Document:

EX-4.B

 Exhibit 4(b) 

PPL ELECTRIC UTILITIES CORPORATION 

OFFICER’S CERTIFICATE 

(under Sections 201 and 301 of the Indenture dated as of August 1, 2001) 

Establishing the Form and Certain Terms of the 

First Mortgage Bonds, 4.15% Series due 2048 

The undersigned, Tadd J. Henninger, Treasurer of PPL Electric Utilities Corporation (the “Company”), pursuant to Supplemental
Indenture No. 20, dated as of June 1, 2018 (“Supplemental Indenture No. 20”), and Sections 201 and 301 of the Indenture of the Company dated as of August 1, 2001 (the “Original Indenture”, and as heretofore
supplemented, the “Indenture”) to The Bank of New York Mellon, as trustee (the “Trustee”), does hereby establish for the series of Securities established in Supplemental Indenture No. 20 the following terms and
characteristics (capitalized terms used herein which are not defined herein shall have the meanings specified in the Indenture, and the lettered clauses set forth herein correspond to such clauses in Section 301 of the Original Indenture): 

 

	 	a)	the title of the Securities of such series shall be “First Mortgage Bonds, 4.15% Series due 2048” (the “Bonds”); 

 

	 	b)	the aggregate principal amount of Bonds which may be authenticated and delivered under the Indenture shall be limited to $400,000,000, except as contemplated in Section 301(b) and the last paragraph of
Section 301 of the Original Indenture; 

  

	 	c)	interest on the Bonds shall be payable to the Person or Persons in whose names the Bonds are registered at the close of business on the Regular Record Date for such interest, except as otherwise expressly provided in
the form of Bond attached hereto and hereby authorized and approved; 

  

	 	d)	the principal shall be due and payable on June 15, 2048; and the Company shall not have the right to extend the Maturity of the Bonds as contemplated in Section 301(d) of the Original Indenture;

  

	 	e)	as provided in the form of Bond attached as Exhibit A hereto, the Bonds shall bear interest at a fixed rate of 4.15% per annum; the Interest Payment Dates for the Bonds shall be June 15 and December 15 of each
year, commencing December 15, 2018; the Regular Record Date for the interest payable on any Interest Payment Date with respect to the Bonds shall be the close of business on the June 1 or December 1 (whether or not a Business Day)
immediately preceding such Interest Payment Date; and the Company shall not have any right to extend any interest payment periods for the Bonds as contemplated in Sections 301(e) and 312 of the Original Indenture; 

 

	 	f)	the Corporate Trust Office of the Trustee in New York, New York shall be the office or agency of the Company at which the principal of and any premium and interest on the Bonds at Maturity shall be payable, at which
registration of transfers and exchanges of the Bonds may be effected and at which notices and demands to or upon the Company in respect of the Bonds and the Indenture may be served; and the Trustee will initially be the Security Registrar and the
Paying Agent for the Bonds; provided, however, that the Company reserves the right to change, by one or more Officer’s Certificates, any such office or agency and such agent; each installment of interest on a Bond shall be payable as provided
in Exhibit A hereto; 

	 	g)	the Bonds shall be redeemable, in whole or in part, at the option of the Company as and to the extent provided in Exhibit A hereto; 

  

	 	h)	inapplicable; 

  

	 	i)	the Bonds shall be issued in denominations of $1,000 and any integral multiple of $1,000 in excess thereof; 

  

	 	j)	inapplicable; 

  

	 	k)	inapplicable; 

  

	 	l)	inapplicable; 

  

	 	m)	inapplicable; 

  

	 	n)	inapplicable; 

  

	 	o)	reference is hereby made to the provisions of Supplemental Indenture No. 20 for certain covenants of the Company for the benefit of the Holders of the Bonds, in addition to those set forth in Article Seven of the
Indenture; 

  

	 	p)	inapplicable; 

  

	 	q)	the only obligations or instruments that shall be considered Eligible Obligations in respect of the Bonds shall be Government Obligations; and the provisions of Section 801 of the Indenture as supplemented by
Section 103 of Supplemental Indenture No. 20 shall apply to the Bonds; 

  

	 	r)	 the Bonds shall be initially issued in global form and the depository for the global Bonds shall initially be The
Depository Trust Company (“DTC”); provided, that the Company reserves the right to provide for another depository, registered as a clearing agency under the Exchange Act, to act as depository for the global Bonds (DTC and any such
successor depository, the “Depository”); beneficial interests in Bonds issued in global form may not be exchanged in whole or in part for individual certificated Bonds in definitive form, and no transfer of a global Bond in whole or in
part may be registered in the name of any Person other than the Depository or its nominee except that (i) if the Depository (A) has notified the Company that it is unwilling or unable to continue as depository for the global Bonds or
(B) has ceased to be a clearing agency registered under the Exchange Act and, in either case, a successor depository for such global Bonds has not been appointed by the Company within 90 days of such notice or cessation, the Company will
execute, and the Trustee, upon receipt of a Company Order for the authentication and delivery of definitive Bonds, will authenticate and deliver Bonds in definitive certificated form in an aggregate principal amount equal to the principal amount of
the global Bonds representing such Bonds in exchange for such global Bond, such definitive Bonds to be registered in the names provided by the Depository; each global Bond (i) shall represent and shall be denominated in an amount equal to the
aggregate principal amount of the outstanding Bonds to be represented by such global Bond, (ii) shall be registered in the name of the Depository or its nominee, (iii) shall be delivered by the Trustee to the Depository, its nominee, any
custodian for the Depository or otherwise pursuant to the Depository’s instruction and (iv) shall bear a legend restricting the transfer of such global Bond to any person other than the Depository or its nominee; none of the Company, the
Trustee, any Paying Agent or any Authenticating Agent will have any responsibility or liability for any aspect of the records relating to, or payments made on 

  
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account of, beneficial ownership interests in a global Bond or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests; the Bonds in global form will
contain restrictions on transfer, substantially as described in the form set forth in Exhibit A hereto; 

  

	 	s)	inapplicable; 

  

	 	t)	reference is made to clause (r) above; no service charge shall be made for the registration of transfer or exchange of the Bonds; provided, however, that the Company may require payment of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with the exchange or transfer; 

  

	 	u)	inapplicable; 

  

	 	v)	inapplicable; and 

  

	 	w)	except as otherwise determined by the proper officers of the Company and communicated to the Trustee in a Company Order or as established in one or more Officer’s Certificates supplemental to this Officer’s
Certificate, the Bonds shall be substantially in the form of the Bond attached hereto, which form is hereby authorized and approved, and shall have such further terms as are set forth in such form. 

  
 3 

 IN WITNESS WHEREOF, I have executed this Officer’s Certificate this 14th day of June, 2018
in New York, New York. 
  

	
	             /s/ Tadd J. Henninger
	Name:  Tadd J. Henninger
	Title:    Treasurer

 [Signature Page to Officer’s Certificate pursuant to Sections 201 and 301 of the Indenture]

 Exhibit A 

[FORM OF BOND] 
 Unless this
certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation (“DTC”), to PPL Electric Utilities Corporation or its agent for registration of transfer, exchange or payment, and any
certificate to be issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an interest herein. 

 

			
	No._______________	  	CUSIP No. ____________

 PPL ELECTRIC UTILITIES CORPORATION 

FIRST MORTGAGE BOND, 4.15% SERIES DUE 2048 

PPL ELECTRIC UTILITIES CORPORATION, a corporation duly organized and existing under the laws of the Commonwealth of Pennsylvania (herein
referred to as the “Company,” which term includes any successor Person under the Indenture referred to below), for value received, hereby promises to pay to _________________________ or to its registered assigns, the principal sum of
_____________ Dollars ($            ) on June 15, 2048 (the “Stated Maturity Date”), and to pay interest on said principal sum semi-annually in arrears on June 15 and
December 15 of each year commencing December 15, 2018 (each an “Interest Payment Date”) at the rate of 4.15% per annum until the principal hereof is paid or made available for payment. Interest on the Securities of this series
will accrue from and including June 14, 2018 to and excluding the first Interest Payment Date, and thereafter will accrue from and including the last Interest Payment Date to which interest has been paid or duly provided for. No interest will
accrue on the Securities with respect to the day on which the Securities mature. 
 In the event that any Interest Payment Date is not a
Business Day, then payment of interest payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of such delay) with the same force and effect as if made on the
Interest Payment Date. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date will, as provided in such Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the June 1 or December 1, whether or not a Business Day, (each such date a “Regular Record Date”) immediately preceding such Interest Payment Date, except that interest payable at Maturity
will be payable to the Person to whom principal shall be paid. Any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose
name this Security (or one or more Predecessor Securities) is registered at the close of business on a Special Record Date for the payment of such Defaulted Interest to be fixed by the Trustee, notice whereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided in the Indenture referred to herein. Interest on this 

  
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Security will be computed on the basis of a 360-day year consisting of twelve 30-day months, and with respect to
any period less than a full calendar month, on the basis of the actual number of days elapsed during the period. 
 Payment of the principal
of and premium, if any, and interest at Maturity on this Security shall be made upon presentation of this Security at the corporate trust office of The Bank of New York Mellon in New York, New York, or at such other office or agency as may be
designated for such purpose by the Company from time to time, in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts, and payment of interest, if any, on this
Security (other than interest payable at Maturity) shall be made by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register, provided that if such Person is a securities depositary, such
payment may be made by such other means in lieu of check as shall be agreed upon by the Company, the Trustee and such Person. 
 This
Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”), issued and issuable in one or more series under an Indenture dated as of August 1, 2001 (herein, together with any amendments or
supplements thereto, called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes
any successor trustee under the Indenture), and reference is hereby made to the Indenture, including Supplemental Indenture No. 20 thereto, for a statement of the property mortgaged, pledged and held in trust, the nature and extent of the
security, the conditions upon which the Lien of the Indenture may be released and the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and delivered. The acceptance of this Security shall be deemed to constitute the consent and agreement by the Holder thereof to all of the terms and provisions of the Indenture. This Security is
one of the series designated on the face hereof. 
 This Security is subject to redemption at the option of the Company, in whole at any
time or in part from time to time. If this Security is redeemed by the Company before the Par Call Date, this Security will be redeemed by the Company at a redemption price equal to the greater of: 

 

	 	(a)	100% of the principal amount of this Security to be so redeemed; and 

  

	 	(b)	as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the principal amount of this Security to be so redeemed that would be due if the
Stated Maturity Date of this Security were the Par Call Date (not including any portion of such payments of interest accrued to the date of redemption) discounted to the redemption date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus 20 basis points, 

plus, in either of the above cases, accrued and unpaid interest to the date of redemption. 

If this Security is redeemed by the Company on or after the Par Call Date, this Security will be redeemed by the Company at a redemption price
equal to 100% of the principal amount of this Security to be so redeemed, plus accrued and unpaid interest to the Redemption Date. 

“Adjusted Treasury Rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to
maturity of the Comparable Treasury Issue, assuming a price for 

  
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the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for that redemption date. 

“Comparable Treasury Issue” means the United States Treasury security selected by the Quotation Agent as having an actual or
interpolated maturity comparable to the remaining term of this Security to be redeemed (assuming for this purpose that the Stated Maturity Date of this Security were the Par Call Date) that would be used, at the time of selection and in accordance
with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of this Security. 

“Comparable Treasury Price” means, with respect to any redemption date: 

 

	 	a)	the average of four Reference Treasury Dealer Quotations for that redemption date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or 

 

	 	b)	if the Quotation Agent obtains fewer than four Reference Treasury Dealer Quotations, the average of all Reference Treasury Dealer Quotations so received. 

“Par Call Date” means December 15, 2047. 

“Quotation Agent” means one of the Reference Treasury Dealers appointed by the Company. 

“Reference Treasury Dealer” means: 
  

	 	(a)	each of BNP Paribas Securities Corp., Credit Suisse Securities (USA) LLC, Morgan Stanley & Co. LLC and Wells Fargo Securities, LLC (or their respective affiliates that are Primary Treasury Dealers), or their
respective successors, unless any of them is not or ceases to be a primary U.S. Government securities dealer in the United States (a “Primary Treasury Dealer”), in which case the Company shall substitute another Primary Treasury Dealer;
and 

  

	 	(b)	any other Primary Treasury Dealer selected by the Company. 

 “Reference Treasury Dealer
Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage
of its principal amount), as provided to the Quotation Agent by that Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such redemption date. 

Promptly after the calculation thereof, the Company shall give the Trustee written notice of the redemption price for any redemption occurring
prior to the Par Call Date. The Trustee shall have no responsibility for any such calculation. 
 Notice of redemption shall be given by
mail to Holders of Securities of this series, not less than 10 days nor more than 60 days prior to the date fixed for redemption, all as provided in the Indenture. As provided in the Indenture, notice of redemption at the election of the Company as
aforesaid may state that such redemption shall be conditional upon the receipt by the applicable Paying Agent or Agents of money sufficient to pay the principal of and premium, if any, and interest, on this Security on or prior to the date fixed for
such redemption; a notice of redemption so conditioned shall be of no force or effect if such money is not so received and, in such event, the Company shall not be required to redeem this Security. Notwithstanding Section 504 of the Indenture,
any such notice of redemption with respect 

  
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to a redemption occurring prior to the Par Call Date need not set forth the redemption price but only the manner of calculation thereof. 

In the event of redemption of this Security in part only, a new Security or Securities of this series of like tenor representing the
unredeemed portion hereof shall be issued in the name of the Holder hereof upon the cancellation hereof. 
 If an Event of Default with
respect to the Securities of this series shall occur and be continuing, the principal of this Security may be declared due and payable in the manner and with the effect provided in the Indenture. 

The Indenture contains provisions for defeasance at any time of the entire indebtedness of this Security upon compliance with certain
conditions set forth in the Indenture. 
 The Indenture contains provisions for release of the Lien thereof upon compliance with certain
conditions set forth therein. 
 The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the
modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of all series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Securities of all series affected at the time
Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by
the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security. 
 As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless (a) such Holder shall have previously given the
Trustee written notice of a continuing Event of Default; (b) the Holders of 25% in aggregate principal amount of the Outstanding Securities shall have made written request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity; (c) the Trustee shall not have received from the Holders of a majority in aggregate principal amount of the Outstanding Securities a direction inconsistent with such request; and
(d) the Trustee shall have failed to institute any such proceeding for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement
of any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein. 
 No reference
herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the
times, place and rate, and in the coin or currency, herein prescribed. 
 The Securities of this series are issuable only in registered form
without coupons, and in denominations of $1,000 and integral multiples thereof. As provided in the Indenture and subject to certain limitations therein and herein set forth, Securities of this series are exchangeable for a like

  
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aggregate principal amount of Securities of the same series and Tranche and of like tenor and of authorized denominations, as requested by the Holder surrendering the same. 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith. 
 The Company shall not be required to execute and the Security
Registrar shall not be required to register the transfer of or exchange of (a) Securities of this series during a period of 15 days immediately preceding the date notice is given identifying the serial numbers of the Securities of this series
called for redemption or (b) any Security so selected for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part. 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the absolute owner hereof for all purposes (subject to Sections 305 and 307 of the Indenture), whether or not this Security be overdue, and neither the Company, the Trustee nor any
such agent shall be affected by notice to the contrary. 
 The Indenture and this Security shall be governed by and construed in accordance
with the laws of the State of New York (including, without limitation, Section 5-1401 of the New York General Obligations Law or any successor to such statute), except to the extent that the Trust
Indenture Act shall be applicable and except to the extent that the law of the any other jurisdiction shall mandatorily govern. 
 As used
herein, “Business Day,” means any day, other than a Saturday or Sunday, that is not a day on which banking institutions or trust companies in The City of New York, New York, or other city in which a paying agent for such Security is
located, are generally authorized or required by law, regulation or executive order to remain closed. All other terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture. 

As provided in the Indenture, no recourse shall be had for the payment of the principal of or premium, if any, or interest on any Securities,
or any part thereof, or for any claim based thereon or otherwise in respect thereof, or of the indebtedness represented thereby, or upon any obligation, covenant or agreement under the Indenture, against, and no personal liability whatsoever shall
attach to, or be incurred by, any incorporator, stockholder, member, officer or director, as such, past, present or future of the Company or of any predecessor or successor corporation (either directly or through the Company or a predecessor or
successor corporation), whether by virtue of any constitutional provision, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise; it being expressly agreed and understood that the Indenture and all the Securities
are solely corporate obligations and that any such personal liability is hereby expressly waived and released as a condition of, and as part of the consideration for, the execution of the Indenture and the issuance of the Securities. 

  
 A-5 

 Unless the certificate of authentication hereon has been executed by the Trustee referred to
herein by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose. 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed. 

 

			
	PPL ELECTRIC UTILITIES CORPORATION
		
	By:	 	 
		 	

 [FORM OF CERTIFICATE OF AUTHENTICATION] 

CERTIFICATE OF AUTHENTICATION 

This is one of the Securities of the series designated therein referred to in the within-mentioned Indenture. 

Dated:                 , 

 

			
	THE BANK OF NEW YORK MELLON, as Trustee
		
	By:	 	 
		 	Authorized Signatory

  
 A-6Blueprint

 

Exhibit 10.45

 

EQUITY FINANCING AGREEMENT

 

This EQUITY FINANCING AGREEMENT (the
“Agreement”), dated as of March _1_, 2018 (the
“Execution Date”), is entered into by and
between Guided Therapeutics, Inc., a
__Delaware_______ corporation with its principal executive
office at __5835 Peachtree Corners East, Norcross, Georgia 30092_
(the “Company”),and GHS
Investments LLC, a Nevada limited liability company, with offices
at 420 Jericho Turnpike, Suite 207, Jericho, NY 11753. (the
“Investor”).

 

 

RECITALS:

 

 

WHEREAS, the parties desire that, upon the terms
and subject to the conditions contained herein, the Investor shall
invest up to Ten Million Dollars ($10,000,000) (the "Commitment
Amount"), from time to time over the course of twenty-four (24)
months after an effective registration of the underlying shares
(the “Contract Period”) to purchase the Company’s
common stock par value $_0.001_ per share (the
“Common Stock”);

 

 

WHEREAS, such investments will be made in reliance
upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act of 1933, as amended (the
“1933
Act”), Rule 506 of
Regulation D promulgated by the SEC under the 1933 Act, and/or upon
such other exemption from the registration requirements of the 1933
Act as may be available with respect to any or all of the
investments in Common Stock to be made hereunder;
and

 

 

WHEREAS, contemporaneously with the execution and
delivery of this Agreement, the parties hereto are executing and
delivering a Registration Rights Agreement substantially in the
form attached hereto as Exhibit A
(the “Registration Rights
Agreement”) pursuant to
which the Company has agreed to provide certain registration rights
under the 1933 Act, and the rules and regulations promulgated
thereunder, and applicable state securities
laws.

 

 

NOW
THEREFORE, in consideration of the foregoing recitals, which shall
be considered an integral part of this Agreement, the covenants and
agreements set forth hereafter, and other good and valuable
consideration, the receipt and sufficiency of which is hereby
acknowledged, the Company and the Investor hereby agree as
follows:

 

SECTION I.

DEFINITIONS

 

For
all purposes of and under this Agreement, the following terms shall
have the respective meanings below, and such meanings shall be
equally applicable to the singular and plural forms of such defined
terms.

 

“1933 Act” shall have the meaning set forth in the
recitals.

 

“1934 Act” shall mean the Securities Exchange Act of
1934, as amended, or any similar federal statute, and the rules and
regulations of the SEC thereunder, all as the same will then be in
effect.

 

“Affiliate” shall have the meaning set forth in
Section
5.7.

 

“Agreement” shall have the meaning set forth in the
preamble.

 

 

 

“Articles of
Incorporation” shall have
the meaning set forth in Section
4.3.

 

“By-laws” shall have the meaning set forth in
Section
4.3.

 

“Closing” shall have the meaning set forth in
Section
2.4.

 

“Closing Date” shall have the meaning set forth in
Section
2.4.

 

“Common Stock” shall have the meaning set forth in the
recitals.

 

“Control” or “Controls” shall have the meaning set forth in
Section
5.7.

 

“Effective
Date” shall mean the date
the SEC declares effective under the 1933 Act the Registration
Statement covering the Securities.

 

“Environmental
Laws” shall have the
meaning set forth in Section
4.13.

 

“Execution
Date” shall have the
meaning set forth in the preamble.

 

“Indemnified
Liabilities” shall have
the meaning set forth in Section
10.

 

“Indemnitees” shall have the meaning set forth in
Section
10.

 

“Indemnitor” shall have the meaning set forth in
Section
10.

 

“Ineffective
Period” shall mean any
period of time that the Registration Statement or any supplemental
registration statement becomes ineffective or unavailable for use
for the sale or resale, as applicable, of any or all of the
Registrable Securities (as defined in the Registration Rights
Agreement) for any reason (or in the event the prospectus under
either of the above is not current and deliverable) during any time
period required under the Registration Rights
Agreement.

 

“Investor” shall have the meaning set forth in the
preamble.

 

“Market
Price” shall mean the
average of the two (2) lowest volume weighted average prices of the
Company's Common Stock during the Pricing
Period.

 

“Material Adverse
Effect” shall have the
meaning set forth in Section
4.1.

 

“Maximum Common Stock
Issuance” shall have the
meaning set forth in Section
2.5.

 

“Open Period” shall mean the period beginning on and
including the Trading Day immediately following the Effective Date
and ending on the earlier to occur of (i) the date which is twenty
four (24) months from the Effective Date; or (ii) termination of
the Agreement in accordance with Section
8.

 

“Pricing
Period” shall mean
fifteen (15) consecutive trading days preceding the receipt of the
applicable Put Notice.

 

 

 

 

“Principal
Market” shall mean the
New York Stock Exchange, the NYSE Amex, the Nasdaq Capital Market,
the Nasdaq Global Market, the Nasdaq Global Select Market or the
OTC Markets, whichever is the principal market on which the Common
Stock is listed.

 

“Prospectus” shall mean the prospectus, preliminary
prospectus and supplemental prospectus used in connection with the
Registration Statement.

 

“Purchase
Amount” shall mean the
total amount being paid by the Investor on a particular Closing
Date to purchase the Securities.

 

“Purchase
Price” shall mean eighty
percent (80%) of the Market Price.

 

“Put” shall mean the Company is entitled to
request equity investments (the “Put” or
“Puts”) by the Investor during the Contract Period,
pursuant to which the Company will issue Common Stock to the
Investor with an aggregate Purchase Price equal to the value of the
Put, subject to a price per share calculation based on the Market
Price.

 

“Put Amount” shall mean the total dollar amount
requested by the Company pursuant to an applicable Put. The timing
and amounts of each Put shall be at the discretion of the Company.
The maximum dollar amount of each Put will not exceed two (2) times
the average daily trading dollar volume for the Company’s
Common Stock during the ten (10) trading days preceding the Put
Date. No Put will be made in an amount greater than four hundred
thousand dollars ($400,000). Puts are further limited to the
Investor owning no more than 9.99% of the outstanding stock of the
Company at any given time.

 

“Put Notice” shall mean a written notice sent to the
Investor by the Company stating the Put Amount in U.S. dollars that
the Company intends to sell to the Investor pursuant to the terms
of the Agreement and stating the current number of Shares issued
and outstanding on such date.

 

“Put Notice
Date” shall mean the
Trading Day, as set forth below, on which the Investor receives a
Put Notice.

 

 

“Put
Restriction” shall mean a
minimum of ten (10) trading days following a Put Notice Date.
During this time, the Company shall not be entitled to deliver
another Put Notice.

 

“Put Shares
Due” shall have the
meaning set forth in Section
2.4.

 

“Registered Offering Transaction
Documents” shall mean
this Agreement, and the Registration Rights Agreement between the
Company and the Investor as of the date
herewith.

 

“Registration Rights
Agreement” shall have the
meaning set forth in the recitals.

 

“Registration
Statement” means the
registration statement of the Company filed under the 1933 Act
covering the Securities issuable hereunder.

 

“Related
Party” shall have the
meaning set forth in Section
5.7.

 

“Resolution” shall have the meaning set forth in
Section
7.5.

 

 

 

“SEC” shall mean the U.S. Securities and
Exchange Commission.

 

“SEC
Documents” shall have the
meaning set forth in Section
4.6.

 

“Securities” shall mean the shares of Common Stock
issued pursuant to the terms of this Agreement.

 

“Settlement
Date” shall have the
meaning set forth in Section
6.2.

 

“Shares” shall mean the shares of the
Company’s Common Stock.

 

“Subsidiaries” shall have the meaning set forth in
Section
4.1.

 

“Trading Day” shall mean any day on which the Principal
Market for the Common Stock is open for trading, from the hours of
9:30 am until 4:00 pm.

 

“Waiting
Period” shall have the
meaning set forth in Section
2.2.

 

SECTION II

PURCHASE AND SALE OF COMMON STOCK

 

2.1 PURCHASE
AND SALE OF COMMON STOCK.
Subject to the terms and conditions set forth herein, the Company
shall issue and sell to the Investor, and the Investor shall
purchase from the Company, up to that number of Shares having an
aggregate Purchase Price of Ten Million Dollars
($10,000,000).

 

2.2 DELIVERY
OF PUT NOTICES. Subject to the
terms and conditions herein, and from time to time during the Open
Period, the Company may, in its sole discretion, deliver a Put
Notice to the Investor which states the dollar amount (designated
in U.S. Dollars), which the Company intends to sell to the Investor
on a Closing Date (the “Put”). The Put Notice shall be in the form
attached hereto as Exhibit C
and incorporated herein by reference.
The price of the Put shall be eighty (80%) percent of the
“Market Price”, which is the average of the two (2)
lowest volume weighted average prices of the Company’s Common
Stock for fifteen (15) consecutive trading days preceding the Put
Date. During the Open Period, the Company shall not be entitled to
submit a Put Notice until after the previous Closing has
been completed. There will be a minimum of ten (10) trading days
between Put Notices.

 

2.3 CONDITIONS
TO INVESTOR’S OBLIGATION TO PURCHASE
SHARES. Notwithstanding
anything to the contrary in this Agreement, the Company shall not
be entitled to deliver a Put Notice and the Investor shall not be
obligated to purchase any Shares at a Closing unless each of the
following conditions are satisfied:

 

i.

a
Registration Statement shall have been declared effective and shall
remain effective and available for the resale of all the
Registrable Securities (as defined in the Registration Rights
Agreement) at all times until the Closing with respect to the
subject Put Notice;

 

ii.

at
all times during the period beginning on the related Put Notice
Date and ending on and including the related Closing Date, the
Common Stock shall have been listed or quoted for trading on the
Principal Market and shall not have been suspended from trading
thereon for a period of two (2) consecutive Trading Days during the
Open Period and the Company shall not have been notified of any
pending or threatened proceeding or other action to suspend the
trading of the Common Stock;

 

 

 

 

iii.

the
Company has complied with its obligations and is otherwise not in
breach of or in default under, this Agreement, the Registration
Rights Agreement or any other agreement executed between the
parties, which has not been cured prior to delivery of the
Investor’s Put Notice Date;

 

iv.

no
injunction shall have been issued and remain in force, or action
commenced by a governmental authority which has not been stayed or
abandoned, prohibiting the purchase or the issuance of the
Securities; and

 

v.

the
issuance of the Securities will not violate any shareholder
approval requirements of the Principal Market.

 

If
any of the events described in clauses (i) through (v) above occurs
during a Pricing Period, then the Investor shall have no obligation
to purchase the Put Amount of Common Stock set forth in the
applicable Put Notice.

 

2.4 MECHANICS
OF PURCHASE OF SHARES BY INVESTOR. Subject to the satisfaction of the conditions set
forth in Sections 2.5, 7 and 8 of this Agreement, at the end
of the Pricing Period, the Purchase Price shall be established and
the number of Put Shares shall be delivered for a particular Put.
In the event that (i) the lowest volume-weighted average price (the
“VWAP”) of the
Company’s Common Stock for any given trading day during the
ten (10) trading days following a Put Notice (the
“Trading
Period”) is less than 75% of the Market Price used to
determine the Purchase Price in connection with the Put and (ii) as
of the end of such Trading Period, the Investor holds Shares issued
pursuant to such Put Notice (the “Trading Period Shares”), then the
Company shall issue such additional Shares, on the Trading Day
immediately following the Trading Period, as may be necessary to
adjust the Purchase Price for that portion of the Put represented
by the Trading Period Shares, to equal the lowest VWAP during the
Trading Period.

 

 

 

 

The
Closing of a Put shall occur upon the first Trading Day following
the receipt and approval (before 9:30am Eastern Standard Time) by
Investor's broker of the Put Shares, whereby the Company shall have
caused the Transfer Agent to electronically transmit, prior to the
applicable Closing Date, the applicable Put Shares by crediting the
account of the Investor's broker with DTC through its Deposit
Withdrawal Agent Commission ("DWAC") system, and the Investor shall
deliver the Investment Amount specified in the Put Notice by wire
transfer of immediately available funds to an account designated by
the Company ("Closing Date" or "Closing"). In addition, on or prior
to such Closing Date, each of the Company and Investor shall
deliver to each other all documents, instruments and writings
required to be delivered or reasonably requested by either of them
pursuant to this Agreement in order to implement and effect the
transactions contemplated herein.

 

 

 

 

2.5 OVERALL
LIMIT ON COMMON STOCK ISSUABLE.
Notwithstanding anything contained herein to the contrary, if
during the Open Period the Company becomes listed on an exchange
which limits the number of shares of Common Stock that may be
issued without shareholder approval, then the number of Shares
issuable by the Company and purchasable by the Investor, shall not
exceed that number of the shares of Common Stock that may be
issuable without shareholder approval (the
“Maximum Common Stock
Issuance”). If such
issuance of shares of Common Stock 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 the Articles of
Incorporation of the Company, if such issuance of shares of Common
Stock could cause a delisting on the Principal Market. 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
Securities or the Investor’s obligation in accordance with
the terms and conditions hereof to purchase a number of Shares in
the aggregate up to the Maximum Common Stock Issuance, and that
such approval pertains only to the applicability of the Maximum
Common Stock Issuance limitation provided in this
Section
2.5.

 

 

 

 

2.6 LIMITATION
ON AMOUNT OF OWNERSHIP. Notwithstanding anything to the
contrary in this Agreement, in no event shall the Investor be
entitled to purchase that number of Shares, which when added to the
sum of the number of shares of Common Stock beneficially owned (as
such term is defined under Section 13(d) and Rule 13d-3 of the 1934
Act), by the Investor, would exceed 9.99% of the number of shares
of Common Stock outstanding on the Closing Date, as determined in
accordance with Rule 13d-1(j) of the 1934 Act.

 

 

SECTION III

INVESTOR’S REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

The
Investor represents and warrants to the Company, and covenants,
that to the best of the Investor's knowledge:

 

3.1 SOPHISTICATED
INVESTOR. The Investor has, by
reason of its business and financial experience, such knowledge,
sophistication and experience in financial and business matters and
in making investment decisions of this type that it is capable of
(I) evaluating the merits and risks of an investment in the
Securities and making an informed investment decision; (II)
protecting its own interest; and (III) bearing the economic risk of
such investment for an indefinite period of
time.

 

3.2 AUTHORIZATION;
ENFORCEMENT. This Agreement has
been duly and validly authorized, executed and delivered on behalf
of the Investor and is a valid and binding agreement of the
Investor enforceable against the Investor in accordance with its
terms, subject as to enforceability to general principles of equity
and to applicable bankruptcy, insolvency, reorganization,
moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’
rights and remedies.

 

3.3 SECTION
9 OF THE 1934 ACT. During the
term of this Agreement, the Investor will comply with the
provisions of Section 9 of the 1934 Act, and the rules promulgated
thereunder, with respect to transactions involving the Common
Stock.

 

3.4 ACCREDITED
INVESTOR. Investor is an
“Accredited Investor” as that term is defined in Rule
501(a) of Regulation D of the 1933 Act.

 

3.5 NO
CONFLICTS. The execution,
delivery and performance of the Documents by the Investor and the
consummation by the Investor of the transactions contemplated
hereby and thereby will not result in a violation of Partnership
Agreement or other organizational documents of the
Investor.

 

3.6 OPPORTUNITY
TO DISCUSS. The Investor has
received all materials relating to the Company’s business,
finance and operations which it has requested. The Investor has had
an opportunity to discuss the business, management and financial
affairs of the Company with the Company’s
management.

 

3.7 INVESTMENT
PURPOSES. The Investor is
purchasing the Securities for its own account for investment
purposes and not with a view towards distribution and agrees to
resell or otherwise dispose of the Securities solely in accordance
with the registration provisions of the 1933 Act (or pursuant to an
exemption from such registration provisions).

 

 

 

 

3.8 NO
REGISTRATION AS A DEALER. The
Investor is not required to be registered as a “dealer”
under the 1934 Act, either as a result of its execution and
performance of its obligations under this Agreement or
otherwise.

 

3.9 GOOD
STANDING. The Investor is a
limited liability company, duly organized, validly existing and in
good standing in the State of its Nevada.

 

3.10 TAX
LIABILITIES. The Investor
understands that it is liable for its own tax
liabilities.

 

3.11 REGULATION
M. The Investor will comply
with Regulation M under the 1934 Act, if
applicable.

 

3.12 NO
SHORT SALES. No short sales
shall be permitted by the Investor or its affiliates during the
period commencing on the Execution Date and continuing through the
termination of this Agreement.

SECTION IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

Except
as set forth in the Schedules attached hereto, or as disclosed on
the Company’s SEC Documents, the Company represents and
warrants to the Investor that:

 

4.1 ORGANIZATION
AND QUALIFICATION. The Company
is a corporation duly organized and validly existing in good
standing under the laws of the State of Delaware, and has the
requisite corporate power and authorization to own its properties
and to carry on its business as now being conducted. Both the
Company and the companies it owns or controls
(“Subsidiaries”) are duly qualified to do business and are
in good standing in every jurisdiction in which its ownership of
property or 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. As used in this Agreement,
“Material Adverse
Effect” means a change,
event, circumstance, effect or state of facts that has had or is
reasonably likely to have, a material adverse effect on the
business, properties, assets, operations, results of operations,
financial condition or prospects of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability
of the Company to perform its obligations under the Registered
offering Transaction Documents.

 

4.2 AUTHORIZATION;
ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

 

i.

The Company has the requisite corporate power and
authority to enter into and perform this Investment Agreement and
the Registration Rights Agreement (collectively, the
“Registered Offering Transaction
Documents”), and to issue
the Securities in accordance with the terms hereof and
thereof.

 

ii.

The
execution and delivery of the Registered Offering Transaction
Documents by the Company and the consummation by it of the
transactions contemplated hereby and thereby, including without
limitation the issuance of the Securities pursuant to this
Agreement, have been duly and validly 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 shareholders.

 

 

 

iii.

The
Registered Offering Transaction Documents have been duly and
validly executed and delivered by the Company.

 

iv.

The
Registered Offering Transaction Documents 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.

 

4.3 CAPITALIZATION.
As of the date hereof, the authorized capital stock of the Company
consists of ____1,000,000,000_____ shares of the Common Stock, par
value $___0.001______per share, of which as of the date hereof
___108,461,949_____shares are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable.

 

 

 

 

Except as disclosed in the Company’s publicly available
filings with the SEC or as otherwise set forth on Schedule
4.3:

 

 

i.

no
shares of the Company’s capital stock are subject to
preemptive rights or any other similar rights or any liens or
encumbrances suffered or permitted by the Company;

 

ii.

there
are no outstanding debt securities;

 

iii.

there
are no outstanding shares of capital stock, 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;

 

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 1933 Act (except the Registration Rights
Agreement);

 

v.

there
are no outstanding securities of the Company or any of its
Subsidiaries which contain any redemption or similar provisions,
and there are no contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or
may become bound to redeem a security of the Company or any of its
Subsidiaries;

 

vi.

there
are no securities or instruments containing anti-dilution or
similar provisions that will be triggered by the issuance of the
Securities as described in this Agreement;

 

vii.

the
Company does not have any stock appreciation rights or
“phantom stock” plans or agreements or any similar plan
or agreement; and

 

viii.

there
is no dispute as to the classification of any shares of the
Company’s capital stock.

 

 

ix.

 

 

The Company has furnished to the Investor, or the
Investor has had access through EDGAR to, true and correct copies
of the Company’s Articles of Incorporation, as in effect on
the date hereof (the “Articles of
Incorporation”), and the
Company’s By-laws, as in effect on the date hereof (the
“By-laws”), and the terms of all securities
convertible into or exercisable for Common Stock and the material
rights of the holders thereof in respect
thereto.

 

4.4 ISSUANCE
OF SHARES. The Company has
reserved the amount of Shares included in the Company’s
registration statement for issuance pursuant to the Registered
Offering Transaction Documents, which have been duly authorized and
reserved (subject to adjustment pursuant to the Company’s
covenant set forth in Section 5.5
below) pursuant to this Agreement.
Upon issuance in accordance with this Agreement, the Securities
will be validly issued, fully paid for and non-assessable and free
from all taxes, liens and charges with respect to the issuance
thereof. In the event the Company cannot register a sufficient
number of Shares for issuance pursuant to this Agreement, the
Company will use its best efforts to authorize and reserve for
issuance the number of Shares required for the Company to perform
its obligations hereunder as soon as reasonably
practicable.

 

4.5 NO
CONFLICTS. The execution,
delivery and performance of the Registered Offering Transaction
Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby will not (i) result in
a violation of the Articles of Incorporation, any Certificate of
Designations, Preferences and Rights of any outstanding series of
preferred stock of the Company or the By-laws; or (ii) conflict
with, or constitute a material default (or an event which with
notice or lapse of time or both would become a material default)
under, or give to others any rights of termination, amendment,
acceleration or cancellation of, any material agreement, contract,
indenture mortgage, indebtedness or instrument to which the Company
or any of its Subsidiaries is a party, or to the Company’s
knowledge result in a violation of any law, rule, regulation,
order, judgment or decree (including United States federal and
state securities laws and regulations and the rules and regulations
of the Principal Market or principal securities exchange or trading
market on which the Common Stock is traded or listed) applicable to
the Company or any of its Subsidiaries or by which any property or
asset of the Company or any of its Subsidiaries is bound or
affected. Neither the Company nor its Subsidiaries is in violation
of any term of, or in default under, the Articles of Incorporation,
any Certificate of Designations, Preferences and Rights of any
outstanding series of preferred stock of the Company or the By-laws
or their organizational charter or by-laws, respectively, or any
contract, agreement, mortgage, indebtedness, indenture, instrument,
judgment, decree or order or any statute, rule or regulation
applicable to the Company or its Subsidiaries, except for possible
conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations that would not individually or in the
aggregate have or constitute a Material Adverse Effect. The
business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law,
statute, ordinance, rule, order or regulation of any governmental
authority or agency, regulatory or self-regulatory agency, or
court, except for possible violations the sanctions for which
either individually or in the aggregate would not have a Material
Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the 1933 Act or any securities laws
of any states, to the Company’s knowledge, the Company is not
required to obtain any consent, authorization, permit or order of,
or make any filing or registration (except the filing of a
registration statement as outlined in the Registration Rights
Agreement between the parties) with, any court, governmental
authority or agency, regulatory or self-regulatory agency or other
third party in order for it to execute, deliver or perform any of
its obligations under, or contemplated by, the Registered Offering
Transaction Documents in accordance with the terms hereof or
thereof. All consents, authorizations, permits, 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 and are in full force and effect as of the date
hereof. The Company and its Subsidiaries are unaware of any facts
or circumstances which might give rise to any of the foregoing. The
Company is not, and will not be, in violation of the listing
requirements of the Principal Market as in effect on the date
hereof and on each of the Closing Dates and is not aware of any
facts which would reasonably lead to delisting of the Common Stock
by the Principal Market in the foreseeable
future.

 

 

 

 

4.6  SEC
DOCUMENTS; FINANCIAL STATEMENTS. As of the date hereof, the Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting
requirements of the 1934 Act (all of the foregoing filed prior to
the date hereof and all exhibits included therein and financial
statements and schedules thereto and documents incorporated by
reference therein, and amendments thereto, being hereinafter
referred to as the “SEC
Documents”). The Company
has delivered to the Investor or its representatives, or they have
had access through EDGAR to, true and complete copies of the SEC
Documents. As of their respective filing dates, the SEC Documents
complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC or the time they were
amended, if amended, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in 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, by a firm that is a
member of the Public Companies Accounting Oversight Board
(“PCAOB”) 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). No
other written information provided by or on behalf of the Company
to the Investor which is not included in the SEC Documents,
including, without limitation, information referred to in
Section
4.3of this Agreement, contains
any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the
light of the circumstance under which they are or were made, not
misleading. Neither the Company nor any of its Subsidiaries or any
of their officers, directors, employees or agents have provided the
Investor with any material, nonpublic information which was not
publicly disclosed prior to the date hereof and any material,
nonpublic information provided to the Investor by the Company or
its Subsidiaries or any of their officers, directors, employees or
agents prior to any Closing Date shall be publicly disclosed by the
Company prior to such Closing Date.

 

4.7 ABSENCE
OF CERTAIN CHANGES. Except as
otherwise set forth in the SEC Documents, the Company does not
intend to change the business operations of the Company in any
material way. The Company has not taken any steps, and does not
currently expect to take any steps, to seek protection pursuant to
any bankruptcy law nor does the Company or its Subsidiaries have
any knowledge or reason to believe that its creditors intend to
initiate involuntary bankruptcy proceedings.

 

4.8 ABSENCE
OF LITIGATION AND/OR REGULATORY PROCEEDINGS. Except as set forth in the SEC Documents, there
is no action, suit, proceeding, inquiry or investigation before or
by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the executive
officers of Company or any of its Subsidiaries, threatened against
or affecting the Company, the Common Stock or any of the
Company’s Subsidiaries or any of the Company’s or the
Company’s Subsidiaries’ officers or directors in their
capacities as such, in which an adverse decision could have a
Material Adverse Effect.

 

 

 

 

4.9 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 the Registered Offering Transaction
Documents and the transactions contemplated hereby and thereby. The
Company further acknowledges that the Investor is not acting as a
financial advisor or fiduciary of the Company (or in any similar
capacity) with respect to the Registered Offering Transaction
Documents and the transactions contemplated hereby and thereby and
any advice given by the Investor or any of its respective
representatives or agents in connection with the Registered
Offering Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Investor’s
purchase of the Securities, and is not being relied on by the
Company. The Company further represents to the Investor that the
Company’s decision to enter into the Registered Offering
Transaction Documents has been based solely on the independent
evaluation by the Company and its
representatives.

 

4.10 NO
UNDISCLOSED EVENTS, LIABILITIES, DEVELOPMENTS OR
CIRCUMSTANCES. Except as set
forth in the SEC Documents, as of the date hereof, no event,
liability, development or circumstance has occurred or exists, or
to the Company’s knowledge is contemplated to occur, with
respect to the Company or its Subsidiaries or their respective
business, properties, assets, prospects, operations or financial
condition, that would be required to be disclosed by the Company
under applicable securities laws on a registration statement filed
with the SEC relating to an issuance and sale by the Company of its
Common Stock and which has not been publicly
announced.

 

4.11 EMPLOYEE
RELATIONS. Neither the Company
nor any of its Subsidiaries is involved in any union labor dispute
nor, to the knowledge of the Company or any of its Subsidiaries, is
any such dispute threatened. Neither the Company nor any of its
Subsidiaries is a party to a collective bargaining agreement, and
the Company and its Subsidiaries believe that relations with their
employees are good. No executive officer (as defined in Rule 501(f)
of the 1933 Act) has notified the Company that such officer intends
to leave the Company’s employ or otherwise terminate such
officer’s employment with the Company.

 

4.12 INTELLECTUAL
PROPERTY RIGHTS. The Company
and its Subsidiaries own or possess adequate rights or licenses to
use all 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. Except as set forth in the SEC Documents, none of
the Company’s trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, government
authorizations, trade secrets or other intellectual property rights
necessary to conduct its business as now or as proposed to be
conducted have expired or terminated, or are expected to expire or
terminate within two (2) years from the date of this Agreement. 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, or of any such
development of similar or identical trade secrets or technical
information by others and, except as set forth in the SEC
Documents, 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. The Company and its
Subsidiaries have taken commercially reasonable security measures
to protect the secrecy, confidentiality and value of all of their
intellectual properties.

 

 

 

 

4.13 ENVIRONMENTAL
LAWS. The Company and its
Subsidiaries (i) are, to the knowledge of the management and
directors of the Company and its Subsidiaries, in compliance with
any and all applicable 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, to the
knowledge of the management and directors of the Company, received
all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective
businesses; and (iii) are in compliance, to the knowledge of the
management and directors of the Company, with all terms and
conditions of any such permit, license or approval where, in each
of the three (3) foregoing cases, the failure to so comply would
have, individually or in the aggregate, a Material Adverse
Effect.

 

4.14 TITLE.
The Company and its Subsidiaries have good and marketable title to
all personal property owned by them which is material to the
business of the Company and its Subsidiaries, in each case free and
clear of all liens, encumbrances and defects except such as are
described in the SEC Documents or such as do not materially affect
the value of such property and do not interfere with the use made
and proposed to be made of such property by the Company or any of
its Subsidiaries. Any real property and facilities held under lease
by the Company or any of its Subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as
are not material and do not interfere with the use made and
proposed to be made of such property and buildings by the Company
and its Subsidiaries.

 

4.15 INSURANCE.
Each of the Company’s Subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks
and in such amounts as management of the Company reasonably
believes to be prudent and customary in the businesses in which the
Company and its Subsidiaries are engaged. Neither the Company nor
any of its Subsidiaries has been refused any insurance coverage
sought or applied for and neither the Company nor its Subsidiaries
has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary
to continue its business at a cost that would not have a Material
Adverse Effect.

 

4.16 REGULATORY
PERMITS. With the exception of
US FDA approval and the CE Mark, the Company and its Subsidiaries
have in full force and effect all certificates, approvals,
authorizations and permits from the appropriate federal, state,
local or foreign regulatory authorities and comparable foreign
regulatory agencies, necessary to own, lease or operate their
respective properties and assets and 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, approval, authorization or
permit, except for such certificates, approvals, authorizations or
permits which if not obtained, or such revocations or modifications
which, would not have a Material Adverse
Effect.

 

4.17 INTERNAL
ACCOUNTING CONTROLS. Except as
otherwise set forth in the SEC Documents, the Company and each of
its Subsidiaries maintain a system of internal accounting controls
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles by a firm
with membership to the PCAOB and to maintain asset accountability;
(iii) access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Company’s management has
determined that the Company’s internal accounting controls
were not effective as of the date of this Agreement as further
described in the SEC Documents.

 

 

 

 

4.18 NO
MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Company nor any of its Subsidiaries
is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation which in the
judgment of the Company’s officers has or is expected in the
future to have a Material Adverse Effect. Neither the Company nor
any of its Subsidiaries is a party to any contract or agreement
which in the judgment of the Company’s officers has or is
expected to have a Material Adverse Effect.

 

4.19 TAX
STATUS. The Company and each of
its Subsidiaries has made or filed all United States federal and
state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject (unless and
only to the extent that the Company and each of its Subsidiaries
has set aside on its books provisions reasonably adequate for the
payment of all unpaid and unreported taxes) and has paid all taxes
and other governmental assessments and charges that are material in
amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and has
set aside on its books 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 that have not been resolved by written agreement for payment
with a taxing authority in any material amount claimed to be due by
the taxing authority of any jurisdiction, and the officers of the
Company know of no basis for any such claim.

 

4.20 CERTAIN
TRANSACTIONS. Except as set
forth in the SEC Documents filed at least ten (10) days prior to
the date hereof and except for arm’s length transactions
pursuant to which the Company makes payments in the ordinary course
of business upon terms no less favorable than the Company could
obtain from disinterested third parties , none of the officers,
directors, or employees of the Company is presently a party to any
transaction with the Company or any of its Subsidiaries (other than
for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee or, to the knowledge of
the Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or partner, such that
disclosure would be required in the SEC
Documents..

 

4.21 DILUTIVE
EFFECT. The Company understands
and acknowledges that the number of shares of Common Stock 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 period between the Effective Date and the end of the
Open 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 Registered Offering Transaction
Documents, its obligation to issue shares of Common Stock 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.

 

4.22 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.

 

 

 

 

4.23 NO
BROKERS, FINDERS OR FINANCIAL ADVISORY FEES OR
COMMISSIONS. No brokers,
finders or financial advisory fees or commissions will be payable
by the Company, its agents or Subsidiaries, with respect to the
transactions contemplated by this Agreement.

 

4.24 EXCLUSIVITY.
The Company shall not pursue a similar Equity Financing transaction
with any other party unless and until good faith negotiations have
terminated between the Investor and the Company or until such time
as the registration statement has been declared effective by the
SEC.

SECTION V

COVENANTS OF THE COMPANY

5.1 BEST EFFORTS. The Company shall
use all commercially reasonable efforts to timely satisfy each of
the conditions set forth in Section 7 of this
Agreement.

 

5.2 REPORTING STATUS. Until one of
the following occurs, the Company shall file all reports required
to be filed with the SEC pursuant to the 1934 Act, and the Company
shall not terminate its status, or take an action or fail to take
any action, which would terminate its status as a reporting company
under the 1934 Act: (i) this Agreement terminates pursuant to
Section 8 and the
Investor has the right to sell all of the Securities without
restrictions pursuant to Rule 144 promulgated under the 1933 Act,
or such other exemption, or (ii) the date on which the Investor has
sold all the Securities and this Agreement has been terminated
pursuant to Section
8.

 

5.3 USE OF PROCEEDS. The Company
will use the proceeds from the sale of the Shares (excluding
amounts paid by the Company for fees as set forth in the Registered
Offering Transaction Documents) for general corporate and working
capital purposes and acquisitions or assets, businesses or
operations or for other purposes that the Board of Directors, in
good faith deem to be in the best interest of the
Company.

 

5.4 FINANCIAL INFORMATION. During
the Open Period, the Company agrees to make available to the
Investor via EDGAR or other electronic means the following
documents and information on the forms set forth: (i) within five
(5) Trading Days after the filing thereof with the SEC, a copy of
its Annual Reports on Form 10-K, its Quarterly Reports on Form
10-Q, any Current Reports on Form 8-K and any Registration
Statements or amendments filed pursuant to the 1933 Act; (ii)
copies of any notices and other information made available or given
to the shareholders of the Company generally, contemporaneously
with the making available or giving thereof to the shareholders;
and (iii) within two (2) calendar days of filing or delivery
thereof, copies of all documents filed with, and all correspondence
sent to, the Principal Market, any securities exchange or market,
or the Financial Industry Regulatory Association, unless such
information is material nonpublic information.

 

5.5 RESERVATION OF SHARES. The
Company shall take all action necessary to at all times have
authorized, and reserved the amount of
Shares included in the Company’s registration statement for
issuance pursuant to the Registered Offering Transaction
Documents. 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 as described in
this Section 5.5,
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.

 

 

 

 

5.6 LISTING. The Company shall
promptly secure and maintain the listing of all of the Registrable
Securities (as defined in the Registration Rights Agreement) on the
Principal Market and each other national securities exchange and
automated quotation system, if any, upon which shares of Common
Stock are then listed (subject to official notice of issuance) and
shall maintain, such listing of all Registrable Securities from
time to time issuable under the terms of the Registered Offering
Transaction Documents. Neither the Company nor any of its
Subsidiaries shall take any action which would be reasonably
expected to result in the delisting or suspension of the Common
Stock on the Principal Market (excluding suspensions of not more
than one (1) Trading Day resulting from business announcements by
the Company). The Company shall promptly provide to the Investor
copies of any notices it receives from the Principal Market
regarding the continued eligibility of the Common Stock for listing
on such automated quotation system or securities exchange. The
Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 5.6.

 

5.7 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.

 

5.8 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
Registered Offering Transaction Documents in the form required by
the 1934 Act, if such filing is required.

 

5.9 CORPORATE EXISTENCE. The
Company shall use all commercially reasonable efforts to preserve
and continue the corporate existence of the Company.

 

 

 

 

5.10 NOTICE
OF CERTAIN EVENTS AFFECTING REGISTRATION; SUSPENSION OF RIGHT TO
MAKE A PUT. The Company shall promptly notify the Investor
upon the occurrence of any of the following events in respect of a
Registration Statement or related prospectus in respect of an
offering of the Securities: (i) receipt of any request for
additional information by the SEC or any other federal or state
governmental authority during the period of effectiveness of the
Registration Statement for amendments or supplements to the
Registration Statement or related prospectus; (ii) the issuance by
the SEC or any other federal or state governmental authority of any
stop order suspending the effectiveness of any 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
Securities for sale in any jurisdiction or the initiation or notice
of any proceeding for such purpose; (iv) the happening of any event
that makes any statement made in such Registration Statement or
related prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or
that requires the making of any changes in the Registration
Statement, related prospectus or documents so that, in the case of
a 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 or supplement to the Registration Statement would be
appropriate, and the Company shall promptly make available to
Investor any such supplement or amendment to the related
prospectus. The Company shall not deliver to Investor any Put
Notice during the continuation of any of the foregoing events in
this Section
5.10.

 

5.11 TRANSFER
AGENT. The Company shall deliver instructions to its
transfer agent to issue Shares to the Investor that are issued to
the Investor Pursuant to the Transactions contemplated
herein.

 

5.12 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 VI

CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL

 

The
obligation hereunder of the Company to issue and sell the
Securities to the Investor is further subject to the satisfaction,
at or before each Closing Date, of each of the following conditions
set forth below. These conditions are for the Company’s sole
benefit and may be waived by the Company at any time in its sole
discretion.

 

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

 

6.2 The Investor shall
have delivered to the Company the Purchase Price for the Securities
being purchased by the Investor.

 

 

 

 

6.3 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 which prohibits
the consummation of any of the transactions contemplated by this
Agreement.

SECTION VII

FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO
PURCHASE

 

The
obligation of the Investor hereunder to purchase Securities is
subject to the satisfaction, on or before each Closing Date, of
each of the following conditions set forth below.

 

7.1 The Company shall
have executed the Registered Offering Transaction Documents and
delivered the same to the Investor.

 

7.2 The representations
and warranties of the Company shall be true and correct as of the
date when made and as of the applicable Closing Date as though made
at that time and the Company shall have performed, satisfied and
complied with the covenants, agreements and conditions required by
the Registered Offering Transaction Documents to be performed,
satisfied or complied with by the Company on or before such Closing
Date. The Investor may request an update as of such Closing Date
regarding the representation contained in Section 4.3.

 

7.3 The Company shall
have executed and delivered to the Investor the certificates
representing, or have executed electronic book-entry transfer of,
the Securities (in such denominations as the Investor shall
request) being purchased by the Investor at such
Closing.

 

7.4 The Board of
Directors of the Company shall have adopted resolutions consistent
with Section
4.2(ii) (the “Resolutions”) and such Resolutions
shall not have been amended or rescinded prior to such Closing
Date.

 

7.5 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 which prohibits
the consummation of any of the transactions contemplated by this
Agreement.

 

7.6 Within thirty (30)
days after the Agreement is executed, the Company agrees to use its
best efforts to file with the SEC a registration statement covering
the shares of stock underlying the Equity Financing contemplated
herein. Such registration statement shall conform to the
requirements of the rules and regulations of the SEC and the terms
and conditions of Equity Financing this agreement as expressed in
the registration statement shall be reviewed and approved by the
Investor. The Company will take any and all steps necessary to have
its registration statement declared effective by the SEC within 30
days but no more than 90 days after the Company has filed its
registration statement. Such registration Statement shall conform
to the requirements of the rules and regulations of the SEC and the
terms and conditions of the equity financing Equity Financing as
expressed in the Registration Statement and shall be reviewed and
approved by the Investor. The Registration Statement shall be
effective on each Closing Date and no stop order suspending the
effectiveness of the Registration statement shall be in effect or
to the Company’s knowledge shall be pending or threatened.
Furthermore, on each Closing Date (I) neither the Company nor the
Investor shall have received notice that the SEC has issued or
intends to issue a stop order with respect to such Registration
Statement or that the SEC otherwise has suspended or withdrawn the
effectiveness of such Registration Statement, either temporarily or
permanently, or intends or has threatened to do so (unless the
SEC’s concerns have been addressed), and (II) no other
suspension of the use or withdrawal of the effectiveness of such
Registration Statement or related prospectus shall
exist.

 

 

 

7.7 At the time of each
Closing, the Registration Statement (including information or
documents incorporated by reference therein) and any amendments or
supplements thereto shall 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 or which would require public disclosure or an update
supplement to the prospectus.

 

7.8 If applicable, the
shareholders of the Company shall have approved the issuance of any
Shares in excess of the Maximum Common Stock Issuance in accordance
with Section 2.5 or
the Company shall have obtained appropriate approval pursuant to
the requirements of applicable state and federal laws and the
Company’s Articles of Incorporation and By-laws.

 

7.9 The conditions to
such Closing set forth in Section 2.3 shall have been
satisfied on or before such Closing Date.

 

7.10 The
Company shall have certified to the Investor the number of Shares
of Common Stock outstanding when a Put Notice is given to the
Investor. The Company’s delivery of a Put Notice to the
Investor constitutes the Company’s certification of the
existence of the necessary number of shares of Common Stock
reserved for issuance.

SECTION VIII

TERMINATION

 

This
Agreement shall terminate upon any of the following
events:

 

8.1 when the Investor
has purchased an aggregate of Ten Million Dollars ($10,000,000) in
the Common Stock of the Company pursuant to this Agreement;
or

 

8.2 on the date which
is twenty four (24) months after the Effective Date;
or

 

8.3 at such time that
the Registration Statement is no longer in effect.

 

Any and
all shares, or penalties, if any, due under this Agreement shall be
immediately payable and due upon termination of this
Agreement.

SECTION IX

SUSPENSION

 

This
Agreement shall be suspended upon any of the following events, and
shall remain suspended until such event is rectified:

 

i.

The trading of the
Common Stock is suspended by the SEC, the Principal Market or FINRA
for a period of two (2) consecutive Trading Days during the Open
Period; or

 

ii.

The Common Stock
ceases to be quoted, listed or traded on the Principal Market or
the Registration Statement is no longer effective (except as
permitted hereunder). Immediately upon the occurrence of one of the
above-described events, the Company shall send written notice of
such event to the Investor.

 

 

 

SECTION X

INDEMNIFICATION

 

In
consideration of the parties mutual obligations set forth in the
Transaction Documents, the Company ( the “Indemnitor”) shall defend,
protect, indemnify and hold harmless the Investor and all of the
investor’s shareholders, officers, directors, employees,
counsel, and direct or indirect investors and any of the foregoing
person’s agents or other representatives (including, without
limitation, those retained in connection with the transactions
contemplated by this Agreement) (collectively, the
“Indemnitees”)
from and against any and all actions, causes of action, suits,
claims, losses, costs, penalties, fees, liabilities and damages,
and reasonable expenses in connection therewith (irrespective of
whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable
attorneys’ fees and disbursements (the “Indemnified Liabilities”),
incurred by any Indemnitee as a result of, or arising out of, or
relating to (I) any misrepresentation or breach of any
representation or warranty made by the Indemnitor or any other
certificate, instrument or document contemplated hereby or thereby;
(II) any breach of any covenant, agreement or obligation of the
Indemnitor contained in the Registered Offering Transaction
Documents or any other certificate, instrument or document
contemplated hereby or thereby; or (III) any cause of action, suit
or claim brought or made against such Indemnitee by a third party
and arising out of or resulting from the execution, delivery,
performance or enforcement of the Registered Offering Transaction
Documents or any other certificate, instrument or document
contemplated hereby or thereby, except insofar as any such
misrepresentation, breach or any untrue statement, alleged untrue
statement, omission or alleged omission is made in reliance upon
and in conformity with information furnished to Indemnitor which is
specifically intended for use in the preparation of any such
Registration Statement, preliminary prospectus, prospectus or
amendments to the prospectus. To the extent that the foregoing
undertaking by the Indemnitor may be unenforceable for any reason,
the Indemnitor shall make the maximum contribution to the payment
and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law. The indemnity provisions
contained herein shall be in addition to any cause of action or
similar rights Indemnitor may have, and any liabilities the
Indemnitor or the Indemnitees may be subject to.

 

 

 

 

SECTION XI

GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION.

11.1 LAW
GOVERNING THIS AGREEMENT. This Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada
without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the
transactions contemplated by this Agreement shall be brought only
in the state or federal courts located in New York City, New York
State. The parties to this Agreement hereby irrevocably waive any
objection to jurisdiction and venue of any action instituted
hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens.
The parties executing this
Agreement and other agreements referred to herein or delivered in
connection herewith on behalf of the Company agree to submit to the
in personam jurisdiction of such courts and hereby irrevocably
waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable attorney’s
fees and costs. In the event that any provision of this Agreement
or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or
proceeding in connection with this Agreement or any other
Transaction Documents by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.

 

11.2 LEGAL
FEES; AND MISCELLANEOUS FEES. Except as otherwise set forth
in the Registered Offering Transaction Documents (including but not
limited to Section V of the Registration Rights Agreement), each
party shall pay the fees and expenses of its advisers, counsel, the
accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation,
execution, delivery and performance of this Agreement. Any
attorneys’ fees and expenses incurred by either the Company
or the Investor in connection with the preparation, negotiation,
execution and delivery of any amendments to this Agreement or
relating to the enforcement of the rights of any party, after the
occurrence of any breach of the terms of this Agreement by another
party or any default by another party in respect of the
transactions contemplated hereunder, shall be paid on demand by the
party which breached the Agreement and/or defaulted, as the case
may be. The Company shall pay all stamp and other taxes and duties
levied in connection with the issuance of any
Securities.

 

11.3 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and by
the different signatories hereto on separate counterparts, each of
which, when so executed, shall be deemed an original, but all such
counterparts shall constitute but one and the same instrument. This
Agreement may be executed by facsimile transmission, PDF,
electronic signature or other similar electronic means with the
same force and effect as if such signature page were an original
thereof.

 

11.4 HEADINGS;
SINGULAR/PLURAL. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement. Whenever required by the context
of this Agreement, the singular shall include the plural and
masculine shall include the feminine.

 

11.5 SEVERABILITY.
If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement in that jurisdiction or the
validity or enforceability of any provision of this Agreement in
any other jurisdiction.

 

 

 

 

11.6 ENTIRE
AGREEMENT; AMENDMENTS. This Agreement is the FINAL AGREEMENT
between the Company and the Investor with respect to the terms and
conditions set forth herein, and, the terms of this Agreement may
not be contradicted by evidence of prior, contemporaneous, or
subsequent oral agreements of the Parties. No provision of this
Agreement may be amended other than by an instrument in writing
signed by the Company and the Investor, and no provision hereof may
be waived other than by an instrument in writing signed by the
party against whom enforcement is sought. The execution and
delivery of the Registered Offering Transaction Documents shall not
alter the force and effect of any other agreements between the
Parties, and the obligations under those agreements.

 

11.7 NOTICES.
Any notices 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 (I) upon receipt, when delivered
personally; (II) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (III) one (1)
day after deposit with a nationally recognized overnight delivery
service, in each case properly addressed to the party to receive
the same. The addresses and facsimile numbers for such
communications shall be:

	

If to
the Company:

 

 

 

 

 

With a
copy to:

 

	
 

	

Guided
Therapeutics, Inc Attn: Gene Cartwright

5835
Peachtree Corners East

Suite D
Norcross, GA 30092

 

Fax:770-242-8639

 

Guided
Therapeutics, Inc

Attn:
Mark Faupel

5835
Peachtree Corners East

Suite
D

Norcross,
GA 30092

 

Fax:
770-242-8639

 

	
 

	
 

	
 

	

If to
the Investor:

 

 

 

 

	
 

	

GHS
Investments, LLC

420
Jericho Turnpike, Suite 207Jericho, NY 11753

 

 

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

11.8 NO
ASSIGNMENT. This Agreement may not be assigned.

 

 

 

 

11.9 NO
THIRD PARTY BENEFICIARIES. This Agreement is intended for
the benefit of the parties hereto and is not for the benefit of,
nor may any provision hereof be enforced by, any other person,
except that the Company acknowledges that the rights of the
Investor may be enforced by its general partner.

 

11.10 SURVIVAL.
The representations and warranties of the Company and the Investor
contained in Sections 3 and 4, the agreements and covenants set
forth in Sections 5 and 6, and the indemnification provisions set
forth in Section
10, shall survive each of the Closings and the termination
of this Agreement.

 

11.11 PUBLICITY.
The Investor acknowledges that this Agreement and all or part of
the Registered Offering Transaction Documents may be deemed to be
“material contracts” as that term is defined by Item
601(b)(10) of Regulation S-K, and that the Company may therefore be
required to file such documents as exhibits to reports or
registration statements filed under the 1933 Act or the 1934 Act.
The Investor further agrees that the status of such documents and
materials as material contracts shall be determined solely by the
Company, in consultation with its counsel.

 

11.12 FURTHER
ASSURANCES. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall
execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably
request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions
contemplated hereby.

 

11.13 PLACEMENT
AGENT. If so required, the Company agrees to pay a
registered broker dealer, to act as placement agent, a percentage
of the Put Amount on each Put toward the fee as outlined in that
certain placement agent agreement entered into between the Company
and the placement agent. 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 the Registered
Offering Transaction Documents. 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.

 

11.14 NO
STRICT CONSTRUCTION. The language used in this Agreement
will be deemed to be the language chosen by the parties to express
their mutual intent, and no rules of strict construction will be
applied against any party, as the parties mutually agree that each
has had a full and fair opportunity to review this Agreement and
seek the advice of counsel on it.

 

11.15 REMEDIES.
The Investor shall have all rights and remedies set forth in this
Agreement and the Registration Rights Agreement and all rights and
remedies which such holders have been granted at any time under any
other agreement or contract and all of the rights which the
Investor has by law. Any person having any rights under any
provision of this Agreement shall be entitled to enforce such
rights specifically (without posting a bond or other security), to
recover damages by reason of any default or breach of any provision
of this Agreement, including the recovery of reasonable attorneys
fees and costs, and to exercise all other rights granted by
law.

 

 

 

 

11.16 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 fraudulent 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.

 

11.17 PRICING
OF COMMON STOCK. For purposes of this Agreement, the price
of the Common Stock shall be as reported by Quotestream
Media.

 

SECTION XII

NON-DISCLOSURE OF NON-PUBLIC INFORMATION

 

The
Company shall not disclose non-public information to the Investor,
its advisors, or its representatives.

 

Nothing
herein shall require the Company to disclose non-public information
to the Investor or its advisors or representatives, and the Company
represents that it does not disseminate non-public information to
any investors who purchase stock in the Company in a public
offering, to money managers or to securities analysts, provided,
however, that notwithstanding anything herein to the contrary, the
Company will, as hereinabove provided, immediately notify the
advisors and representatives of the Investor and, if any,
underwriters, of any event or the existence of any circumstance
(without any obligation to disclose the specific event or
circumstance) of which it becomes aware, constituting non-public
information (whether or not requested of the Company specifically
or generally during the course of due diligence by such persons or
entities), which, if not disclosed in the prospectus included in
the Registration Statement would cause such prospectus to include a
material misstatement or to omit a material fact required to be
stated therein in order to make the statements, therein, in light
of the circumstances in which they were made, not misleading.
Nothing contained in this Section 12 shall be construed
to mean that such persons or entities other than the Investor
(without the written consent of the Investor prior to disclosure of
such information) may not obtain non-public information in the
course of conducting due diligence in accordance with the terms of
this Agreement and nothing herein shall prevent any such persons or
entities from notifying the Company of their opinion that based on
such due diligence by such persons or entities, that the
Registration Statement contains an untrue statement of material
fact or omits a material fact required to be stated in the
Registration Statement or necessary to make the statements
contained therein, in light of the circumstances in which they were
made, not misleading.

 

 

 

 

SECTION XIII

ACKNOWLEDGEMENTS OF THE PARTIES

 

Notwithstanding
anything in this Agreement to the contrary, the parties hereto
hereby acknowledge and agree to the following: (i) the 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 short the Company’s common stock at any time during
this Agreement; (ii) the Company shall, by 8:30 a.m. EST on the
second Trading Day following the date hereof, file a current report
on Form 8-K disclosing the material terms of the transactions
contemplated hereby and in the other Registered Offering
Transaction Documents; (iii) the Company has not and shall not
provide material non-public information to the Investor unless
prior thereto the Investor shall have executed a written agreement
regarding the confidentiality and use of such information; and (iv)
the Company understands and confirms that the Investor will be
relying on the acknowledgements set forth in clauses (i) through
(iii) above if the Investor effects any transactions in the
securities of the Company.

 

[Signature page follows]

 

 

 

 

 

 

Your
signature on this Signature Page evidences your agreement to be
bound by the terms and conditions of the Investment Agreement as of
the date first written above. The undersigned signatory hereby
certifies that he has read and understands the Investment
Agreement, and the representations made by the undersigned in this
Investment Agreement are true and accurate, and agrees to be bound
by its terms.

 

GHS
INVESTMENTS, LLC

 

 

By:
_________________________________

Name:
____________

Title:
_____________

 

GUIDED
THERAPEUTICS, INC.

 

By:
__________________________________

Name:
____________

Title:
____________

 

 

 

 

 

[SIGNATURE PAGE OF EQUITY FINANCING AGREEMENT]

 

 

 

 

 

 

 

 

 

 

LIST OF EXHIBITS

 

 

 

EXHIBIT
A                             

Registration
Rights Agreement

 

EXHIBIT B Notice of Effectiveness

 

EXHIBIT
C                             

Put
Notice

 

EXHIBIT
D                             

Put
Settlement Sheet

 

 

 

 

 

 

EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT

 

See attached.

 

 

 

 

 

 

 

 

 

EXHIBIT B

 

 

FORM OF NOTICE OF EFFECTIVENESS

 

 

OF REGISTRATION STATEMENT

 

 

                                                                                                 

Date:
__________

 

 

[TRANSFER AGENT]

 

            

Re: Guided Therapeutics Inc.,

 

Ladies and Gentlemen:

 

            

We are counsel to Guided Therapeutics,
Inc., a _________ corporation (the
“Company”), and have represented the Company in
connection with that certain Equity Financing Agreement (the
“Investment Agreement”) entered into by and among the
Company and GHS Investments LLC(the “Investor”)
pursuant to which the Company has agreed to issue to the Investor
shares of the Company’s common stock, $___ par value per
share (the “Common Stock”) on the terms and conditions
set forth in the Investment Agreement. Pursuant to the Investment
Agreement, the Company also has entered into a Registration Rights
Agreement with the Investor (the “Registration Rights
Agreement”) pursuant to which the Company agreed, among other
things, to register the Registrable Securities (as defined in the
Registration Rights Agreement), including the shares of Common
Stock issued or issuable under the Investment Agreement under the
Securities Act of 1933, as amended (the “1933 Act”). In
connection with the Company’s obligations under the
Registration Rights Agreement, on ____________ ___, 20__, the
Company filed a Registration Statement on Form S- ___ (File No.
__-________) (the “Registration Statement”) with the
Securities and Exchange Commission (the “SEC”) relating
to the Registrable Securities which names the Investor as a selling
shareholder thereunder.

            

In connection with
the foregoing, we advise you that a member of the SEC's staff has
advised us by telephone that the SEC has entered an order declaring
the Registration Statement effective under the 1933 Act at ______
on __________, 20__ and we have no knowledge, after telephonic
inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any
proceedings for that purpose are pending before, or threatened by,
the SEC and the Registrable Securities are available for sale under
the 1933 Act pursuant to the Registration Statement

 

 

 

 

                                                                            

Very
truly yours,

 

 

 

 

 

                                                                            

[Company
Counsel]

 

 

 

 

 

 

EXHIBIT C

 

FORM OF PUT NOTICE

 

 

 

 

 

Date:

 

 

RE: Put Notice Number __

 

 

Dear Mr./Ms.__________,

 

This is to inform you that as of today, Guided Therapeutics,
Inc., a _______ corporation (the
“Company”), hereby elects to exercise its right
pursuant to the Equity Financing Agreement to require GHS
Investments LLC to purchase shares of its common stock. The Company
hereby certifies that:

 

The amount of this put is $__________.

 

 

The Pricing Period runs from _______________ until
_______________.

 

 

The Purchase Price is: $_______________

 

 

The number of Put Shares Due:___________________.

 

 

The current number of shares of common stock issued and outstanding
is: _________________.

 

 

The number of shares currently available for issuance on the S-1
is: ________________________.

 

 

 

Regards,

 

Guided
Therapeutics, Inc.,

 

By:
__________________________________

Name:

Title:

 

 

 

 

 

 

 

EXHIBIT D

 

 

PUT SETTLEMENT SHEET

 

 

Date: ________________

 

 

Dear Mr. ________,

 

Pursuant to the Put given by Guided Therapeutics, Inc.,
to GHS Investments LLC
(“GHS”) on _________________ 201_, we are now
submitting the amount of common shares for you to issue to
GHS.

 

Please have a certificate bearing no restrictive legend totaling
__________ shares issued to GHS immediately and send via DWAC to
the following account:

 

 

[INSERT]

 

 

If not DWAC eligible, please send FedEx Priority Overnight
to:

 

 

[INSERT ADDRESS]

 

 

Once these shares are received by us, we will have the funds wired
to the Company.

 

 

Regards,

 

GHS INVESTMENTS LLC

 

 

By:
_________________________________

Name:

Title

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