Document:

Exhibit 10.1 

INVESTMENT
AGREEMENT

 

INVESTMENT
AGREEMENT
(this
“AGREEMENT”),
dated
as of
July 16, 2014
by and
between
ENERGIE
HOLDINGS,
INC.,
a Delaware
corporation
(the “Company”),
and Dutchess
Opportunity
Fund, II,
LP, a Delaware
Limited
Partnership
(the
“Investor”).

 

WHEREAS,
the parties
desire
that,
upon the
terms
and subject
to the conditions
contained
herein,
 the Investor
 shall
 invest
 up  to
 five
 million
 dollars 
($5,000,000)
 to 
purchase
the Company's
Common
Stock
with
$.0001 par
value
per share
(the “Common
Stock”);

 

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

 

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

 

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

 

SECTION
1.  DEFINITIONS.

 

As
 used in this
 Agreement,
 the
following
 terms
 shall have
the following
 meanings
specified
or indicated
below,
and such
meanings
shall be equally
applicable
to the singular
and plural
forms
of such
defined
terms.

 

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

 

“1934
Act”
shall mean
the Securities
Exchange
Act of
1934,
as it
may be
amended.

 

“AAA”
shall have
the meaning
specified
in Section
11.

 

“Affiliate”
shall have
the meaning
specified
in Section
5(H).

 

“Agreement”
shall mean
this
Investment
Agreement.

 

“Articles
of Incorporation”
shall have
the meaning
specified
in Section
4(C).

 

“By-laws”
shall have
the meaning
specified
in Section
4(C).

 

“Closing”
shall have
the meaning
specified
in Section
2(E).

 

“Closing
Date”
shall have
the meaning
specified
in Section 2(E).

 

 

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	1	 

    	 

    

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

 

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

 

“Control”
or “Controls”
shall have
the meaning
specified
in Section 5(H).

 

“DTC”
shall have
the meaning
specified
in Section
2(E).

 

“DWAC”
shall have
the meaning
specified
in Section
2(E).

 

“Effective
Date”
shall mean
the date
the SEC
declares
effective
under
the 1933
Act the

Registration
Statement
covering
the Securities.

 

“Equity
Line Transaction
Documents”
shall mean
this
Agreement
and the
Registration

Rights
Agreement.

 

“FAST”
shall have
the meaning
specified
in Section
2(E).

 

“Fee
Shares”
shall have
the meaning
specified
in Section
11.

 

“Indemnities”
shall have
the meaning
specified
in Section
10.

 

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

 

“Indemnitor”
shall have
the meaning
specified
in Section
10.

 

“Investor”
shall have
the meaning
indicated
in the
preamble of this
Agreement.

 

“Material
Adverse
Effect”
shall have
the meaning
specified
in Section
4(A).

 

“Maximum
Common
Stock
Issuance”
shall have
the meaning
specified
in Section
2(F).

 

“Minimum
Acceptable
Price”
with
respect
to any
Put Notice
Date shall
be the
price defined
by the
Company in
the applicable
Put Notice.

 

“Open
Market
Adjustment
Amount”
shall have
the meaning
specified
in Section
2(G).

 

“Open
Market
Share
Purchase”
shall have
the meaning
specified
in Section
2(G).

 

“Open
Period”
shall mean
the period
beginning
on and including
the
Trading Day
immediately
following
the Effective
Date and
ending
on the
earlier
to occur
of (i)
the date
which is
thirty-six
(36) months
from
the Effective
Date; or (ii)
termination
of the
Agreement
in accordance
with
Section 9,
below.

 

“Pricing
Period”
shall mean
the five
(5)
consecutive
Trading
Days
beginning
on the Put
Notice Date
and ending
on and
including
the date
that
is four
(4) Trading
Days
after such
Put Notice
Date.

 

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

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	2	 

    	 

    

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

 

“Purchase
 Amount”
 shall
 mean
 the 
total
 amount 
being 
paid  by 
the  Investor
 on  a

particular
Closing
Date
to purchase
the Securities.

 

“Purchase
Price”
shall mean
ninety-four
percent
(94%)
of the
lowest
daily
VWAP
(as defined
herein)
of the
Common
Stock
during
the Pricing
Period.

 

“Put”
shall have
the meaning
set forth
in Section
2(B) hereof.

 

“Put
Amount”
shall have
the meaning
set forth
in Section
2(B) hereof.

 

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

 

“Put
Notice Date”
shall mean
the Trading
Day,
as set forth
below,
immediately
following
the day
on which
the Investor
receives
a Put Notice,
however
a Put
Notice
shall be
deemed delivered
on (a) the
Trading
Day it
is received
by facsimile
or email by
the Investor
if such
notice
is received
prior to
noon Eastern
Time,
or (b)
the immediately
succeeding
Trading Day
if it
is received
by facsimile
or otherwise
after
noon Eastern
Time
on a Trading
Day. No
Put Notice
may be
deemed
delivered
on a day
that is
not a
Trading Day.

 

“Put
Restriction”
shall mean
the days
during
the Pricing
Period.
During
this
time,
the

Company
shall not
be entitled
to deliver
another
Put Notice.

 

“Put
Shares
Due”
shall have
the meaning
specified
in Section
2(G).

 

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

Agreement.

 

“Registration
Statement”
means
the registration
statement
of the
Company
filed
under

the
1933 Act
covering the
resale by
the Investor
of the
Common
Stock
issuable
hereunder.

 

“Related
Party”
shall have
the meaning
specified
in Section 5(H).

 

“Resolutions”
shall have
the meaning
specified
in Section
7(E).

 

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

 

“SEC
Documents”
shall have
the meaning
specified
in Section
4(F).

 

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

Agreement.

 

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

 

“Subsequent
Purchasers”
shall have
the meaning
specified
in Section
2(G).

 

“Subsidiaries”
shall have
the meaning
specified
in Section
4(A).

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	3	 

    	 

    

“Trading
Day”
shall mean
any day
on which
the Principal
Market
for the
Common
Stock

is
open for
trading,
from the
hours of
9:30 am
until
4:00 pm Boston
Time.

 

“VWAP”
shall mean
the volume
weighted
average price
during
a Trading
Day.

 

SECTION
2.  PURCHASE
AND SALE
OF COMMON
STOCK.

 

(A)
 PURCHASE 
AND  SALE
OF COMMON
 STOCK.
 Subject
 to the
 terms
 and conditions
set forth
herein,
the Company
may issue
and sell
to the
Investor,
and the
Investor
shall purchase
from the Company,
up to that
number
of Shares
having
an aggregate
Purchase Price
of five
million
dollars ($5,000,000).

 

(B)
 DELIVERY
OF PUT
NOTICES.
Subject
to the
terms
and conditions
of the
Equity
Line Transaction
Documents,
and from
time
to time
during
the Open
Period,
the Company
may, in
its 
sole discretion,
 deliver
 a Put
 Notice
to the
Investor 
which states
the dollar 
amount (designated
in U.S.
Dollars)
(the “Put
Amount”)
of Shares
which
the Company
intends to
sell to
the Investor
on a Closing
Date
(the
“Put”).
The Put
Amount
shall be
equal
to up to
either
1) two
hundred
percent
(200%)
of the average
daily volume
(U.S.
market
only) of
the Common
Stock
for the
three (3)
Trading Days
prior to
the applicable
Put Notice
Date, multiplied
by the average
of the three
(3) daily
closing
prices
immediately
preceding the
Put
Date
or 2) one
hundred
thousand
dollars ($100,000).
During
the Open
Period,
the Company
shall not
be entitled
to submit
a Put
Notice until
the Pricing
Period
for the
prior Put
has been
completed.
The Common
Stock
identified
in the
Put
Notice shall
be purchased
for
a price equal
to the
Purchase Price.

 

(C)
 COMPANY’S
RIGHT
TO SUSPEND.  On
each
Put Notice
submitted
to the
Investor
by the Company,
the Company
shall
have
the option
to specify
a Suspension
Price
for that
Put.
 In
the event
the Common
Stock
falls below
the Suspension
Price,
the Put
shall be temporarily
suspended.
 The
Put shall
resume
at such time
as the
Common
Stock
is above
the Suspension
Price,
provided
the dates
for the Pricing
Period for
that particular
Put are still
valid.
In the
event
the Pricing
Period
has been
complete, any shares
above
the Suspension
Price
due to
the Investor
shall be
sold to
the Investor
by the
Company at
the Suspension
Price
under
the terms
of this
Agreement.
The Suspension
Price
for a
Put may not
be changed
by the Company
once submitted
to the
Investor.

 

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

 

(1)
a Registration
Statement
shall have
been declared
effective
and shall
remain
effective
and available
for the resale
of all
the Registrable
Securities
(as defined
in the
Registration
Rights
Agreement)
at all
times
until
the Closing
with
respect
to the
subject
Put Notice;

 

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

 

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	4	 

    	 

    

(3)
the Company
has complied
with
its
obligations
and is
otherwise
not in
breach of
or in
default
under
this
Agreement,
the Registration
Rights
Agreement
or any other agreement
executed
in connection
herewith
which
has not
been cured
prior to
delivery
of the Put
Notice;

 

(4)
 no injunction
shall have
been issued
and remain
in force,
or action
commenced
by a governmental
authority
which
has not
been stayed
or abandoned,
prohibiting
the purchase
or the
issuance
of the
Securities;
and

 

(5)
 the issuance
of the
Securities
pursuant
to this
Agreement
will not
violate any
shareholder
approval
requirements
of the
Principal
Market.

 

If
any of the
events
described
in clauses
(1) through
(5)
above
occurs
during
a Pricing
Period,
then the
Investor
 shall
have
no obligation
to purchase
the Common
Stock
 subject
to the
applicable
Put Notice.

 

(E)
 MECHANICS
OF PURCHASE
OF SHARES
BY INVESTOR.
The closing
of the
purchase
by the Investor
of Shares
(a “Closing”)
shall occur
on the
date
which
is no
later than
five
(5) Trading
Days
following
the applicable
Put Notice
Date (each
a “Closing
Date”).
On each
Closing
Date, (I)
the Company
shall deliver
to the
Investor
pursuant
to this
Agreement,
certificates
representing
the Shares
to be
issued
to the
Investor
on such date
and registered
in the
name
of the
Investor;
and (II)
the Investor
shall
deliver
to the
Company
the Purchase
Price
to be
paid for
such Shares,
based on
the Put
Amount
set forth
in Section
2(B).
In lieu
of delivering
physical
certificates
representing
the Securities
and provided
that
the Company's
transfer
agent
then
is participating
in The
Depository
Trust
Company
(“DTC”)
Fast Automated
Securities
Transfer
(“FAST”)
program,
upon request
of the
Investor,
the Company
shall use
all commercially
reasonable
efforts
to cause
its transfer
agent
to electronically
transmit
the Securities
by crediting
the account
of the
Investor's
prime broker
(as specified
by the Investor
within
a reasonable
period
in advance
of the
Investor's
notice)
with
DTC through
its
Deposit Withdrawal
Agent
Commission
(“DWAC”)
system.

 

The
Company
understands
that
a delay in
the issuance
of Securities
beyond
the Closing
Date  could
 result
 in 
economic
 damage
 to  the 
Investor.
 After
 the Effective
 Date, 
as compensation
to the
Investor
for
such loss,
the
Company agrees
to make
payments
to the
Investor
for late
issuance
of Securities
(delivery
of Securities
after
the applicable
Closing Date) in
accordance
with
the following
schedule (where
“No.
of Days
Late”
is defined
as the
number
of trading
days
beyond
the Closing
Date,
with
the Amounts
being
cumulative.):

 

LATE
PAYMENT
FOR EACH
NO. OF
DAYS LATE

 

	1	$100
	2	$200
	3	$300
	4	$400
	5	$500
	6	$600
	7	$700
	8	$800
	9	$900
	10	$1000
	Over 10	$1,000 + $200 for each Business

 
  

    	ELED INVESTMENT AGREEMENT JULY.2014	5	 

    	 

    

Day
late beyond
10 days

 

 

 

 

The
Company shall
make
any payments
incurred
under
this
Section
in immediately
available
funds upon
demand
by the Investor.
Nothing
herein
shall limit
the Investor's
right
to pursue
actual
damages
for the
Company's
failure
to issue
and deliver
the Securities
to the
Investor,
except
that
such late
payments
shall offset
any such actual damages
incurred
by the Investor,
and any
Open
Market Adjustment
Amount,
as set forth
below.

 

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

 

(G)
 OPEN
 MARKET
 ADJUSTMENT.
 If,
 by  the
 third
 (3rd)
 business
 day after
 a Closing
Date, the
Company
fails
to deliver
any portion
of the
Securities
subject
to a
Put Notice
to  the
Investor 
(the 
“Put 
Shares
 Due”)
 and 
the  Investor
 purchases,
 in 
an  open 
market
transaction
or otherwise,
shares
of Common
Stock
necessary
to make
delivery
by the
Investor
of shares
in respect
of sales
to subsequent
purchasers,
pursuant
to transactions
entered
into before
the Closing
Date (“Subsequent
Purchasers”),
which such shares
of Common
Stock
would
have
been delivered
to the
Investor
by the Company but
for the
Company’s
failure
to so deliver
(the “Open
Market Share
Purchase”),
then
the Company
shall pay
to the
Investor,
in addition
to any
other amounts due
to Investor
pursuant
to the
Put, and
not in
lieu thereof,
the Open
Market
Adjustment
Amount
(as defined
below).
The “Open
Market
Adjustment
Amount”
is the
amount equal
to the
excess, if
any,
of (x)
the Investor's
total purchase
price (including
brokerage
commissions,
 if 
any) for
 the 
Open  Market
 Share
 Purchase
 minus
 (y) 
the  net
proceeds (after
brokerage
commissions,
if any)
received
by the Investor
from the
sale of
the Put Shares
Due to
such Subsequent
Purchasers.
The Company shall
pay the Open
Market Adjustment
Amount
to the
Investor in
immediately
available
funds
within
five
(5) business
days of
written
demand
by the
Investor.
 By
way of illustration
and not
in limitation
of the foregoing,
if the Investor
 purchases
shares of
 Common
Stock having
 a total purchase
price (including
brokerage
commissions)
of $11,000
to cover
an Open
Market
Share
Purchase
with
respect
to shares
of Common
Stock
it sold
to Subsequent
Purchasers for
net proceeds
of $10,000,
the Open
Market
Adjustment
Amount
which
the Company
will
be required
to pay
to the
Investor
will be
$1,000.

 

(H)
 LIMITATION
ON AMOUNT
OF OWNERSHIP.
Notwithstanding
anything
to the contrary
in this
Agreement,
in no
event
shall the
Investor
be entitled
to purchase
that
number
of Shares,
which
when
added to
the sum of
the number
of shares
of Common
Stock
beneficially

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	6	 

    	 

    

owned
(as such
term
is defined
under
Section
13(d) and
Rule
13d-3
of the
1934 Act),
by the Investor,
would exceed
4.99% of
the number
of shares
of Common
Stock
outstanding
on the Closing
Date, as
determined
in accordance
with
Rule 13d-1(j)
of the
1934 Act.

 

SECTION
3.  INVESTOR'S
REPRESENTATIONS,
WARRANTIES
AND COVENANTS.
 The

Investor
represents
and warrants
to the
Company,
and covenants,
that:

 

(A)
 SOPHISTICATED
INVESTOR.
The Investor
has,
by reason
of its
business
and financial
experience,
such knowledge,
sophistication
and experience
in financial
and business
matters
and in
making
investment
decisions
of this
type
that
it is
capable
of (1)
evaluating
the merits
and risks
of an
investment
in the
Securities
and making
an informed
investment
decision;
(2) protecting
its
own interest;
and (3)
bearing
the economic
risk
of such
investment
for an
indefinite
period
of time.

 

(B)
 AUTHORIZATION;
ENFORCEMENT.
The Investor
has the requisite
power and
authority
to enter
into and
perform
this
Agreement
and the
Registration
Rights
Agreement.
The execution
and delivery
of the
Equity
Line Transaction
Documents
by the
Investor
and the
consummation
by it of
the transactions
contemplated
hereby
and thereby
have
been duly
and validly
authorized
by the
Investor's
general
partners
and no
further
consent
or authorization
is required
by its
partners.
This
Agreement
has been
duly and
validly
authorized,
executed
and delivered
on behalf
 of 
the Investor
 and
is a 
valid
and binding
 agreement
 of 
the Investor
enforceable
against
the Investor
in accordance
with
its
terms,
subject
as to
enforceability
to general
 principles
 of 
equity
and  to
 applicable
 bankruptcy,
 insolvency,
 reorganization,
moratorium,
liquidation
and other similar
laws
relating
to, or
affecting
generally,
the enforcement
of applicable
creditors'
rights
and remedies.

 

(C)
 SECTION
9 OF THE
1934 ACT.
During
the term
of this
Agreement,
the Investor
will comply
with
the provisions
of Section
9 of the
1934 Act,
and the
rules
promulgated
thereunder,
with
respect
to transactions
involving
the Common
Stock.
The Investor
agrees not
to sell
the Company's
stock short,
either
directly
or indirectly
through
its affiliates,
principals
or advisors,
the Company's
common
stock
during
the term
of this
Agreement.

 

(D)
 ACCREDITED
INVESTOR.
Investor
is an
“Accredited
Investor”
as that
term
is

defined
in Rule
501(a) of
Regulation
D of the
1933 Act.

 

(E)
 NO
CONFLICTS.
The execution,
delivery
and performance
of the
Transaction Documents
by the Investor
and the
consummation
by the Investor
of the
transactions
contemplated
hereby
and thereby
will
not (1)
result
in a
violation
of the
partnership
agreement
or other
organizational
documents of
the Investor,
(2) conflict
with,
or constitute
a material
default
(or an event
which
with
notice
or lapse
of time
or both
would
become a material
default)
under,
or give
to others
any rights
of termination,
amendment, acceleration
or cancellation
of, any material
agreement,
contract,
indenture
mortgage,
indebtedness
or instrument
to which
the Investor
is a party,
or to
the Investor’s
knowledge
result
in a violation
of any
law,
rule,
regulation,
order, judgment
or decree
(including
United
States federal
and state
securities
laws and
regulations)
applicable
to the
Investor
or by which
any property or
asset of
the Investor
is bound
or affected.

 

(F)
NO VIOLATIONS.
Except
as disclosed
in Schedule
3(f),
the Investor
is not
in violation
of any
term of,
or in
default
under,
the partnership
agreement
of other
organizational
documents
of the
Investor
or any
material
contract,
agreement,
mortgage,
indebtedness,
indenture,
instrument,
judgment,
decree
or order
or any statute,
rule
or regulation
applicable
to

 
  

    	ELED INVESTMENT AGREEMENT JULY.2014	7	 

    	 

    

the
Investor,
except for
conflicts,
defaults,
terminations,
amendments,
accelerations,
cancellations
and violations
that
would
not,
individually
or in
the aggregate,
constitute
or reasonably
be expected
to constitute
a material
adverse
effect
on the
Investor. 
The business
of the
Investor
is not
being conducted,
and shall
not be
conducted,
in violation
of any
law,
statute,
ordinance,
rule, order
or regulation
of any
governmental
authority
or agency,
regulatory
or self- regulatory
agency,
or court,
except for
violations
the sanctions
for
which
either,
individually
or in the
aggregate,
would
not have
or reasonably
be expected
to have
a material
adverse
effect
on the
Investor.
 Except
as specifically
contemplated
by this
Agreement
and as
required
under the

1933
Act or
any securities
laws
of any
states,
to the
Investor’s
knowledge,
the Investor
is not

required
 to  obtain
 any 
consent,
 authorization,
 permit
 or  order
 of,
 or 
make
 any filing
 or registration
(except
the filing
of a registration
statement
as outlined
in the
Registration
Rights
Agreement)
with,
any court,
governmental
authority
or agency,
regulatory
or self-regulatory
agency or
other third
party in
order for it
to execute,
deliver
or perform
any of its
obligations
under,
or contemplated
by, the
Equity
Line Transaction
Documents
in accordance
with
the terms
hereof
or thereof
except
for those
consents,
authorizations,
permits,
orders
or filings
as have been
obtained
or effected
on or prior to the
date hereof
and are in full
force and effect
as of the
date
hereof.
 Except
as disclosed
in Schedule
3(f),
the Investor
is unaware
of any
facts or
circumstances
which might
give
rise to
any violation
or default
set forth
in this
Section 3(F).

 

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

 

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

1933
Act (or
pursuant
to an
exemption
from
such registration
provisions).

 

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

 

(J)
 GOOD
 STANDING.
 The 
Investor 
is  a 
Limited
 Partnership,
 duly organized,
validly
existing
and in good
standing
in the
state
of Delaware.

 

(K)
 TAX
 LIABILITIES.
 The Investor
 understands
that 
it  is
 liable
 for 
its 
own  tax
liabilities.

 

SECTION
4.  REPRESENTATIONS
AND WARRANTIES
OF THE
COMPANY.
 Except
as set
forth
in the
Schedules
attached
hereto,
or as disclosed
in the
Company's
SEC Documents,
the Company
represents
and warrants
to the
Investor
that:

 

(A)
 ORGANIZATION
AND QUALIFICATION.
The Company is
a corporation
duly organized
and validly
existing
in good
standing
under
the laws
of the
State of
Delaware,
USA and
has the requisite
corporate
power
and authorization
to own
its
properties
and to
carry
on its business
as now being
conducted.
Both
the Company
and the
companies it
owns or
controls
(“Subsidiaries”)
are duly
qualified
to do business
and are in
good
standing
in every
jurisdiction
in which
its
ownership
of property or
the nature
of the business
conducted
by it
makes
such qualification
necessary,
except
to the
extent
that
the failure
to be so qualified
or be in
good standing
 would
not  have
a  Material
Adverse 
Effect.
 As used
in this
Agreement,
 “Material

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	8	 

    	 

    

Adverse
Effect”
means any
material
adverse
effect on
(1)
the properties,
assets, operations,
results
of operations,
or financial
condition
of the
Company and
its
Subsidiaries,
if any,
taken
as a whole,
(2) the
transactions
contemplated
hereby
or by the
agreements
and instruments
to be entered
into in
connection
herewith,
or (3)
the authority
or ability
of the
Company to
perform
its obligations
under the
Equity
Line Transaction
Documents
other than
as a result
of (a)
changes
adversely
 affecting
 the
 United
 States
 economy
 (so  long
 as  the
 Company is
 not disproportionately
affected
thereby),
(b)
changes
adversely
affecting
the
industry
in which
the Company operates
(so long
as the
Company is
not disproportionately
affected thereby),
(c) the announcement
or consummation
of the
transactions
contemplated
by this
Agreement,
and (d)
changes
in the
market price
of the
Common
Stock.

 

(B)
 AUTHORIZATION;
 ENFORCEMENT;
 COMPLIANCE
WITH
 OTHER
INSTRUMENTS.

 

(1)
 The
Company has
the requisite
corporate
power
and authority
to enter
into and
perform
the Equity
Line Transaction
Documents,
and to
perform
its
obligations
contemplated
hereby
and thereby.

 

(2)
 The
execution
and delivery
of the
Equity
Line Transaction
Documents
by the Company
and the
consummation
by it
of the
transactions
contemplated
hereby
and thereby,
including
without
limitation
the reservation
for issuance
and the
issuance
of the
Securities
pursuant
to this
Agreement,
have
been duly
and validly
authorized
by the
Company's
Board
of Directors
and no
further
consent or
authorization
is required
by the Company,
its
Board
of Directors,
or its
shareholders.

 

(3)
 The 
Equity
 Line Transaction
 Documents
 have
 been 
duly  and
 validly
executed
and delivered
by the
Company.

 

(4)
 The
Equity
Line Transaction
Documents
constitute
the valid
and binding
obligations
of the
Company
enforceable
against
the Company
in accordance
with
their
terms,
except
as such enforceability
may be
limited
by general
principles
of equity
or applicable
bankruptcy,
insolvency,
reorganization,
moratorium,
liquidation
or similar
laws
relating
to, or affecting
generally,
the enforcement
of creditors'
rights
and remedies.

 

(C)
CAPITALIZATION.
As of
the date
hereof,
the authorized
capital
stock
of the Company
consists
of 250,000,000
shares
of Common
Stock
with
$.0001 par
value
per share,
of as of
July 15,
2014, 51,400,000
shares
were issued
and outstanding.
Except
as disclosed
in the Company’s
publicly
available
filings
with
the SEC:
(1) no shares
of the
Company's
capital stock
are subject
to preemptive
rights
or any other
similar
rights
or any
liens
or encumbrances
suffered
or permitted
by the
Company;
(2) there
are no
outstanding
debt securities;
(3) there
are no outstanding
shares
of capital
stock,
options,
warrants,
scrip,
rights
to subscribe
to, calls
or commitments
of any
character
whatsoever
relating
to, or securities
or rights
convertible
into,
any shares
of capital
stock
of the
Company
or any
of its
Subsidiaries,
or contracts,
commitments,
understandings
or arrangements
by which
the Company
or any
of its
Subsidiaries
is or may
become bound
to issue
additional
shares
of capital
stock
of the
Company or any
of its Subsidiaries
or options,
warrants,
scrip,
rights
to subscribe
to, calls
or commitments
of any
character
whatsoever
relating
to, or
securities
or rights
convertible
into, any
shares
of capital
stock
of the
Company or any
of its
Subsidiaries;
(4) there
are no agreements
or arrangements
under
which
the Company or
any of its
Subsidiaries
is obligated
to register
the sale
of any of
their
securities
under
the 1933
Act
(except
the Registration
Rights
Agreement);
(5)
there
are no outstanding
securities
of the Company
or any of its
Subsidiaries
which contain
any redemption

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	9	 

    	 

    

or 
similar
 provisions,
 and there
are  no contracts,
 commitments,
 understandings
 or arrangements
by which
the Company
or any
of its
Subsidiaries
is or may
become bound
to redeem
a security
of the
Company or any
of its
Subsidiaries;
(6) there
are no securities
or instruments
containing
anti-dilution
or similar
provisions
that
will
be triggered
by the issuance
of the
Securities
as described
in this
Agreement;
(7) the
Company
does not
have
any stock
appreciation
rights
or “phantom
stock”
plans
or agreements
or any
similar
plan or
agreement;
and (8)
there
is no
dispute as
to the
classification
of any
shares
of the
Company's
capital
stock.

 

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

 

(D)
ISSUANCE
OF SHARES.
The Company
has reserved
5,000,000
Shares
for issuance
pursuant
to this
Agreement,
which
have
been duly
authorized
and reserved
for issuance
(subject
to adjustment
pursuant
to the Company's
covenant
set forth
in Section
5(F) below)
pursuant
to this
Agreement.
Upon
issuance
in accordance
with
this
Agreement,
the Securities
will
be validly
issued,
fully paid
for and non-assessable
and free
from
all taxes,
liens and
charges
with
respect
to the
issue thereof.
In the
event
the Company
cannot
register
a sufficient
number
of Shares
for issuance
pursuant
to this
Agreement,
the
Company will
use its
best  efforts
to authorize
and reserve
for  issuance
the number
 of 
Shares
required
for the
Company to
perform
its
obligations
hereunder
as soon as
reasonably
practicable.

 

(E)
NO CONFLICTS.
The execution,
delivery
and performance
of the
Equity
Line Transaction
Documents
by the
Company and
the consummation
by the Company
of the
transactions
contemplated
hereby
and thereby
will not
(I) result
in a
violation
of the
Articles
of Incorporation,
any Certificate
of Designations,
Preferences
and Rights
of any
outstanding
series
of preferred
stock
of the
Company or the By-laws;
or (II)
conflict
with,
or constitute
a material
default
(or an event
which
with
notice
or lapse
of time
or both
would
become a material
default)
under,
or give
to others
any rights
of termination,
amendment,
acceleration
or cancellation
of, any material
agreement,
contract,
indenture
mortgage,
indebtedness
or instrument
to which
the Company or any
of its Subsidiaries
is a party,
or to the Company's
knowledge
result in
a violation
of any law,
rule,
regulation,
order, judgment
or decree
(including
United
States
federal
and state securities
laws
and regulations
and the rules
and regulations
of the Principal
Market or principal
securities
exchange
or trading
market
on which the
Common Stock
is traded
or listed)
applicable
to the
Company or any
of its
Subsidiaries
or by which
any property
or asset
of the
Company or any
of its
Subsidiaries
is bound
or affected.
Except
as disclosed
in Schedule

4(e),
neither the Company
nor its Subsidiaries is in violation
of any term of, or in default
under, the Articles of Incorporation,
any Certificate of Designations, Preferences
and Rights of any
outstanding
series of preferred
stock of the Company
or the By-laws
or their
organizational
charter  or  by-laws,  respectively,  or  any
contract,  agreement, 
mortgage,  indebtedness, indenture, instrument, judgment,
decree or order
or any statute, rule or regulation
applicable to the Company
or its Subsidiaries,
except for possible
conflicts, defaults, terminations,
amendments,
accelerations,
cancellations
and violations that would not individually
or in the
aggregate
have or constitute
a Material Adverse Effect. The business of the Company
and its Subsidiaries is not
being conducted,
and shall
not be conducted, in violation of any law,
statute,
ordinance, rule, order or
regulation of any governmental
authority
or agency, regulatory
or self- regulatory agency,
or court,
except for possible violations the sanctions for which
either individually
or in the aggregate would
not have
a Material Adverse Effect. Except
as specifically

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	10	 

    	 

    

contemplated
by this
Agreement
and as
required
under
the 1933
Act or
any securities
laws
of any states,
to the
Company's
knowledge,
the Company is
not required
to obtain
any consent,
authorization,
 permit
 or 
order  of,
 or  make
any filing
 or 
registration
 (except
 the filing
 of 
a registration
statement
as outlined
in the
Registration
Rights
Agreement
between
the Parties)
with,
any court,
governmental
authority
or agency,
regulatory
or self-regulatory
agency or
other third
party
in order
for it to
execute,
deliver
or perform
any of
its obligations
under,
or contemplated
by, the Equity
Line Transaction
Documents
in accordance
with
the terms
hereof
or  thereof.
 All consents,
 authorizations,
 permits,
 orders,
filings
and registrations
which the
Company is
required
to obtain
pursuant
to the preceding
sentence
have
been obtained
or effected
on or prior to the
date hereof
and are in full
force and effect
as of the date
hereof.
Except
as disclosed
in Schedule
4(e), the Company
and its
Subsidiaries
are unaware of
any facts
or circumstances
which
might
give
rise
to any
violation
or default
of any
of the foregoing.
The Company
is not,
and will
not be,
in violation
of the
listing
requirements
of the
Principal
Market
as in
effect
on the
date
hereof
and on each
of the
Closing
Dates
and is
not aware
of any facts
which
would
reasonably
lead
to delisting
of the
Common
Stock
by the Principal
Market
in the
foreseeable
future.

 

(F)
 SEC 
DOCUMENTS;
 FINANCIAL
 STATEMENTS.
 As 
of  the
date 
hereof,
 the Company
has filed
all reports,
schedules,
forms,
statements
and other
documents
required
to be filed
by it with
the SEC
pursuant
to the
reporting
requirements
of the
1934 Act
(all
of the
foregoing
filed
prior to
the date
hereof
and all
exhibits
included
therein
and financial
statements
and schedules
thereto
and documents
incorporated
by reference
therein
being  hereinafter
referred
 to 
as  the "SEC
 Documents").
 The 
Company has 
delivered
 to 
the  Investor
 or 
its representatives,
or they
have had
access through
the SEC’s
EDGAR
website
to, true
and complete
copies of
the SEC
Documents.
As of
their
respective
filing
dates,
the SEC
Documents
complied in
all material
respects
with
the requirements
of the
1934 Act
and the rules
and regulations
of the
SEC promulgated
thereunder
applicable
to the
SEC Documents,
and none
of the SEC
Documents,
at the time
they were
filed with
the SEC, contained
any untrue
statement
of a material
fact
or omitted
to state
a material
fact
required
to be stated
therein
or necessary
to make
the statements
therein,
in light
of the
circumstances
under
which
they
were made,
not misleading.
As of
their respective
dates, the
financial
statements
of the
Company
included
in the SEC
Documents
complied
as to form
in all
material
respects
with
applicable
accounting
requirements
and the
published
rules
and regulations
of the
SEC with
respect
thereto.
Such financial
statements
have
been prepared
in accordance
with
generally accepted
accounting
principles,
 and 
audited
by a  firm
 that 
is  a member
 a member
 of 
the  Public
 Companies
Accounting
 Oversight
 Board
 ("PCAOB")
 consistently
applied,
 during
 the 
periods
 involved
(except
(I) as may
be otherwise
indicated
in such financial
statements
or the notes
thereto,
or (II)
in the
case of
unaudited
interim
statements,
to the
extent
they
may exclude
footnotes
or may be
condensed
or summary
statements)
and fairly
present in
all
material
respects
the financial
position
of the
Company
as of
the dates
thereof
and the
results
of its
operations
and cash flows
for the
periods
then ended
(subject,
in the
case of unaudited
statements,
to normal
year-end
audit
adjustments).
No other
written
information
provided
by or on behalf
of the
Company
to the
Investor
which
is not
included
in the
SEC Documents,
including,
without
limitation,
information
referred
to in Section
4(D) of
this
Agreement,
contains
any untrue
statement
of a material
fact or
omits to
state any
material
fact
necessary
to make
the statements
therein,
in the
light
of the circumstance
under which
they
are or were
made, not
misleading.
Neither
the Company
nor any
of its
Subsidiaries
or any of
their
officers,
directors,
employees
or agents
have
provided
the Investor
with
any material,
nonpublic
information
which
was not
publicly
disclosed
prior to
the date
hereof
and any
material,
nonpublic
information
provided
to the
Investor
by the Company
or its
Subsidiaries
or any of
their
officers,
directors,
employees
or agents
prior to
any Closing
Date shall be
publicly
disclosed
by the Company
prior to such
Closing
Date.

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	11	 

    	 

    

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

 

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

 

(I)
ACKNOWLEDGMENT
REGARDING
INVESTOR'S PURCHASE
OF SHARES.
The Company acknowledges
and agrees
that the
Investor
is acting
solely
in the
capacity
of an arm's
length
purchaser
with
respect
to the Equity
Line Transaction
Documents
and the
transactions
contemplated
hereby
and thereby.
The Company
further
acknowledges
that
the Investor
is not
acting as
a financial
advisor
or fiduciary
of the
Company
(or in
any similar
capacity)
with
respect
to  the
 Equity
Line Transaction
 Documents
and  the
transactions
contemplated 
hereby
and thereby
and any
advice
given
by the Investor
or any of its
respective
representatives
or agents
in connection
with
the Equity
Line Transaction
Documents
and the
transactions
contemplated
hereby
and thereby
is merely
incidental
to the
Investor's
purchase
of the
Securities,
and is
not being
relied
on by the
Company.
The Company
further
represents
to the
Investor
that
the Company's
decision
to enter into
the Equity
Line Transaction
Documents
has been
based solely
on the independent
evaluation
by the
Company and
its
representatives.

 

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

 

(K)
 EMPLOYEE
 RELATIONS.
 Neither
 the 
Company
nor  any
 of  its
 Subsidiaries
 is involved
 in 
any union
 labor
 dispute
nor, 
to the
 knowledge
 of 
the  Company
or  any of
 its Subsidiaries,
is any
such dispute
threatened.
Neither
the Company
nor any
of its
Subsidiaries
is a party
to a collective
bargaining
agreement,
and the
Company and
its
Subsidiaries
believe
that relations
with
their
employees
are good.
No executive
officer
(as defined
in Rule
501(f)
of the

1933
Act)
has notified
the
Company that
such officer
intends to
leave
the Company's
employ or otherwise
terminate
such officer's
employment
with
the Company.

 

(L)
INTELLECTUAL
PROPERTY
RIGHTS.
The Company and
its
Subsidiaries
own or possess
adequate
rights
or licenses
to use
all trademarks,
trade
names,
service
marks,
service
mark
registrations,
service
names,
patents,
patent
rights,
copyrights,
inventions,
licenses, approvals,
governmental
authorizations,
trade
secrets
and rights
necessary
to conduct
their respective
businesses
as now
conducted.
Except
as set forth
in the
SEC Documents,
none of

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	12	 

    	 

    

the
Company's
trademarks,
trade names,
service
marks,
service
mark
registrations,
service names,
patents,
patent
rights,
copyrights,
inventions,
licenses, approvals,
government
authorizations,
trade
secrets
or other
intellectual
property rights
necessary
to conduct
its business
as now or as
proposed
to be
conducted
have expired
or terminated,
or are expected
to expire
or terminate
within
two
(2) years
from
the date
of this
Agreement.
The Company and
its Subsidiaries
do not
have
any knowledge
of any
infringement
by the
Company or
its
Subsidiaries
of trademark,
trade
name
rights,
patents,
patent
rights,
copyrights,
inventions,
licenses, service
names,
service
marks,
service
mark registrations,
trade
secret
or other
similar
rights
of others,
or of
any such development
of similar
or identical
trade secrets
or technical
information
by others and,
except
as set forth
in the
SEC Documents,
there
is no claim,
action or
proceeding
being made
or brought
against,
or to the
Company's
knowledge,
being
threatened
against,
the Company or
its
Subsidiaries
regarding
trademark,
trade
name,
patents,
patent rights,
invention,
copyright,
license, service
names, service
marks, service
mark registrations,
trade
secret or other infringement;
and the
Company
and its
Subsidiaries
are unaware
of any facts
or circumstances
which
might
give
rise
to any
of the
foregoing.
The Company
and its
Subsidiaries
have taken
commercially
reasonable
security
measures to
protect the
secrecy, confidentiality
and value
of all of
their
intellectual
properties.

 

(M)
ENVIRONMENTAL
LAWS.
The Company and
its
Subsidiaries
(I)
are,
to the
knowledge
of the
Company
and its
Subsidiaries,
in compliance
with
any and
all applicable
foreign,
federal,
state
and local
laws
and regulations
relating
to the protection
of human
health and
safety,
the environment
or hazardous
or toxic
substances
or wastes,
pollutants or contaminants
("Environmental
Laws");
(II)
have,
to the
knowledge
of the
Company,
received
all permits,
licenses or
other approvals
required
of them
under
applicable
Environmental
Laws
to conduct
 their 
respective
businesses;
 and
(III)
 are in compliance,
 to the knowledge
of  the
Company,
with
all terms
and conditions
of any such
permit,
license
or approval
where,
in each
of the
three (3)
foregoing
cases,
the failure
to so comply
would
have,
individually
or in
the aggregate,
a Material
Adverse
Effect.

 

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

 

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

 

(P)
REGULATORY
PERMITS.
The Company
and its
Subsidiaries
have
in full
force
and

 

    	ELED INVESTMENT AGREEMENT JULY.2014	13	 

    	 

    

effect
all certificates,
approvals,
authorizations
and permits
from
the appropriate
federal,
state,
local
or foreign
regulatory
authorities
and comparable
foreign
regulatory
agencies,
necessary
to own, lease
or operate their
respective
properties and
assets and
conduct
their respective
businesses,
and neither
the Company
nor any
such Subsidiary
has received
any notice
of proceedings
relating
to the revocation
or modification
of any
such certificate,
approval,
authorization
or permit,
except
for such certificates,
approvals,
authorizations
or permits
which
if not
obtained,
or such
revocations
or modifications
which,
would
not have
a Material
Adverse Effect.

 

(Q)
INTERNAL
ACCOUNTING
CONTROLS.
The
Company and
each of
its
Subsidiaries
maintain
a system
of internal
accounting
controls
sufficient
to provide
reasonable
assurance
that
(I) transactions
are executed
in accordance
with
management's
general
or specific
authorizations;
(II)
transactions
are recorded
as necessary
to permit
preparation
of financial
statements
 in 
conformity
with 
generally
accepted  accounting
 principles
 by a  firm
 with
membership
to the PCAOB
and to maintain
asset accountability;
(III)
reasonable
controls
to safeguard
assets
are in
place;
and (IV)
the recorded
accountability
for assets
is compared
with
the existing
assets at
reasonable
intervals
and appropriate
action is
taken
with
respect
to any differences.

 

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

 

(S)
TAX
STATUS.
The Company
and each
of its
Subsidiaries
has made
or filed
all United
States
federal
and state
income
and all
other tax returns,
reports
and declarations
required
by any jurisdiction
to which
it  is
 subject
 (unless and
only to the
extent
 that 
the Company and 
each  of
 its
 Subsidiaries
 has 
set  aside
 on  its
 books
 provisions
 reasonably
adequate
for
the payment
of all
unpaid
and unreported
taxes)
and has
paid
all taxes
and other governmental
assessments
and charges
that
are
material
in amount,
shown or determined
to be due
on such returns,
reports
and declarations,
except
those
being contested
in good
faith
and has set aside
on its books
provision
reasonably
adequate
for the payment
of all
taxes for
periods
subsequent
to the periods
to which
such returns,
reports
or declarations
apply.
There
are no unpaid
taxes
in any
material
amount claimed
to be
due by the
taxing
authority
of any jurisdiction,
and the
officers
of the
Company
know
of no basis
for any
such claim.

 

(T)
CERTAIN
TRANSACTIONS.
Except
as set forth
in the
SEC Documents
filed
at least
ten (10)
days
prior to
the date
hereof
and except
for arm's
length
transactions
pursuant
to which
the Company makes
payments
in the
ordinary
course
of business
upon terms
no less favorable
than
the Company
could obtain
from disinterested
third
parties
and other
than
the grant
of stock
options
disclosed
in the
SEC Documents
or stock
options
granted
in the future
as contemplated
by current
compensation
agreements
or plans
disclosed
in the
SEC Documents,
none of
the officers,
directors,
or employees
of the
Company is
presently a party
to any
transaction
with
the Company or 
any  of
 its
Subsidiaries
 (other
 than for
 services
 as employees,
 officers
 and directors),
including
any contract,
agreement
or other arrangement
providing
for the
furnishing
of services
to or
by, providing
for rental
of real
or personal
property
to or from,
or otherwise
requiring
payments
to or from
any officer,
director
or such employee
or, to
the knowledge
of the
Company,
any corporation,
partnership,
trust
or other entity
in which
any officer,
director,
or any

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	14	 

    	 

    

such employee
has a substantial
interest
or is an
officer,
director,
trustee
or partner.

 

(U)
DILUTIVE
EFFECT.
The Company
understands
and acknowledges
that
the number
of shares
of Common
Stock issuable
upon purchases
pursuant
to this
Agreement
will
increase in
certain
circumstances
including,
but not
necessarily
limited
to, the
circumstance
wherein
the trading
price
of the
Common
Stock
declines
during
the period
between
the Effective
Date and the
end of the Open
Period.
The Company's
executive
officers
and directors
have studied
and fully
understand
the nature
of the
transactions
contemplated
by this
Agreement
and recognize
that
they
have
a potential
dilutive
effect
on the shareholders
of the
Company.
The Board
of Directors
of the
Company has
concluded,
in its
good faith
business
judgment,
and with
full understanding
of the
implications,
that such
issuance
is in the
best interests
of the
Company. The
Company
specifically
acknowledges
that,
subject
to such limitations
as are expressly
set forth
in the
Equity
Line Transaction
Documents,
its obligation
to issue
shares
of Common
Stock
upon purchases
pursuant
to this
Agreement
is absolute
and unconditional
regardless
of the
dilutive
effect
that
such issuance
may have
on the
ownership
interests
of other
shareholders
of the
Company.

 

(V)
LOCK-UP.
The Company
shall cause
its
officers
and directors
to refrain
from selling

Common
Stock
during
each Pricing
Period.

 

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

 

(X)
NO BROKERS,
FINDERS
OR FINANCIAL
ADVISORY
FEES OR COMMISSIONS.
No brokers,
finders
or financial
advisory
fees
or commissions
will
be payable
by the
Company, its
agents
or Subsidiaries,
with
respect
to the transactions
contemplated
by this
Agreement,
except
as otherwise
disclosed
in this
Agreement.

 

SECTION
5.  COVENANTS
OF THE
COMPANY

 

(A)
 EFFORTS.
The Company
shall use
all commercially
reasonable
efforts
to timely
satisfy
each of the
conditions
set forth
in Section
8 of this
Agreement.

 

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

 

(C)
 REPORTING
STATUS.
Until one
of the
following
occurs,
the Company
shall file
all reports
required
to be
filed
with
the SEC
pursuant
to the
1934 Act,
and the
Company shall
not terminate
its status,
or take
an action
or fail
to take
any action,
which
would
terminate
its status
as a reporting
company
under
the
1934 Act:
(1) this
Agreement
terminates
pursuant
to Section
9, or (2)
the date
on which
the Investor
has sold
all the
Securities;
provided
that the
Investor shall
promptly
notify
the Company
after
the Investor has
sold all the
Securities.

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	15	 

    	 

    

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

 

(E)
 FINANCIAL
INFORMATION.
During
the Open
Period,
the Company agrees
to make
available
to the Investor
via
the SEC’s
EDGAR
website
or other electronic
means the
following
documents
and information
on the forms
set forth:
(1)
within
five
(5) Trading
Days
after the
filing
thereof
with
the SEC,
a copy
of its
Annual
Reports
on Form
10-K,
its
Quarterly
Reports
on Form
10-Q,
any Current
Reports
on Form
8-K and
any Registration
Statements
or amendments
filed
pursuant
to the
1933 Act;
(2) copies
of any
notices
and other
information
made available
or given
to the
shareholders
of the
Company generally,
contemporaneously
with
the making
available
or giving
thereof
to the shareholders;
and (3) within
two (2)
calendar
days of
filing or delivery
thereof,
copies of all
documents filed
with,
and all correspondence
sent to,
the Principal
Market,
any securities
exchange
or market,
or the Financial
Industry
Regulatory
Authority,
unless such
information
is material
nonpublic
information.

 

(F)
 RESERVATION
OF SHARES.
The
Company
shall
reserve
5,000,000
Shares
for the
issuance
of the
Securities
to the
Investor
as required
hereunder.
In the
event
that
the Company determines
that it
does not
have
a sufficient
number
of authorized
shares
of Common
Stock
 to reserve
 and 
keep  available
 for 
issuance
 as  described
 in 
this 
Section 
5(F),  the Company
shall use
all
commercially
reasonable
efforts
to increase
the number
of authorized
shares 
of  Common
 Stock
 by seeking
 shareholder
 approval
 for
 the authorization
 of 
such additional
shares.

 

(G)
 LISTING.
The Company
shall promptly
secure and
maintain
the listing
of all
of the Registrable
Securities
(as defined
in the Registration
Rights
Agreement)
on the Principal
Market
and each
other
national
securities
exchange
and automated
quotation
system,
if any, upon
which
shares
of Common
Stock
are then
listed
(subject
to official
notice of
issuance)
and shall
maintain,
such listing
of all
Registrable
Securities
from time
to time
issuable
under the
terms
 of 
the  Equity
Line  Transaction
 Documents.
 Neither
 the 
Company
nor  any
of its Subsidiaries
shall take
any action which
would be
reasonably
expected
to result
in the delisting
or suspension
of the Common
Stock
on the Principal
Market
(excluding
suspensions
of not more
than
one (1)
trading
day resulting
from
business
announcements
by the
Company).
The Company shall
promptly provide
to the
Investor
copies of
any notices
it receives
from the Principal
Market
regarding
the continued
eligibility
of the
Common
Stock
for
listing
on such automated
quotation
system or securities
exchange.
The Company
shall pay all
fees and
expenses
in connection
with satisfying
its
obligations
under this
Section 5(G).

 

(H)
 TRANSACTIONS
WITH
AFFILIATES.
The Company
shall not,
and shall
cause each 
of  its
Subsidiaries
 not 
to,  enter
into,  amend,
 modify
or  supplement,
 or permit
 any Subsidiary
 to enter
 into, 
amend,
 modify
 or  supplement,
 any 
agreement,
 transaction,
commitment
or arrangement
with
any of
its
or any Subsidiary's
officers,
directors,
persons
who were
officers
or directors
at any time
during
the
previous
two
(2) years,
shareholders
who beneficially
own
5% or more
of the
Common
Stock,
or Affiliates
or with
any individual
related by blood,
marriage
or adoption
to any
such individual
or with
any entity
in which
any such entity
or individual
owns
a 5% or
more
beneficial
interest
(each
a “Related
Party”),
except
for
(1) customary
employment
arrangements
and benefit
programs
on reasonable
terms,
(2)
any agreement,
transaction,
commitment
or arrangement
on an arms-length
basis
on terms
no less favorable
than terms
which
would have
been obtainable
from a disinterested
third
party
other

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	16	 

    	 

    

than
such Related
Party,(3)
any agreement,
transaction,
commitment
or arrangement
which
is approved
by a majority
of the
disinterested
directors
of the
Company,
or (4) extensions
or amendments
of any
existing
employment
agreement.
For purposes
hereof,
any director
who is
also an
officer
of the
Company
or any
Subsidiary
of the
Company shall
not be
a disinterested
director
with
respect to
any such
agreement,
transaction,
commitment
or arrangement.
“Affiliate”
for purposes
hereof
means,
with
respect
to any
person
or entity,
another
person
or entity
that, directly
or indirectly,
(1) has
a 5% or
more equity
interest
in that
person
or entity,
(2) has
5% or more
common ownership
with that
person or
entity,
(3) controls
that person
or entity,
or (4)
is under
common
control with
that
person
or entity.
“Control”
or “Controls”
for
purposes
hereof
means
that
a person
or entity
has the
power,
directly or
indirectly,
to conduct
or govern
the policies
of another
person
or entity.

 

(I)
 FILING
OF FORM
8-K.
On or before
the date
which
is four
(4) Trading
Days
after the
date
of execution
of this
Agreement,
the Company
shall file
a Current
Report
on Form
8-K with
 the 
SEC  describing
 the 
terms
 of 
the transaction
 contemplated
 by the 
Equity
 Line Transaction
Documents
in the
form
required
by the
1934 Act,
if such
filing
is required.

 

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

 

(K)
 NOTICE
OF CERTAIN
EVENTS
AFFECTING
REGISTRATION;
SUSPENSION OF
RIGHT
TO MAKE
A PUT.
The Company
shall promptly
notify
the Investor
upon the occurrence
of any
of the
following
events
in respect
of a Registration
Statement
or related
prospectus in
respect of
an offering
of the
Securities:
(1) receipt
of any
request
for
additional
information
by the SEC
or any
other federal
or state
governmental
authority
during
the period
of effectiveness
of the
Registration
Statement
for
amendments
or supplements
to the
Registration
Statement
or related
prospectus;
(2) the
issuance
by the SEC
or any
other federal
or state
governmental
authority
of any
stop order
suspending
the effectiveness
of any
Registration
Statement
or the initiation
of any
proceedings
for that
purpose;
(3) receipt
of any
notification
with
respect
to the
suspension
of the
qualification
or exemption
from qualification
of any
of the
Securities
for sale
in any
jurisdiction
or the initiation
or notice
of any
proceeding for such
purpose;
(4) the
happening
of any
event
that
makes any
statement
made in
such Registration
Statement
or related
prospectus
or any
document
incorporated
or deemed
to be
incorporated
therein
by reference
untrue
in any material
respect or that
requires
the making
of any changes
in the Registration
Statement,
 related prospectus
or  documents
so that, 
in the case of
 a Registration
Statement,
it will
not contain
any untrue
statement
of a material
fact
or omit
to state
any material
fact required
to be
stated
therein
or necessary
to make
the statements
therein
not misleading,
 and 
that 
in the 
case of  the
related
 prospectus,
 it 
will 
not  contain
 any untrue
statement
of a
material
fact or
omit
to state
any material
fact required
to be
stated therein
or necessary
to make
the statements
therein,
in the
light
of the
circumstances
under
which
they were
made, not
misleading;
and (5)
the Company's
reasonable
determination
that
a post-
effective
amendment to the
Registration
Statement
would be appropriate,
and the Company
shall promptly
make
available
to Investor
any such
supplement
or amendment
to the
related prospectus.
 The 
Company
shall  not
 deliver
 to 
the  Investor
 any Put
 Notice 
during
 the continuation
of any
of the
foregoing
events
in this
Section 5(K).

 

(L)
 REIMBURSEMENT.
 If
(I) the
Investor becomes
involved
in any
capacity
in any
action, proceeding
or investigation
brought
by any shareholder
of the
Company,
in connection
with
or as a
result
of the
consummation
of the
transactions
contemplated
by the
Equity
Line Transaction
Documents,
or if
the Investor
is impleaded
in any such action,
proceeding
or investigation
by any
person
(other than
as a result
of a breach of the
Investor’s
representations

 
  

    	ELED INVESTMENT AGREEMENT JULY.2014	17	 

    	 

    

and
warranties
set forth
in this
Agreement);
or (II)
the Investor
becomes
involved
in any
capacity
in any
action, proceeding
or investigation
brought
by the SEC
against
or involving
the Company
(unless
the Company
is involved
in the
action, proceeding
or investigation
as a witness
only)
or in connection
with
or as a
result
of the
consummation
of the
transactions
contemplated
by the Equity
Line Transaction
Documents
(other than
as a result
of a
breach
of the
Investor’s
representations
and warranties
set forth
in this
Agreement),
or if this
Investor
is impleaded
in any 
such  action, 
proceeding 
or  investigation
by  any 
person,
 then
 in 
any  such 
case,  the
Company will
reimburse
the Investor for
its
actual, reasonable
legal
and other
expenses
(including
the cost of any
investigation
and preparation)
incurred
in connection
therewith,
as such expenses
are incurred.
In addition,
other than
with
respect
to any
matter
in which
the Investor
is a
named
party,
the Company
will
pay to
the Investor
the charges,
as reasonably
determined
by the Investor,
for the time
of any
officers or
employees
of the
Investor
devoted
to appearing
and preparing
to appear
as witnesses,
assisting
in preparation
for hearings,
trials
or pretrial
matters,
or otherwise
with
respect to
inquiries,
hearing,
trials,
and other
proceedings
relating
to the
subject
matter
of this
Agreement.
The reimbursement
obligations
of the
Company
under
this
section shall
be in addition
to any
liability
which
the Company
may otherwise
have, shall
extend
upon the same terms
and conditions
to any affiliates
of the Investor
that are
actually named
in such
action, proceeding
or investigation,
and partners,
directors,
agents,
employees,
attorneys,
accountants,
auditors
and controlling
persons
(if any),
as the case may
be, of
Investor
and any
such affiliate,
and shall
be binding
upon and
inure
to the
benefit
of any
successors of
the Company,
the Investor
and any such
affiliate
and any such
person.
 However,
in all
events,
if the Investor
is found
to be guilty
of violations
of the federal
or state securities
laws
(or pleads
“no contest”
or other
similar
plea or
settles an
investigation
or pleading
without
a specific
finding
of liability
but is
still
subject
to civil
or criminal
liability),
the Company
will
have
no responsibility
to pay
any of
the Investor’s
fees
and expenses
regardless
of whether
or not
the Company
is or
is also
found
to have
liability.

 

(M)
 TRANSFER
AGENT.
Upon
effectiveness
of the
Registration
Statement,
and for
so long
as the
Registration
Statement
is effective,
the Company
shall deliver
instructions
to its
transfer
agent
to issue Shares
to the Investor
that
are covered for
resale
by the Registration
Statement
free of
restrictive
legends.

 

(N)
 ACKNOWLEDGEMENT
 OF TERMS.
 The 
Company hereby
 represents
 and warrants
to the
Investor
that: (1)
it is
voluntarily
entering
into this
Agreement
of its
own freewill,
(2) it
is not
entering
this Agreement
under
economic
duress,
(3) the
terms
of this
Agreement
are reasonable
and fair
to the
Company, and
(4) the
Company has
had independent
legal
counsel of
its
own choosing
review
this
Agreement,
advise
the Company
with
respect
to this
Agreement,
and represent
the Company
in connection
with
this
Agreement.

 

SECTION
6.  CONDITIONS
OF THE
COMPANY'S
OBLIGATION
TO SELL.
 The
obligation
hereunder
of the
Company
to issue
and sell
the Securities
to the
Investor
is further
subject to
the satisfaction,
at or before
each Closing
Date, of
each of the
following
conditions
set forth
below.
These conditions
are for the Company's
sole benefit
and may
be waived
by the Company
at any
time
in its
sole discretion.

 

(A)
 The Investor
shall have
executed
this
Agreement
and the
Registration
Rights

Agreement
and delivered
the same to
the Company.

 

(B)
 The
Investor
shall have
delivered
to the
Company
the Purchase
Price
for the
Securities
being
purchased
by the
Investor
between
the end
of the
Pricing
Period
and the
Closing
Date via
a Put Settlement
Sheet (hereto
attached as Exhibit
D). Immediately
after

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	18	 

    	 

    

receipt
of confirmation
of delivery
of such Securities
to the
Investor,
the Investor,
by wire
transfer
of immediately
available
funds pursuant
to the
wire
instructions
provided
by the Company,
will
disburse
the funds
constituting
the Purchase
Amount.

 

(C)
 The representations
and warranties
of the
Investor
shall be
true
and correct
in all
material
respects
as of
the date
when
made
and as of
the applicable
Closing
Date as
though
made at
that time
and the
Investor
shall have
performed,
satisfied
and complied in
all material
respects
 with
 the 
covenants, 
agreements
 and 
conditions
 required
by  the  Equity
 Line Transaction
Documents
to be
performed,
satisfied
or complied
with
by the
Investor
on or before
such Closing
Date.

 

(D)
 No
statute,
rule,
regulation,
executive
order, decree,
ruling
or injunction
shall have
been enacted,
entered,
promulgated
or endorsed
by any
court
or governmental
authority
of competent
jurisdiction
which
prohibits
the consummation
of any of
the transactions
contemplated
by this
Agreement.

 

SECTION
7.  FURTHER
CONDITIONS
OF THE
INVESTOR'S
OBLIGATION
TO PURCHASE.
The obligation
of the
Investor
hereunder
to purchase
Shares
is subject
to the
satisfaction,
on or before each
Closing
Date,
of each
of the
following
conditions
set forth
below.

 

(A)
 The Company
shall have
executed
the Equity
Line Transaction
Documents
and

Commitment
Shares
and delivered
the same
to the
Investor.

 

(B)
 The
Common
Stock
shall be
authorized
for quotation
on the Principal
Market and
trading
in the
Common
Stock
shall not
have
been suspended
by the Principal
Market
or the
SEC, at
any time
beginning
on the date
hereof
and through
and including
the respective
Closing Date
(excluding
suspensions
of not
more
than one
(1) Trading
Day resulting
from
business
announcements
by the Company,
provided
that
such suspensions
occur prior
to the
Company's
delivery
of the
Put Notice
related
to such
Closing).

 

(C)
 The
representations
and warranties
of the
Company
shall be
true and
correct
in all material
respects
as of the
date
when
made
and as
of the
applicable
Closing
Date as
though made
at that
time
and the
Company shall
have
performed,
satisfied
and complied
in all
material
respects
 with
 the 
covenants, 
agreements
 and 
conditions
 required
by  the  Equity
 Line Transaction
Documents
to be
performed,
satisfied
or complied with
by the
Company on
or before such
Closing Date.
The Investor
 may request
an update
as of  such Closing
 Date
regarding
the representation
contained
in Section
4(C) above.

 

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

 

(E)
 The Board
of Directors
of the
Company shall
have adopted
resolutions
consistent
with
Section
4(B)(2)
above
(the “Resolutions”)
and such
Resolutions
shall not
have
been amended or
rescinded
prior
to such
Closing
Date.

 

(F)
 No
statute,
rule,
regulation,
executive
order, decree,
ruling
or injunction
shall have
been enacted,
entered,
promulgated
or endorsed
by any court
or governmental
authority
of competent
jurisdiction
which
prohibits
the consummation
of any of
the transactions
contemplated
by this
Agreement.

 

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	19	 

    	 

    

(G)
 The
Registration
Statement
shall be effective
on each
Closing
Date and
no stop order
suspending
the effectiveness
of the
Registration
statement
shall be
in effect
or to the
Company's
knowledge
shall
be pending
or threatened.
Furthermore,
on each
Closing
Date
(1) neither
the Company
nor the
Investor
shall have
received
notice
that
the SEC
has issued
or intends to
issue a
stop
order with
respect
to such Registration
Statement
or that
the SEC
otherwise
has suspended
or withdrawn
the effectiveness
of such Registration
Statement,
either
temporarily
or permanently,
or intends
or has
threatened
to do so
(unless the
SEC's
concerns have
been addressed
and Investor
is reasonably
satisfied
that
the SEC
no longer
is considering
or intends
to take
such action), and
(2)
no other
suspension
of the
use or withdrawal
of the effectiveness
of such
Registration
Statement
or related
prospectus
shall exist.

 

(H)
 At
the time
of each
Closing,
the Registration
Statement
(including
information
or documents
incorporated
by reference
therein)
and any
amendments or
supplements
thereto
shall not
contain
any untrue
statement
of a material
fact or omit
to state
any material
fact required
to be
stated therein
or necessary
to make
the statements
therein
not misleading
or which
would require
public disclosure
or an
update
supplement to
the prospectus.

 

(I)
 If
applicable,
the shareholders
of the
Company shall
have
approved
the issuance
of any
Shares
in excess
of the
Maximum
Common
Stock
Issuance
in accordance
with
Section

2(H)
or the
Company shall
have
obtained
appropriate
approval
pursuant
to the
requirements
of

Delaware
law and
the Company’s
Articles
of Incorporation
and By-laws.

 

(J)
 The
conditions
to such
Closing
set forth
in Section
2(E) shall
have
been satisfied
on or before
such Closing
Date.

 

(K)
 The Company
shall  have
 certified
to the Investor
 the number
 of 
Shares
of Common
Stock
outstanding
when a
Put Notice
is given
to the Investor.
 The
Company's
delivery of
a Put
Notice
to the
Investor constitutes
the Company's
certification
of the
reservation
for issuance
of the
necessary
number
of shares
of Common
Stock
subject
to a Put
Notice.

 

SECTION
8.  TERMINATION.
 This
 Agreement
 shall 
terminate
 upon 
any  of
 the 
following
events:

 

(A)
 when
the Investor
has purchased
an aggregate
of five
million
dollars $5,000,000
in the
Common
Stock
of the
Company
pursuant
to this
Agreement;
or,

 

(B)
 on the
date
which is
thirty-six
(36) months
after
the Effective
Date; or,

 

(C)
 upon written
notice
of the
Company to
the Investor.
Any and
all shares,
or penalties,
if any,
due under
this
Agreement
shall be
immediately
payable
and due
upon termination
of this
Agreement.

 

SECTION
9.  SUSPENSION.
 The
Company’s
right
to cause
the Investor
to purchase
Shares
pursuant
to a Put
Notice, and the
Investor’s
obligation
to purchase
Shares
under
this
Agreement
shall be
suspended
upon
any of the
following
events,
and shall
remain suspended
until
such event
is rectified:

 

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

 

 

 

 

 
 
    	ELED INVESTMENT AGREEMENT JULY.2014	20	 

    	 

    

(B)
 The Common
Stock
ceases
to be
registered
under
the 1934
Act or
listed
or traded
on the
Principal
Market.
 Immediately
upon the
occurrence
of one
of the
above-described
events,
the Company
shall send
written
notice
of such event
to the
Investor.

 

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

 

SECTION
11. GOVERNING
LAW;
DISPUTES
SUBMITTED
TO ARBITRATION.
All disputes
arising under
this
agreement
shall be governed
by and interpreted
in accordance
with
the laws
of the
Commonwealth
of Massachusetts,
without
regard
to principles
of conflict
of laws.
The parties
to this
agreement
will
submit
all disputes
arising under
this agreement
to arbitration
in Boston, MA
before a single
arbitrator
of the American
Arbitration
Association
(“AAA”).
The arbitrator
shall be selected
by application
of the rules
of the AAA,
or by mutual
agreement
of the
parties,
except
that
such arbitrator
shall be an attorney
admitted
to practice
law in Commonwealth
of Massachusetts.
No party
to this Agreement
will
challenge
the jurisdiction
or venue
provisions
as provided
in this
section. No
party to
this agreement
will challenge
the jurisdiction
or venue
provisions
as provided
in this
section. Nothing
contained
herein
shall prevent
the party
from obtaining
an injunction.

 

LEGAL
EXPENSES;
FEE SHARES
AND MISCELLANEOUS
EXPENSES.
Except
as otherwise
set forth
in the
Equity
Line Transaction
Documents,
each party
shall pay
the fees
and expenses

 

    	ELED INVESTMENT AGREEMENT JULY.2014	21	 

    	 

    

of
its
advisers,
counsel, the
accountants
and other
experts,
if any,
and all
other expenses
incurred
by such party
incident
to the
negotiation,
preparation,
execution,
delivery
and performance
of this
Agreement.
Any attorneys'
fees
and expenses
incurred
by either
the Company or
the Investor
in connection
with
the preparation,
negotiation,
execution
and delivery
of any
amendments to this
Agreement
or relating
to the
enforcement
of the
rights
of any
party,
after
the occurrence
of any
breach of the
terms
of this
Agreement
by another
party
or any default
by another party
in respect
of the
transactions
contemplated
hereunder,
shall be
paid on demand
by the party
which
breached the
Agreement
and/or defaulted,
as the case may
be. The
Company shall pay
all stamp and
other
taxes and
duties
levied
in connection
with
the issuance
of any
Securities.
The Company
has paid
fifteen
thousand
dollars ($15,000)
for
the preparation
of the
Equity
Line Transaction
Documents.
 If
the Company
is not
DWAC eligible
at the
time
of a Put
Closing, there
will
be a $2,000
charge
on each
Closing
Date
to cover
costs associated
with,
but not limited
to: deposit
costs, legal
review
fees and
wire
fees. If
the Company is
DWAC eligible
at the time
of a Put
Closing,
there
will be
a $500 charge
on each Closing
Date.

 

SECTION
12. COUNTERPARTS.
This
Agreement
may be
executed
in two
or more
identical
counterparts,
all of
which
shall be considered
one and
the same
agreement
and shall
become effective
when
counterparts
have
been signed
by each
party and
delivered
to the
other
party;
provided
that a
facsimile
signature
shall be considered
due execution
and shall
be binding
upon the signatory
thereto
 with
 the  same force
 and 
effect
 as  if
 the 
signature
 were 
an  original
signature.

 

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

 

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

 

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

 

SECTION
16. NOTICES.
Any notices
or other
communications
required
or permitted
to be given
under
the terms
of this
Agreement
must
be in
writing
and will
be deemed
to have
been delivered
(A)
upon receipt,
when delivered
personally;
(B)
upon receipt,
when sent
by facsimile
or  email 
with
 the 
signed 
document 
attached
 in 
PDF format
 (provided
 confirmation
of transmission
is mechanically
or electronically
generated
and kept
on file by the
sending party);
or (C)
one (1)
day after deposit
with
a nationally
recognized
overnight
delivery
service,
in each
case  properly
 addressed 
to  the
party
 to  receive
 the 
same. The  addresses
 and 
facsimile
numbers
for such
communications
shall be:

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	22	 

    	 

    

If
to the
Company:

 

ENERGIE
HOLDINGS,
INC.

4885
Ward
Road,
Suite
300

Wheat
Ridge,
Colorado
80033

Telephone:
(720)
963-8055

 

If
to the
Investor:

 

Dutchess
Opportunity
Fund, II,
LP

50
Commonwealth
Avenue,
Suite
2

Boston,
MA 02116

Telephone:
(617)
301-4700

 

 

 

 

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

 

SECTION
17. NO
ASSIGNMENT.
This
Agreement
and any
rights,
agreements
or obligations
hereunder
may not
be assigned,
by operation
of law,
merger
or otherwise,
and any
purported
assignment
by a party
without
prior written
consent
of the other party
will
be null and
void
and not 
binding on 
such  other
 party.
Subject
 to 
the  preceding
sentence,
 all 
of the terms,
agreements,
 covenants,
 representations,
 warranties
 and 
conditions
of  this
 Agreement
 are binding
upon,
and inure
to the
benefit
of and
are enforceable
by, the
parties
and their
respective
successors and
assigns.

 

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

 

SECTION
19. SURVIVAL.
The indemnification
provisions
set forth
in Section
11, shall
survive
each of
the Closings
and the
termination
of this
Agreement.

 

SECTION
20. PUBLICITY.
The Company
and the
Investor
shall
consult
with
each other
in issuing
any press releases
or otherwise
making
public
statements
with
respect
to the
transactions
contemplated
hereby
and no
party
shall issue
any such press
release
or otherwise
make
any such public
statement
without
the prior
consent of
the other
party,
which consent
shall not
be unreasonably
withheld
or delayed,
except
that no
prior
consent
shall
be required
if such
disclosure
is required
by law,
in which
such case the disclosing
party
shall provide
the other party
with
prior notice
of such public
statement.
The Investor
acknowledges
that this
Agreement
and all
or part
of the Equity
Line Transaction
Documents
may be deemed
to be “material
contracts”
as that
term
is defined
by Item
601(b)(10)
of Regulation
S-B,
and that
the Company may
 therefore
 be  required
 to file
 such  documents
 as  exhibits
 to 
reports
 or 
registration
statements
filed
under
the
1933 Act
or the
1934 Act.
The Investor
further
agrees
that
the status
of such documents
and materials
as material
contracts
shall be determined
solely by
the Company,
in consultation
with
its counsel.

 

SECTION
21. FURTHER
ASSURANCES.
Each party
shall do
and perform,
or cause
to be done
and performed,
all such
further
acts
and things,
and shall
execute
and deliver
all such

 

    	ELED INVESTMENT AGREEMENT JULY.2014	23	 

    	 

    

other
agreements,
certificates,
instruments
and documents,
as the
other
party
may reasonably
request
in order
to carry
out the
intent and
accomplish
the purposes
of this
Agreement
and the
consummation
of the
transactions
contemplated
hereby.

 

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

 

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

 

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

 

SECTION
25. PRICING
OF COMMON
STOCK.
For purposes
of this
Agreement,
the VWAP
of the
Common
Stock
shall be
as reported
on a direct
feed service.

 

SECTION
26. NON-DISCLOSURE
OF NON-PUBLIC
INFORMATION.

 

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

 

(B)
 Nothing
herein
shall require
the Company
to disclose
non-public
information
to the Investor
or its
advisors
or representatives,
provided,
however,
that
notwithstanding
anything
herein
to the
contrary,
the Company will,
as hereinabove
provided,
immediately
notify
the advisors
and representatives
of the
Investor
and,
if any,
underwriters,
of any event
or the existence
of any
circumstance
(without
any obligation
to disclose
the specific
event
or circumstance)
of which
it becomes
aware, constituting
non-public
information
(whether
or not requested
of the
Company specifically
or generally
during
the course
of due
diligence
by such persons
or entities),
which, if
not disclosed
in the prospectus
included
in the Registration
Statement
would cause such
prospectus
to include
a material
misstatement
or to
omit a material
fact required
to be
stated
therein
in order
to make
the statements,
therein,
in light
of the
circumstances
in which
they
were made,
not misleading.
Nothing
contained
in this
Section
29 shall be
construed
to mean
that
such persons
or entities
other
than the
Investor
(without
the written
consent
of the
Investor
prior to
disclosure
of such information)
may
not obtain
non-public

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	24	 

    	 

    

information
in the
course
of conducting
due diligence
in accordance
with
the terms
of this
Agreement
and nothing
herein
shall prevent
any such
persons
or entities
from
notifying
the Company
of their
opinion
that
based on
such due
diligence
by such persons
or entities,
that the
Registration
Statement
contains
an untrue
statement
of material
fact
or omits a material
fact required
to be stated
in the
Registration
Statement
or necessary
to make
the statements
contained
therein,
in light
of the
circumstances
in which
they
were made,
not misleading.

 

SECTION
27. ACKNOWLEDGEMENTS
OF THE
PARTIES.
 Notwithstanding
anything
in this
Agreement
to the
contrary,
the parties
hereto
hereby
acknowledge
and agree
to the
following:
(A)
the Investor
makes no
representations
or covenants
that
it will
not engage
in trading
in the
securities
of the
Company,
other than
the Investor
will
not sell
short
any of the
Company's
common stock
at any
time
during
a Pricing
Period;
(B)
the Company
shall, by
8:30 a.m.
Boston Time
on the fourth
Trading
Day following
the date
hereof,
file
a current
report
on Form
8-K disclosing
the material
terms
of the
transactions
contemplated
hereby
and in
the other
Equity
Line Transaction
Documents;
(C) the
Company has
not and shall
not provide
material
non- public
information
to the
Investor
unless prior
thereto
the Investor
shall have
executed
a written
agreement
regarding
the
confidentiality
and use
of such information;
and (D)
the Company
understands
and confirms
that
the Investor
will
be relying
on the acknowledgements
set forth
in clauses
(A)
through
(C) above
if the
Investor
effects
any transactions
in the
securities
of the
Company.

 

[Signature
Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	25	 

    	 

    

SIGNATURE
PAGE
OF INVESTMENT
AGREEMENT

 

Your
signature
on this
Signature
Page
evidences
your
agreement
to be
bound
by the terms
and conditions
of the
Investment
Agreement
and the
Registration
Rights
Agreement
as of the date
first
written
above.

 

The
undersigned
signatory
hereby
certifies
that
he has
read
and understands
the Investment
Agreement,
and the
representations
made
by the
undersigned
in this
Investment
Agreement
are
true and
accurate,
and agrees
to be
bound by
its terms.

 

DUTCHESS
OPPORTUNITY
FUND,
II,
L.P.

 

 

 

 

 

	 	By: 	 
	 	Douglas H. Leighton	 
	 	Managing Member of:	 
	 	Dutchess Capital Management, II, LLC General Partner to:	 
	 	Dutchess Opportunity Fund, II, LP	 

 

 

 

	 	ENERGIE HOLDINGS, INC.	 
	 	 	 
	 	 	 
	 	By:	 
	 	Harold Hansen	 
	 	Cheif Executive Officer 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    	ELED INVESTMENT AGREEMENT JULY.2014	26	 

    	 

    

LIST
OF EXHIBITS

 

EXHIBIT
A  Registration
Rights
Agreement

EXHIBIT
B  Opinion
of Company's
Counsel

EXHIBIT
C  Put
Notice

EXHIBIT
D  Put
Settlement
Sheet

    	ELED INVESTMENT AGREEMENT JULY.2014	27	 

    	 

    

EXHIBIT
A

REGISTRATION
RIGHTS
AGREEMENT
(Attached)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A-1

    	 	 	 

    	 

    

EXHIBIT
B

 

OPINION
OF COMPANY’S
COUNSEL

 

(Attached)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-1

    	 	 	 

    	 

    

EXHIBIT
C

 

FORM
OF PUT
NOTICE

 

Date:

 

RE:
Put Notice
Number
 

 

Dear
Mr. Leighton:

 

This
is to
inform
you that
as of today,
ENERGIE
HOLDINGS,
INC.
a Delaware
corporation
(the "Company"),
hereby
elects
to exercise
its right
pursuant
to the
Investment
Agreement
entered into
with Dutchess
Opportunity
Fund
II, LP
(“Dutchess”)
to require
Dutchess
to purchase
shares
of its common
stock. The
Company
hereby
certifies
that:

 

1.
The undersigned
is the
duly
elected
   of
the Company.

 

2.
There
are no
fundamental
changes
to the
information
set forth
in the
Registration
Statement
which would
require
the Company
to file
a post
effective
amendment
to the
Registration
Statement.

 

3.
The Company
has performed
in all
material
respects
all covenants
and agreements
to be performed
by the Company
and has
complied
in all
material
respects
with
all obligations
and conditions
contained
in this Agreement
on or prior
to the Put
Notice
Date,
and shall
continue
to perform
in all material
respects
all covenants
and agreements
to be performed
by the Company
through
the applicable
Put Date.
All conditions
to the delivery
of this Put Notice
are satisfied
as of
the date
hereof.

 

4.
The undersigned
hereby
represents,
warrants
and covenants
that it
has made
all filings
(“SEC
Filings”)
required
to be
made
by it
pursuant
to applicable
securities
laws
(including,
without
limitation,
all filings
required
under the
Securities
Exchange
Act
of 1934,
which
include
Forms 10-Q,
10-K,
8-K,
etc.). All
SEC Filings
 and 
other  public
 disclosures
made 
by  the
 Company,
including,
 without
 limitation,
all 
press releases,
analysts
meetings
and calls,
etc. (collectively,
the “Public
Disclosures”),
have been
reviewed
and  approved
for  release
 by the
 Company’s
attorneys
 and, 
if  containing
financial
information,
the Company’s
independent
certified
public
accountants.
None of the Company’s
Public
Disclosures
contain
any untrue
statement
of a material
fact
or omit
to state
any material
fact
required
to be stated
therein
or necessary
to make
the statements
therein,
in the
light
of the circumstances
under
which
they were made,
not misleading.

 

5.
The amount
of this put
is up
to   
shares.

 

6. The
Pricing
Period
runs from
   until
   .

 

7. The
Suspension
Price
is $ 
 .

 

8. The
current
number
of shares
issued
and outstanding
as of the Company
are:  

 

9. The
number
of shares
currently
available
for resale
pursuant
to the
Registration
Statement
on Form
S-

1 for
the Equity
Line
are:  .

 

[Company
Name]

	 	[Company Name]
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:	 	 

 

 
 

    	 	 	 

    	 

    

EXHIBIT
D

 

FORM
OF PUT
SETTLEMENT
SHEET

 

Date:

 

RE: 
ENERGIE HOLDINGS,
INC.

 

Dear
  :

 

Pursuant
to the
Put
given
by ENERGIE
HOLDINGS,
INC.
to Dutchess
Opportunity
Fund,
II, LP on  
 20__, we
are now
submitting
the amount
of common
shares
for you
to issue
to Dutchess.

 

Please
deliver
   shares
to Dutchess
Opportunity
Fund,
II,
LP immediately
and send
via DWAC
to the
following
account:

 

XXXXXX

 

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

Douglas
H. Leighton

    	 	 	 

    	 

    

	DATE	PRICE
	Date of Day 1	VWAP of Day 1
	Date of Day 2	VWAP of Day 2
	Date of Day 3	VWAP of Day 3
	Date of Day 4	VWAP of Day 4
	 Date of Day 5	VWAP of Day 5

 

 

 

	LOWEST VWAP IN PRICING PERIOD	 	 
	 	 	 
	PUT AMOUNG	 	 
	 	 	 
	PURCHASE PRICE (NINETY-FOUR PERCENT (94%))	 	 
	 	 	 
	AMOUNT OF SHARES DUE	 	 

 

 

 

 

The
undersigned
has completed
this
Put
as of
this  
 _th day
of   _,
20  _.

 

	 	ENERGIE HOLDINGS, INC.	 
	 	 	 	 
	 	By:	 	 
	 	Name:	 	 
	 	Title:Exhibit 10.2

REGISTRATION
RIGHTS
AGREEMENT

 

Registration
Rights
Agreement
(the
“Agreement”),
dated
as of
July 16, 2014,
by and between
Energie
Holdings,
Inc.,
a corporation
organized
under
the laws
of Delaware,
USA (the “Company”),
 and 
Dutchess 
Opportunity
Fund, II,
 LP, 
a  Delaware
 Limited
 Partnership
 (the “Investor”).

 

Whereas,
in connection
with
the Investment
Agreement
by and between
the Company
and the
Investor
of this
date
(the “Investment
Agreement”),
the Company
has agreed
to issue
and sell
to the
Investor
up to
5,000,000
shares of
the Company’s
Common
Stock,
$.0001
par value
per share
(the “Common
Stock”),
to be
purchased pursuant
to the
terms
and subject
to the
conditions
set forth
in the
Investment
Agreement;
and

 

Whereas,
to induce
the Investor
to execute
and deliver
the Investment
Agreement,
the Company has
agreed
to provide
certain
registration
rights
under
the Securities
Act of
1933,
as amended,  and
 the rules
 and 
regulations
 thereunder,
 or  any
 similar
 successor
 statute
(collectively,
the “1933
Act”),
and applicable
state securities
laws,
with
respect
to the
shares of
Common
Stock
issuable
pursuant
to the
Investment
Agreement.

 

Now
therefore,
in consideration
of the
foregoing
promises
and the
mutual
covenants
contained
hereinafter
and other
good
and valuable
consideration,
the receipt
and sufficiency
of which
are hereby
acknowledged,
the Company
and the
Investor
hereby
agree
as follows:

 

Section
1.  DEFINITIONS.

 

As
used in this
Agreement,
the following
terms
shall have
the following
meanings:

 

“Execution
Date” means
the date
of this
Agreement
set forth
above.

 

“Person”
means a corporation,
a limited
liability
company,
an association,
a partnership,
an organization,
a business,
an individual,
a governmental
or political
subdivision
thereof
or a governmental
agency.

 

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

 

“Register,”
 “Registered,”
 and 
“Registration”
 refer
 to  the Registration
 effected
 by preparing
and filing
one (1)
or more
Registration
Statements
in compliance
with
the 1933
Act and
pursuant
to Rule
415 under
the 1933
Act or
any successor
rule
providing
for offering
securities
on a continuous
basis
(“Rule
415”),
and the
declaration
or ordering
of effectiveness
of such Registration
Statement(s)
by the United
States
Securities
and Exchange
Commission
(the “SEC”).

 

“Registrable
Securities”
means
(i)
the shares
of  Common
Stock
issued
or issuable
pursuant
to the
Investment
Agreement,
(ii)
the Fee
Shares
and (iii)
any shares
of capital
stock issued
or issuable
with respect
to such shares
of Common
Stock,
if any,
as a result
of any
stock split,
stock
dividend,
recapitalization,
exchange
or similar
event
or otherwise,
which
have
not been
(x) included
in the
Registration
Statement
that
has been
declared
effective
by the
SEC,
or

 

 

 

 
 
    	ELED.REGISTRATION.RIGHTS.JULY.2014	1	 

    	 

    

(y)
sold under
circumstances
meeting
all of
the applicable
conditions
of Rule
144 (or
any similar
provision
then in force)
under the
1933 Act.

 

“Registration
 Statement”
 means
 the 
registration
 statement
 or 
statements
 of 
the

Company
filed
under the
1933 Act
covering
the Registrable
Securities.

 

All
capitalized
terms
used in
this
Agreement
and not
otherwise
defined
herein
shall have
the same
meaning
ascribed
to them
as in
the Investment
Agreement.

 

Section
2.  REGISTRATION.

 

(a)
 Subject
to Section
3(g),
the Company
shall, within
twenty-one
(21)
days
after
the date
of this
Agreement,
file
with
the SEC
the Registration
Statement
or Registration
Statements
(as is
necessary)
on Form
S-1 (or,
if such form
is unavailable
for such a
registration,
on such other
form
as is
available
for such registration),
covering
the resale
of all
of the
Registrable
Securities,
which Registration
Statement(s)
shall
state that,
in accordance
with Rule
416 promulgated
under the
1933 Act,
such Registration
Statement
also covers
such indeterminate
number
of additional
shares of
Common
Stock
as may
become issuable
upon stock
splits,
stock
dividends
or similar
transactions.
The Company
shall initially
register
for resale
5,000,000
shares
of Common
Stock,
except
to the
extent
that
the SEC
requires
the share
amount
to be reduced
as a condition
of effectiveness.

 

(b)
The Company
agrees
not to
include
any other
securities
in the
Registration
Statement
covering
the Registrable
Securities
without
the Investor’s
prior written
consent
which the
Investor may
withhold
in its
sole discretion.
Furthermore,
the Company
agrees
that
it will
not file
any other
Registration
Statement
for
other
securities,
until
thirty
calendar
days after
the Registration
Statement
for the
Registrable
Securities
is declared
effective
by the
SEC.

 

Section
3.  RELATED
OBLIGATIONS.

 

At
such time
as the
Company
is obligated
to prepare
and file
the Registration
Statement
with
the SEC
pursuant
to Section
2(a),
the Company
shall have
the following
obligations
with
respect to
the Registration
Statement:

 

(a)
 The
Company shall
use all
commercially
reasonable
efforts
to cause
such Registration
Statement
relating
to the
Registrable
Securities
to become
effective
within
ninety
(90)
days
after the
date
that
the Registration
Statement
is filed
and shall
keep
such Registration
Statement
effective
until
the earlier
to occur
of  the
date
on which
(A)
the
Investor shall
have sold
all the
Registrable
Securities;
or (B)
the Company
has no
right
to sell
any additional
shares of
Common
Stock
under the
Investment
Agreement
(the “Registration
Period”).
The Registration
Statement
(including
any amendments
or supplements
thereto
and prospectuses
contained
therein)
shall not
contain
any untrue
statement
of a
material
fact or
omit
to state
a material
fact required
to be stated therein,
or necessary
to make
the statements
therein,
in light
of the
circumstances
in which
they
were made,
not misleading.
The Company shall
use all commercially
reasonable
efforts
to respond
to all
SEC comments
within
ten (10)
business
days from
receipt
of such comments
by the Company.
The Company
shall use
all commercially
reasonable
efforts
to cause the Registration
Statement
relating
to the Registrable
Securities
to become
effective
no later
than five
(5) business
days
after
notice
from
the SEC
that
the Registration
Statement
may  be declared
effective.
The  Investor
 agrees
to  provide
all information
which it
is required
by law
to provide
to the Company,
including
the intended
method

    	ELED.REGISTRATION.RIGHTS.JULY.2014	2	 

    	 

    

of
disposition
of the
Registrable
Securities,
and the
Company’s
obligations
set forth
above
shall be
conditioned
on the
receipt
of such
information.

 

(b)
The Company
shall prepare
and file
with
the SEC
such amendments
(including
post-effective
amendments) and
supplements
to the
Registration
Statement
and the
prospectus used
in connection
with
such Registration
Statement,
which prospectus
is to be
filed
pursuant
to Rule
424 promulgated
under
the 1933
Act,
as may be necessary
to keep
such Registration
Statement
effective
during
the Registration
Period,
and, during
such period,
comply
with
the provisions
of the 1933
Act with
respect
to the disposition
of all
Registrable
Securities
of the
Company covered
by such Registration
Statement
until
such time
as all
of such Registrable
Securities
shall have
been disposed
of in
accordance
with
the intended
methods of
disposition
by the Investor
thereof
as set forth
in such Registration
Statement.
In the
event
the number
of shares
 of 
Common
 Stock 
covered  by the
 Registration
 Statement
 filed
 pursuant
 to 
this Agreement
is at any time
insufficient
to cover all of the
Registrable
Securities,
the Company
shall amend such Registration
Statement,
or file
a new Registration
Statement
(on the short
form
available
therefor,
if applicable),
or both,
so as to
cover all
of the
Registrable
Securities,
in each
case, as
soon as practicable,
but in
any event
within
fifty
(50) calendar
days
after the
necessity
therefor
arises (based
on the
then
Purchase
Price
of the
Common
Stock
and other
relevant
factors
on which
the Company
reasonably
elects to
rely),
assuming
the Company
has sufficient
authorized
shares
at that
time,
and if
it does
not, within
fifty
(50) calendar
days after
such shares
are authorized.
 The
Company shall
use commercially
reasonable
efforts
to cause
such amendment
and/or
new Registration
Statement
to become
effective
as soon as
practicable
following
the filing
thereof.

 

(c)
 The
Company shall
make available
to the
Investor
whose
Registrable
Securities
are included
in any
Registration
Statement
and its
legal
counsel
without
charge
(i)
if requested
by the
Investor,
promptly
after the
same is prepared
and filed
with
the SEC
at least
one (1)
copy of
such Registration
Statement
and any
amendment(s)
thereto,
including
financial
statements
and schedules,
all documents
incorporated
therein
by reference
and all
exhibits,
the prospectus
included
in such
Registration
Statement
(including
each preliminary
prospectus) and,
with
regards
to such Registration
Statement(s),
any correspondence
by or on
behalf
of the
Company to the
SEC or the staff
of the SEC
and any correspondence
from the SEC
or the staff
of the SEC
to the
Company or
its
representatives;
and (ii)
upon the effectiveness
of any
Registration
Statement,
the Company
shall make
available
copies of the
prospectus,
via EDGAR,
included
in such Registration
Statement
and all amendments
and supplements
thereto.

 

(d)
 The
Company shall
use commercially
reasonable
efforts
to (i)
register
and qualify
the Registrable
Securities
covered by the
Registration
Statement
under
such other
securities
or “blue
sky”
laws
of such states
in the
United
States as the
Investor
reasonably
requests;
(ii) prepare and
file
in those
jurisdictions,
such amendments
(including
post-effective
amendments) and
supplements
to such
registrations
and qualifications
as may be
necessary
to maintain
the effectiveness
thereof
during
the Registration
Period;
(iii)
take
such other
actions
as may be necessary
to maintain
such registrations
and qualifications
in effect
at all
times
during
the Registration
Period,
and (iv)
take
all other
actions
reasonably
necessary
or advisable
to qualify
the Registrable
Securities
for sale
in such jurisdictions;
provided,
however,
that the Company
shall not
be required
in connection
therewith
or as a condition
thereto
to (x)
qualify
to do business
in any jurisdiction
where
it would
not otherwise
be required
to qualify
but for this
Section
3(d),
or (y)
subject
itself
to general
taxation
in any
such jurisdiction.
 The Company
shall promptly
notify
the Investor
who holds
Registrable
Securities
of the
receipt
by the Company
of any notification
with
respect
to the
suspension
of the
registration
or qualification
of any
of the
Registrable
Securities
for sale
under the
securities
or “blue sky”
laws
of any jurisdiction
in the

    	ELED.REGISTRATION.RIGHTS.JULY.2014	3	 

    	 

    

United
States
or its
receipt
of actual
notice
of the
initiation
or threatening
of any
proceeding for
such purpose.

 

(e)
 As
promptly as
practicable
after becoming
aware of
such event,
the Company
shall notify
the Investor
in writing
of the
happening
of any
event
as a result
of which
the prospectus
 included
in the Registration
Statement,
 as then
in effect,
 includes
an untrue statement
of a
material
fact or
omission
to state
a material
fact required
to be
stated therein
or necessary
to make
the statements
therein,
in light
of the
circumstances
under which
they
were made,
not misleading
(“Registration
Default”)
and use
all diligent
efforts
to promptly
prepare a supplement
or amendment
to such Registration
Statement
and take
any other necessary
steps to
cure the
Registration
Default
(which,
if such Registration
Statement
is on
Form
S-3,
may consist
of a document
to be filed
by the Company
with
the SEC pursuant
to Section
13(a),

13(c),
14 or 15(d)
of the
1934 Act
(as defined
below)
and to
be incorporated
by reference
in the
prospectus) to
correct
such untrue
statement
or omission,
and make
available
copies of such

supplement
or amendment
to the
Investor.
The Company
shall also
promptly notify
the Investor

(i)
when
a prospectus
or any
prospectus
supplement
or post-effective
amendment has
been filed,
and when
the Registration
Statement
or any post-effective
amendment
has become
effective;
(ii)
of any
request
by the SEC
for
amendments
or supplements
to the
Registration
Statement
or related
prospectus
or related
information,
(iii)
of the
Company’s
reasonable
determination
that
a post-effective
amendment to
the Registration
Statement
would
be appropriate,
(iv)
in the
event
the Registration
Statement
is no
longer
effective,
or (v)
if the
Registration
Statement
is stale
as a result
of the
Company’s
failure to
timely
file
its
financials
or otherwise.
If a Registration
Default
occurs
during
the period
commencing
on the Put
Notice Date
and ending
on the
Closing
Date, the
Company
acknowledges
that
its failure
to cure
such a Registration
Default
within
ten (10)
business
days will
cause the Investor
to suffer
damages
in an amount
that will
be difficult
to ascertain.

 

(f)
The  Company
 shall 
use  all 
commercially
 reasonable
 efforts
 to 
prevent 
the issuance
of any
stop order
or other  suspension
of effectiveness
of the
Registration
Statement,
or the suspension
of the qualification
of any of
the Registrable
Securities
for sale in
any jurisdiction
and, if
such an
order or suspension
is issued,
 to
obtain
the withdrawal
of such order
or suspension
at the
earliest
possible
moment
and to
notify
the Investor
holding Registrable
Securities
being sold
of the issuance
of such order
and the resolution
thereof
or its
receipt
of actual notice
of the
initiation
or threat
of any proceeding
concerning
the effectiveness
of the Registration
Statement.

 

(g)
 The
Company
shall permit
the Investor
and one
(1) legal
counsel,
designated
by the Investor,
to review
and comment
upon the
Registration
Statement
and all
amendments
and supplements
thereto
at least
one (1)
calendar
day prior
to their
filing
with
the SEC.
 However,
any postponement
of a filing
of a Registration
Statement
or any postponement
of a request
for acceleration
or any postponement
of the
effective
date
or effectiveness
of a
Registration
Statement
by written
request
of the
Investor (collectively,
the "Investor's
Delay")
shall not
act to trigger
any penalty
of any
kind,
or any
cash amount due
or any
in-kind
amount
due the Investor
from
the Company
under
any and
all agreements
of any nature
or kind
between
the Company
and the
Investor.
The event(s)
of an Investor's
Delay
shall
act to suspend
all obligations
of any kind
or nature
of the
Company under
any and
all agreements
of any
nature
or kind
between
the Company
and the
Investor.

 

(h)
The  Company
 shall 
hold 
in  confidence
 and 
not  make
 any 
disclosure
 of information
concerning
the Investor
unless (i)
disclosure
of such
information
is necessary
to comply
with
federal
or state securities
laws,
(ii)
the disclosure
of such information
is necessary

    	ELED.REGISTRATION.RIGHTS.JULY.2014	4	 

    	 

    

to
avoid
or correct
a misstatement
or omission
in any
Registration
Statement,
(iii)
the release
of such information
is ordered
pursuant
to a
subpoena
or other final,
non-appealable
order from
a court
or governmental
body of
competent
jurisdiction,
(iv)
such information
has been
made generally
available
to the
public
other than
by disclosure
in violation
of this
Agreement
or any other
agreement,
or (v)
the Investor
has consented
to such
disclosure.
 The
Company
agrees
that
it shall,
upon learning
that
disclosure
of such
information
concerning
the Investor
is sought
in or
by a court
or governmental
body of competent
jurisdiction
or through
other
means,
give
prompt
written
notice
to the Investor
and allow
the Investor,
at the
Investor’s
expense,
to undertake
appropriate
action
to prevent
disclosure
of,
or to obtain
a protective
order covering
such information.

 

(i)
The  Company
 shall 
use  all 
commercially
 reasonable
 efforts
 to 
maintain
designation
 and quotation
 of 
all  the
 Registrable
 Securities
 covered 
by  any 
Registration
Statement
on the
Principal
Market.
The Company
shall pay
all fees
and expenses
in connection
with satisfying
its
obligation
under this
Section
3(i).

 

(j)
 The
Company shall
provide a
transfer
agent
for
all
the Registrable
Securities
not later than
the effective
date of
the first
Registration
Statement
filed
pursuant
hereto.

 

(k)
 If 
requested
 by the Investor,
 the 
Company
shall  (i)
 as  soon
 as  reasonably
practical
incorporate
in a prospectus
supplement
or post-effective
amendment such information
as the
Investor
reasonably
determines
should be
included
therein
relating
to the
sale and
distribution
of Registrable
Securities,
including,
without
limitation,
information
with
respect
to the offering
of the
Registrable
Securities
to be
sold in
such offering;
(ii)
make
all required
filings
of such prospectus
supplement
or post-effective
amendment
as soon
as reasonably
possible
after
being notified
of the
matters
to be incorporated
in such prospectus
supplement
or post-effective
amendment;
and (iii)
supplement
or make
amendments
to any
Registration
Statement
if reasonably
requested
by the
Investor.

 

(l)
The  Company
 shall 
use  all
 commercially
 reasonable
 efforts
 to 
cause  the
Registrable
Securities
covered
by the applicable
Registration
Statement
to be
registered
with
or approved
by such other governmental
agencies
or authorities
as may be necessary
to facilitate
the disposition
of such Registrable
Securities.

 

(m)
The Company
shall otherwise
use all
commercially
reasonable
efforts
to comply
with 
all  applicable
 rules
 and 
regulations
 of 
the  SEC
 in 
connection
with
 any 
registration
hereunder.

 

(n)
Within
one (1)
business
day after
the Registration
Statement
which
includes
Registrable
Securities
is declared
effective
by the
SEC, the
Company shall
deliver
to the
transfer
agent
for such Registrable
Securities,
with
copies to
the Investor,
a written
notification
that such
Registration
Statement
has been
declared
effective
by the
SEC.

 

Section
4.  OBLIGATIONS
OF THE
INVESTOR.

 

(a)
At least
five
(5) calendar
days
prior
to the
first
anticipated
filing
date
of the
Registration
Statement
the Company
shall notify
the Investor
in writing
of the
information
the Company requires
from the Investor
for the Registration
Statement.
It shall be a condition
precedent to the
obligations
of the
Company to
complete the
registration
pursuant
to this
Agreement
with
respect
to the
Registrable
Securities
and the
Investor
agrees to
furnish to
the Company that
information
regarding
itself,
the Registrable
Securities
and the intended
method

    	ELED.REGISTRATION.RIGHTS.JULY.2014	5	 

    	 

    

of
disposition
of the
Registrable
Securities
as shall
reasonably
be required
to effect
the registration
of the
resale
of such Registrable
Securities
and the
Investor
shall execute
such documents in
connection
with
such registration
as the
Company may reasonably
request.
The Investor
covenants
and agrees
that,
in connection
with
any sale
of Registrable
Securities
by it pursuant
to the Registration
Statement,
it shall
comply
with
the “Plan
of Distribution”
section
of the
then current
prospectus
relating
to such Registration
Statement.

 

(b)
The  Investor,
 by  its
 acceptance
 of 
the  Registrable
 Securities,
 agrees
 to cooperate
with
the Company
as reasonably
requested
by the Company
in connection
with
the preparation
and filing
of any
Registration
Statement
hereunder.

 

(c)
 The
Investor
agrees
that,
upon receipt
of written
notice
from
the Company
of the happening
of any
event
of the
kind
described
in Section
3(f)
or the first
sentence
of Section
3(e),
the Investor
will
immediately
discontinue
disposition
of Registrable
Securities
pursuant
to any Registration
Statement(s)
covering
the resale
of such
Registrable
Securities
until
the Investor’s
receipt
of the
copies of
the supplemented
or amended
prospectus
contemplated
by Section
3(f)
or the first
sentence
of Section
3(e).

 

Section
5.  EXPENSES
OF REGISTRATION.

 

All
reasonable
expenses,
other than
underwriting
discounts
and commissions
and other
than 
as  set forth
 in 
the  Investment
 Agreement,
 incurred
 in 
connection
 with
 registrations
including
comments,
filings
or qualifications
pursuant
to Section
2 and Section
3, including,
without
limitation,
all registration,
listing
and qualifications
fees,
printing
and accounting
fees,
and fees
and disbursements
of counsel
for the
Company shall
be paid by
the Company.

 

Section
6.  INDEMNIFICATION.

 

In
the event
any Registrable
Securities
are included
in the
Registration
Statement
under this
Agreement:

 

(a)
 To
the fullest
extent
permitted
by law,
the Company,
under
this
Agreement,
will, and
hereby
does, indemnify,
hold harmless
and defend
the Investor,
the directors,
officers,
partners,
 employees,
 counsel,
 agents,
 representatives
 of,
 and each
Person, 
if  any,
 who controls,
the Investor
within
the meaning
of the
1933 Act
or the
Securities
Exchange
Act of

1934,
as amended
(the
“1934
Act”)
(each,
an “Indemnified
Person”),
against
any losses,
claims,

damages,
liabilities,
judgments,
fines,
penalties,
charges,
costs, attorneys’
fees, amounts
paid in settlement
or expenses,
joint or
several (collectively,
“Claims”),
incurred
in investigating,
preparing
or defending
any action,
claim,
suit,
inquiry,
proceeding,
investigation
or appeal
taken
from
the foregoing
by or before
any court
or governmental,
administrative
or other regulatory
agency,
body or
the SEC,
whether
pending
or threatened,
whether
or not an
indemnified
party
is or may be
a party
thereto
(“Indemnified
Damages”),
to which
any of
them
may become subject
insofar
as such Claims
(or actions
or proceedings,
whether
commenced
or threatened,
in respect
thereof)
arise out
of or
are based
upon:
(i)
any untrue
statement
or alleged
untrue statement
of a
material
fact
in the
Registration
Statement
or any post-effective
amendment thereto
or in
any filing
made
in connection
with
the qualification
of the
offering
under
the securities
or other
“blue sky”
laws of any
jurisdiction
in which
the Investor
has requested
in writing
that
the Company
register
or qualify
the Shares
(“Blue
Sky Filing”),
or the omission
or alleged
omission to
state a
material
fact
required
to be
stated therein
or necessary
to make
the statements
therein,
in light
of the
circumstances
under
which the
statements
therein
were made,
not misleading,
(ii)
any untrue
statement
or alleged
untrue statement
of a
material
fact
contained

    	ELED.REGISTRATION.RIGHTS.JULY.2014	6	 

    	 

    

in
the final
prospectus
for
the offer
of the
Registrable
Securities
(as amended
or supplemented,
if the
Company
files
any amendment thereof
or supplement
thereto
with
the SEC)
or the omission 
or alleged
 omission
 to state
therein
any  material
fact 
necessary
 to  make
 the statements
made therein,
in light
of the
circumstances
under which
the statements
therein
were made,
not misleading,
or (iii)
any violation
or alleged
violation
by the Company
of the
1933 Act,
the 1934
Act,
any other
law, including,
without
limitation,
any state
securities
law,
or any rule
or regulation
thereunder
relating to
the offer
or sale
of the
Registrable
Securities
pursuant
to the Registration
Statement
(the
matters
in the
foregoing
clauses
(i) through
(iii)
being, collectively,
“Violations”).
Subject
to the
restrictions
set forth
in Section
6(c) the
Company
shall reimburse
each Indemnified
Person,
promptly
as such expenses
are incurred
and are
due and payable,
for any
reasonable
legal
fees
or other reasonable
expenses
incurred
by them
in connection
with investigating
or defending
any such Claim.
Notwithstanding
anything
to the
contrary
contained
herein,
the indemnification
agreement
contained
in this
Section 6(a):
(i) shall
not apply
to a Claim
arising out
of or based
upon a Violation
which is
due to
the inclusion
in the Registration
Statement
of the
information
furnished
to the
Company
by any
Indemnified
Person expressly
for use
in connection
with
the preparation
of the
Registration
Statement
or any such amendment
thereof
or supplement
thereto;
(ii)
shall not
be available
to the
extent
such Claim
is based
on (A) a failure
of the Investor
to deliver
or to
cause to be
delivered the
prospectus made
available
by the Company;
 (B)
 the Indemnified
Person’s 
use of an incorrect
 prospectus
despite
being promptly
advised in
advance by the
Company in writing
not to use such
incorrect
prospectus;
(C)
the manner
of sale of
the Registrable
Securities
by the Investor
or of the
Investor’s
failure
to register
as a dealer under
applicable
securities
laws; (D)
any omission of
the Investor
to notify
the Company
of  any material
fact 
that  should
be stated in the
Registration
Statement
 or prospectus 
relating
to the
 Investor
 or  the 
manner
 of 
sale;  and
 (E)
 any amounts 
paid  in
settlement
of any
Claim
if such
settlement
is effected
without
the prior
written
consent
of the
Company, which
consent shall
not be unreasonably
withheld.
Such indemnity
shall remain
in full
force
and effect
regardless
of any
investigation
made
by or on behalf
of the
Indemnified
Person and
 shall survive
the resale
of the
Registrable
Securities
by the
Investor pursuant
to the Registration
Statement;
and (iii)
shall not be available
to the
extent
the Claim
arises out
of the
gross negligence
or willful
misconduct
of the
Indemnified
Person.

 

(b)
In  connection
 with
 any 
Registration
 Statement
 in 
which 
the  Investor
 is participating,
the Investor
agrees
to severally
and jointly
indemnify,
hold harmless
and defend,
to the same
extent
and in the
same manner
as is set forth
in Section
6(a), the
Company, each
of its
 directors,
officers,
employees,
counsel,
agents
and representatives
and each
Person, if
any, who
controls
the Company
within
the meaning
of the
1933 Act
or the
1934 Act
(each,
an “Indemnified
Party”),
against any
Claim or Indemnified
Damages
to which
any of them
may become subject,
under
the 1933
Act, the
1934 Act or otherwise,
insofar
as such Claim
or Indemnified
Damages
arise
out of
or are
based upon
any Violation,
in each
case to
the
extent,
and only
to the
extent,
that
such Violation
is due to (i)
the inclusion
in the
Registration
Statement
of the
written
information
furnished
to the Company
by the Investor
expressly
for use in
connection
with
such Registration
Statement;
(ii) a
failure
of the
Investor to
deliver
or to
cause to
be delivered
the prospectus 
made available
by the Company
or  the Investor’s
use of  an
incorrect
prospectus
despite
being timely
advised
by the Company
in writing
not to
use such incorrect
prospectus;
(iii) the
Investor’s
failure to
register
as a dealer
under applicable
securities
laws;
(iv)
the Investor’s
gross negligence
or willful misconduct;
or (v) any
omission of the
Investor
to notify
the Company
of any
material
fact that
should be
stated
in the
Registration
Statement
or prospectus
relating
to the Investor
or the manner
of sale;
and, subject
to Section

6(c),
the Investor
will
reimburse
any legal
or other expenses
reasonably
incurred
by them
in connection
 with
 investigating
 or 
defending
 any 
such  Claim;
 provided,
 however,
 that
 the

indemnity
 agreement
 contained
 in 
this 
Section 
6(b)  and 
the  agreement
 with
 respect
 to

    	ELED.REGISTRATION.RIGHTS.JULY.2014	7	 

    	 

    

contribution
contained
in Section
7 shall
not apply
to amounts
paid in
settlement of
any Claim
if such settlement
is effected
without
the prior
written
consent
of the
Investor,
which
consent
shall not
be unreasonably
withheld.
 Such
indemnity
shall
remain
in full
force and
effect
regardless
of any
investigation
made by
or on behalf
of such Indemnified
Party
and shall
survive
the resale
of the
Registrable
Securities
by the
Investor pursuant
to the
Registration
Statement.

 

(c)
 Promptly
after receipt
by an Indemnified
Person or
Indemnified
Party
under
this Section
6 of notice
of the
commencement
of any
action or
proceeding
(including
any governmental
action or proceeding)
involving
a Claim,
such Indemnified
Person or
Indemnified
Party
shall, if
a Claim
in respect
thereof
is to
be made
against
any indemnifying
party
under
this Section
6, deliver
to the
indemnifying
party
a written
notice
of the
commencement
thereof,
and the
indemnifying
party
shall
have
the right
to participate
in, and,
to the
extent
the indemnifying
party so
desires,
jointly with
any other indemnifying
party similarly
noticed,
to assume
control
of the
defense
thereof
with
counsel
mutually satisfactory
to the
indemnifying
party and
the Indemnified
Person
or the
Indemnified
Party,
as the case
may be;
provided,
however,
that
an Indemnified
Person or
Indemnified
Party,
as the case
may be,
shall have
the right
to retain
its own
counsel 
with
the fees
and expenses
to be
paid by the
indemnifying
 party,
 if, 
in the reasonable
opinion
of counsel
retained
by the Indemnified
Person or
Indemnified
Party,
the representation
by counsel
of the
Indemnified
Person
or Indemnified
Party and
the indemnifying
party
would
be inappropriate
due to
actual
or potential
differing
interests
between
such Indemnified
Person or
Indemnified
Party and
any other party
represented
by such counsel
in such proceeding.
 The
indemnifying
party shall
pay for only
one (1) separate
legal
counsel for
the Indemnified
Persons or the
Indemnified
Parties,
as applicable,
and such
counsel
shall be selected
by the
Investor, if
the Investor
is entitled
to indemnification
hereunder,
or the
Company,
if the
Company is
entitled
to indemnification
hereunder,
as applicable.
 The
Indemnified
Party
or Indemnified
Person shall
cooperate
fully
with
the indemnifying
party
in connection
with
any negotiation
or defense
of any
such action
or Claim
by the indemnifying
party
and shall
furnish to
the indemnifying
party
all information
reasonably
available
to the
Indemnified
Party or Indemnified
Person which
relates to
such action
or Claim.
The indemnifying
party shall
keep the
Indemnified
Party
or Indemnified
Person fully
apprised
at all
times as
to the
status of
the defense
or any settlement
negotiations
with
respect
thereto.
No indemnifying
party
shall be liable
for
any settlement
of any
action, claim
or proceeding
affected
without
its
written
consent; provided,
 however,
 that
 the  indemnifying
 party
shall  not
 unreasonably
 withhold,
 delay or condition
its consent.
No indemnifying
party
shall,
without
the consent
of the Indemnified
Party
or Indemnified
Person, consent
to entry
of any
judgment
or enter
into any
settlement
or other
compromise
which
does not
include
as an unconditional
term thereof
the giving
by the claimant
or plaintiff
to such Indemnified
Party or Indemnified
Person of a release
from
all liability
in respect
to such
Claim.
Following
indemnification
as provided
for hereunder,
the indemnifying
party shall
be subrogated
to all rights
of the Indemnified
Party
or Indemnified
Person with
respect
to all
third
parties,
firms
or corporations
relating
to the
matter
for which
indemnification
has  been
 made.
The failure
 to 
deliver 
written
 notice
 to 
the  indemnifying
 party
 within
 a reasonable
time
of the
commencement
of any such
action shall
not relieve
such indemnifying
party
of any
liability
to the
Indemnified
Person or Indemnified
Party
under
this Section
6, except
to the
extent
that the
indemnifying
party
is prejudiced
in its ability
to defend
such action.

 

(d)
 The
indemnity
agreements
contained
herein
shall
be in
addition
to (i)
any cause
of action
or similar
right
of the
Indemnified
Party
or Indemnified
Person against
the indemnifying
party
or others,
and (ii)
any liabilities
the indemnifying
party may
be subject
to pursuant
to the
law.

    	ELED.REGISTRATION.RIGHTS.JULY.2014	8	 

    	 

    

Section
7.  CONTRIBUTION.

 

To
the extent
any indemnification
by an indemnifying
party
is prohibited
or limited
by law,
the indemnifying
party
agrees
to make
the maximum
contribution
with
respect
to any
amounts for which
it would
otherwise
be liable
under
Section
6 to the
fullest
extent
permitted
by law;
provided,
however,
that:
(i)
no contribution
shall be made
under circumstances
where
the maker
would
not have
been liable
for indemnification
under
the fault
standards
set forth
in Section
6; (ii) no seller
of Registrable
Securities
guilty
of fraudulent
misrepresentation
(within
the meaning
of Section
11(f)
of the
1933
Act)
shall be
entitled
to contribution
from
any seller
of Registrable
Securities
who was
not guilty
of fraudulent
misrepresentation;
and (iii)
contribution
by any seller of
Registrable
Securities
shall be
limited
in amount
to the
net amount
of proceeds
received
by such seller from
the sale
of such
Registrable
Securities.

 

Section
8.  REPORTS
UNDER THE
1934 ACT.

 

With
a view
to making
available
to the
Investor
the benefits
of Rule
144 promulgated
under
the 1933
Act or
any other
similar
rule or
regulation
of the
SEC that
may at
any time
permit the
Investor
to sell
securities
of the
Company
to the
public
without
registration
(“Rule
144”),
provided
that
the Investor
holds any
Registrable
Securities
which
are eligible
for resale
under Rule
144 and
such information
is necessary
in order
for
the Investor
to sell
such Securities
pursuant
to Rule
144, the Company
agrees
to:

 

(a)
 make
and keep
public
information
available,
as those
terms
are
understood
and defined
in Rule
144;

 

(b)
 file
with
the SEC
in a
timely
manner
all reports
and other
documents
required
of the
Company under
the 1933
Act and
the 1934 Act
so long
as the Company
remains subject
to such requirements
(it being
understood
that nothing
herein
shall limit
the Company’s
obligations
under
Section
5(c) of
the Investment
Agreement)
and the filing
of such
reports
and other
documents
is required
for the
applicable
provisions
of Rule
144; and

 

(c)
 furnish
to the
Investor,
promptly
upon request,
(i)
a written
statement
by the

Company
that
it has
complied
with
the reporting
requirements
of Rule
144, the
1933 Act
and the

1934
Act applicable
to the
Company,
(ii)
a copy
of the
most
recent
annual
or quarterly
report
of the
Company and
such other reports
and documents
so filed
by the
Company,
and (iii)
such

other
information
as may
be reasonably
requested
to permit
the Investor
to sell
such securities
pursuant
to Rule
144 without
registration.

 

Section
9.  NO
ASSIGNMENT
OF REGISTRATION
RIGHTS.

 

This
Agreement
and the
rights,
agreements
or obligations
hereunder
may not be assigned,
by operation
of law,
merger
or otherwise,
and without
the prior
written
consent
of the
other party
hereto,
and any
purported
assignment
by a party
without
prior written
consent
of the
other party
will
be null
and void
and not
binding
on such other
party.
 Subject
to the preceding
sentence,
all of
the terms,
agreements,
covenants,
representations,
warranties
and conditions
of this
Agreement
are binding
upon,
and inure
to the
benefit
of and
are
enforceable
by, the parties
and their
respective
successors and assigns.

    	ELED.REGISTRATION.RIGHTS.JULY.2014	9	 

    	 

    

Section
10.  AMENDMENT
OF REGISTRATION
RIGHTS.

 

The
provisions
of this
Agreement
may be
amended
only with
the written
consent
of the

Company
and the
Investor.

 

Section
11.  MISCELLANEOUS.

 

(a)
 Any notices
or other communications
required
or permitted
to be given
under the
terms
of this
Agreement
must be
in writing
and will
be deemed
to have
been
delivered
(i)
upon receipt,
when delivered
personally;
(ii) upon
receipt,
when sent
by facsimile
or email
with
the signed
document
attached
in PDF
format
(provided
a confirmation
of transmission
is mechanically
or electronically
generated
and kept
on file
by the
sending
party);
or (iii)
one (1)
day after
deposit
with
a nationally
recognized
overnight
delivery
service,
in each
case properly addressed
to the
party
to receive
the same.
 The
addresses and
facsimile
numbers
for such
communications
shall be:

 

If
to the
Company:

 

 

ENERGIE
HOLDINGS,
INC.

4885
Ward
Road, Suite
300

Wheat
Ridge,
Colorado
80033

Telephone:
(720)
963-8055

 

If
to the
Investor:

 

Dutchess
Opportunity
Fund, II,
LP

50 Commonwealth
Ave, Suite
2

Boston,
MA 02116

Telephone:
(617)
301-4700

 

 

Each
party shall
provide
five
(5) business
days
prior notice
to the
other party
of any
change
in address, phone
number,
facsimile
number
ore-mail
address.

 

(b)
Failure of
any party
to exercise
any right
or remedy
under
this
Agreement
or otherwise,
or delay
by a party
in exercising
such right
or remedy,
shall not
operate
as a waiver
thereof.

 

(c)
 This
Agreement
and the
Investment
Agreement
constitute
the entire
agreement
among the
parties
hereto
with
respect
to the
subject
matter
hereof
and thereof.
 There
are
no restrictions,
promises,
warranties
or undertakings,
other
than
those set
forth
or referred
to herein
and therein.

 

(d)
This
Agreement
and the
Investment
Agreement
supersede all
prior agreements
and understandings
among
the parties
hereto with
respect to
the subject
matter
hereof
and thereof.

 

(e)
 The
headings
in this
Agreement
are for convenience
of reference
only and
shall not limit
or otherwise
affect
the meaning
hereof.
Whenever
required
by the
context
of this
Agreement,
the singular
shall include
the plural
and masculine
shall include
the feminine.
 This

    	ELED.REGISTRATION.RIGHTS.JULY.2014	10	 

    	 

    

Agreement
shall not
be construed
as if
it had
been prepared
by one
of the
parties,
but rather
as if
all the
parties
had prepared
the same.

 

(f)
This
Agreement
may be
executed
in two
or more
identical
counterparts,
each of
which
shall be deemed
an original
but all
of which
shall constitute
one and
the same
agreement.
This
Agreement,
once executed
by a party,
may be delivered
to the other
party
hereto
by facsimile
transmission
or by e-mail
delivery
of a PDF
format
of a copy
of this
Agreement
bearing the
signature
of the
party
so delivering
this
Agreement.

 

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

 

(h)
In  case 
any  provision
 of 
this 
Agreement
 is 
held 
by  a  court
 of 
competent
jurisdiction
to be
excessive
in scope
or otherwise
invalid
or unenforceable,
such provision
shall be adjusted
rather than
voided,
if possible,
so that
it is
enforceable
to the maximum
extent
possible,
and the
validity
and enforceability
of the remaining
provisions
of this
Agreement
will
not in
any way
be affected
or impaired
thereby.

 

Section
12.  GOVERNING
LAW; DISPUTES
SUBMITTED
TO ARBITRATION.

 

All
disputes
arising under
this
agreement
shall
be governed
by and
interpreted
in accordance
with
the laws
of the
Commonwealth
of Massachusetts,
without
regard
to principles
of conflict
of laws.
The parties
to this
agreement
will
submit
all disputes
arising under
this agreement
to arbitration
in Boston,
Massachusetts
before
a single
arbitrator
of the
American
Arbitration
Association
(“AAA”).
The arbitrator
shall be
selected by
application
of the
rules of
the AAA,
or by mutual
agreement
of the
parties,
except
that
such arbitrator
shall be
an attorney admitted
to practice
law in
the Commonwealth
of Massachusetts.
No party
to this
agreement
will challenge
the jurisdiction
or venue
provisions
as provided
in this
section. Nothing
contained
herein
shall prevent
the party
from obtaining
an injunction.

 

*.*.*

    	ELED.REGISTRATION.RIGHTS.JULY.2014	11	 

    	 

    

SIGNATURE
PAGE
OF REGISTRATION
RIGHTS
AGREEMENT

 

Your
signature
on this
Signature
Page
evidences
your
agreement
to be
bound
by the terms
and conditions
of the
Investment
Agreement
and the
Registration
Rights
Agreement
as of the date
first
written
above.

 

The
undersigned
signatory
hereby
certifies
that
he has
read
and understands
the Registration
Rights
Agreement,
and the
representations
made
by the
undersigned
in this
Registration
Rights
Agreement
are true
and accurate,
and agrees
to be
bound
by its
terms.

 

DUTCHESS
OPPORTUNITY
FUND,
II,
L.P.

 

 

 

	 	By: 	 
	 	Douglas H. Leighton	 
	 	Managing Member of:	 
	 	Dutchess Capital Management, II, LLC General Partner to:	 
	 	Dutchess Opportunity Fund, II, LP	 

 

 

 

	 	ENERGIE HOLDINGS, INC.	 
	 	 	 
	 	 	 
	 	By:	 
	 	Harold Hansen	 
	 	Cheif Executive Officer 	 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Signature
Page
to Registration
Rights
Agreement

    	ELED.REGISTRATION.RIGHTS.JULY.2014	12

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