-B Reference Pool

 

(On File with Collateral Agent)

 

EA-1

 

Exhibit B

 

Form Of Monthly Investor Report

 

EB-1EX 10.71

AMENDED AND RESTSATED
INVESTMENT AGREEMENT

 

THIS
AMENDED AND RESTATED AGREEMENT dated as of the 22nd day of July, 2014 (the “Agreement”) is by and between
Beaufort Capital Partners LLC (the “Investor”), and iHookup Social, Inc. (the “Company”).

WHEREAS,
the parties desired that, upon the terms and subject to the conditions contained in the investment agreement, by and between the
Investor and the Company, dated June 25, 2014 (the “Original Investment Agreement”), that the Company would
issue and sell to the Investor, from time to time as provided therein, and the Investor would purchase from the Company up to Two
Million Five Hundred Thousand Dollars ($2,500,000) of the Company’s fully registered, freely tradable common stock (the “Common
Stock”);

WHEREAS,
the parties agreed to increase the aggregate dollar amount of Common Stock that the Company would be capable of selling to the
Investor, from time to time, to up to Five Million Dollars ($5,000,000), by amending and restating the Agreement;

WHEREAS,
the parties now 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 Dollars
($5,000,000) of the Company’s Common Stock; and

WHEREAS,
such investments will be made in reliance upon the provisions of the Securities Act of 1933, as amended, and the regulations
promulgated thereunder (the “Securities Act”), and 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 investments to be made hereunder.

NOW, THEREFORE,
the parties hereto agree as follows:

ARTICLE I.

Certain Definitions

Section 1.1.
“Advance” shall mean the portion of the Commitment Amount requested by the Company in the Advance Notice.

Section 1.2.
“Advance Date” shall mean the fifth Trading Day after expiration of the applicable Pricing Period for each Advance.

Section 1.3.
“Advance Notice” shall mean a written notice in the form of Exhibit A attached hereto to the Investor
executed by an officer of the Company and setting forth the Advance amount that the Company requests from the Investor. An Advance
Notice cannot be sent if a prior Advance has not yet been completed. No Advance Notice can be delivered by the Company on a day
which is not a Trading Day.

Section 1.4.
[Intentionally Blank]

Section
1.5. “Advance Shares” shall mean the shares of Common Stock issued and sold to the Investor pursuant to an Advance
Notice under the terms and conditions hereof.

Section
1.6. “Average Daily Trading Volume” means the average trading volume of the Common Stock of the ten Trading
Days prior to the date of delivery of the Advance.

Section 1.7
Reserved.

Section 1.8.
“Closing Daily Price” means, as related to the Common Stock as of any date, the last closing price for such
security during normal trading on the OTCQB, or, if the OTCQB is not the principal securities exchange or trading market for such
security, the last closing bid price during normal trading of such security on the principal securities exchange or trading market
where such security is listed or traded as reported by such principal securities exchange or trading market, or if the foregoing
do not apply, the last closing bid price during normal trading of such security in the over-the-counter market on the electronic
bulletin board for such security, or, if no closing bid price is reported for such security, the average of the bid prices of any
market makers for such security as reported in the "pink sheets" by the Pink OTC Markets, Inc. If the closing
bid price cannot be calculated for such security on such date on any of the foregoing bases, the closing bid price of such security
on such date shall be the fair market value as mutually determined by the Company and the Investor.  If the Company and
the Investor are unable to agree upon the fair market value of the Common Stock, then such dispute shall be resolved by an investment
banking firm mutually acceptable to the Company and the Investor in this offering and any fees and costs associated therewith shall
be paid by the Company and the Investor, equally.

Section 1.9.
“Closing” shall mean one of the closings of a purchase and sale of Common Stock pursuant to Section 2.3.

Section 1.10.
“Commitment Amount” shall mean the aggregate amount of Five Million Dollars ($5,000,000) which the Investor
has agreed to provide to the Company in order to purchase the Common Stock pursuant to the terms and conditions of this Agreement.

    	 

    	 

    

Section 1.11.
“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.

Section 1.12.
“Common Stock” shall mean the Company’s freely tradable, fully registered and unencumbered common stock.

Section 1.13.
“Condition Satisfaction Date” shall have the meaning set forth in Section 7.2.

Section 1.14.
“Damages” shall mean any loss, claim, damage, liability, costs and expenses (including, without limitation,
reasonable attorney’s fees and disbursements and costs and expenses of expert witnesses and investigation).

Section 1.15.
“Effective Date” shall mean the date on which the SEC first declares effective a Registration Statement registering
the resale of the Registrable Securities as set forth in Section 7.2(a).

Section 1.16.
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

Section 1.17.
“Environmental Laws” shall have the meaning set forth in Section 4.11.

Section 1.18. “Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

Section
1.19. “Evaluation Date” shall have the meaning set forth in Section 4.30.

Section
1.20. ”Event of Default” shall have the meaning set forth in Section 7.2.

Section
1.21. “Indemnified Liabilities” shall have the meaning set forth in Section 5.1(a).

Section
1.22. “Indemnified Party” and “Indemnifying Party” shall have the meaning set forth in Section
5.2.

Section
1.23. “Investor Indemnitees” shall have the meaning set forth in Section 5.1(a).

Section
1.24. “Losses” shall have the meaning set forth in Section 5.1(b).

Section 1.25.
“Material Adverse Effect” shall mean any condition, circumstance, or situation that may result in, or reasonably
be expected to result in (i) a material adverse effect on the legality, validity or enforceability of the Agreement, including
on the legal status of the Advance Shares as free trading, (ii) a material adverse effect on the results of operations, assets,
business or condition (financial or otherwise) of the Company, taken as a whole, (iii) a material adverse effect on the Company’s
ability to perform its obligations hereunder in any material respect on a timely basis its obligations under the Agreement, or
(iv) shares of the Company cease to be listed or trading of the Common Stock is suspended continuously for more than five (5) trading
days.

Section 1.26.
“Market Price” shall mean the average of the 3 lowest Closing Daily Prices of the Company’s Common Stock
during the Pricing Period.

Section 1.27.
“Maximum Advance Amount” The number of Advance Shares sold in each Advance shall not be greater than either
(i) two hundred percent (200%) of the Average Daily Trading Volume, or (ii) the number of shares of Common Stock which would cause
the aggregate holdings of the Investor’s shares of common stock of the Company to be greater than 4.99% of the issued and
outstanding shares of common stock of the Company (including Common Stock and shares of restricted common stock).

Section
1.28. “Maximum Common Stock Issuance” shall have the meaning set forth in Section 2.2.

Section
1.29. “Ownership Limitation” shall have the meaning set forth in Section 2.2.

Section 1.30.
“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.

Section 1.31.
“Pricing Period” shall mean the five (5) consecutive Trading Days prior to the Advance Date. 

Section 1.32.
“Principal Market” shall mean the Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market, the American Stock Exchange, the OTCQB, or the New York Stock Exchange, whichever is at the time the principal trading
exchange or market for the Common Stock.

Section 1.33.
“Purchase Price” shall mean eighty percent (80%) of the Market Price during the Pricing Period.

    	 

    	 

    

Section 1.34.
“Registrable Securities” shall mean the Advance Shares to be issued hereunder (i) in respect of which a
Registration Statement has not been declared effective by the SEC, (ii) which have not been sold under circumstances meeting
all of the applicable conditions of Rule 144 or (iii) which have not been otherwise transferred to a holder who may trade
such Advance Shares without restriction under the Securities Act, and the Company has delivered a new certificate or other evidence
of ownership for such securities not bearing a restrictive legend.

Section
1.35. “Registration Limitation” shall have the meaning set forth in Section 2.2.

Section 1.36.
“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.

Section 1.37.
“Registration Statement” shall mean a registration statement on Form S-1 or Form S-3 (if use of such form is
then available to the Company pursuant to the rules of the SEC and, if not, 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
resale of the Registrable Securities to be registered thereunder in accordance with the provisions of this Agreement and the Registration
Rights Agreement, and in accordance with the intended method of distribution of such securities), for the registration of the resale
by the Investor of the Registrable Securities under the Securities Act.

Section 1.38.
“Regulation D” shall mean Regulation D under the Securities Act.

Section
1.39. “Related Party” shall have the meaning set forth in Section 6.15.

Section
1.40. “Rule 144” shall mean Rule 144 (or any similar provision then in force) promulgated under the Securities
Act.

Section 1.41.
“SEC” shall mean the United States Securities and Exchange Commission.

Section 1.42.
“Securities Act” shall have the meaning set forth in the recitals.

Section
1.43. “Third Party Claim” shall have the meaning set forth in Section 5.2(b).

Section 1.44.
“Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.

Section 1.45.
“Valuation Event” shall have the meaning set forth in Section 2.10.

Section 1.46.
“Trading Day” shall mean any day during which the New York Stock Exchange shall be open for business.

Section 1.47.
“VWAP” means, as of any date, the daily dollar volume-weighted average price for such security as reported by
Bloomberg, LP through its “Historical Price Table Screen (HP)” with Market: Weighted Average function selected (or
comparable financial news service (U.S market only)), or, if no dollar volume-weighted average price is reported for such security
by Bloomberg, LP (or comparable financial news service (U.S market only)), the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as reported on OTC Markets.

ARTICLE II.

Advances

Section 2.1.
Advances Subject to the terms and conditions of this Agreement (including, without limitation, the provisions 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, Advance Shares, by the delivery, in the Company’s sole discretion, of Advance Notices. The aggregate maximum
amount of all Advances that the Investor shall be obligated to make under this Agreement shall not exceed the Commitment Amount.
Once an Advance Notice is received by the Investor, it shall not be terminated, withdrawn or otherwise revoked by the Company except
as set forth in this Agreement. Fifty precent (50%) of each Advance shall be immediately directed to the Investor to pay down any
and all remaining debt the Company has to the Investor, which was loaned by the Investor to the Company prior to the effectiveness
of the Registration Statement, as declared by the SEC, until such time as no such debt remains. In the Event the Company fails
to issue an Advance Notice within eighteen (18) months of the Registration Statement being decalred effective by the SEC, the Company
shall pay to the Investor an amount in cash equal to the Registration Fees (as defined in Section 12.4 below).

Section 2.2. Mechanics.

(a) 
Advance Notice. At any time during the Commitment Period, the Company may require the Investor to purchase Advance Shares
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 Advance Shares issuable to the Investor pursuant to an Advance cause the aggregate number of shares
of Common Stock beneficially owned by the Investor and its affiliates to exceed 4.99% of the then outstanding Common Stock (the
“Ownership Limitation”) (as of the date of this Agreement, Investor and its affiliates held zero (0%) percent
of the outstanding Common Stock), (iv) under no circumstances shall the aggregate offering price or number of Advance Shares, as
the case may be, exceed the aggregate offering price or number of shares of Common Stock available for issuance under a Registration
Statement (the “Registration Limitation”) and (v) the Common Stock must be DWAC eligible and sent to the Investor
in electronic form, instead of certificate form. In the event that the Investor sends written acceptance of accepting a physical
certificate, all fees and expenses for this certificate will be paid by the Company.

    	 

    	 

    

(b) 
Date of Delivery of Advance Notice. An Advance Notice shall be deemed delivered on (i) the Trading Day it is received
by email (to the address set forth in Section 11.1 herein) by the Investor if such notice is received prior to 5:00 pm Eastern
Time, or (ii) the immediately succeeding Trading Day if it is received by email 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.
The Company acknowledges and agrees that the Investor shall be entitled to treat any email it receives from officers whose email
addresses are identified by the Company purporting to be an Advance Notice as a duly executed and authorized Advance Notice from
the Company.

Section 2.3.
Closings.

(a)
On the Advance Date, the Company shall deliver to the Investor’s brokerage account in electronic form, such number of Advance
Shares of the DWAC eligible Common Stock registered in the name of the Investor in accordance with the Advance Notice and pursuant
to this Agreement. Once such Advance Shares have been accepted by the Investor, the Investor shall immediately deliver to the Company
the amount of the Advance by wire transfer of immediately available funds as determined by the Purchase Price. On or prior to the
Advance 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 Section 2.3(b) below in order to implement and effect the transactions contemplated
herein.

(b)
Obligations Upon Closing. The Investor agrees to advance the amount corresponding to the Advance Notice to the Company upon
completion of each of the following conditions:

(i) The
Company shall have delivered via electronic delivery to the Investor the Advance Shares applicable to the Advance in accordance
with Section 2.3(a).

(ii) A
Registration Statement filed pursuant to the Registration Rights Agreement shall be effective and available for the resale of all
applicable Advance Shares to be issued in connection with the Advance and any certificates evidencing such shares shall be free
of restrictive legends.

(iii) the
Company shall have obtained all material permits and qualifications required by any applicable state for the offer and sale of
the Registrable Securities, or shall have the availability of exemptions therefrom. The sale and issuance of the Registrable Securities
shall be legally permitted by all laws and regulations to which the Company is subject;

(iv) the
Company shall have filed with the SEC in a timely manner all reports, notices and other documents required of a “reporting
company” under the Exchange Act and applicable SEC regulations; and

(v) the
Company’s transfer agent shall be DWAC eligible.

Section 2.4.
[Intentionally Omitted]

Section 2.5.
Hardship. In the event the Investor sells shares of the Advance Shares after receipt of an Advance Notice and the Company
fails to perform the obligations mandated in Section 2.3, which are within the sole control of the Company, the Company agrees
that in addition to and in no way limiting the rights and obligations set forth in Article V hereto and in addition to any other
remedy to which the Investor is entitled at law or in equity, including, without limitation, specific performance, it will hold
the Investor harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred,
arising out of or in connection with such default by the Company and acknowledges that irreparable damage would occur in the event
of any such default.  It is accordingly agreed that the Investor shall be entitled to an injunction or injunctions to prevent
such breaches of this Agreement and to specifically enforce, without the posting of a bond or other security, the terms and provisions
of this Agreement.

Section
2.6. Removal of Restricted Legends. If either shares of restricted stock are released to the Investor upon a Break Event
(as described in Section 12.4 below) and the Company rejects the Investors request to direct the Company’s transfer agent
to remove the restricted legend from the Investor’s stock certificate five trading days after the Investor’s request
to remove such restricted legend, then the Company shall pay the Investor $1,000.00 for each day beyond the five trading days the
Company fails to remove such restricted legend. Company covenants that, except as set forth below, there shall be no justifiable
reason not to remove the restricted legend from the stock certificates and in the event that Company attempts to offer such justification,
the Company shall pay the Investor $$2,000.00 for each day beyond the five trading days the company fails to remove such restricted
legend. Notwithstanding the foregoing, the Company shall not be liable to pay the Investor either of the above fees if the Investor
is not in full compliance with the applicable rules and regulations used to remove any restricted legend or fails reasonably comply
with requests by the Company or its transfer agent related to the removal of the restricted legend or is otherwise in breach of
this Agreement.

Section
2.7      Increase in Commitment Amount.  At any time prior to the one year anniversary of
the Effective Date (the “Commitment Increase Date”) the Company may notify the Investor in writing that it wishes
to increase the Commitment Amount (provided that the Company has the ability to register the additional Commitment Amount on the
Registration Statement) effective upon the Commitment Increase Date and the Commitment Amount shall automatically be deemed increased.

Section
2.8 Reimbursement.    If (I) the Investor becomes a defendant in any capacity in any legal action or
proceeding brought by any shareholder of the Company, in connection with the alleged breach of duty by the officers or directors
of the Company or a material misstatement made by the Company in connection with its filings made with the SECThe reimbursement
obligations of the Company under this section shall be in addition to any liability which the Company may otherwise have, shall
extend upon the same terms and conditions to any affiliates of the Investor that are actually named in such action, proceeding
or investigation, and partners, directors, agents, employees, attorneys,

    	 

    	 

    

accountants, auditors and controlling
persons (if any), as the case may be, of Investor and any such affiliate, and shall be binding upon and inure to the benefit of
any successors of the Company, the Investor and any such affiliate and any such person. Any and all costs that Investor pays for
relating to clearing and processing stock certificates shall be deducted from any payment the Company receives from Investor.

Section 2.9 Overall
Limit on Issuable Common Stock. Notwithstanding anything contained herein to the contrary, if during the Commitment Period
the Company becomes listed on an exchange that limits the number of shares of Common Stock that may be issued without shareholder
approval, then the total number of Advance Shares issuable by the Company and purchasable by the Investor pursuant to this Agreement
shall not exceed that number of shares of Common Stock that may be issuable without shareholder approval (the “Maximum
Common Stock Issuance”).  If such issuance of Advance Shares could cause a delisting on the Principal Market, then
the Maximum Common Stock Issuance shall first be approved by the Company's shareholders in accordance with applicable law and the
By-laws and Amended and Restated Articles of Incorporation of the Company. The parties understand and agree that the Company's
failure to seek or obtain such shareholder approval shall in no way adversely affect the validity and due authorization of the
issuance and sale of Advance Shares in accordance with the terms and conditions hereof to the Investor or the Investor's obligation
in accordance with the terms and conditions hereof to purchase a number of Advance Shares in the aggregate up to the Maximum Common
Stock Issuance limitation, and that such approval pertains only to the applicability of the Maximum Common Stock Issuance limitation
provided in this Section 2.9.

 

Section 2.10. Valuation
Event. The Company agrees that it shall not take any action that would result in a Valuation Event occurring during a Pricing
Period. Valuation Event shall mean an event in which the Company at any time during a Pricing Period takes any of the following
actions: (i) subdivides or combines its Common Stock or (ii) pays a dividend in Ordinary Shares or makes any other purchase of
its Ordinary Shares.

 

 

ARTICLE III.

Representations of Investor

Investor
hereby represents and warrants to, and agrees with, the Company that the following are true and correct as of the date hereof and
as of each Advance Date:

Section 3.1.
Organization and Authorization. The Investor is duly incorporated or organized and validly existing in the jurisdiction
of its incorporation or organization and has all requisite power and authority to purchase and hold the securities issuable hereunder.
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 (including, without limitations, the Registration Rights Agreement), 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.

Section 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.

Section 3.3.
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 his or 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 its 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.

Section 3.4.
Information. The Investor and its advisors (and its counsel), if any, have been furnished with all materials relating to
the business, finances and operations of the Company and information it deemed material to making an informed investment decision.
The Investor and its advisors, if any, have been afforded the opportunity to ask questions of the Company and its management and
has either done so or has waived its opportunity to do so. Neither such inquiries nor any other due diligence investigations conducted
by such Investor or its advisors, if any, or its representatives shall modify, amend or affect the Investor’s right to rely
on the Company’s representations and warranties contained in this Agreement. The Investor understands that its investment
involves a high degree of risk. The Investor is in a position regarding the Company, which, based upon employment, family relationship
or economic bargaining power, enabled and enables such Investor to obtain information from the Company in order to evaluate the
merits and risks of this investment.

Section 3.5.
Receipt of Documents. The Investor and its counsel have received and read in their entirety: (i) this Agreement and
the Exhibits annexed hereto; (ii) all due diligence and other information necessary to verify the accuracy and completeness
of such representations, warranties and covenants; and (iii) answers to all questions the Investor submitted to the Company
regarding an investment in the Company; and the Investor has relied on the information contained therein and has not been furnished
any other documents, literature, memorandum or prospectus.

Section 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 (as that term is defined in Rule 405 of the Securities Act).

Section 3.7.
Trading Activities. The Investor’s trading activities with respect to the Common Stock shall be in compliance with
all applicable securities laws, rules and regulations and the rules and regulations of the Principal Market on which the Common
Stock is listed or traded. Investor makes no representations or covenants that it will not engage in trading in the securities
of the Company, other than the Investor will not engage in any short sales of the Common Stock, or other similar activity that
profits on the decline in the price of Common Stock, at any time during the Agreement. Nothing contained in this Agreement shall
be deemed a representation or warranty by the Investor to hold any Stock for any period of time. The Company acknowledges and agrees
that transactions in its securities by the Investor may impact the market price of the Stock, including during periods when the
prices at which the Company may be required to issue Investor’s stock are determined.

    	 

    	 

    

 

ARTICLE
IV.

Representations
and Warranties of the Company

 

Except
as stated below, on the disclosure schedules attached hereto the Company hereby represents and warrants to, and covenants with,
the Investor that the following are true and correct as of the date hereof:

Section 4.1.
Organization and Qualification. The Company is duly incorporated or organized and validly existing in the jurisdiction of
its incorporation or organization 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 on the Company and
its subsidiaries taken as a whole.

Section 4.2.
Authorization, Enforcement, Compliance with Other Instruments. (i) The Company has the requisite corporate power and
authority to enter into and perform this Agreement, the Registration Rights Agreement and any related agreements, in accordance
with the terms hereof and thereof, (ii) the execution and delivery of this Agreement, the Registration Rights 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, the Registration Rights Agreement and any related agreements
have been duly executed and delivered by the Company, (iv) this Agreement, the Registration Rights Agreement and assuming
the execution and delivery thereof and acceptance by the Investor and 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.

Section 4.3.
Capitalization. The authorized capital stock of the Company consists of 10,000,000,000 shares of Common Stock, of which
48,064,622 shares of Common Stock are issued and outstanding, and 50,000,000 shares of authorized Preferred Stock, of which 2,500,000
shares are issued and outstanding All of such outstanding shares have been validly issued and are fully paid and nonassessable.
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 disclosed on Schedule 4.3, 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; and (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 the Registration Rights Agreement), except pursuant to the terms
of an agreement between the Company and the Investor. 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 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.

Section 4.4.
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, any certificate
of designations of any outstanding series of preferred stock of the Company 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 agreement, indenture or instrument to which the Company or any of
its subsidiaries is a party, or result in a violation of any 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 or any of its subsidiaries
is bound or affected and which would cause a Material Adverse Effect. Neither the Company nor its subsidiaries is in violation
of any term of or in default under its Articles 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. The business of the Company and its subsidiaries is not being conducted
in violation of any material law, ordinance, and 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 or the Registration Rights
Agreement in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date hereof.
The Company and its subsidiaries are unaware of any fact or circumstance which might give rise to any of the foregoing.

Section 4.5.
SEC Documents; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents
required to be filed by it with the SEC under the Securities Exchange Act (all of the foregoing filed prior to the date hereof
or amended after the date hereof and all exhibits include therein and financial statements and schedules thereto and documents
incorporated by reference therein, being hereinafter referred to as the “SEC Documents”) on timely basis or
has received a valid extension of such time of filing and has filed any such SEC Document prior to the expiration of any such extension.
The Company has delivered to the Investor or its representatives, or made available through the SEC’s website at http://www.sec.gov.,
true and complete copies of the SEC Documents. 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 in all material respects 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).

Section 4.6.
No Misstatement or Omission.  Each part of the Registration Statement, when such part became or becomes effective,
and the related prospectus (“Prospectus”), on the date of filing thereof with the SEC and at each Advance Date and
Closing Date, conformed or will conform in all material respects with the requirements of the Securities Act and the rules and
regulations promulgated thereunder; each part of the Registration Statement, when such part became or becomes effective, did not
or will not contain an 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 not misleading; and the Prospectus, on the date of filing thereof with the SEC and at each Advance
Date, did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made, not misleading; except that the foregoing shall not
apply to statements or omissions in any such document made in reliance on information furnished in writing to the Company by the
Investor expressly stating that such information is intended for use in the Registration Statement, the Prospectus, or any amendment
or supplement thereto.

Section 4.7.
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 on the Company’s business or financial condition.

Section 4.8.
Absence of Events of Default. No event of default, as defined in the respective agreement to which the Company is a party,
and no event which, with the giving of notice or the passage of time or both, would become an event of default (as so defined),
has occurred and is continuing, which would have a Material Adverse Effect on the Company’s business, properties, prospects,
financial condition or results of operations. The Company shall notify the Investor immediately upon any event of default, or anything
that is likely to detrimentally affect the ability of the Company to perform its obligations under this Agreement, occurring, or
becoming, to the Company’s knowledge, likely to occur, and include the specifics of such event of default or other event
in its notice. At the Investor’s request, the Company shall provide the Investor with a certificate signed by two (2) of
its directors or its Chief Executive Officer, which shall state whether an event of default has occurred or is continuing.

Section 4.9.
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 and its subsidiaries are unaware of any facts or
circumstances which might give rise to any of the foregoing.

Section 4.10.
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.

Section 4.11.
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.

Section 4.12.
Title. 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.

Section 4.13.
Insurance. Upon the Company generating revenue, the Company and each of its subsidiaries will become insured by insurers
of recognized financial responsibility against such losses and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company and its subsidiaries are engaged. Neither the Company nor any
such subsidiary has been refused any insurance coverage sought or applied for and neither the Company nor any such subsidiary has
any reason to believe that it will not be able to renew its existing liability 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 materially
and adversely affect the condition, financial or otherwise, or the earnings, business or operations of the Company and its subsidiaries,
taken as a whole.

    	 

    	 

    

Section 4.14.
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.

Section 4.15.
[Intentionally Omitted.]

Section 4.16.
No Material Adverse Breaches, etc. Neither the Company nor any of its subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation which in the judgment of the Company’s officers
has or is expected in the future to have a Material Adverse Effect on the business, properties, operations, financial condition,
results of operations or prospects of the Company or its subsidiaries. Except as set forth in the SEC Documents, neither the Company
nor any of its subsidiaries is in breach of any contract or agreement which breach, in the judgment of the Company’s officers,
has or is expected to have a Material Adverse Effect on the business, properties, operations, financial condition, results of operations
or prospects of the Company or its subsidiaries.

Section 4.17.
Absence of Litigation. 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 (i) have a Material Adverse Effect
on the transactions contemplated hereby (ii) adversely affect the validity or enforceability of, or the authority or ability of
the Company to perform its obligations under, this Agreement or any of the documents contemplated herein, or (iii) have a Material
Adverse Effect on the business, operations, properties, financial condition or results of operation of the Company and its subsidiaries
taken as a whole.

Section 4.18.
Reserved.

Section 4.19.
Tax Status. The Company and each of its subsidiaries has made or filed all 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 has set aside on its 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.

Section 4.20.
Certain Transactions. 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.

Section 4.21.
Rights of First Refusal. The Company is not obligated to offer the securities offered hereunder on a right of first refusal
basis or otherwise to any third parties including, but not limited to, current or former shareholders of the Company, underwriters,
brokers, agents or other third parties.

Section 4.22.
Use of Proceeds. The Company shall use the net proceeds from this offering for working capital and other general corporate
purposes including paying relevant fees and commissions incurred from this transaction. The Company will not provide any funding
to or purchase an interest in any person listed by the United States Department of the Treasury’s Office of Foreign Assets
Control as a Specially Designated National and Blocked Person.

Section 4.23.
[Intentionally Omitted]

Section 4.24.
Opinion of Counsel. Investor shall receive opinions from counsel to the Company on the date hereof substantially in the
form attached hereto as Exhibit B.

Section 4.25.
[Intentionally Omitted]

Section 4.26.
Dilutive Effect. The Company understands and acknowledges that the number of Advance Shares issuable upon purchases pursuant
to this Agreement will increase in certain circumstances including, but not necessarily limited to, the circumstance wherein the
trading price of the Common Stock declines during the Pricing Period. The Company’s executive officers and directors have
studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential
dilutive effect on the shareholders of the Company. The Board of Directors of the Company has concluded, in its good faith business
judgment, and with full understanding of the implications, that such issuance is in the best interests of the Company. The Company
specifically acknowledges that, subject to such limitations as are expressly set forth in the Agreement, its obligation to issue
Advance Shares upon purchases pursuant to this Agreement is absolute and unconditional regardless of the dilutive effect that
such issuance may have on the ownership interests of other shareholders of the Company.

Section 4.27.
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, partner or fiduciary of the Company or
any of its affiliates or subsidiaries (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 Common Stock hereunder. The Company
is aware and acknowledges that it may not be able to request Advances under this Agreement if it cannot obtain an effective Registration
Statement or if any issuances of Common Stock pursuant to any Advances would violate any rules of the Principal Market.

 

    	 

    	 

    

Section 4.28.
No Advice from the Investor. The Company acknowledges that it has reviewed this Agreement and the transactions contemplated
by this Agreement with his or its own legal counsel and investment and tax advisors. The Company is relying solely on such counsel
and advisors and not on any statements or representations of the Investor or any of its 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. The Company is not relying on any representation except for the representations of the Investor contained in
this Agreement.

Section
4.29. No Similar Transactions. Except as disclosed on Schedule 4.29, the Company has not entered into any transaction
similar in nature to the one described in this Agreement.

Section
4.30. [Intentionally Omitted]

Section
4.31 Other Transactions. If at any time during the Term of the Agreement, the Company enters into an equity line of credit,
whereby the Issuer may sell securities at a future determined price, the Company’s right to request Advances as set forth
in Section 2.1 shall terminate. If the Company enters into such an equity line of credit, the Company shall pay to the Investor
an amount in cash equal to the Registration Fees. The Company confirms that except for certain Convertible Notes set forth in the
attached Disclosre Schedule, it has not entered into (A) any an agreement with any other fund or entity to effect any financing
involving the sale of debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right
to receive additional shares of Common Stock at a price that is based upon and/or varies with the trading prices of Company’s
Common Stock at any time after the initial issuance of such securities or is subject to reset upon the occurrence of specified
or contingent events and (B) any agreement, including but not limited to an equity line of credit, whereby the Issuer may sell
securities at a future determined price

 Section
4.32 The Advance Shares.  The Advance 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 encumbrances 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, conforms in all material respects to the description thereof contained in the Registration Statement and the
Common Stock, including the Advance Shares, will conform to the description thereof contained in the Prospectus as amended or supplemented. 
Neither the stockholders of the Company, nor any other Person have any preemptive rights or rights of first refusal with respect
to the Advance Shares or other rights to purchase or receive any of the Advance Shares or any other securities or assets of the
Company, and 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 Advance
Shares.  The Company is not obligated to offer the Advance Shares on a right of first refusal basis or otherwise to any third
parties including, but not limited to, current or former shareholders of the Company, underwriters, brokers, agents or other third
parties.

Section
4.33 [Intentionally Omitted]

Section
4.34 Blue Sky. The Company shall, at its sole cost and expense, on or before each of the Closing
Dates, take such action as the Company shall reasonably determine is necessary to qualify the Securities for, or obtain exemption
for the Securities for, sale to the Investor at each of the Closings pursuant to this Agreement under applicable securities or
“Blue Sky” laws of such states of the United States, as reasonably specified by the Investor, and shall provide evidence
of any such action so taken to the Investor on or prior to the Closing Date. 

Section
4.35 Reservation of Shares. The Company shall reserve thirty million (30,000,000)
shares of Stock for the issuance of the Securities to the Investor
as required hereunder. In the event that the Company determines that it does not have a sufficient number of authorized shares
of Common Stock to reserve and keep available for issuance, the Company shall use all commercially reasonable efforts to increase
the number of authorized shares of Common Stock by seeking shareholder approval for the authorization of such additional shares.

Section
4.36 Payment Set Aside. To the extent that the Company makes a payment or payments to the Investor
hereunder or under the Registration Rights Agreement or the Investor enforces or exercises its rights hereunder or thereunder,
and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated,
declared to be invalid or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise
restored to the Company, a trustee, receiver or any other person under any law (including, without limitation, any bankruptcy law,
state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not
been made or such enforcement or setoff had not occurred. 

Section
4.37 Share Capital. There are no securities or instruments containing anti-dilution of similar
provision that will be triggered by the issuance of shares of Common Stock pursuant to this Agreement. The Company does not have
any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement and there is
no dispute as to the class of any shares of the Company.

ARTICLE
V.

Indemnification

The
Investor and the Company represent to the other the following with respect to itself:

Section 5.1.
Indemnification.

    	 

    	 

    

(a)
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 defend, protect, indemnify and hold harmless the Investor, and all of
its officers, directors, partners, employees and agents (including, without limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the “Investor Indemnitees”) from and against any and all actions,
causes of action, suits, claims, losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith
, and including reasonable attorneys’ fees and disbursements (the “Indemnified Liabilities”), incurred
by the Investor Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or
breach of any representation or warranty made by the Company in this Agreement or the Registration Rights Agreement or any other
certificate, instrument or document contemplated hereby or thereby, (b) any breach of any covenant, agreement or obligation
of the Company contained in this Agreement or the Registration Rights Agreement or any other certificate, instrument or document
contemplated hereby or thereby, or (c) any cause of action, suit or claim brought or made against such Investor Indemnitee
not arising out of any action or inaction of an Investor Indemnitee., 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. 

(b)
In consideration for the Company’s execution and delivery of this Agreement and in addition to Investor’s other obligations
hereunder, Investor shall defend, protect. indemnify and hold harmless the Investor, and all of its officers, directors, partners,
employees and agents (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Company Indemnitees”) from and against any and all Indemnificed Liabilities, incurred by
the Company Indemnitees or any of them as a result of, or arising out of, or relating to (a) any misrepresentation or breach
of any representation or warranty made by Investor in this Agreement or or any other certificate, instrument or document contemplated
hereby or thereby, (b) any breach of any covenant, agreement or obligation of Investor contained in this Agreement or the
Registration Rights Agreement or any other certificate, instrument or document contemplated hereby or thereby, or (c) any
investigation or claim by the SEC of or against Investor.

(b)
Contribution.  In the event that the indemnity provided in Section 5.1 is unavailable to or insufficient to hold harmless
an indemnified party for any reason, the indemnifying party severally agrees to contribute to the aggregate losses, claims, damages
and liabilities (including legal or other expenses reasonably incurred in connection with investigating or defending the same)
(collectively “Losses”) to which theindemnifying party may be subject in such proportion as is appropriate to
reflect the relative benefits received by the indemnifying party on the one hand 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
Losses 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 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 losses, liabilities, claims, damages and expenses
incurred by an indemnified party and referred to above in this section shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified Party 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 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.  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.

I 
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 indemnified person at law or in equity.  The obligations of the parties to indemnify or make contribution
under this Article V shall survive termination.

(d) 
Notwithstanding anything in this Agreement to the contrary, neither party to this Agreement shall be responsible or liable for
any indirect, special, punitive, or consequential damages actually or allegedly suffered or incurred by the other party to this
Agreement arising under, out of, or relating to this Agreement even if the other party has been advised or knew, or should have
known, of the possibility thereof.

Section
5.2 Notification of Claims for Indemnification. Each party entitled to indemnification under this Article V (an “Indemnified
Party”) shall, promptly after the receipt of notice of the commencement of any claim against such Indemnified Party in
respect of which indemnity may be sought from the party obligated to indemnify such Indemnified Party under this Article V (the
“Indemnifying Party”), notify the Indemnifying Party in writing of the commencement thereof. Any such notice
shall describe the claim in reasonable detail. The failure of any Indemnified Party to so notify the Indemnifying Party of any
such action shall not relieve the Indemnifying Party from any liability which it may have to such Indemnified Party (a) other
than pursuant to this Article V or (b) under this Article V unless, and only to the extent that, such failure results in the
Indemnifying Party’s forfeiture of substantive rights or defenses or the Indemnifying Party is prejudiced by such delay.
The procedures listed below shall govern the procedures for the handling of indemnification claims.

(a)
Any claim for indemnification for Indemnified Liabilities that do not result from a Third Party Claim as defined in the following
paragraph, shall be asserted by written notice given by the Indemnified Party to the Indemnifying Party. Such Indemnifying Party
shall have a period of thirty (30) days after the receipt of such notice within which to respond thereto. If such Indemnifying
Party does not respond within such thirty (30) day period, such Indemnifying Party shall be deemed to have refused to accept
responsibility to make payment as set forth in Section 5.1. If such Indemnifying Party does not respond within such thirty
(30) day period or rejects such claim in whole or in part, the Indemnified Party shall be free to pursue such remedies as
specified in this Agreement.

    	 

    	 

    

(b)
If an Indemnified Party shall receive notice or otherwise learn of the assertion by a person or entity not a party to this Agreement
of any threatened legal action or claim (collectively a “Third Party Claim”), with respect to which an Indemnifying
Party may be obligated to provide indemnification, the Indemnified Party shall give such Indemnifying Party written notice thereof
within twenty (20) days after becoming aware of such Third Party Claim.

(c)
An Indemnifying Party may elect to defend (and, unless the Indemnifying Party has specified any reservations or exceptions, to
seek to settle or compromise) at such Indemnifying Party’s own expense and by such Indemnifying Party’s own counsel,
any Third Party Claim. Within thirty (30) days after the receipt of notice from an Indemnified Party (or sooner if the nature
of such Third Party Claim so requires), the Indemnifying Party shall notify the Indemnified Party whether the Indemnifying Party
will assume responsibility for defending such Third Party Claim, which election shall specify any reservations or exceptions. If
such Indemnifying Party does not respond within such thirty (30) day period or rejects such claim in whole or in part, the
Indemnified Party shall be free to pursue such remedies as specified in this Agreement. In case any such Third Party Claim shall
be brought against any Indemnified Party, and it shall notify the Indemnifying Party of the commencement thereof, the Indemnifying
Party shall be entitled to assume the defense thereof at its own expense, with counsel satisfactory to such Indemnified Party in
its reasonable judgment; provided, however, that any Indemnified Party may, at its own expense, retain separate counsel to participate
in such defense at its own expense. Notwithstanding the foregoing, in any Third Party Claim in which both the Indemnifying Party,
on the one hand, and an Indemnified Party, on the other hand, are, or are reasonably likely to become, a party, such Indemnified
Party shall have the right to employ separate counsel and to control its own defense of such claim if, in the reasonable opinion
of counsel to such Indemnified Party, either (x) one or more significant defenses are available to the Indemnified Party that
are not available to the Indemnifying Party or (y) a conflict or potential conflict exists between the Indemnifying Party,
on the one hand, and such Indemnified Party, on the other hand, that would make such separate representation advisable; provided,
however, that in such circumstances the Indemnifying Party (i) shall not be liable for the fees and expenses of more than
one counsel to all Indemnified Parties and (ii) shall reimburse the Indemnified Parties for such reasonable fees and expenses
of such counsel incurred in any such Third Party Claim, as such expenses are incurred, provided that the Indemnified Parties agree
to repay such amounts if it is ultimately determined that the Indemnifying Party was not obligated to provide indemnification under
this Article IX. The Indemnifying Party agrees that it shall not, without the prior written consent of the Indemnified Party, settle,
compromise or consent to the entry of any judgment in any pending or threatened claim relating to the matters contemplated hereby
(if any Indemnified Party is a party thereto or has been actually threatened to be made a party thereto) unless such settlement,
compromise or consent includes an unconditional release of such Indemnified Party from all liability arising or that may arise
out of such claim. The Indemnifying Party shall not be liable for any settlement of any claim effected against an Indemnified Party
without the Indemnifying Party’s written consent, which consent shall not be unreasonably withheld, conditioned or delayed.
The rights accorded to an Indemnified Party hereunder shall be in addition to any rights that any Indemnified Party may have at
common law, by separate agreement or otherwise; provided, however, that notwithstanding the foregoing or anything to the contrary
contained in this Agreement, nothing in this Article V shall restrict or limit any rights that any Indemnified Party may have to
seek equitable relief.

 

ARTICLE
VI.

Covenants

Section 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. During the Commitment Period, the Company shall notify the
Investor promptly if (i) the Registration Statement shall cease to be effective under the Securities Act, (ii) the Common Stock
shall cease to be authorized for listing on the Principal Market, (iii) the Common Stock ceases to be registered under Section
12(g) of the Exchange Act or (iv) the Company fails to file in a timely manner all reports and other documents required of it as
a reporting company under the Exchange Act.

Section 6.2.
Quotation of Common Stock. The Company shall maintain the Common Stock’s authorization for quotation on the Principal
Market and use its best efforts to file within any mandatory timeframe all reports required to be filed by the Company.

Section 6.3.
Exchange Act Registration. The Company will cause its Common Stock to continue to be registered under Section 12(g) of 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.

Section 6.4.
Transfer Agent Instructions. On the Advance Date, the Company shall deliver instructions to its transfer agent to issue
shares of Common Stock to the Investor free of restrictive legends.

Section 6.5.
Corporate Existence. The Company will take all steps necessary to preserve and continue the corporate existence of the Company.

Section 6.6.
Notice of Certain Events Affecting Registration; Suspension of Right to Make an Advance. The Company shall not deliver to
the Investor any Advance Notice during the continuation of any of the following events: (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 of 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 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; and the Company will promptly make available to the
Investor any such supplement or amendment to the related prospectus..

Section 6.7.
Equity Credit Line Transactions. During the term of this Agreement, the Company shall not enter into any Prohibited Transaction
without the prior written consent of the Investor, which consent may be withheld at the sole discretion of the Investor. For the
purposes of this Agreement, the term “Prohibited Transaction” shall refer to the issuance by the Company of
any “future priced securities,” which shall mean the issuance of shares of Common Stock or securities of any type whatsoever
that are, or may become, convertible or exchangeable into shares of Common Stock pursuant to any equity line financing registered
with the SEC on Form S-1.

Section 6.8.
Consolidation; Merger; Subdivision of Stock. The Company shall not, at any time after the delivery of an Advance Notice
and before the Advance Date applicable to such Advance Notice, 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.

Section 6.9.
[Intentionally Omitted].

Section 6.10.
[Intentionally Omitted].

Section
6.11. Listing of Shares.  The Company will use commercially reasonable efforts to cause the Shares to be listed
on the Principal Market and to qualify the Shares for sale under the securities laws of such jurisdictions as the Investor designates;
provided that the Company shall not be required in connection therewith to qualify as a foreign corporation or to file a general
consent to service of process in any jurisdiction.

Section
6.12.  [Intentionally Omitted]

Section
6.13.  No General Solicitation. Neither the Company, nor any of its affiliates, nor any person acting on
its behalf, has engaged in any form of general solicitation or general advertising (within the meaning of Regulation D) in connection
with the offer or sale of the Common Stock to be offered as set forth in this Agreement.

Section 6.14. [Intentionally
Omitted]

 

Section
6.15. Transactions With Affiliates. The Company shall not, and shall cause each of its Subsidiaries not to, enter into,
amend, modify or supplement, or permit any Subsidiary to enter into, amend, modify or supplement, any agreement, transaction, commitment
or arrangement with any of its or any Subsidiary's officers, directors, persons who were officers or directors at any time during
the previous two (2) years, shareholders who beneficially own 5% or more of the Common Stock, or Affiliates or with any individual
related by blood, marriage or adoption to any such individual or with any entity in which any such entity or individual owns a
5% or more beneficial interest (each a "Related Party"), except for (I) customary employment arrangements and benefit
programs on reasonable terms, (II) any agreement, transaction, commitment or arrangement on an arms-length basis on terms no less
favorable than terms which would have been obtainable from a disinterested third party other than such Related Party, or (III)
any agreement, transaction, commitment or arrangement which is approved by a majority of the disinterested directors of the Company.
For purposes hereof, any director who is also an officer of the Company or any Subsidiary of the Company shall not be a disinterested
director with respect to any such agreement, transaction, commitment or arrangement. "Affiliate" for purposes hereof
means, with respect to any person or entity, another person or entity that, directly or indirectly, (I) has a 5% or more equity
interest in that person or entity, (II) has 5% or more common ownership with that person or entity, (III) controls that person
or entity, or (IV) is under common control with that person or entity. "Control" or "Controls" for purposes
hereof means that a person or entity has the power, directly or indirectly, to conduct or govern the policies of another person
or entity.

 

Section
6.16. Filing of Form 8-K. On or before the date which is four (4) Trading Days after the Execution Date, the Company shall
file a Current Report on Form 8-K with the SEC describing the terms of the transaction contemplated by the Equity Line Transaction
Documents in the form required by the 1934 Act, if such filing is required.

 

 

Section
6.17. Acknowledgement of Terms. The Company hereby represents and warrants to the Investor that: (i) it is voluntarily entering
into this Agreement of its own freewill, (ii) it is not entering this Agreement under economic duress, (iii) the terms of this
Agreement are reasonable and fair to the Company, and (iv) the Company has had independent legal counsel of its own choosing review
this Agreement, advise the Company with respect to this Agreement, and represent the Company in connection with this Agreement.

 

Section
6.18. [Intentionally Omitted]

 

 

Section
6.19. Conduct of Business. The Company shall, and shall cause all of its subsidiaries to carry on and conduct its business
and the business of each subsidiary in a proper and efficient manner in accordance with good commercial practice, and ensure that
while the Investor holds any of the Stock, that the voting any other rights attached to the Stock are not altered in a manner which,
in the opinion of the Investor, is materially prejudicial to the Investor.

 

Section
6.20. Miscellaneous Covenants. The Company shall not, and shall cause all of its subsidiaries not to, directly or indirectly,
without the Investor’s written approval: (a) dispose, in a single transaction, or in a series of transactions, of all or
any part of its assets unless such disposal is (i) in the ordinary course of business; (ii) for fair market value; and (iii) approved
by the board of directors of the Company; (b) reduce its used share capital or any uncalled liability in respect of its issued
capital, except by means of a purchase or redemption of the share capital that is permitted under law; (c) undertake any consolidation
of its share capital; (d) change the nature of its business or the nature of the business of any subsidiary; (e) transfer the jurisdiction
of incorporation of the Company or any of its Subsidiaries; (f) enter into any agreement with respect to any of the matters referred
to in this section.

 

    	 

    	 

    

Section
6.21. [Intentionally Omitted].

 

Section
6.22. [Intentionally Omitted].

 

Section
6.23. Illegality and Impossibility. Without limiting the generality of the Investor’s rights set out elsewhere in
this Agreement, if in the reasonable opinion of the Investor, at any time there exists a law which , or an official or reasonable
interpretation of which, makes it , or may make it illegal or impossible in practice of the Investor to undertake any of the Advances,
or render any of the contemplated Advances unenforceable, void or voidable, the Investor may, by giving a notice to the Company
suspend or cancel some or all of its obligations under this Agreement, or terminate this Agreement.

 

Section
6.24. Costs of Registration Statement. The Investor covenants to pay all costs and expenses of the Company associated with
the Registration Statement.

 

ARTICLE
VII.

Conditions for Advance and Conditions to Closing

Section 7.1.
Conditions Precedent to the Obligations of the Company. The obligation hereunder of the Company to issue and sell Advance
Shares to the Investor incident to each Closing is subject to the satisfaction, or waiver by the Investor in writing, at or before
each such Closing, of each of the conditions set forth below.

(a) 
Accuracy of the Investor’s Representations and Warranties. The representations and warranties of the Investor shall
be true and correct in all material respects.

(b) 
Performance by the Investor. The Investor shall have performed, satisfied and complied in all respects with all covenants,
agreements and conditions required by this Agreement and the Registration Rights Agreement to be performed, satisfied or complied
with by the Investor at or prior to such Closing.

Section 7.2.
Conditions Precedent to the Right of the Company to Deliver an Advance Notice. The right of the Company to deliver an Advance
Notice is subject to the fulfillment by the Company, on such Advance Date (a “Condition Satisfaction Date”),
of each of the following conditions, any of which may be waived in writing by the Investor:

(a) 
Free Trading. Advance Shares to be issued with respect to the applicable Advance Notice will be freely trading .

(b) 
Authority. The Company shall have obtained all permits and qualifications required by any applicable state in accordance
with the Registration Rights Agreement for the offer and sale of Advance Shares, or shall have the availability of exemptions there-from.
The sale and issuance of Advance Shares shall be legally permitted by all laws and regulations to which the Company is subject.

(c) 
Fundamental Changes. There shall not exist any fundamental changes to the information set forth in a Registration Statement
which would require the Company to file a post-effective amendment to a Registration Statement.

(d) 
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 and the Registration Rights Agreement to be performed, satisfied or complied
with by the Company at or prior to each Condition Satisfaction Date.

(e) 
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 may have the effect
of prohibiting or adversely affecting any of the transactions contemplated by this Agreement.

(f) 
No Suspension of Trading in or Delisting of Common Stock. The Common Stock is trading on the Principal Market. The trading
of Common Stock is not suspended by any government or the Principal Market. The issuance of Advance 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 quotation of the Common Stock on the Principal Market and the Company shall
have no knowledge of any event which would be more likely than not to have the effect of causing the Common Stock to not be trading
or quoted on the Principal Market.

(g) 
Maximum Advance Amount In no event shall the Company issue such additional shares (i) in excess of the Maximum Advance Amount
or (ii) if such issuance would result in non-compliance with any securities laws. If any of the Company’s representations
in this Agreement are false, then no Advances shall be permitted. Any portion of an Advance that would cause the Investor to exceed
the Ownership Limitation shall automatically be withdrawn.

(h) 
No Knowledge. The Company has no knowledge of any event which would be more likely than not to have the effect of causing
the Advance Shares with respect to the applicable Advance Notice not to be freely tradable.

(i) 
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.

(j)
Failure to Deliver Shares. Company understands that a delay in the issuance of Common Stock could result in economic damage
to the Investor. If the Company fails to cause the delivery of the Shares when due, the Company shall pay to the Investor on demand
in cash by wire transfer of immediately available funds to an account designated by the Investor as liquidated damages for such
failure and not as a penalty, an amount equal to five percent (5%) of the payment required to be paid by the Investor on such Settlement
Date (i.e., the Advance Amount)

    	 

    	 

    

for the initial 30 days
following such date until the Shares have been delivered, and an additional 5% for each additional 30-day period thereafter until
the Shares have been delivered.

(k)
Fees Paid. The Company shall not be obligated to pay to Investor any fees and expenses related to this Agreement.

(l)
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 any federal or state governmental, administrative or self-regulatory authority during
the Commitment Period, the response to which would require any amendments or supplements to any filings; (ii) 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.

(m)
No Right of First Refusal. No person is entitled or purports to be entitled, to any right of first refusal, pre-emptive
right, right of participation, or any similar right, to participate in the transaction or otherwise with respect to any securities
of the Company.

(n)
No Security. The Company has not granted security with respected to any indebtedness or other equity of the Company.

(o)
No Adjustment. The issuance and sale of any of the Investor’s stock will not obligate the Company to issue Stock or
other securities to any other persona and will not result in the adjustment of the exercise, conversion, exchange, or reset price
of any outstanding security.

(p)
No Other Rights. There are no voting, buy-sell, outstanding or authorized stock appreciation, right of first purchase, phantom
stock, profit participation or equity based compensation agreements, options or arrangement, or like rights relating to the securities
of the Company or agreements of any kind among the Company and any person,

(q)
Valid Issuance. When issued pursuant to this Agreement, all Investor’s stock will be validly issued and fully paid,
and will be free and clear of any and all liens and restrictions, except for restrictions on transfer imposed by applicable laws.

(r)
Regulatory Issues. No stop order, trading halt, suspension of trading, cessation of quotation, or removal of the company
of the Stock from any exchange has been requested by the Company or imposed by any governmental authority or regulatory body. There
is no fact or circumstance that may cause the Company to request, or any governmental authority or regulatory body to impose any
stop order, trading halt, suspension of trading, cessation of quotation or removal of the Company or the Stock from any exchange.

(s)
No Additional Material Adverse Effect. There has been no event or condition that has had or may have a Material Adverse
Effect since the date of the Company’s latest audited financial statements:

(t)
No Liabilities. The Company has not incurred any liabilities (contingent or otherwise) other than: (a) trade payables and
accrued expenses incurred in the ordinary course of business consistent with past practice; and (b) liabilities not required to
be reflected in the Company’s financial statements pursuant to the financial standards pursuant to which such financial statements
are prepared, or required to be disclosed in the Company’s public filings;

(u)
No Change in Accounting. The Company has not altered its method of accounting; and

(v)
No Dividends. The Company has not declared or made any dividend or distribution of cash or other property to its shareholders,
or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock.

(w)
No Conflict, Breach, Violation or Default. The execution and delivery of, and the performance of the terms of, the Agreement
or any Advance Notice or Advance will not: (i) result in the creation of any lien in respect of any property of the Company or
any of its subsidiaries; or (ii) violate, conflict with, result in a breach of an provision of, require any notice or consent under,
constitutes a default under, resulting in the termination of, or in a right of termination or cancellation of, accelerate the performance
required by, result in the triggering of any payment or other material obligations pursuant to, ay of the terms, conditions or
provisions of: (a) the Company’s constitution as in effect on the date of this Agreement; or (b) any law , governmental authorization,
or order of any court, domestic or foreign, having jurisdiction over the Company, any subsidiary, or any of their respective assets
or properties; or (c) any material agreement or instrument to which the Company or any subsidiary is a party or by which the Company
or a subsidiary is bound or to which any their respective assets or properties is subject (or render any such agreement or instrument
voidable or without further effect).

(x)
Litigation. (i) There are no pending actions, suits or proceedings against or affecting the Company, its subsidiaries or
any of its or their properties, and to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated;
(ii) Neither the Company nor any subsidiary, nor any director or officer is or has been the subject of any action, suit, proceeding,
or investigation involving a claim of violation of or liability under securities laws or a claim of breach of fiduciary duty; (iii)
There has not been, and to the knowledge of the Company there is no, pending or contemplated investigation by a governmental authority
involving the Company or any current or former director or officer of the Company; and (iv) No regulatory body has issued any stop
order or other order suspending the effectiveness of a Registration Statement or any related prospectus filed or lodged by the
Company.

(y)
Compliance. Neither the Company nor any subsidiary: (i) is in material default under, or in material violation of (and no
event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company
or any subsidiary under), nor has the Company or any subsidiary received notice of a claim that is in default under or that is
in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which
it or any of its properties is bound (whether or not such default

    	 

    	 

    

or violation has been
waived); (ii) is in violation of nay order of any court, arbitrator or governmental authority or regulatory body; (iii) is or has
been in violation of any law.

(z)
[Intentionally Omitted]

(aa)
[Intentionally Omitted]

(bb)
Solvency. The Company shall confirm in writing each of the following:

(i)
The Company and each of its subsidiaries is able, and is not aware of anything which would render the Company or any of its subsidiaries
unable, to pay all its debts as and when they become due and payable.

(ii)
No judicial order has been made or obtained against the Company or any of its subsidiaries which is unpaid or unsatisfied.

(iii)
No attachment in in the process of being levied or enforced against any asset of the Company or its subsidiaries.

(iv)
No administrator, liquidator, provisional liquidator, controller or receiver of, or in connection with, the Company or any of its
subsidiaries has been appointed, and the Company is not aware of such appointment pending, threatened, or being likely.

(v)
No person has entered into, proposed, sanctioned, approved, or commenced, legal action relating to a scheme of arrangement of the
affairs of the Company or any of its subsidiaries, or between any of those people and any of its shareholders or creditors.

(vi)
Neither the Company nor any of its subsidiaries is in default under any security interest over, or in relation to, any asset.

(vii)
The Company did not receive a qualified opinion from its auditors with respect to its most recent fiscal year end and, after giving
effect to the contemplated transactions and Advances, does not anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year.

(cc)
[Intentionally Omitted.]

(dd)
Non-public information. Neither the Company nor any person acting on its behalf has provided the Investor or its agents,
representative or counsel with any information that constitutes inside information or material non-public information, and to the
Company’s knowledge, the Investor does not possess any inside information or material non-public information.

(ee)
Prohibited Transactions. The Company has not entered or agreed to enter into a Prohibited Transaction.

(gg)
No Breach. The Company is not in breach of this Agreement.

(hh)
Brokers and finders. No person will have, as a result of the contemplated transactions and Advances, any valid right, interest
or claim against or upon the Company, any subsidiary or an Investor for any commission, fee or other compensation pursuant to any
agreement, arrangement or understanding entered into by or on behalf of the Company.

(ii)
No Event of Default. No Event of Default has occurred, and no Event of Default would result from an Advance being effected.
Any of the following shall constitute an Event of Default:

(a)                 
Any of the representations, warranties, or covenants made by the Company or any of its agents, officers, directors, employees or
representatives in an document, materials or public filing are inaccurate, false or misleading in any material respect, as of the
date as of which it is made or deemed to be made, or any certificate or financial or other written statements furnished by or on
behalf of the Company to the Investor, any of its representatives, or the company’s shareholders, is inaccurate, false or
misleading, in any material respect, as of the date as of which it is made or deemed to be made, or on any Advance Date.

 

(b)                
The Company or any subsidiary of the Company is or becomes insolvent.

 

(c)                 
An administrator is appointed over all or any of the assets or undertaking of the Company or any subsidiary or any step preliminary
to the appointment to an administrator has been taken.

(d)                
A controller or similar officer is appointed to all or any of the assets or undertaking of the Company or any subsidiary.

(e)                 
An application or order is made, a proceeding is commenced, a resolution is passed or proposed, or an application to a court or
other steps are taken for the winding up or dissolution of the Company or any subsidiary , or for the Company or any subsidiary
to enter an arrangement, compromise or composition with, or assignment for the benefit of, its creditors, a class of them, or any
of them.

(f)                 
The Company or any of its subsidiaries ceases, suspends or threatens to cease or suspend, the conduct of all or a substantial part
of its business, or dispose of, or threaten to dispose of, a substantial part of its assets or to reduce its capital.

(g)                 
There exists a fact or circumstance that may cause the Company to request, or the Principal Market or any other governmental authority
or regulatory body to impose a stop order, trading halt, suspension of trading, cessation of quotation, or removal of the Company
or the Common Stock for the Principal Market.

    	 

    	 

    

(h)                
Any of the following has occurred: (i) trading in securities have been suspended or limited, (ii) minimum prices have been established
on the securities, (iii) a banking moratorium has been declared by the authorities in New York or the jurisdiction where the Company
is incorporated or where the Common Stock is trading, (iv) a material outbreak or escalation of hostilities or another national
or international calamity of such magnitude in its effect on, or adverse change in the markets in the United States or the market
where the Common Stock trades, makes it impracticable or inadvisable for the Investor to close on an Advance or accept an Advance
Notice.

 

(i)                  
The Company challenges, disputes or denies the right of the Investor to receive any shares of the Common Stock, or otherwise dishonors
or rejects any action taken, or document delivered, in furtherance of the Investor’s rights to receive any Common Stock.

(j)                  
A stop order, trading halt, suspension of trading, cessation of quotation, or removal of the Company or the Stock from an exchange
has been requested by the Company or imposed on the Company.

(k)                
A Material Adverse Effect, or an event, development or condition which, in the reasonable judgment of the Investor would be likely
to have a Material Adverse Effect occurs.

(l)                  
There exists a law which, or an official or reasonable interpretation of which, in the Investor’s reasonable opinion, makes
it, or is more likely than not to make it, illegal or impossible for the Investor or the Company to undertake any of the Advances
in accordance with this Agreement, or renders, or is more likely than not to render, consummation of any of the Advances in accordance
with this Agreement unenforceable, void, voidable or unlawful, or contrary to or inconsistent with any law.

(m)               
If: (i) a change in an interpretation or administration of a law or a proposed law introduced or proposed to be introduced to any
governing body of law; (ii) compliance by the Investor or any of its Affiliates with a law or an interpretation or administration
of a law, has, or is more likely than not to have, in the reasonable opinion of the Investor, directly or indirectly, the effect
of (iv) varying the duties, obligation or liabilities of the Company or the Investor in connection with this Agreement or any Advance
so that the Investor’s rights, powers, benefits, remedies or economic burden (including any tax treatment in the hands of
the Investor) are adversely affected (including by way of delay or postponement); (v) otherwise adversely affecting rights, powers,
benefits, remedies or the economic burden of the Investor (including by way of delay or postponement); (vi) otherwise making it
impracticable for the Investor to undertake any of the Advances or contemplated Advances.

(n)                
A securities registrar or similar entity refuses to comply with a direction to issue, or record an issuance of securities to the
Investor.

(o)                
Any consent, permit, approval, registration or waiver necessary or appropriate for the consummation of an Advance that remains
to be consummated at the applicable time, has not been issued or received, or does not remain in full force or effect.

(p)                
 

(q)                
The Company fails to perform, comply with, or observe any other term, covenant, undertaking, obligation or agreement under this
Agreement.

(r)                 
A default judgment of an amount of $500,000 or greater is entered against the Company or any of its subsidiaries.

(s)                 
Any present or future liabilities, including contingent liabilities, of the Company or any of its subsidiaries for an amount or
amounts totaling more than $500,000 have not been satisfied on time, or have become prematurely payable.

 

7.3 Investor
Right to Investigate an Event of Default.

If in
the Investor’s reasonable opinion, an Event of Default has occurred, or is or may be continuing: (a) the Investor may investigate
such purported Event of Default; (b) the Company shall co-operate with the Investor in such investigation; and (c) the Company
shall comply with all reasonable requests made by the Investor of the Company in connection with any investigation by the Investor.

 

7.
4 Rights of the Investor upon Event of Default.

(a)
Upon the occurrence of existence of any Event of Default at any time during the continuance of such Event of Default, the Investor
may: (i) declare, by notice to the Company, effective immediately, that the break fee described in Section 12.4 under the Agreement
to be immediately due and payable in the shares held in escrow, as described below, without presentment, demand, protest or any
other notice of any kind (other than notice to the applicable escrow agent), all of which are expressly waived by the Company,
anything to the contrary contained in this Agreement; (ii) terminate this Agreement by notice to the Company, effective as of the
date set out in the Investor’s notice.

(b)
Where an Event of Default has occurred, the Investor shall have: (i) no obligation to accept an Advance Notice or to consummate
a closing under this Agreement; and (ii) the right to postpone the Advance accordingly.

(c)
In addition to the remedies set out elsewhere, upon the occurrence or existence of any Event of Default, the Investor may exercise
any other right, power or remedy granted to it by the Agreement or otherwise permitted by law, including any suit in equity and/or
by action at law.

 

ARTICLE
VIII.

Non-Disclosure of Non-Public Information

Section 8.1.
Non-Disclosure of Non-Public Information.

 (a) 
Subject to Section 6.6 and except as otherwise provided in this Agreement or the Registration Rights Agreement, the Company covenants
and agrees that it has not in the past and will refrain in the future from disclosing, and shall cause its officers, directors,
employees

    	 

    	 

    

and agents to refrain
from disclosing, any material non-public information to the Investor without also disseminating such information to the public
at the same time.

(b) Nothing
herein shall require the Company to disclose material, non-public information to the Investor or its advisors or representatives,
and the Company represents that it does not disseminate material, non-public information to any Investors who purchase stock in
the Company in a public offering, to money managers or to securities analysts in violation of Regulation FD of the Exchange Act,
provided, however, that notwithstanding anything herein to the contrary, the Company will, as hereinabove provided and subject
to compliance with Regulation FD, 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 material, 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 Section 8.1 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 material, 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

Section 9.
Governing Law. This Agreement shall be governed by and interpreted solely in accordance with the laws of the State of New
York without regard to the principles of conflict of laws. Any dispute arising out of or in connection with this Agreement or
otherwise relating to the parties relationship shall be settled only by litigation and exclusively in the State of New York, City
of New York. The Company and the Investor further agree that no demand for punitive or exemplary damages shall be made. The parties
hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other
in respect of any matter arising out of or in connection with this Agreement. The parties agree that in the event of any action,
litigation or proceeding between the parties arising out of or in relation to this Agreement, the prevailing party in a final
judgment after the appeal period has passed shall be awarded, in addition to any damages, injunctions or other relief, such party’s
costs and expenses, including but not limited to all related costs and reasonable attorneys’, accountants’ and experts’
fees incurred in bringing such action, litigation or proceeding and/or enforcing any judgment or order granted therein. No party
to this Agreement will challenge the jurisdiction or venue provisions as provided in this section.  The section shall
survive termination of the Agreement.

ARTICLE
X.

Assignment; Termination

Section 10.1.
Assignment. Neither this Agreement nor any rights or obligations of the Company or the Investor hereunder may be assigned
to any other Person.

Section 10.2.
Termination.

(a) Unless
earlier terminated as provided hereunder, this Agreement shall terminate automatically on the earliest of (i) the first day
of the month next following the 36-month anniversary of the Effective Date, (ii) the date on which the Investor shall have
made payment of Advances pursuant to this Agreement in the aggregate amount of the Commitment Amount or (iii) the Registration
Statement is no longer effective.

(b) The
obligation of the Investor to make an Advance to the Company pursuant to this Agreement shall terminate permanently (including
with respect to an Advance Date 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, during the Commitment Period,
or (ii) the Company shall at any time fail materially to comply with the requirements of Article VI and such failure
is not cured within thirty (30) days after receipt of written notice from the Investor, provided, however, that
this paragraph (c) 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. The Investor may terminate
this Agreement by sending email notice to the Company declaring a Material Adverse Effect.

(c) Nothing
in this Section 10.2 shall be deemed to release the Company or the Investor from any liability for any breach under this Agreement,
or to impair the rights of the Company and the Investor to compel specific performance by the other party of its obligations under
this Agreement. The indemnification provisions contained in Sections 5.1 and 5.2 shall survive termination hereunder.

ARTICLE
XI.

Notices

Section 11.1.
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 will be deemed to have been delivered upon being sent to the following email addresses:

If
to the Company: robert@ihookupsocial.com

If
to the Investor: rmarino@beaufortcp.com

Each
party shall provide five (5) days’ prior written notice to the other party of any change in email address.

    	 

    	 

    

ARTICLE
XII.

Miscellaneous

Section 12.1.
Counterparts. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one
and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party.

Section 12.2
Entire Agreement; Amendments. This Agreement supersedes all other prior agreements including the Original Investment Agreement,
negotiations or discussions both oral or written 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 and therein contain
the entire understanding of the parties with respect to the matters covered herein and therein and, except as specifically set
forth herein or therein, neither the Company nor the Investor makes any representation, warranty, covenant or undertaking with
respect to such matters. No provision of this Agreement may be waived or amended other than by an instrument in writing signed
by the party to be charged with enforcement. The provisions of this Agreement shall be construed in favor of the Investor. Except
as specifically set out in this Agreement, neither the Company nor the Investor makes any representation, warranty, covenant or
undertaking with respect to any subject matter regarding this Agreement or otherwise.

Section 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.

Section 12.4.
Break Fee and Expenses. Each of the parties shall pay its own fees and expenses (including the fees of any attorneys, accountants,
appraisers or others engaged by such party) in connection with this Agreement. The Investor shall pay the legal fees associated
with the Registration Statement (the “Registration Fees”). In consideration for entering into this Agreement,
the Company is required to issue an initial 1,000,000 shares of common stock to an escrow agent mutually agreed upon by the parties
hereto. Upon effectiveness of the Registration Statement, such shares shall immediately be returned to the Company by the applicable
escrow agent. In the event (i) the Registration Statement is not declared effective within eighteen (18) months of the initial
filing thereof, or (ii) there is a breach by the Company of any material terms of this Agreement, the Registration Rights Agreement
or any related agreements, such shares shall be issued to the Investor by such escrow agent (each a “Break Event”).

Section 12.5.
[Intentionally Omitted].

Section
12.6 Publicity. Prior to issuing any public statements, the Company shall send to the Investor for approval any press releases
or public statement with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise
make any such public statement without the prior written consent of the other party. Notwithstanding the foregoing, the Company
shall not publicly disclose the name of the Investor unless the Investor provides written approval to do so.

Section
12.7 Placement Agent. If so required by the SEC, the Company agrees to pay a registered broker dealer, to act as placement
agent, a percentage of the Put Amount on each draw toward the fee.  The Investor shall have no obligation with respect
to any fees or with respect to any claims made by or on behalf of other persons or entities for fees of a type contemplated in
this Section that may be due in connection with the transactions contemplated by this Agreement. The Company shall indemnify and
hold harmless the Investor, their employees, officers, directors, agents, and partners, and their respective affiliates, from and
against all claims, losses, damages, costs (including the costs of preparation and attorney's fees) and expenses incurred in respect
of any such claimed or existing fees, as such fees and expenses are incurred.

Section 12.8
No Third Party Beneficiaries. Notwithstanding anything contained in this Agreement to the
contrary, nothing in this Agreement, expressed or implied, is intended to confer on any Person other than the parties hereto any
rights, remedies, obligations or liabilities under or by reason of this Agreement, and no Person that is not a party to this Agreement
(including without limitation any partner, member, shareholder, director, officer, employee or other beneficial owner of any party
hereto, in its own capacity as such or in bringing a derivative action on behalf of a party hereto) shall have any standing as
third party beneficiary with respect to this Agreement or the transactions contemplated hereby.

Section 12.9
No Personal Liability of Directors, Officers, Owners, Etc. No director, officer, employee,
incorporator, shareholder, managing member, member, general partner, limited partner, principal or other agent of any of the Investor
or the Company shall have any liability for any obligations of the Investor or the Company under this Agreement or for any claim
based on, in respect of, or by reason of, the respective obligations of the Investor or the Company hereunder. Each party hereto
hereby waives and releases all such liability. This waiver and release is a material inducement to each party’s entry into
this Agreement. 

Section
12.10. Delay. The Investor shall not be obligated to perform and shall not be deemed to be in default hereunder,
if the performance of an obligation required hereunder is prevented by the occurrence of any of the following, acts of God, strikes,
lock-outs, other industrial disturbances, acts of a public enemy, war or war-like action (whether actual, impending or expected
and whether de jure or de facto), acts of terrorists, arrest or other restraint of government (civil or military), blockades, insurrections,
riots, epidemics, landslides, lightning, earthquakes, fires, hurricanes, storms, floods, washouts, sink holes, civil disturbances,
explosions, breakage or accident to equipment or machinery, confiscation or seizure by any government or public authority, nuclear
reaction or radiation, radioactive contamination or other causes, whether of the kind herein enumerated or otherwise, that are
not reasonably within the control of the party claiming the right to delay performance on account of such occurrence.

 

 

 

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IN
WITNESS WHEREOF, the parties hereto have caused this Investment Agreement to be executed by the undersigned, thereunto duly
authorized, as of the date first set forth above.

	 	 	 	 	 
	 	 	COMPANY:
	 	 	iHookup Social, Inc.
	 	 	 	 	 
	 	 	By:	 	/s/ Robert Rositano, Jr.
	 	 	 	 	 
	 	 	Name: Robert Rositano Jr.
	 	 	Title: President
	 	 	 	 	 
	 	 	INVESTOR:
	 	 	Beaufort Capital Partners LLC
	 	 	 	 	 
	 	 	By:	 	/s/ Robert P. Marino
	 	 	 	 	 
	 	 	Name: Robert P. Marino
	 	 	Title: Managing Member

    	 

    	 

    

EXHIBIT A

ADVANCE NOTICE

iHookup
Social, Inc.. (the “Company”)

The
undersigned, __________________________hereby certifies, with respect to the sale of shares of Common Stock of the Company issuable
in connection with this Advance Notice, delivered pursuant to the Investment Agreement (the “Agreement”), as
follows:

1.
The undersigned is the duly elected Officer of the Company, its Chief Executive, President or Chief Financial Officer.

2. There
are no fundamental changes to (a) the covenants in Article IV of the Investment Financing Agreement and (b) 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 in all material respects all covenants and agreements to be performed by the Company and has complied in
all material respects with all obligations and conditions contained in the Agreement on or prior to the Advance Date, and shall
continue to perform in all material respects all covenants and agreements to be performed by the Company through the applicable
Advance Date. All conditions to the delivery of this Advance Notice are satisfied as of the date hereof.

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, which include Forms 10-Q or, 10-K or, 8-K, etc.). All SEC Filings and other public disclosures made by the
Company, including, without limitation, all press releases, analysts meetings and calls, etc. (collectively, the “Public
Disclosures”), have been reviewed and approved for release by the Company’s attorneys and, if containing financial
information, the Company’s independent certified public accountants. None of the Company’s Public Disclosures contain,
as of their respective dates, 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.

5. The Advance requested
is  ________________shares.

6. There are currently
_______________________ amount of shares outstanding on a fully diluted basis.

The undersigned has
executed this Certificate this  _____  day of  _____.

	 	 	 	 	 
	 	____________________________

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 	 	 	 	 	 	 

Please email this Advance Notice to: rmarino@beaufortcp.com

	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 
	 	 	 

 

    	 

    	 

    

 

 

EXHIBIT B

FORM OF OPINION

 

1.        
The Company is a corporation validly existing and in good standing under the laws of the State 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 filed by the Company under the Securities Exchange Act of 1934, as amended, (the “Exchange Act”)
and the rules and regulations of the Commission thereunder (the “Public Filings”) and to enter into and perform
its obligations under the Investment Agreement.

2.        The
Company has the requisite corporate power and authority to enter into and perform its obligations under the Investment Agreement
and to issue the Common Shares in accordance with their terms.  The execution and delivery of the Investment 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
Investment Agreement has been duly executed and delivered and the Investment Agreement constitutes a valid and binding obligation
of the Company enforceable against the Company in accordance with its 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 Common Shares are duly authorized and, upon issuance in accordance with the terms of the Investment Agreement, will be duly
and validly issued, fully paid and nonassessable, 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 Investment Agreement by the Company (other than performance by the Company of its
obligations under the indemnification sections of such agreements, as to which no opinion need be rendered) will not (i) result
in a violation of the Company’s Articles 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 filed by the Company as an exhibit to the Company’s Public Filings;
or (iii) to our knowledge, result in a violation of any federal or state law, rule or regulation, order, judgment or decree applicable
to the Company.

5.        
To our knowledge without independent investigation 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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