Document:

stlt_ex1025.htm

EXHIBIT 10.25
 
TERMINATION AGREEMENT AND RELEASE
 
This TERMINATION AGREEMENT AND RELEASE, dated as of December 23, 2015 (this "Agreement"), is entered into by and among Spotlight Innovation Inc. ("Company"), the nine investors listed on the signature page hereto (each, an "Investor" and collectively, the "Investors"), Elco Securities, Ltd. (the "Intermediary"), Jonathan Kramer ("Escrow Agent"), Catwalk Capital, LLC (the "Advisor"), and Cristopher Grunewald.
 
RECITALS
 
A. The Investors and the Company entered into Unit Subscription Agreements dated June 9, 2014 (USA Control No. 849207105 STLT No's: 01-10, collectively "USA") pursuant to the Confidential Memorandum of Terms (MOT Control No. 849207105 STLT, the "MOT"); 
 
B. Pursuant to the USA, the Investors, Intermediary, Advisor, and the Company entered into an Account Management Agreement for the management of the USA (AMA Control No: AMA 849207105 STLT the "AMA");
 
C. Pursuant to the USA, the Investors and the Company entered into an Escrow& Compliance Attorney Agreement (the "CCA") pursuant to which Escrow Agent was appointed as Escrow Agent & Compliance Attorney for the receipt of the deposit of shares of Company's super voting Class C Series Preferred Stock, described in Exhibit C to the MOT; and
 
D. For due and valuable consideration, acknowledgement of which is received, the Investors, Advisor, Escrow Agent and Intermediary, have agreed to terminate, cancel and unwind the USA, and any and all related agreements (including but not limited to USA, MOT, AMA and CCA, and the other agreements and documents contemplated hereby collectively referred to as the "Transaction Documents," copies of which are attached hereto). 
 
NOW, THEREFORE, in consideration of the premises and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
 
1. Termination. For due and valuable consideration, acknowledgement of which is received, the Company, Investors, Advisor, Escrow Agent and Intermediary agree that, effective immediately the Transaction Documents are hereby terminated, cancelled, deemed null and void, and shall be of no further force or effect. For due and valuable consideration, acknowledgement of which is received, the Advisor agrees that effective the date hereof, all of the Warrants referenced in the Agreement to Settle Fees dated on or about March 30, 2015 are terminated/cancelled. The Parties further agree that this Agreement terminates and cancels any and all understandings, oral and or written agreements, implied or otherwise between the Parties, which may not be specifically referenced in this Agreement.   

 
	 
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2. Cancellation/Return of Series A Preferred Stock. The Investors agree that effective the date hereof, all of the shares of Series A Preferred Stock issued by the Company and held by the Intermediary pursuant to the Transaction Documents as set forth on Schedule 2 are hereby cancelled. Immediately prior to the execution by the Parties of this Agreement, the Intermediary will send to the Transfer Agent of the Company at the following address: Shay Galam, VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598, Phone: (212) 828-8436, via overnight delivery from a reputable courier, the following original documents: (i) certificates evidencing the Series A Preferred Stock owned by such Investor (or assignee) for cancellation, and (ii) letters to the Transfer Agent of the Company (in the form annexed hereto) signed by the Investors instructing the Transfer Agent to cancel such shares of Series A Preferred Stock. 
 
3. Cancellation/Return of Warrants. The Investors (or their assigns) agree that effective the date hereof all of the Warrants issued by the Company and held by the Intermediary pursuant to the Transaction Documents as set forth on Schedule 3 are hereby cancelled. Immediately prior to the execution by the Parties of this Agreement, the Intermediary will send to the Transfer Agent of the Company at the following address: Shay Galam, VStock Transfer, LLC, 18 Lafayette Place, Woodmere, New York 11598, Phone: (212) 828-8436, via overnight delivery from a reputable courier, the following original documents: (i) certificates evidencing the Warrants owned by such Investor (or assignee) for cancellation, and (ii) letters to the Transfer Agent of the Company (in the form annexed hereto) signed by the Investors instructing the Transfer Agent to cancel such Warrants. 
 
4. Return of Series C Preferred Stock. Upon execution of this Agreement by the parties hereto, and conveyance of evidence of the same to the Escrow Agent, the Escrow Agent is authorized to and shall immediately deliver the original certificate evidencing the shares of Series C Preferred Stock (500,000 shares) and the Power of Attorney held by the Escrow Agent to the Company via overnight delivery from a reputable courier. Upon completion of this delivery, Escrow Agent's duties pursuant to the CCA shall be complete and the Escrow Agent discharged. The Escrow Agent shall then provide any final invoicing to Company, pursuant to the CCA, which shall be due upon delivery.
 
5. Covenant. Each of the parties covenants and agrees, at its own expense, to execute and deliver, at the request of the other party, such further instruments and to take such other action as such other party may reasonably request to effectuate the terms of this Agreement. The Investors further covenant and agree that the shares of Series A Preferred Stock and Warrants of the Company referenced in this Agreement represent all of the securities of the Company owned by the Investors. The Investors waive any and all preemptive rights to participate in any future financing of the Company or its affiliates.   

 
	 
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6. Confidentiality; Publicity. Except for filings required by the Company with the Securities and Exchange Commission and related releases, copies of which shall be supplied to all parties prior to dissemination, the parties agree that each will keep confidential and will not disclose or divulge any confidential, proprietary, or secret information that they may obtain from the other parties pursuant to this Agreement, unless such information is known, or until such information becomes known, to the public; provided, however,that the parties may disclose such information (a) to their attorneys, accountants, consultants and other professionals to the extent necessary to obtain their services in connection with this Agreement and the transactions contemplated hereby, (b) upon the request or demand of any governmental regulatory agency or authority after such party has first had a reasonable opportunity to contest or seek the modification of the request or demand, (c) that is or becomes available to the public other than as a result of a disclosure by the disclosing party, (d) in connection with any litigation to which a party is or may be a party, (e) to the extent necessary in connection with the exercise of any remedy under this Agreement or (f) to the extent otherwise required by law. No party hereto will issue any press release or other public announcement or disclose the terms of this Agreement (including, without limitation, any consideration payable hereunder) without the prior written approval of each other party, except as such disclosure may be made in the course of normal reporting practices by a party hereto or as otherwise required by law, including provisions of the Exchange Act of 1934. The provisions of this Section 6 shall survive the closing of this Agreement.
 
7. Survival of Representations and Warranties. All agreements, representations, warranties, and covenants contained herein shall survive the execution and delivery of this Agreement and the closing of the transactions contemplated hereby.
 
8. Consideration. In consideration for entering into this Agreement, once the Company has received written verification that the Transfer Agent has received the Series A Preferred Stock and Warrants as per Sections 2 and 3 above, and the Company has received the Series C Preferred Stock as per Section 4 above, the Company agrees to issue in the name of the Advisor an aggregate of 500,000 shares of its Common Stock with restrictive legend (the "Shares," copies of such Shares will be provided by the Company to the Advisor via facsimile). The Shares shall be held by the Company and released to the Advisor upon the satisfaction by the Advisor of certain conditions set forth in two separate termination agreements of even date hereof between the Advisor and the Company. The Company, with no further action or consent of the Advisor, shall be entitled to cancel such portion of the Shares and returned such shares to treasury if the Advisor has breached the terms of such agreement(s) pursuant to the terms thereto. The Investors hereby represent that each is an "accredited investor" as defined in Regulation D under the Securities Act. In the next the Company files a registration statement with the Securities and Exchange Commission within twelve months of the date hereof, the Company agrees to include such portion of said 500,000 shares of its Common Stock which are released to the Advisor upon the satisfaction by the Advisor of certain conditions set forth in two separate termination agreements of even date hereof between the Advisor and the Company.   

 
	 
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9. Mutual Releases; Covenants Not to Sue.
 
(a) The Investors, Advisor and Intermediary, for and on behalf of themselves and the Investor Related Parties (as defined below), do hereby unequivocally release and discharge the Company and any of its former and current subsidiaries, equity holders, controlling persons, directors, officers, employees, agents, Affiliates, members, managers, general or limited partners, successors or assignees or any former or current subsidiary, equity holder, controlling person, director, officer, employee, agent, Affiliate, member, manager, general or limited partner, successor or assignee of any of the foregoing (collectively, the "Company Related Parties"), from any and all past, present or future liabilities, actions, claims or damages of any kind or nature, in law, equity or otherwise, asserted or that could have been asserted, under any Applicable Law or otherwise, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, anticipated or unanticipated, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not matured, liquidated or not liquidated, fixed or contingent, whether or not concealed or hidden, from the beginning of time until the date of execution of this Agreement, that in any way arises from or out of, are based upon, or are in connection with or relate in any way to or involve, directly or indirectly, any of the actions, transactions, occurrences, statements, representations, misrepresentations, omissions, allegations, facts, practices, events, claims or any other matters, things or causes whatsoever, or any series thereof, that were, could have been, or in the future can or might be alleged, asserted, set forth, claimed, embraced, involved, or referred to in, or related to, directly or indirectly: (i) the Transaction Documents, (ii) any breach, non-performance, action or failure to act under any of the Transaction Documents, (iii) the events leading to the termination of the Transaction Agreement, (iv) any deliberations or negotiations in connection with the Transaction Documents, and (v) any SEC filings, public filings, periodic reports, press releases, proxy statements or other statements issued, made available or filed relating, directly or indirectly, to the transactions contemplated by the Transaction Documents (collectively, the "Investor Released Claims"); provided, however, that no Party shall be released from any breach, non-performance, action or failure to act under this Agreement occurring on or after the date hereof.
 
(b) The Company, for and on behalf of itself and the Company Related Parties, does hereby unequivocally release and discharge the Investors, Advisor and Intermediary and any of their former and current subsidiaries, equity holders, controlling persons, directors, officers, employees, agents, Affiliates, members, managers, general or limited partners, spouses, heirs, trusts, trustees, successors, assignees, or any former or current subsidiary, equity holder, controlling person, director, officer, employee, agent, Affiliate, member, manager, general or limited partner, successor or assignee of any of the foregoing (collectively, the "Investor RelatedParties"), from any and all past, present or future liabilities, actions, claims or damages of any kind or nature, in law, equity or otherwise, asserted or that could have been asserted, under any Applicable Law or otherwise, whether known or unknown, suspected or unsuspected, foreseen or unforeseen, anticipated or unanticipated, disclosed or undisclosed, accrued or unaccrued, apparent or not apparent, foreseen or unforeseen, matured or not matured, liquidated or not liquidated, fixed or contingent, whether or not concealed or hidden, from the beginning of time until the date of execution of this Agreement, that in any way arises from or out of, are based upon, or are in connection with or relate in any way to or involve, directly or indirectly, any of the actions, transactions, occurrences, statements, representations, misrepresentations, omissions, allegations, facts, practices, events, claims or any other matters, things or causes whatsoever, or any series thereof, that were, could have been, or in the future can or might be alleged, asserted, set forth, claimed, embraced, involved, or referred to in, or related to, directly or indirectly: (i) the Transaction Documents and the transactions contemplated by the Transaction Documents, (ii) any breach, non-performance, action or failure to act under any of the Transaction Documents, (iii) the events leading to the termination of the Transaction Agreement, (iv) any deliberations or negotiations in connection with the Transaction Documents, and (v) any SEC filings, public filings, periodic reports, press releases, proxy statements or other statements issued, made available or filed relating, directly or indirectly, to the transactions contemplated by the Transaction Documents (collectively, the "Company Released Claims" and, together with the Investor Released Claims, the "Released Claims"); provided, however, that no Party shall be released from any breach, non-performance, action or failure to act under this Agreement occurring on or after the date hereof.   

 
	 
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(c) In connection with such waiver and relinquishment, the Parties acknowledge that they or their attorneys or agents may hereafter discover claims or facts in addition to or different from those which they now know or believe to exist with respect to the Released Claims, but that it is their intention hereby fully, finally and forever to settle and release all of the Released Claims. In furtherance of this intention, the releases herein given shall be and remain in effect as full and complete mutual releases with regard to the Released Claims notwithstanding the discovery or existence of any such additional or different claim or fact.
 
(d) Each Party, on behalf of itself and its respective Related Parties, hereby covenants to each other Party and their respective Related Parties not to, with respect to any Released Claim, directly or indirectly encourage or solicit or voluntarily assist or participate in any way in the investigation, filing, reporting or prosecution by such Party or its Related Parties or any third party of a suit, arbitration, mediation, or claim against any other Party and/or its Related Parties relating to any Released Claim. The covenants contained in this Section shall survive this Agreement indefinitely regardless of any statute of limitations.
 
10.Representations of the Parties.
 
(a) Each Party represents and warrants to the other Parties as follows:
 
(i) Such Party has the requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby. The execution and delivery by such Party of this Agreement, the performance of its obligations hereunder and its consummation of the transactions contemplated hereby have been duly and validly authorized and approved by all necessary action of such Party, as applicable, and no other action on the part of such Party, is necessary to authorize the execution and delivery by such Party of this Agreement, the performance by it of its obligations hereunder and its consummation of the transactions contemplated hereby. This Agreement has been duly and validly executed and delivered by such Party, and, assuming the due authorization, execution and delivery by the other Parties, constitute legal and binding obligations of such Party, enforceable against such Party in accordance with its terms, except as (a) the enforceability hereof may be limited by bankruptcy, insolvency, moratorium or other similar laws affecting the enforcement of creditors' rights generally and (b) the availability of equitable remedies may be limited by equitable principles of general applicability. 
 
(ii) The execution and delivery by such Party of this Agreement does not, and the consummation of the transactions contemplated hereby and the performance of its obligations hereunder will not (with or without the giving of notice, the termination of any grace period or both): (a) violate, conflict with, or result in a breach or default under any provision of the organizational documents of such Party, as applicable or (b) to the best knowledge of each Party, violate any Applicable Law.   

 
	 
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11. Notices. All notices, requests, consents and other communications under this Agreement shall be in writing and shall be delivered by hand, sent by fax, or nationally recognized overnight courier or mailed by first class certified or registered mail, return receipt requested, postage prepaid:
 
	If to the Company:
	Mr. Cristopher Grunewald
President
Spotlight Innovation Inc.
6750Westown Parkway, Suite 200-226
West Des Moines, IA 50266
	 

	If to all other parties as set forth on Schedule 11.
	 
	 

 
Notices provided in accordance with this Section 11 shall be deemed given (i) when received, if sent by hand, (ii) when received, if sent by facsimile prior to 5:00 p.m. local time at the place received (otherwise on the next following business day), (iii) one business day after delivery to a nationally recognized overnight courier service and (iv) five business days after deposit in the U.S. mail first class certified or registered, postage prepaid.
 
12. Entire Agreement. This Agreement, and any exhibits and schedules attached hereto or referenced herein embody the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersede all prior oral or written agreements and understandings relating to such subject matter. Notwithstanding the foregoing, the Parties have executed an Omnibus Agreement of even date herewith, which terminates and cancels any and all understandings, oral and or written agreements, implied or otherwise, between the Parties, which may not be specifically referenced herein.
 
13. Amendments and Waivers. Except as otherwise expressly set forth in this Agreement, any term of this Agreement may be amended and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively), with the written consent of each of the parties. No waivers of or exceptions to any term, condition or provision of this Agreement, in any one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of any such term, condition or provision.
 
14. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed to be an original, but all of which shall be one and the same document.   

   
15. Section Headings. The section headings are for the convenience of the parties and in no way alter, modify, amend, limit or restrict the contractual obligations of the parties.   

 
	 
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16. Severability.If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the Parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
 
17. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE COMMONWEALTH OF THE BAHAMAS (WITHOUT GIVING EFFECT TO ANY CONFLICTS OR CHOICE OF LAWS PROVISIONS WHICH WOULD CAUSE THE APPLICATION OF THE DOMESTIC SUBSTANTIVE LAWS OF ANY OTHER JURISDICTION). 
 
18. Waiver of Jury Trial. EACH OF THE PARTIES HERETO HEREBY VOLUNTARILY AND IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR OTHER PROCEEDING BROUGHT IN CONNECTION WITH THIS AGREEMENT, ANY OF THE TRANSACTION DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
 
19. Fees and Expenses. Each of the parties agrees to pay their respective costs and expenses incurred by such party in connection with this Agreement and the transactions contemplated hereby. In any action to enforce the terms of this Agreement, the successful party shall be entitled to recover its reasonable attorneys' fees, costs and expenses from the party that refused or failed to perform.
 
20. Reliance on Independent Legal Advice. Each of the Parties further represents and warrants to each other, as of the date hereof that it has received advice from its own, independent legal counsel prior to its execution of this Termination Agreement and is executing the same freely and voluntarily.
 
21. Specific Performance. The Parties agree that if any of the provisions of this Agreement were not performed by the Parties in accordance with their specific terms or were otherwise breached thereby, irreparable damage would occur, no adequate remedy at law would exist and damages would be difficult to determine, and that each Party will be entitled to specific performance to prevent breaches of the provisions of this Agreement and to enforce specifically the terms and provisions hereof, in addition to any other remedy to which it may be entitled at law or in equity.
 
22. Escrow Agent and Compliance Attorney Signature. The Escrow Agent executes this document to signify his agreement to the Termination of the CCA pursuant to paragraph 1, and his agreement to deliver shares pursuant to paragraph 4 only. Escrow Agent is not otherwise a party to this Agreement, and should not be considered bound by any other provision herein.
 
23. Cristopher Grunewald Signature. Cristopher Grunewald executes this document in his individual capacity to signify his agreement to the Termination of the CCA pursuant to paragraph 1. Cristopher Grunewald is not otherwise a party to this Agreement, and should not be considered bound by any other provision herein.
 
[The immediately following page contains the signatures of the parties.]   

 
	 
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IN WITNESS WHEREOF, this Agreement has been executed by the parties hereto as of the day and year first above written.
     

	SPOTLIGHT INNOVATION INC.	 
	ESCROW & COMPLIANCE ATTORNEY	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Cristopher Grunewald
	 
	By:
	/s/ Jonathan Kramer	 

	Name:
	Cristopher Grunewald	 
	Name:
	Jonathan Kramer	 

	Title:
	President	 
	Title:
		 

	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 

	Cristopher Grunewald
	 
	 
	 
	 

	 
	 
	 
	 
	
	INTERMEDIARY
Elco Securities Ltd.
	 
	ADVISOR
Catwalk Capital, LLC
	 

	 
	 
	 
	 
	 
	 

	By:
	/s/ Isaac Collie
	 
	By:
	/s/ J. Greig	 

	Name:
	Isaac Collie	 
	Name:
	J. Greig
	 

	Title
	Managing Director	 
	Title:
	Principal
	 

     
	INVESTORS
				 

	 
	 
	 

	Copperbottom Investments, Ltd.
		Britannia Securities International, Ltd. 

						 

	By: 
			By: 
		 

	Name: 
			Name: 
		 

	Title: 
			Title: 
		 

						 

	Agri-Technologies International, Ltd.
		On Time Investments, Ltd. 

						 

	By: 
			By: 
		 

	Name: 
			Name: 
		 

	Title: 
			Title: 
		 

						 

	RnD Company, Ltd.
		Rooftop Holdings, Ltd. 

						 

	By: 
			By: 
		 

	Name: 
			Name: 
		 

	Title: 
			Title: 
		 

						 

	Sequence Investments Ltd.
		Anybright Investments, Ltd. 

						 

	By: 
			By: 
		 

	Name: 
			Name: 
		 

	Title: 
			Title: 
		 

						 

	Orange Investments, Ltd. 
				 

	 
	 
	 
	 
	 
	 

	By: 
					 

	Name: 
					 

	Title: 
					 

 
[Signature Page to Termination Agreement and Release]   

 
	 
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SCHEDULE 11
 
INVESTORS
 
	1
	Copperbottom Investments, Ltd.:

		Loyalist Plaza, Don Mackay Boulevard, Marsh Harbor Abaco Bahamas

	 
	 

	2
	Britannia Securities International, Ltd. 

		53 St. Peter Street Tiverton, Devon EX16 6NW United Kingdom

	 
	 

	3
	Agri-Technologies International, Ltd. 

		Loyalist Plaza, Don Mackay Boulevard Marsh Harbor Abaco Bahamas

	 
	 

	4
	On Time Investments, Ltd. 

		94 Deswell St., P.O. Box NA-7521, Nassau, Bahamas

	 
	 

	5
	RnD Company, Ltd. 

		Loyalist Plaza, Don Mackay Boulevard Marsh Harbor Abaco Bahamas

	 
	 

	6
	Rooftop Holdings, Ltd. 

		94 Deswell St. P.O. Box NA-7521 Nassau Bahamas

	 
	 

	7
	Sequence Investments, Ltd. 

		Loyalist Plaza, Don Mackay Boulevard Marsh Harbor Abaco Bahamas

	 
	 

	8
	Anybright Investments, Ltd. 

		Loyalist Plaza, Don Mackay Boulevard, Marsh Harbor Abaco Bahamas

	 
	 

	9
	Orange Investments, Ltd. 

		Loyalist Plaza, Don Mackay Boulevard, Marsh Harbor Abaco Bahamas

  
	INTERMEDIARY
	 
	TGC

	Elco Securities Ltd. 
Loyalist Plaza, Don Mackay Boulevard 
P.O. Box AB-20377  
Marsh Harbour, Abaco, Bahamas
	 
	The Greig Companies, Inc.
1730 LaBounty Rd Ste-3, #174
Ferndale, WA 98248
 

	 
	 
	 

	 
	 
	 

	ESCROW & COMPLIANCE ATTORNEY
	 
	 

	Jonathan Kramer
Whitfield& Eddy, PLC
317 6th Avenue, Suite 1200
Des Moines, IA 50309
	 
	 

 
	 
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[Insert Letterhead of Investor]
 
Shay Galam
VStock Transfer, LLC
18 Lafayette Place 
Woodmere, New York 11598
 
		RE: 	Cancellation of (Series A Preferred Stock/Warrants) of Spotlight Innovation Inc.

 
Dear Mr. Galam:
 
This shall serve as notice that the enclosed shares of Series A Preferred Stock and Warrants of Spotlight Innovation Inc. are hereby cancelled as set forth below:
 
List shares/warrants
    	 
	 
	Sincerely,
	 

		 
		 

		 
	Insert Applicable signature
	 

 
 
10 | Pagestlt_ex1026.htm

EXHIBIT 10.26
 
THIS NOTE AND THE SHARES OF COMMON STOCK WHICH MAY BE PURCHASED PURSUANT TO THE CONVERSION OF THIS NOTE HAVE BEEN ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"). SUCH SECURITIES MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION UNLESS THE TRANSFER IS IN ACCORDANCE WITH RULE 144 OR A SIMILAR RULE AS THEN IN EFFECT UNDER THE SECURITIES ACT OR UNLESS THE COMPANY RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT STATING SUCH SALE OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT. 
 
SPOTLIGHT INNOVATION INC.
 
CONVERTIBLE NOTE
 
	Issuance Date: December 31, 2015
	$2,500,000.00

 
FOR VALUE RECEIVED, Spotlight Innovation Inc., a Nevada corporation (the "Company"), hereby promises to pay to the order of K4, LLC, (the "Holder"), the principal sum of Two Million Five Hundred Thousand Dollars (US$2,500,000) in lawful money of the United States of America, together with interest thereon at the rate of eight percent (8%) per annum. Interest will begin to accrue on the date of this Convertible Note (the "Note"). Interest shall be computed on the basis of a 365-day year for the actual number of days elapsed and shall compound monthly for all amounts outstanding. The parties acknowledge that this Note was issued in consideration of the termination of that certain note between the Company and The Greig Companies, Inc. dated March 27, 2015, and the termination of certain agreements between the Holder and The Greig Companies, Inc. and for other consideration set forth in this Note. Any other loan agreements, obligations or related documents other than this Note pertaining to the obligations referenced herein are terminated, null and void. 
 
1. Interest Payments. The Company shall make interest payments to Holder on a monthly basis commencing one month from the Issuance Date, and each successive month thereafter until the earlier of the Maturity Date, a conversion (pursuant to Section 3 below), or payment by the Company of the outstanding principal amount. 
 
2. Prepayment. The Company shall have the right to prepay all or a portion of the outstanding principal sum of this Note as follows:
 
(a) On or before December 31, 2016 only with the written consent of the Holder, such consent not to be unreasonably withheld, for such purposes including but not limited to a NASDAQ listing of the securities of the Company or as a condition to an equity financing by the Company; and
 
(b) At any time after December 31, 2016 upon thirty days written notice by the Company to the Holder.   
    
	 
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3. Conversion.
 
(a) Optional Conversion. The Holder shall have the right to convert all or a portion of the principal sum of this Note into shares of common stock of the Company in denominations of not less than Two Hundred Fifty Thousand ($250,000) Dollars as follows:
 
(i) At any time up to December 31, 2016 at a discount of Twenty Percent (20%) of the average price of the common stock of the Company during the 20 consecutive trading days immediately prior to such conversion, but not less than $.90; or    

 
(ii) At any time after December 31, 2016 and up to the close of business on December 31, 2017 at a discount of Fifteen Percent (15%) of the average price of the common stock of the Company during the 20 consecutive trading days immediately prior to such conversion, but not less than $1.35; and
 
(iii) At any time after December 31, 2017 and up to the close of business on March 27, 2020 at a discount of Five Percent (5%) of the average price of the common stock of the Company during the 20 consecutive trading days immediately prior to such conversion, but not less than $1.85.
 
If the Holder elects such Optional Conversion the Holder shall send to the Company the completed Conversion Notice annexed hereto as Exhibit A.
 
(b) Fractional Shares. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect to the issuance and delivery of Common Stock upon conversion of any Conversion Amount. 
 
(c) Adjustment of Conversion Price upon Subdivision or Combination of Common Stock. If the Company, at any time while this Note is outstanding, shall (i) pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock, (ii) subdivide outstanding shares of Common Stock into a larger number of shares, (iii) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (iv) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the conversion price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution, or shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.   

 
	 
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4. Events Of Default. Each of the following shall constitute an "Event of Default".
 
(a) Failure to make any required payment after ten (10) days of receipt of notice by Holder that such payment was not made; or 
 
(b) Upon any Voluntary Bankruptcy or Insolvency Proceedings, which is defined as any of the following actions by the Company: (i) applying for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property; (ii) making a general assignment for the benefit of its creditors; (iii) dissolution or liquidation; (iv) commencing a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; or (v) taking any material action to effect any of the foregoing. 
 
(c) upon any Involuntary Bankruptcy or Insolvency Proceedings, which is defined as proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency, or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within sixty (60) days of commencement.
 
Upon the occurrence of any Event of Default, the Holder may, at its option, declare in writing all principal and interest due hereunder to be due and payable immediately and, upon any such declaration, the same shall become and be immediately due and payable. Upon the occurrence of any Event of Default, the Holder may, in addition to declaring all amounts due hereunder to be immediately due and payable, pursue any available remedy, whether at law or in equity.
 
5. Maturity Date. The Maturity Date of this Note shall be March 27, 2020.
 
6. Notices. 
 
(a) Any notices, consents, waivers or other communications required or permitted to be given under the terms hereof 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) Trading 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, to:
	Spotlight Innovation Inc.

		6750 Westown Parkway, Suite 200-226
West Des Moines, Iowa 50266 
Attention: Cristopher Grunewald, Chief Executive Officer
Telephone: (515) 274-9087

	 
	 

	If to the Holder, at such address as set forth on the signature page attached hereto.

 
	 
	3

	

	 

  
7. Choice of law. This Note shall be governed by and construed in accordance with the laws of the State of Iowa without regard to the principles of conflict of laws. The parties further agree that any action between them shall be heard in Polk County, Iowa.
 
8. Waiver of Presentment, Demand and Dishonor. No delay on the part of the Holder in exercising any power or right hereunder shall operate as a waiver of any such power or right; nor shall any single or partial exercise of any power or right preclude any other or further exercise of such power or right, or the exercise of any other power or right, and no waiver whatsoever shall be valid unless in writing, signed by the Holder, and then only to the extent expressly set forth herein. No remedy is exclusive of any other remedy and all remedies shall be cumulative to the maximum extent permitted by applicable law. Except as otherwise set forth herein, the Company hereby waives presentment, demand for repayment, diligence, notice of dishonor and all other notices or demands in connection with the delivery acceptance, performance, default or endorsement of this Note.
 
9. Cost of Collection. Maker shall pay to Holder all reasonable costs and expenses of Holder incurred in any collection action under this Note, including, without limitation, court costs, reasonable attorneys' fees, expenses and disbursements.
 
10. Severability. If any provision of this Note is determined by any court or arbitrator of competent jurisdiction to be invalid, illegal or unenforceable, in any respect under applicable law, such provision will be enforced to the maximum extent possible given the intent of the parties hereto, and the balance of this Note shall remain in effect. 
 
11. Reports. The Holder has been furnished with or has had access at the EDGAR Website of the Securities Exchange Commission to the Company's filings available at the EDGAR Website (hereinafter referred to collectively as the "Reports"). In addition, the Holder has received in writing from the Company such other information concerning its operations, financial condition and other matters as the Holder has requested in writing, and considered all factors the Holder deems material in deciding on the advisability of investing in the Securities. 
 
12. Unconditional Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the amounts due under this Note when due. This Note is a direct obligation of the Company. 
 
13. Transaction Costs. Each party shall be responsible for all costs and expenses it incurs in connection with the preparation of this Note.
 
14. Warrants. The Holder and Company agree that the warrant to purchase 300,000 shares of Common Stock of the Company dated March 27, 2015 shall be deemed terminated, and replaced with a warrant to purchase 300,000 shares of common stock at a price of $1.00 per share for a three year term, in the form annexed hereto as Exhibit B. The Company further agrees to issue the Holder a warrant to purchase an additional 200,000 shares of common stock of the Company at a price of $1.25 per share, for a three year term, in the form annexed hereto as Exhibit C.
 
[Signature Page Attached Hereto]
 
	 
	4

	

	 

 
IN WITNESS WHEREOF, the Company has caused this Convertible Note to be duly executed by a duly authorized officer as of the date set forth above.
 
		COMPANY:
	 

		SPOTLIGHT INNOVATION INC.
	 

		 
		 

		By:
	/s/ Cristopher Grunewald
	 

		Name:
	Cristopher Grunewald 
	 

		Title:
	President and Chief Executive Officer 
	 

 
IN WITNESS WHEREOF, the undersigned Holder hereby agrees to the terms set forth in this Note.
 
	 
	K4, LLC
	 

	 	 	 	 
		By:	/s/ John Krohn	 

	 
	Name:
	John Krohn
	 

	 
	Title:
	Director	 

	 
	Address: 
	124 62nd Street
West Des Moines, IA 50266
	 

 
	 
	5

	

	 

 
EXHIBIT A
CONVERSION NOTICE
  
The undersigned hereby irrevocably elects to convert $ ___________ of the principal sum of this Note into shares of Common Stock of Spotlight Innovation Inc., according to the conditions stated therein, as of the Conversion Date written below.
 
	Conversion Date:
	 
	___________________
	 	 
	
	Conversion Price:
	 
	$__________________

	 
	 
	 

	Number of shares of Common Stock to be issued: 
	 
	___________________
		 
	
	Please issue the shares of Common Stock in the following name and to the following address:

		 
	
		 
	
	Name:
	 
	___________________________________________
	Address:
	 
	___________________________________________
	 
	 
	___________________________________________

	 
	 
	___________________________________________

 
	Authorized Signature:
	By: ________________________________________
Name: ______________________________________
Date: _______________________________________

 
	 
	6

	

	 

 
EXHIBIT B
 
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
 
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
SPOTLIGHT INNOVATION INC.
 
Expires: December 31, 2018
 
Number of Shares: 300,000
 
Date of Issuance: December 31, 2015
 
FOR VALUE RECEIVED, the undersigned, Spotlight Innovation Inc., a Nevada corporation (together with its successors and assigns, the "Issuer"), hereby certifies that K4, LLC ("Holder") is entitled to subscribe for and purchase, during the Term (as hereinafter defined), up to Three Hundred Thousand (300,000) shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, par value $0.001 per share (the "Common Stock"), at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 6 hereof.
 
1. Term. The term of this Warrant shall commence on December 31, 2015 and shall expire at 5:00 p.m., Central Time, on December 31, 2018 (such period being the "Term").
 
2. Method of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.
 
(a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part during the Term beginning on the date of issuance hereof.
 
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election by certified or official bank check or by wire transfer to an account designated by the Issuer.   

 
	 
	7

	

	 

  
(c) Issuance of Stock Certificates. In the event of any exercise of this Warrant in accordance with and subject to the terms and conditions hereof, certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three (3) business days after such exercise (the "Delivery Date"). The Holder shall deliver this original Warrant to the Issuer, or an indemnification undertaking with respect to such Warrant in the case of its loss, theft or destruction, at such time that this Warrant is fully exercised. With respect to partial exercises of this Warrant, the Issuer shall keep written records for the Holder of the number of shares of Warrant Stock exercised as of each date of exercise and shall deliver a replacement warrant on identical terms as this Warrant for the balance of Warrant Stock that has not been previously exercised by the Holder.
 
(d) Transferability of Warrant. Subject to Section 2(f) hereof, this Warrant may be transferred by a Holder, in whole or in part. If transferred pursuant to this paragraph, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants to purchase the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant thereto.
 
(e) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder.
 
(f) Compliance with Securities Laws.
 
(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws.
 
(ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with legends in substantially the following form:
 
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.   

 
	 
	8

	

	 

  
(iii) The Issuer agrees to reissue this Warrant or certificates representing any of the Warrant Stock, without the legend set forth above if at such time, prior to making any transfer of any such securities, the Holder shall give written notice to the Issuer describing the manner and terms of such transfer. Such proposed transfer will not be effected until: (a) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that the registration of such securities under the Securities Act is not required in connection with such proposed transfer, (ii) the Issuer has received other evidence reasonably satisfactory to the Issuer that such registration and qualification under the Securities Act and state securities laws are not required, or (iii) the Holder provides the Issuer with reasonable assurances that such security can be sold pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that registration or qualification under the securities or "blue sky" laws of any state is not required in connection with such proposed disposition, or (ii) compliance with applicable state securities or "blue sky" laws has been effected or a valid exemption exists with respect thereto. In the case of any proposed transfer under this Section 2(f), the Issuer will use reasonable efforts to comply with any such applicable state securities or "blue sky" laws, but shall in no event be required, (x) to qualify to do business in any state where it is not then qualified, (y) to take any action that would subject it to tax or to the general service of process in any state where it is not then subject, or (z) to comply with state securities or "blue sky" laws of any state for which registration by coordination is unavailable to the Issuer. The restrictions on transfer contained in this Section 2(f) shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Warrant. 
 
(g) Accredited Investor Status. In no event may the Holder exercise this Warrant in whole or in part unless the Holder is an "accredited investor" as defined in Regulation D under the Securities Act, at the time of exercise. 
 
3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
 
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, when issued in accordance with the terms of this Warrant, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issuance upon exercise of this Warrant a number of authorized but unissued shares of Common Stock equal to at least one hundred percent (100%) of the number of shares of Common Stock issuable upon exercise of this Warrant without regard to any limitations on exercise.
 
(b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any Governmental Authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified.   

 
	 
	9

	

	 

  
(c) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock.
 
(d) Payment of Taxes. The Issuer will pay any documentary stamp taxes attributable to the initial issuance of the Warrant Stock issuable upon exercise of this Warrant; provided, however, that the holder shall be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates representing Warrant Stock in a name other than that of the Holder in respect to which such shares are issued.
 
4. Adjustment of Warrant Price and Number of Shares Issuable Upon Exercise. The Warrant Price and the number of shares of Warrant Stock that may be purchased upon exercise of this Warrant shall be subject to adjustment from time to time as set forth in this Section 4. Upon each adjustment of the Warrant Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Warrant Price resulting from such adjustment, the number of shares of Common Stock obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Warrant Price resulting from such adjustment.
 
(a) Adjustment Due to Dividends, Stock Splits, Etc. If, at any time on or after the Original Issuance Date, the number of outstanding shares of Common Stock is increased by a (i) dividend payable in any kind of shares of capital stock of the Corporation, (ii) stock split, (iii) combination, (iv) reclassification or (v) other similar event, the Warrant Price shall be proportionately reduced by multiplication by a fraction of which the numerator shall be the number of outstanding shares of Common Stock immediately before such event and of which the denominator shall be the number of outstanding shares of Common Stock immediately after such event, or if the number of outstanding shares of Common Stock is decreased by a reverse stock split, combination or reclassification of shares, or other similar event, the Warrant Price shall be proportionately increased by multiplication by a fraction of which the numerator shall be the number of outstanding shares of Common Stock immediately before such event and of which the denominator shall be the number of outstanding shares of Common Stock immediately after such event. In such event, the Issuer shall notify the Corporation's Transfer Agent of such change on or before the effective date thereof.
 
(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time after the Original Issuance Date, there shall be (i) any reclassification or change of the outstanding shares of Common Stock, (ii) any consolidation or merger of the Corporation with any other entity (other than a merger in which the Corporation is the surviving or continuing entity and its capital stock is unchanged), (iii) any sale or transfer of all or substantially all of the assets of the Corporation, (iv) any share exchange or tender offer pursuant to which all of the outstanding shares of Common Stock are effectively converted into other securities or property; or (v) any distribution of the Corporation's assets to holders of the Common Stock as a liquidation or partial liquidation dividend or by way of return of capital (each of (i) - (v) above being a "Corporate Change"), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Corporate Change if it had been, immediately prior to such Corporate Change, the holder of the number of shares of Warrant Stock then issuable upon exercise in full of this Warrant, and in any such case, appropriate provisions (in form and substance reasonably satisfactory to the Holder) shall be made with respect to the rights and interests of the Holder to the end that the economic value of the Warrant Stock is in no way diminished by such Corporate Change and that the provisions hereof including, without limitation, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is not the Issuer, an immediate adjustment of the Warrant Price so that the Warrant Price immediately after the Corporate Change reflects the same relative value as compared to the value of the surviving entity's common stock that existed immediately prior to such Corporate Change and the value of the Common Stock immediately prior to such Corporate Change. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Corporate Change, then the Holder shall be given the same choice as to the consideration it receives upon any exercise of this Warrant following such Corporate Change.   

 
	 
	10

	

	 

  
(c) Other Adjustments. If the Issuer takes any action affecting the Common Stock after the date hereof that would be covered by this Section 4, but for the manner in which such action is taken or structured, and such action would in any way diminish the value of the Warrant or Warrant Stock, then the Warrant Price shall be adjusted in such manner as the Board shall in good faith determine to be equitable under the circumstances.
 
5. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall round the number of shares to be issued upon exercise up to the nearest whole number of shares.
 
6. Definitions. For the purposes of this Warrant, the following terms have the following meanings:
 
"Board" shall mean the Board of Directors of the Issuer.
 
"Capital Stock" means and includes (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type.
 
"Common Stock" means the Common Stock, $0.001 par value per share, of the Issuer and any other Capital Stock into which such stock may hereafter be changed.
 
"Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign.
 
"Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders.
 
"Issuer" means Spotlight Innovation Inc., a Nevada corporation, and its successors. 
 
"Original Issue Date" means December 31, 2015.
 
"OTC Bulletin Board" means the over-the-counter electronic bulletin board.   

 
	 
	11

	

	 

  
"Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature.
 
"Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect.
 
"Term" has the meaning specified in Section 1 hereof.
 
"Warrants" means the Warrants issued pursuant to this Warrant, without limitation, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. 
 
"Warrant Price" initially means $1.00, as such price may be adjusted from time to time as shall result from the adjustments specified in this Warrant, including Section 4 hereto.
 
"Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof.
 
"Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
 
7. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Holder; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 7 without the consent of the Holder of this Warrant. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of this Warrant unless the same consideration is also offered to all holders of the Warrants.
 
8. Governing Law; Jurisdiction. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Iowa, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Warrant shall not be interpreted or construed with any presumption against the party causing this Warrant to be drafted. The Issuer and the Holder agree that venue for any dispute arising under this Warrant will lie exclusively in the state or federal courts located in Polk County, Iowa, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that Iowa is not the proper venue. The Issuer and the Holder irrevocably consent to personal jurisdiction in the state and federal courts of the State of Iowa. The Issuer and the Holder consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law. The Issuer agrees to pay all costs and expenses of enforcement of this Warrant, including, without limitation, reasonable attorneys' fees and expenses. The parties hereby waive all rights to a trial by jury.   

 
	 
	12

	

	 

  
9. Notices. TC "Section 7.4 Notices."\f C \l "2" All notices, requests, consents or other communications required or permitted hereunder to the Issuer shall be in writing and shall be hand delivered or mailed first class postage prepaid, registered or certified mail, to the following address:
 
Spotlight Innovation Inc.
c/o its CEO and CFO
6750 Westown Parkway, Suite 200-226
West Des Moines, Iowa 50266 
 
Such notices and other communications shall, for all purposes of this Agreement, be treated as being effective upon being delivered personally or, if sent by mail, five days after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed as set forth above, and postage prepaid. Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto.
 
10. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
 
11. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock.
 
12 Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein.
 
13. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.   

 
	 
	13

	

	 

  
IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written.
 
	 
	Spotlight Innovation Inc. 
	 

	 	 	 	 
		By:	/s/ Cristopher Grunewald	 

	 
	Name:
	Cristopher Grunewald	 

	 
	Title:
	President and Chief Executive Officer	 

 
	 
	14

	

	 

 
APPENDIX A
 
WARRANT EXERCISE FORM
 
Spotlight Innovation Inc.
 
The undersigned _______________, pursuant to the provisions of the within Warrant, hereby elects to purchase __________________ shares of Common Stock, par value $0.001 per share, of Spotlight Innovation Inc. covered by the within Warrant at a Warrant Price of $1.00 per Warrant Share. The shares of Warrant Stock issuable upon exercise of this Warrant shall be delivered to the address set forth below.
 
The undersigned is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended.
 
The Holder shall pay the sum of $______________ by certified or official bank check (or via wire transfer) to Spotlight Innovation Inc. in accordance with the terms of the Warrant. 
 
 
	Dated: _________________  

		 

	Name:	________________________________________

	Signature:	________________________________________

	Address:
	________________________________________

	 
	________________________________________

	 
	________________________________________

 
	 
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EXHIBIT C
 
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
 
WARRANT TO PURCHASE
SHARES OF COMMON STOCK
OF
SPOTLIGHT INNOVATION INC.
 
Expires: December 31, 2018
 
Number of Shares: 200,000
 
Date of Issuance: December 31, 2015
 
FOR VALUE RECEIVED, the undersigned, Spotlight Innovation Inc., a Nevada corporation (together with its successors and assigns, the "Issuer"), hereby certifies that K4, LLC ("Holder") is entitled to subscribe for and purchase, during the Term (as hereinafter defined), up to Two Hundred Thousand (200,000) shares (subject to adjustment as hereinafter provided) of the duly authorized, validly issued, fully paid and non-assessable Common Stock of the Issuer, par value $0.001 per share (the "Common Stock"), at an exercise price per share equal to the Warrant Price then in effect, subject, however, to the provisions and upon the terms and conditions hereinafter set forth. Capitalized terms used herein and not otherwise defined shall have the meanings set forth in Section 6 hereof.
 
1. Term. The term of this Warrant shall commence on December 31, 2015 and shall expire at 5:00 p.m., Central Time, on December 31, 2018 (such period being the "Term").
 
2. Method of Exercise; Payment; Issuance of New Warrant; Transfer and Exchange.
 
(a) Time of Exercise. The purchase rights represented by this Warrant may be exercised in whole or in part during the Term beginning on the date of issuance hereof.
 
(b) Method of Exercise. The Holder hereof may exercise this Warrant, in whole or in part, by the surrender of this Warrant (with the exercise form attached hereto duly executed) at the principal office of the Issuer, and by the payment to the Issuer of an amount of consideration therefor equal to the Warrant Price in effect on the date of such exercise multiplied by the number of shares of Warrant Stock with respect to which this Warrant is then being exercised, payable at such Holder's election by certified or official bank check or by wire transfer to an account designated by the Issuer.   

 
	 
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(c) Issuance of Stock Certificates. In the event of any exercise of this Warrant in accordance with and subject to the terms and conditions hereof, certificates for the shares of Warrant Stock so purchased shall be dated the date of such exercise and delivered to the Holder hereof within a reasonable time, not exceeding three (3) business days after such exercise (the "Delivery Date"). The Holder shall deliver this original Warrant to the Issuer, or an indemnification undertaking with respect to such Warrant in the case of its loss, theft or destruction, at such time that this Warrant is fully exercised. With respect to partial exercises of this Warrant, the Issuer shall keep written records for the Holder of the number of shares of Warrant Stock exercised as of each date of exercise and shall deliver a replacement warrant on identical terms as this Warrant for the balance of Warrant Stock that has not been previously exercised by the Holder.
 
(d) Transferability of Warrant. Subject to Section 2(f) hereof, this Warrant may be transferred by a Holder, in whole or in part. If transferred pursuant to this paragraph, this Warrant may be transferred on the books of the Issuer by the Holder hereof in person or by duly authorized attorney, upon surrender of this Warrant at the principal office of the Issuer, properly endorsed (by the Holder executing an assignment in the form attached hereto) and upon payment of any necessary transfer tax or other governmental charge imposed upon such transfer. This Warrant is exchangeable at the principal office of the Issuer for Warrants to purchase the same aggregate number of shares of Warrant Stock, each new Warrant to represent the right to purchase such number of shares of Warrant Stock as the Holder hereof shall designate at the time of such exchange. All Warrants issued on transfers or exchanges shall be dated the Original Issue Date and shall be identical with this Warrant except as to the number of shares of Warrant Stock issuable pursuant thereto.
 
(e) Continuing Rights of Holder. The Issuer will, at the time of or at any time after each exercise of this Warrant, upon the request of the Holder hereof, acknowledge in writing the extent, if any, of its continuing obligation to afford to such Holder all rights to which such Holder shall continue to be entitled after such exercise in accordance with the terms of this Warrant, provided that if any such Holder shall fail to make any such request, the failure shall not affect the continuing obligation of the Issuer to afford such rights to such Holder.
 
(f) Compliance with Securities Laws.
 
(i) The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the shares of Warrant Stock to be issued upon exercise hereof are being acquired solely for the Holder's own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell or otherwise dispose of this Warrant or any shares of Warrant Stock to be issued upon exercise hereof except pursuant to an effective registration statement, or an exemption from registration, under the Securities Act and any applicable state securities laws.   

 
	 
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(ii) Except as provided in paragraph (iii) below, this Warrant and all certificates representing shares of Warrant Stock issued upon exercise hereof shall be stamped or imprinted with legends in substantially the following form:
 
THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT") OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE ISSUER SHALL HAVE RECEIVED AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE ISSUER THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
 
(iii) The Issuer agrees to reissue this Warrant or certificates representing any of the Warrant Stock, without the legend set forth above if at such time, prior to making any transfer of any such securities, the Holder shall give written notice to the Issuer describing the manner and terms of such transfer. Such proposed transfer will not be effected until: (a) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that the registration of such securities under the Securities Act is not required in connection with such proposed transfer, (ii) the Issuer has received other evidence reasonably satisfactory to the Issuer that such registration and qualification under the Securities Act and state securities laws are not required, or (iii) the Holder provides the Issuer with reasonable assurances that such security can be sold pursuant to Rule 144 under the Securities Act; and (b) either (i) the Issuer has received an opinion of counsel reasonably satisfactory to the Issuer, to the effect that registration or qualification under the securities or "blue sky" laws of any state is not required in connection with such proposed disposition, or (ii) compliance with applicable state securities or "blue sky" laws has been effected or a valid exemption exists with respect thereto. In the case of any proposed transfer under this Section 2(f), the Issuer will use reasonable efforts to comply with any such applicable state securities or "blue sky" laws, but shall in no event be required, (x) to qualify to do business in any state where it is not then qualified, (y) to take any action that would subject it to tax or to the general service of process in any state where it is not then subject, or (z) to comply with state securities or "blue sky" laws of any state for which registration by coordination is unavailable to the Issuer. The restrictions on transfer contained in this Section 2(f) shall be in addition to, and not by way of limitation of, any other restrictions on transfer contained in any other section of this Warrant. 
 
(g) Accredited Investor Status. In no event may the Holder exercise this Warrant in whole or in part unless the Holder is an "accredited investor" as defined in Regulation D under the Securities Act, at the time of exercise. 
 
3. Stock Fully Paid; Reservation and Listing of Shares; Covenants.
 
(a) Stock Fully Paid. The Issuer represents, warrants, covenants and agrees that all shares of Warrant Stock which may be issued upon the exercise of this Warrant or otherwise hereunder will, when issued in accordance with the terms of this Warrant, be duly authorized, validly issued, fully paid and non-assessable and free from all taxes, liens and charges created by or through the Issuer. The Issuer further covenants and agrees that during the period within which this Warrant may be exercised, the Issuer will at all times have authorized and reserved for the purpose of the issuance upon exercise of this Warrant a number of authorized but unissued shares of Common Stock equal to at least one hundred percent (100%) of the number of shares of Common Stock issuable upon exercise of this Warrant without regard to any limitations on exercise.   

 
	 
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(b) Reservation. If any shares of Common Stock required to be reserved for issuance upon exercise of this Warrant or as otherwise provided hereunder require registration or qualification with any Governmental Authority under any federal or state law before such shares may be so issued, the Issuer will in good faith use its best efforts as expeditiously as possible at its expense to cause such shares to be duly registered or qualified. 
 
(c) Loss, Theft, Destruction of Warrants. Upon receipt of evidence satisfactory to the Issuer of the ownership of and the loss, theft, destruction or mutilation of any Warrant and, in the case of any such loss, theft or destruction, upon receipt of indemnity or security satisfactory to the Issuer or, in the case of any such mutilation, upon surrender and cancellation of such Warrant, the Issuer will make and deliver, in lieu of such lost, stolen, destroyed or mutilated Warrant, a new Warrant of like tenor and representing the right to purchase the same number of shares of Common Stock.
 
(d) Payment of Taxes. The Issuer will pay any documentary stamp taxes attributable to the initial issuance of the Warrant Stock issuable upon exercise of this Warrant; provided, however, that the holder shall be required to pay any tax or taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificates representing Warrant Stock in a name other than that of the Holder in respect to which such shares are issued.
 
4. Adjustment of Warrant Price and Number of Shares Issuable Upon Exercise. The Warrant Price and the number of shares of Warrant Stock that may be purchased upon exercise of this Warrant shall be subject to adjustment from time to time as set forth in this Section 4. Upon each adjustment of the Warrant Price, the Holder of this Warrant shall thereafter be entitled to purchase, at the Warrant Price resulting from such adjustment, the number of shares of Common Stock obtained by multiplying the Warrant Price in effect immediately prior to such adjustment by the number of shares purchasable pursuant hereto immediately prior to such adjustment, and dividing the product thereof by the Warrant Price resulting from such adjustment.
 
(d) Adjustment Due to Dividends, Stock Splits, Etc. If, at any time on or after the Original Issuance Date, the number of outstanding shares of Common Stock is increased by a (i) dividend payable in any kind of shares of capital stock of the Corporation, (ii) stock split, (iii) combination, (iv) reclassification or (v) other similar event, the Warrant Price shall be proportionately reduced by multiplication by a fraction of which the numerator shall be the number of outstanding shares of Common Stock immediately before such event and of which the denominator shall be the number of outstanding shares of Common Stock immediately after such event, or if the number of outstanding shares of Common Stock is decreased by a reverse stock split, combination or reclassification of shares, or other similar event, the Warrant Price shall be proportionately increased by multiplication by a fraction of which the numerator shall be the number of outstanding shares of Common Stock immediately before such event and of which the denominator shall be the number of outstanding shares of Common Stock immediately after such event. In such event, the Issuer shall notify the Corporation's Transfer Agent of such change on or before the effective date thereof.   

 
	 
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(e) Adjustment Due to Merger, Consolidation, Etc. If, at any time after the Original Issuance Date, there shall be (i) any reclassification or change of the outstanding shares of Common Stock, (ii) any consolidation or merger of the Corporation with any other entity (other than a merger in which the Corporation is the surviving or continuing entity and its capital stock is unchanged), (iii) any sale or transfer of all or substantially all of the assets of the Corporation, (iv) any share exchange or tender offer pursuant to which all of the outstanding shares of Common Stock are effectively converted into other securities or property; or (v) any distribution of the Corporation's assets to holders of the Common Stock as a liquidation or partial liquidation dividend or by way of return of capital (each of (i) - (v) above being a "Corporate Change"), then the Holder shall have the right thereafter to receive, upon exercise of this Warrant, the same amount and kind of securities, cash or property as it would have been entitled to receive upon the occurrence of such Corporate Change if it had been, immediately prior to such Corporate Change, the holder of the number of shares of Warrant Stock then issuable upon exercise in full of this Warrant, and in any such case, appropriate provisions (in form and substance reasonably satisfactory to the Holder) shall be made with respect to the rights and interests of the Holder to the end that the economic value of the Warrant Stock is in no way diminished by such Corporate Change and that the provisions hereof including, without limitation, in the case of any such consolidation, merger or sale in which the successor entity or purchasing entity is not the Issuer, an immediate adjustment of the Warrant Price so that the Warrant Price immediately after the Corporate Change reflects the same relative value as compared to the value of the surviving entity's common stock that existed immediately prior to such Corporate Change and the value of the Common Stock immediately prior to such Corporate Change. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Corporate Change, then the Holder shall be given the same choice as to the consideration it receives upon any exercise of this Warrant following such Corporate Change.
 
(f)  Other Adjustments. If the Issuer takes any action affecting the Common Stock after the date hereof that would be covered by this Section 4, but for the manner in which such action is taken or structured, and such action would in any way diminish the value of the Warrant or Warrant Stock, then the Warrant Price shall be adjusted in such manner as the Board shall in good faith determine to be equitable under the circumstances.
 
5. Fractional Shares. No fractional shares of Warrant Stock will be issued in connection with any exercise hereof, but in lieu of such fractional shares, the Issuer shall round the number of shares to be issued upon exercise up to the nearest whole number of shares.
 
6. Definitions. For the purposes of this Warrant, the following terms have the following meanings:
 
"Board" shall mean the Board of Directors of the Issuer.
 
"Capital Stock" means and includes (i) any and all shares, interests, participations or other equivalents of or interests in (however designated) corporate stock, including, without limitation, shares of preferred or preference stock, (ii) all partnership interests (whether general or limited) in any Person which is a partnership, (iii) all membership interests or limited liability company interests in any limited liability company, and (iv) all equity or ownership interests in any Person of any other type.   

 
	 
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"Common Stock" means the Common Stock, $0.001 par value per share, of the Issuer and any other Capital Stock into which such stock may hereafter be changed.
 
"Governmental Authority" means any governmental, regulatory or self-regulatory entity, department, body, official, authority, commission, board, agency or instrumentality, whether federal, state or local, and whether domestic or foreign.
 
"Holders" mean the Persons who shall from time to time own any Warrant. The term "Holder" means one of the Holders.
 
"Issuer" means Spotlight Innovation Inc., a Nevada corporation, and its successors. 
 
"Original Issue Date" means December 31, 2015.
 
"OTC Bulletin Board" means the over-the-counter electronic bulletin board.
 
"Person" means an individual, corporation, limited liability company, partnership, joint stock company, trust, unincorporated organization, joint venture, Governmental Authority or other entity of whatever nature.
 
"Securities Act" means the Securities Act of 1933, as amended, or any similar federal statute then in effect.
 
"Term" has the meaning specified in Section 1 hereof.
 
"Warrants" means the Warrants issued pursuant to this Warrant, without limitation, and any other warrants of like tenor issued in substitution or exchange for any thereof pursuant to the provisions of Section 2(c), 2(d) or 2(e) hereof or of any of such other Warrants. 
 
"Warrant Price" initially means $1.25, as such price may be adjusted from time to time as shall result from the adjustments specified in this Warrant, including Section 4 hereto.
 
"Warrant Share Number" means at any time the aggregate number of shares of Warrant Stock which may at such time be purchased upon exercise of this Warrant, after giving effect to all prior adjustments and increases to such number made or required to be made under the terms hereof.   

 
	 
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"Warrant Stock" means Common Stock issuable upon exercise of any Warrant or Warrants or otherwise issuable pursuant to any Warrant or Warrants.
 
7. Amendment and Waiver. Any term, covenant, agreement or condition in this Warrant may be amended, or compliance therewith may be waived (either generally or in a particular instance and either retroactively or prospectively), by a written instrument or written instruments executed by the Issuer and the Holder; provided, however, that no such amendment or waiver shall reduce the Warrant Share Number, increase the Warrant Price, shorten the period during which this Warrant may be exercised or modify any provision of this Section 7 without the consent of the Holder of this Warrant. No consideration shall be offered or paid to any person to amend or consent to a waiver or modification of any provision of this Warrant unless the same consideration is also offered to all holders of the Warrants.
 
8. Governing Law; Jurisdiction. This Warrant shall be governed by and construed in accordance with the internal laws of the State of Iowa, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction. This Warrant shall not be interpreted or construed with any presumption against the party causing this Warrant to be drafted. The Issuer and the Holder agree that venue for any dispute arising under this Warrant will lie exclusively in the state or federal courts located in Polk County, Iowa, and the parties irrevocably waive any right to raise forum non conveniens or any other argument that Iowa is not the proper venue. The Issuer and the Holder irrevocably consent to personal jurisdiction in the state and federal courts of the State of Iowa. The Issuer and the Holder consent to process being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing in this Section shall affect or limit any right to serve process in any other manner permitted by law. The Issuer agrees to pay all costs and expenses of enforcement of this Warrant, including, without limitation, reasonable attorneys' fees and expenses. The parties hereby waive all rights to a trial by jury.
 
9. Notices. TC "Section 7.4 Notices."\f C \l "2" All notices, requests, consents or other communications required or permitted hereunder to the Issuer shall be in writing and shall be hand delivered or mailed first class postage prepaid, registered or certified mail, to the following address:
 
Spotlight Innovation Inc.
c/o its CEO and CFO
6750 Westown Parkway, Suite 200-226
West Des Moines, Iowa 50266 
 
Such notices and other communications shall, for all purposes of this Agreement, be treated as being effective upon being delivered personally or, if sent by mail, five days after the same has been deposited in a regularly maintained receptacle for the deposit of United States mail, addressed as set forth above, and postage prepaid. Any party hereto may from time to time change its address for notices by giving written notice of such changed address to the other party hereto.   

 
	 
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10. Remedies. The Issuer stipulates that the remedies at law of the Holder of this Warrant in the event of any default or threatened default by the Issuer in the performance of or compliance with any of the terms of this Warrant are not and will not be adequate and that, to the fullest extent permitted by law, such terms may be specifically enforced by a decree for the specific performance of any agreement contained herein or by an injunction against a violation of any of the terms hereof or otherwise.
 
11. Successors and Assigns. This Warrant and the rights evidenced hereby shall inure to the benefit of and be binding upon the successors and assigns of the Issuer, the Holder hereof and (to the extent provided herein) the Holders of Warrant Stock issued pursuant hereto, and shall be enforceable by any such Holder or Holder of Warrant Stock.
 
12. Modification and Severability. If, in any action before any court or agency legally empowered to enforce any provision contained herein, any provision hereof is found to be unenforceable, then such provision shall be deemed modified to the extent necessary to make it enforceable by such court or agency. If any such provision is not enforceable as set forth in the preceding sentence, the unenforceability of such provision shall not affect the other provisions of this Warrant, but this Warrant shall be construed as if such unenforceable provision had never been contained herein.
 
13. Headings. The headings of the Sections of this Warrant are for convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.   

 
	 
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IN WITNESS WHEREOF, the Issuer has executed this Warrant as of the day and year first above written.
    	 
	Spotlight Innovation Inc. 
	 

	 	 	 	 
		By:	/s/ Cristopher Grunewald	 

	 
	Name:
	Cristopher Grunewald	 

	 
	Title:
	President and Chief Executive Officer	 

 
	 
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APPENDIX A
 
WARRANT EXERCISE FORM
 
Spotlight Innovation Inc.
 
The undersigned _______________, pursuant to the provisions of the within Warrant, hereby elects to purchase __________________ shares of Common Stock, par value $0.001 per share, of Spotlight Innovation Inc. covered by the within Warrant at a Warrant Price of $1.25 per Warrant Share. The shares of Warrant Stock issuable upon exercise of this Warrant shall be delivered to the address set forth below.
 
The undersigned is an "accredited investor" as defined in Regulation D under the Securities Act of 1933, as amended.
 
The Holder shall pay the sum of $______________ by certified or official bank check (or via wire transfer) to Spotlight Innovation Inc. in accordance with the terms of the Warrant. 
 
 
	Dated: _________________  

		 

	Name:	________________________________________

	Signature:	________________________________________

	Address:
	________________________________________

	 
	________________________________________

	 
	________________________________________

 
 
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