Document:

stlt_ex104.htm

EXHIBIT 10.4

 

USA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

 

UNIT SUBSCRIPTION AGREEMENT

For Purchase of Units of Convertible Preferred Shares

And

Warrants to Purchase Common Shares in:

Spotlight Innovation

6750 Westown Pkwy Suite200-226

West Des Moines, IA 50266

515-274-9087515-274-9087

A Nevada Company

 

 

  

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This is an offer to sell securities of Spotlight Innovation, Inc. ("Company") to the Investor(s). This Unit Subscription Agreement is conditional on completed Due Diligence meeting the satisfaction of the Investor(s), obtaining appropriate legal opinions and signing of the completed Transaction Documents.

THE OFFER AND SALE OF THE CONVERTIBLE PREFERRED SHARES AND WARRANTS ("UNITS") DESCRIBED HEREIN ARE NOT BEING ISSUED UNDER A REGISTRATION THROUGH THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR THROUGH REGISTRATION WITH ANY STATE'S SECURITIES ACTS, BUT ARE BEING ISSUED IN RELIANCE UPON AVAILABLE EXEMPTIONS FROM SUCH ACTS' REGISTRATION REQUIREMENTS. UNITS PURCHASED HEREUNDER MAY BE SUBJECT TO CERTAIN RESTRICTIONS ON SALE, TRANSFER, HYPOTHECATION OR OTHERWISE. THESE UNITS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, AND NO SUCH COMMISSION HAS PASSED UPON OR ENDORSED THE MERITS OF THESE UNITS OR THE ACCURACY OR ADEQUACY OF THE MEMORANDUM. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS MEMORANDUM DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO PURCHASE IN ANY JURISDICTION IN WHICH SUCH AN OFFER OR SOLICITATION IS NOT AUTHORIZED. CHANGES IN INFORMATION OCCURRING AFTER THE DATE OF THIS MEMORANDUM ARE NOT NECESSARILY REFLECTED HEREIN. PURCHASE OF THESE UNITS INVOLVES A HIGH DEGREE OF RISK.

US NOTICE: Any dissemination of these possible terms to the general public, distribution within the borders of the United States of America, distribution to United States citizens abroad, or to other funding or investment sources could void any exemptions for Private Placement status under US Securities Law. The Company and Investor(s) agree that no public announcements or dissemination of any information to any source other than the Company, the Advisor, the Intermediary or the Investor(s) without an opinion from legal counsel attesting that such announcement or dissemination will not void the private placement exemption or violate Regulation D, Section 4(2) or Section 5 of the Securities Acts of the U.S..

This offer is an "All or None" offering. Should the full offering not be committed to, this offer would be rescinded and any terms become null and void.

 

  

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INTRODUCTION

This Unit Subscription Agreement (the “Agreement”), dated as of (Closing Date) is made and entered into by and among Spotlight Innovation, a Nevada corporation (the “Company”), and each of those persons and entities, severally and not jointly, whose name(s) are set forth on the Signature Page hereto (which persons and entities are herein referred to as the “Investor(s)”).

RECITALS

WHEREAS: the Company has authorized the sale and issuance of an aggregate number of shares of Convertible Preferred Stock of the Company for an amount of equity investment in a unit placement consisting of Convertible Preferred Shares and Warrants (to acquire additional Common Shares) set at prices to be specified in this agreement;

WHEREAS: each Investor(s) desires to purchase from the Company, and the Company desires to issue and sell to each Investor(s), certain Units consisting of shares of the Convertible Preferred Stock plus a specified number of Warrants as described in, and on the terms and conditions of this Agreement;

NOW, THEREFORE: in consideration of the promises and the mutual agreements, covenants, representations and warranties contained in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, hereby agree as follows:

	
1.

	
Definitions and Construction

	
1.1.

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

"Account Management Agreement" ("AMA") is that agreement to enlist a third party Intermediary to administer the Use of Proceeds disbursements. This Agreement will be add ended to that AMA.

"Advisor" means Catwalk Capital, LLC who has been retained by the Investor(s) as their representative.

“Board” shall mean the Board of Directors of the Company.

“Closing” is the transfer of the cash payment to the Company against the delivery of the certificates representing the Convertible Preferred Shares and the Warrants to the Investor(s) as specified in Section 2.2 of this Agreement.

“Closing Date” shall be that date which Closing has occurred as specified in Section 2.2 of this Agreement. Closing shall be evidenced by a letter from Intermediary detailing the closing and the availability of funds (the "Closing Notification").

“Common Stock” shall mean the Company's common stock, par value $0.001 per share.

 

  

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“Common Stockholders” shall mean any holder of common shares.

“Company” has the meaning specified in the Preamble to this Agreement.

 

"Conversion" shall mean the exchange of Preferred Stock for Common Stock under the conversion rate specified in Section 2.1. Said conversion shall occur as follows: The Intermediary shall deliver a notification of conversion (the "Conversion Notice") to the Company prior to the Breakout start requesting the exchange of the Preferred to Common. The Intermediary shall deliver the Preferred Shares, the Conversion Notice and an Instruction Letter to the Transfer Agent. The Company will deliver a letter authorizing the conversion, an attorney opinion letter stating the free trading nature of the shares, or a copy of an effective registration statement, the registration prospectus thereunder and any additional documents required by the Transfer Agent. The Transfer Agent will then deliver back to the Intermediary, either electronic or certificated (Non-Legended) Common Shares according to the instructions provided by the Intermediary. All conversions will use the following metric: That number of Preferred Shares being converted, multiplied by the Conversion Rate (as specified in Figure 1 of Section 2.1.1) will equal that amount of Common Shares.

 

(Preferred Shares X Conversion Rate = Converted Common Shares)

Conversion Notice: is that notification by the Intermediary to the Company and the Transfer Agent of its intent to convert the Preferred shares to Common in preparation to delivering against a specific Breakout.

Convertible Preferred Stock: shall mean that series of the Preferred Class Shares labeled as convertible to Common Shares of the company and fully described in Exhibit C of the Memorandum of Terms (the "MOT") hereto attached as Exhibit A. All Preferred Stock of this series will have a conversion feature to common stock.

Financial Statement(s): are those financial reporting documents of the Company produced according to GAAP and US securities regulations.

GAAP: shall mean Generally Accepted Accounting Principles as defined by the Financial Accounting Standards Board ("FASB").

Investor Stock: shall mean: (i.) the shares of Convertible Preferred Stock issued to an Investor(s) hereunder or otherwise owned by such Investor(s), (ii.) any shares of Common Stock issued as (or issuable upon the conversion or exercise of any warrant, right or other security which is issued as) a dividend or other distribution on or with respect to, or in replacement of, any shares of Preferred or Converted Shares referred to in (i.) and (ii.) above and (iii.) the Warrants to buy common shares which are attached to the Units.

Legend, Legended: is that stamp applied or affixed to a securities instrument by the issuer or the issuers Transfer Agent which states any and all restrictions on the shares.

 

Material Adverse Effect: shall mean, with respect to any Person, a material adverse effect on the business, prospects, assets, financial condition or results of operations of such Person and its subsidiaries, if any, taken as a whole.

Transfer Agent: is that company retained by the Company to manage the transfer of its shares of stock.

Person: shall mean an individual, corporation, partnership, limited liability company or partnership, association, trust, joint venture or other entity.

Purchase Price: is that price paid per Unit purchased a specified in Section 2.1.2 of this Agreement.

 

  

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SEC: shall mean the United States Securities and Exchange Commission.

Transaction Documents: are the Memorandum of Terms (the "MOT"), this Unit Subscription Agreement (the "USA") and the Account Management Agreement (the "AMA").

Unit: shall mean those shares of Convertible Preferred Stock which converts into Common Stock and Warrants to purchase additional shares of the Company's Common Stock which are combined for sale as per Section 2.1.1.

 

Warrants: are those instruments which can be exchanged along with a set dollar amount for common shares of stock as specified in Section 2.1.1. Warrants will be registered with the Preferred Shares so that upon exercise, they will be unrestricted.

1.2 Construction

 

In construing this Agreement, the following principles shall be followed:

 

	
(a)

	
the terms "herein," "hereof," "hereby," and "hereunder," or other similar terms refer to this Agreement as a whole and not only to the particular Article or other subdivision in which any such terms may be employed;

 

	
(b)

	
a reference to any Person shall include such Person's predecessors and successors;

 

	
(c)

	
all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with U.S. GAAP;

 

	
(d)

	
no consideration shall be given to the captions of the articles, sections, subsections, or clauses, which are inserted for convenience in locating the provisions of this Agreement and not as an aid in its construction;

 

	
(e)

	
examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

 

	
(f)

	
the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions;

 

	
(g)

	
a defined term has its defined meaning throughout this Agreement, regardless of whether it appears before or after the place in this Agreement where it is defined;

 

	
(h)

	
the plural shall be deemed to include the singular, and vice versa;

 

	
(i)

	
each exhibit, attachment, and schedule to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any exhibit, attachment, or schedule, the provisions of the main body of this Agreement shall prevail; and

 

	
(j)

	
a reference to the Company shall mean Spotlight Innovation, Inc.; and

 

	
(k)

	
references to Section or Sections contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement; and

 

	
(l)

	
for purposes of clarity, the term Section used alone to refer to a location in a document shall, unless modified by the Title of a specific document which is separate from this Agreement, be taken as identifying a location within this Agreement.

 

  

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2.

	
Purchase and Sale of Units.

	
2.1

	
Issuance and Sale of Units Consisting of Convertible Preferred Stock and Warrants; Purchase Price.

	
2.1.1

	
Structure:

	
  

	
Subject to and upon the terms and conditions set forth in this Agreement, at the Closing the Company will issue and sell individually and not jointly, to the Investor(s), and the Investor(s), severally and not jointly, shall purchase from the Company that number of Units consisting of (i.) shares of Convertible Preferred Stock (the "Shares"), and, (ii) (Warrants to purchase additional Common Shares (the "Warrant") at such prices and in such amounts as are set forth opposite their respective Warrant Series name in Figure 1 hereto, and an expiration date of forty eight (48) months following registration or 24 months following final disbursement of capital from this offering whichever is longer.

 

(Unit Structure (Figure 1))

 

 

Notes:

 

	
1.

	
Assumes current outstanding common for first 12 Breakouts. Discussion with counsel is advised.

	
2.

	
Each Warrant carries the right to purchase 1 registered common share. Warrants will be divided up into separate warrant classes A-AJ and are described in Section 2.2, figures 2-3.

	
3.

	
Includes all equity, including the VAM (described in Section 4.10.1), warrants and assumes no sales of shares by Investors.

 

  

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2.1.2

	
Payment:

	
  

	
The Investor(s), severally and not jointly, shall individually purchase that number of Units as is set next to their names on the Signature Page and such cost per Unit as specified in Figure 1. In consideration of the sale of these Units, and in reliance on the representations and warranties herein provided by the Company for the benefit of the Investor(s), the Investor(s) shall deliver their portion of the agreed to Total Unit Purchase (the "Purchase Price") as is set forth in Figure 1 above. Payment of the Purchase Price, of both the Unit Subscription Agreement and the Warrant exercise, shall be made to the Company's Cash Account with the Intermediary as specified in the AMA which will monitor the capital disbursement.

	
2.1.3

	
All or None:

	
  

	
This is an "All or None" offering. Should the requisite number of Units to fulfill the entire offering not be subscribed to, the offering will not close.

	
2.2

	
Closing; Deliveries.

	 	
(a)

	
The closing of the sale and purchase of the Units hereunder (the “Closing”) shall take place at the offices of the Intermediary, Elco Securities, Ltd. in Abaco, Bahamas. The date of the Closing is hereinafter referred to as the “Closing Date”. Such Closing shall be evidenced by a letter from the Intermediary attesting to the Closing and stating the available capital to the Company in their account (the "Closing Notification").

	 	
(b)

	
At the Closing, the Company shall deliver, or cause to be delivered, to each of the Investor(s), (i.) certificates evidencing the Convertible Preferred Shares being purchased by such Investor(s) as called for in the AMA, registered in the name of such Investor(s), against payment to the Company of the Purchase price by such Investor(s), (ii.) the Warrants being purchased by such Investor(s) against payment to the Company of the Purchase Price by such Investor(s), (iii.) a corporate resolution authorizing the offering, closing and submission to the Account Management Agreement and (iv.) an opinion letter stating that the offering is an obligation of the company and that the offering has been completed according to applicable securities regulations.

 

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3.

	
Representations and Warranties of the Company. The Company hereby represents and warrants to the Investor(s) that the statements contained in this Section 3 are true and correct representations and warranties of the Company which the Investor(s) may rely on.

	
3.1

	
Incorporation, Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under, and by virtue of, the laws of the State of Nevada. The Company has full corporate power and all lawful authority to own, lease and operate its properties and assets and to carry on its business as presently conducted or as proposed to be conducted. The Company is duly qualified or licensed to do business as a either a foreign or domestic corporation and is in good standing in each jurisdiction where the character of its properties or the nature of its business makes such qualification or licensing necessary, except where the failure to be so qualified or licensed would not reasonably be expected to have a Material Adverse Effect.

	
3.2

	
Capitalization. The Capitalization Table in Section 3.2.1 and 3.2.2, sets forth a true and complete model of the Common and Preferred Stock of the Company authorized and outstanding as of the date hereof. There are no shares of Common Stock or Preferred Stock held in the Company's treasury which are not included herein. The Capitalization Table of the Company (immediately prior to the Closing) consists of:

 

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3.2.1

	
Common Shares.

	
  

	
As of the date of this representation, and inclusive only of those instruments already authorized or issued, the capital structure of Common Shares is as follows:

	
  

	
(Common Share Chart)

 

 

  

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3.2.2

	
Preferred Shares.

	
  

	
As of the date of this representation, and inclusive only of those instruments already authorized or issued, the capital structure of Preferred Shares is as follows:

	
  

	
(Preferred Share Chart)

 

 

	
3.2.3

	
Authorization of Present Capitalization. All of the issued, issuable and outstanding shares of all classes of stock have been duly authorized and validly issued and/or are duly authorized and validly issuable. There are no non-assessable classes of stock. There are no classes of stock with any liability attached to the ownership thereof. All shares of Common Stock, Preferred Stock and all other outstanding securities of the Company have been issued in compliance with all applicable federal and state securities laws.

	
3.2.4

	
Outstanding Items. Except as provided for herein: (i.) there are no outstanding subscriptions, options, warrants, calls, contracts, demands, commitments or other agreements or arrangements of any character or nature whatsoever under or pursuant to which the Company is or may become obligated to issue any shares of its capital stock, (ii.) the Company has no obligation (contingent or otherwise) to purchase, redeem or otherwise acquire any shares of its capital stock or any interest therein or to pay any dividend or make any distribution in respect thereof, (iii.) there are no outstanding or authorized stock appreciation, phantom stock or similar rights with respect to the Company and (iv.) the Company has no obligation (contingent or otherwise) to issue any subscription, option, warrant, convertible security or other such right or to issue or distribute to holders of any shares of its capital stock any evidence of indebtedness or assets of the Company.

	
3.2.5

	
Capitalization Table Alteration. The Company does not plan to increase its total authorized or issue any additional shares or warrants, except as provided herein, and for those shares necessary to complete the acquisition of a $1,000,000 to $1,500,000 working capital facility for the company, for a period of at least 36 months.

	
3.3

	
Subsidiaries. The Company owns or controls Celtic Biotech Iowa Inc. through ownership of the majority of the common and Series A Preferred Shares of such corporation. Celtic Biotech Iowa Inc.is an Iowa corporation.

 

  

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3.4

	
Authority; Due Authorization. The Company has the full right, power and authority to execute and deliver this Agreement and the Transaction Documents, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery by the Company of this Agreement and the Transaction Documents, the performance by the Company of its obligations hereunder and thereunder, including the authorization, issuance and delivery of the Shares, and the consummation by the Company of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary director and stockholder action in respect thereof. No other proceedings on the part of the Company, its officers, directors or stockholders, are necessary to authorize the execution and delivery of this Agreement or the Transaction Documents and the performance by the Company of its obligations hereunder or thereunder. This Agreement is and each of the Transaction Documents has been, or, when executed will be, duly executed and delivered by the Company. This Agreement constitutes, and each of the Transaction Documents when executed will constitute, a valid and binding obligation of the Company, enforceable against it in accordance with their respective terms, subject to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditor's rights generally and to general equitable principles.

	
3.5

	
Valid Issuance of Securities.

	
(a)

	
The Units, when issued, sold and delivered in accordance with the terms of this Agreement shall be duly and validly issued, fully paid and non-assessable and free of restrictions on transfer, other than restrictions on transfer under this Agreement, the Stockholders' Agreement and applicable state and federal securities laws. The underlying shares will be issued under rule 144 and shall be restricted from sale for a period of six (6) months or until such date as a registration statement filed with the US Securities and Exchange Commission is filed and accepted.

	
(b)

	
The Shares, when issued, will have been duly and validly reserved for issuance and, upon issuance in accordance with the terms of the Shares, this Agreement and the Certificate of Incorporation, shall be duly and validly issued, fully paid and non-assessable and free of restrictions on transfer, other than restrictions on transfer under this Agreement, the Stockholders' Agreement and applicable federal and state securities laws.

 

	
3.6

	
Stockholder Agreements. Except as provided in this Agreement and the other Transaction Documents, there are no agreements, written or oral, between the Company and any current holder of its securities, or to the Company's knowledge, among any holders of its securities, relating to the acquisition (including, without limitation, rights of first refusal, anti-dilution or preemptive rights), disposition, registration under the Securities Act, or voting of the Common Stock or Preferred Stock. (Stockholder Agreements)

 

	
3.7

	
Governmental Consents. All consents, approvals, orders, authorizations or registrations, qualifications, designations, declarations or filings with any federal, state or local governmental authority on the part of the Company required in connection with the consummation of the transactions contemplated herein have been obtained and are effective, except for such filings required to be made after the Closing under applicable federal and state securities laws, which shall be timely made within the applicable periods therefore.

 

  

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3.8

	
Compliance with Other Instruments.

 

	
(a)

	
The Company is not in, nor shall the conduct of its business as proposed to be conducted, result in, any violation, breach or default of any term of its Certificate of Incorporation, By-Laws or any judgment, decree, order, statute, rule or regulation applicable to or binding upon the Company its business or operations or any of its assets or properties.

	
(b)

	
The execution and delivery by the Company of this Agreement and the Transaction Documents, the performance by the Company of its obligations hereunder and thereunder and the consummation by the Company of the transactions contemplated hereby and thereby shall not: (i.) conflict with or violate any provision of its Certificate of Incorporation or By-Laws, (ii.) conflict with, result in a breach of, or constitute (with or without due notice or lapse of time or both) a default under, create in any party the right to terminate, modify or cancel, or require any notice, consent or waiver under, any contract to which the party is a contract or (iii.) constitute an event which results in the creation of any lien, claim, encumbrance, security interest or charge upon any asset of the Company, the suspension, revocation, impairment, forfeiture or non-renewal of any permit, license, authorization or approval applicable to the Company, its business or operations or any of its assets or properties.

	
3.9

	
Financial Statements; Liabilities. The Company has made available to the Investor(s) the balance sheet of the Company and the income statement of the Company for the last 2 years (collectively, the “Financial Statements”). Any and all public financials as listed on Edgar are also at the disposal of the investor. Such Financial Statements (i.) were prepared from the books and records of the Company; (ii.) are true, correct and complete; and (iii.) present fairly, in all material respects, the financial condition and results of operations of the Company as of the date or dates and for the period or periods therein specified. The books of account and other financial records of the Company are in good order and have been properly maintained in all material respects.

	
3.10

	
Full Disclosure. The Company has provided the Advisor with all information required by the Securities Regulations, which the Company is subject to, in connection with the Investor(s) decision to purchase the Shares.

	
3.11

	
Compliance. The Company represents that they understand that this document may or may not satisfy their requirements of compliance with state or federal law, corporate, securities or other, and they are representing that they have obtained sufficient legal counsel to instruct them on what additional items, if any, that will be required of them to properly complete this Agreement. The Company further represents that initial drafting of this and the accompanying AMA, in no way obfuscates their responsibilities to complete and file the appropriate forms and notifications with the appropriate reporting entities to be in compliance with those laws and regulations.

 

  

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4.

	
Representations and Warranties of each Investor(s). The Investor(s) hereby represents and warrants, severally and not jointly, to the Company that the statements contained in this Section 4 are true and correct representations and warranties of the Investor which the Company may rely on:

	
4.1

	
Organization, Good Standing and Qualification. The Investor(s) has been duly formed and/or incorporated and is validly existing and in good standing under, and by virtue of, the laws of the jurisdiction of its organization or incorporation, as the case may be, and has all requisite power and authority to own its properties and assets and to carry on its business as now conducted and as presently proposed to be conducted.

	
4.2

	
Accreditation. The Investor(s) is an "Accredited Investor(s)" as defined in Rule 501(a) of the United States Securities Act of 1933(See Exhibit A) and has sought investment advice on this transaction from a registered securities advisor or legal advisor who has opined that the investment is suitable for the Investor, and is acquiring the Shares for their own account.

	
4.3

	
Investigation; Consideration of Risks. The Investor(s) acknowledges that it has had an opportunity to examine the business, affairs and current prospects of the Company and has had access to information about the Company that it has requested as represented by the Company in their uploads to the Due Diligence Portal provided by the Advisor. The Investor(s) further acknowledges that it is able to fend for itself in the transactions contemplated by this Agreement and has the ability to bear the economic risks of its investment pursuant hereto. The Investor(s) has such knowledge or experience in financial and business matters that it is capable, either alone or together with its financial and/or legal advisor(s), if any, of evaluating the merits and risks of investing in the Company. The Investor(s) realizes that this investment involves a high degree of risk, including the risk of loss of all investment in the Company. The Investor(s) is able to bear the economic risk of the investment, including the total loss of such investment. The Investor(s) is experienced and knowledgeable in financial and business matters to the extent that the Investor(s) is capable of evaluating the merits and risks of the prospective investment in the Shares.

	
4.4

	
Registration; Restricted Securities. The Investor(s) represents that they are acquiring such securities for investment purposes only. Each Investor(s) understands that the Shares are restricted securities within the meaning of Rule 144 under the Securities Act and that the Shares could be held for a period of six months or until such time as those shares are registered for sale under the Securities Act or an exemption from such registration is available. The Investor(s) further understands that among the conditions for use of Rule 144 may be the availability of current public information about the Company and that such information may not now be available.

	
  

	
The Investor(s) understands that the company shall at its earliest convenience, but not later than three (3) months following the purchase of these securities, use its best efforts to perform a registration of these securities to remove the restrictive legends and allow for sale of such securities unless such securities have become by way of Rule 144, free trading. The Investor(s) shall be registered as selling shareholders.

 

  

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Nothing herein will prohibit the Investor(s) from holding their securities for any period of time as they reasonably see fit. The Investor(s) hereby represents that they will be making investment decisions separate from any other investor and nothing in this Agreement or the AMA has the effect of comingling the individual Investor(s) shareholdings or decision making processes. The location or proximity of signatures on this document are not a representation of the pooling of interests and have been obtained individually from any signing Investor(s).

	
4.5

	
Restrictive Legends. It is understood that the certificates representing the Shares shall be stamped or otherwise imprinted with a legend substantially in the following form or other form as required by law:

 

	
  

	
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR UNDER THE SECURITIES LAWS OF ANY STATE. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS AND UNTIL SUCH SECURITIES ARE REGISTERED UNDER SUCH ACT OR AN OPINION OF COUNSEL IS OBTAINED TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED.

	
4.6

	
Authority. The Investor(s) has the full right, power and authority to execute and deliver this Agreement and the Transaction Documents, to consummate the transactions contemplated hereby and thereby and to perform its obligations hereunder and thereunder. The execution and delivery by the Investor(s) of this Agreement and the Transaction Documents, the performance by the Investor(s) of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby have been duly and validly authorized by all necessary corporate action, in respect thereof, on the part of the Investor(s). No other proceedings on the part of the Investor(s) are necessary to authorize the execution and delivery of this Agreement or the Transaction Documents and the performance by the Investor(s) of their obligations hereunder or thereunder. This Agreement is, and the Transaction Documents have been, or, when executed will be, duly executed and delivered by the Investor(s). This Agreement constitutes, and each of the Transaction Documents when executed will constitute, valid and binding obligations of each of the Investor(s), enforceable against each Investor(s) in accordance with their respective terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditor's rights generally and to general equitable principles.

	
4.7

	
No Public Market. The Investor(s) understands that limited or no public market now exists for any of the Shares, and that the Company has made no assurances that a public market will ever exist for the Shares.

 

	
5.

	
Affirmative Covenants of the Company. The Company covenants to the Investor(s) as follows:

	
5.1

	
Removal of Restrictive Legend. The legend set forth in Section 4.5 above shall be removed by the Company and its Transfer Agent from any certificate evidencing the Shares upon delivery to the Company of an opinion of counsel "Legal Opinion" that a registration statement under the Securities Act is at that time in effect with respect to the Shares or that the Shares can be freely transferred in a public sale without such a registration statement being in effect and that such transfer shall not jeopardize the exemption or exemptions from registration pursuant to which the Company issued the Shares. The Company shall bear the costs of obtaining any legal opinions or other documents necessary to enact such legend removal. Should the Investor(s) be forced to obtain such Legal Opinion independently, such costs shall be reimbursed to them by the Company.

 

  

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5.2

	
Basic Financial Information and Reporting.

	
(a)

	
The Company will maintain true books and records in which full and correct entries will be made of all its business transactions pursuant to a system of accounting established and administered in accordance with GAAP consistently applied, and will set aside on its books all such proper accruals and reserves as shall be required under GAAP consistently applied.

	
(b)

	
As soon as practicable, and within ninety (90) days after signing this Agreement, the Company will furnish the Investor(s) with an audited balance sheet of the Company, as at the end of such fiscal year, and audited statements of income and cash flows of the Company, for such year, all prepared in accordance with GAAP consistently applied. The provision of these statements may be in direct mailings or public filings with the US Securities and Exchange Commission.

	
5.3

	
Inspection Rights. For so long as any Investor of this offering holds at least 5% of the outstanding shares of Stock (as adjusted pursuant to Section 8.14 hereof), that Investor shall have the right, but not the obligation, to participate as a non-voting observer during all meetings of the Company's Board, visit and inspect any of the properties of the Company or any of its subsidiaries, and to discuss the affairs, finances and accounts of the Company or any of its subsidiaries with its officers, and to review such information as is reasonably requested all at such reasonable times during business hours and as often as may be reasonably requested. As such, the Investor(s) shall be included in any Notice issued regarding any periodic, annual or special Meeting of the Board of Directors according to the Bylaws of the Company. The rights granted hereby shall be in addition to, and not in limitation of, any rights afforded stockholders under the General Corporation Law of Nevada. The Investor understand that any such action could put them in an insider position of information and as such, if such rights are executed upon by the investor that they may be restricted from sales of securities until such time as the information they are in possession of has become public. In no way does this right in and of itself put the investors in an insider position and election to execute on this right is at the sole discretion of the investor. The Investor shall notify the Company in writing 90 days in advance of such election to participate or to inspect.

	
5.4

	
Securities Filings. The Company shall timely make, within the applicable periods therefore, all filings required to be made after the Closing under applicable federal and state securities laws in connection with the offer and sale of the Shares.

	
5.5

	
Conversion. The Company shall timely deliver all necessary items to effect any conversion of Preferred Shares to Common Shares following Conversion Notice by the Intermediary. Should the Company refuse to convert or provide the necessary items to the Transfer Agent to effect conversion, and the Investor(s) are forced to institute a suit to force such conversion, the Investor(s) may bill the costs of such suit to the Intermediary against the Cash Account of the Company.

 

  

15

  

 

	
6.

	
Obligations of the Company at Closing. At the Closing, the Company shall deliver to the Investor(s) the following:

	 	
(a)

	
Signed copies of this Unit Subscription Agreement; and

	 	
(b)

	
Resolutions of the Board and stockholders, if required by corporate by laws, of the Company, authorizing and approving all matters in connection with this Agreement and the transactions contemplated hereby, certified by the Secretary or Assistant Secretary of the Company as of the Closing Date; and

 

	 	
(c)

	
 
An attorney opinion letter stating that the corporate action is a binding commitment on the corporation and that the offering is in compliance with applicable securities regulations; and

 

	 	
(d)

	
Certificates representing the Preferred Shares and the Warrants

	
7.

	
Obligations of the Investor(s) at Closing. At the Closing, the Investor(s) shall deliver to the Company, via the Intermediary, the following:

	 	
(a)

	
Conditional undertaking(s) providing the value equal to the aggregate purchase price required to be paid by each Investor(s) with respect to its purchase of the Shares hereunder.

	 	
(b)

	
A Signed Unit Subscription Agreement from each investor. (The Intermediary may gather the required signatures on one document or separate documents. The collection of signatures on one document does not indicate pooling of interest or integration of investment decision processes among the Investor(s).)

	
8.

	
Miscellaneous.

	
8.1

	
Survival of Representations, Warranties and Agreements. The representations and warranties in this Agreement, including any rights arising out of any breach of such representations and warranties, shall survive the Closing for a period of two years. All covenants in this Agreement, including any rights arising out of any breach thereof, shall survive the Closing for the periods specified in Section 5; provided that if no period is specified such covenants shall survive indefinitely.

 

  

16

  

 

	
8.2

	
Transfer; Successors and Assigns. The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the Investor(s). The Company may not assign its rights and obligations hereunder without the consent of the Investor(s). The provisions of this Section 8.2 shall not limit the Investor(s)' ability to assign their rights and obligations under any Transaction Document.

 

	
8.3

	
Governing Law. This Agreement and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the Commonwealth of the Bahamas, without giving effect to principles or conflicts of law. All parties submit to the venue and the laws of Nassau Bahamas for any court actions. No party shall act to contravene such venue or rule of law.

	
8.4

	
Counterparts. This Unit Subscription Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument. Counterpart numbering is included on Page 1 of this document and all subsequent pages identified by the Reference Number at the bottom of each page.

	
8.5

	
Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

	
8.6

	
Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications under this Agreement shall be in writing and shall be conclusively deemed delivered and effective (i.) when hand delivered to the other party, (ii.) five business days after being sent by registered or certified mail, return receipt requested, postage prepaid, (iii.) one business day after being sent via a reputable nationwide overnight courier service guaranteeing next business day delivery or (iv.) in the case of a facsimile transmission, upon transmission thereof by the sender and the issuance by the transmitting machine of a confirmation slip confirming that the number of pages constituting the notice have been transmitted without error; provided, however, that the sender shall contemporaneously mail a copy of the notice to the addressee by the method provided for in (i.) or (ii.) above, but such mailing shall in no way alter the time at which the notice sent by facsimile transmission is deemed received, in each case to the intended recipient as set forth below:

If to the Company, at:

Spotlight Innovation

6750 Westown Pkwy Suite200-226

West Des Moines, IA 50266

Attention: Cristopher Grunewald

  

17

  

 

If to the Advisor:

Catwalk Capital, LLC.

1730 LaBounty Rd Ste-3, #174

Ferndale, WA 98248

Attention: Principal

Investor(s) Notification addresses are located in Appendix A. The Investor(s) maychoose to utilize the Intermediary to receive and distribute notifications as a third partyverification of receipt of such notices. The utilization of this option does not indicate orrepresent that the Investor(s) are acting jointly or have pooled interests.

Any party may change the address to which notices, requests, consents or other communications hereunder are to be delivered by giving the other parties notice in the manner set forth in this Section.

 

	
8.7

	
Company Expenses. The Company shall bear its own costs for the preparation of this Agreement.

	
8.8

	
 Investor(s) Expenses. The Investor(s) shall have their expenses reimbursed monthly up to a maximum of $3,500.00 per month and any associated expenses for Breakup should the transaction not carry forward. Such expenses shall be billed through the Advisor.

	
8.9

	
Amendments and Waivers. Any term of this Agreement may only be amended in writing, and such written agreement is signed by the Company and the Investor(s).

	
8.10

	
Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (a) such provision shall be excluded from this Agreement, (b) the balance of the Agreement shall be interpreted as if such provision were so excluded and (c) the balance of the Agreement shall be enforceable in accordance with its terms. Any exclusion of a provision from this Agreement that has the effect of decreasing the Investor(s) protections afforded herein, will not affect the protections afforded in the AMA.

 

	
8.11

	
Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any party under this Agreement, upon any breach or default of any other party under this Agreement, shall impair any such right, power or remedy of such non-breaching or non-defaulting party nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereafter occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any party of any breach or default under this Agreement, or any waiver on the part of any party of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement or by law or otherwise afforded to any party, shall be cumulative and not alternative.

 

  

18

  

 

	
8.12

	
Entire Agreement. This Agreement and the documents referred to herein, such as, but not limited to the Account Management Agreement, Company Compliance Agreement, Memorandum of Terms and the Warrant Agreements, including Exhibits and Appendices, constitute the entire agreement between the parties hereto, pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled.

	
8.13

	
Confidentiality. The Investor(s) agree that they will keep confidential and will not disclose, divulge or use for any purpose other than to evaluate and monitor their investment in the Company any confidential, proprietary or secret information which the Investor(s) may obtain from the Company pursuant to financial statements, reports and other materials submitted by the Company to the Investor(s) pursuant to this Agreement, or pursuant to visitation or inspection rights granted hereunder or under any Transaction Document (“Confidential Information”), unless such Confidential Information is known, or until such Confidential Information becomes known, to the public (other than as a result of a breach of this Section 8.13 by the Investor(s)); provided, however, that the Investor(s) may disclose Confidential Information (i.) to their attorneys, accountants, consultants, and other professionals to the extent necessary to obtain their services in connection with evaluating and monitoring the Investor(s)' investment in the Company, (ii.) in connection with any legal proceeding relating to this Agreement or any of the Transaction Documents or (iii.) as may otherwise be required by law, provided that the Investor(s) take reasonable steps to minimize the extent of any such required disclosure. Subject to the provisions of this Section 8.13, the Investor(s) shall use, and shall use their best efforts to ensure that their authorized representatives use, the same degree of care as the Investor(s) use to protect their own confidential information to keep confidential any Confidential Information furnished to them, except that the Investor(s) may disclose such Confidential Information to any partner, member, subsidiary or parent of the Investor(s) so long as such partner, member, subsidiary or parent is advised of the confidentiality provisions of this Section 8.13. The Company shall notify Investor(s) prior to delivery of any information which would place the Investor(s) in an insider knowledge position and await confirmation that such information delivery is acceptable to the Investor(s). Any Confidential information shall be stamped or labeled as "Confidential".

 

	
8.14

	
Adjustments for Stock Splits, Etc. Where in this Agreement there is a reference to a specific number of shares of Investor(s) Stock, then, upon the occurrence of any subdivision, combination, stock dividend or stock split, the specific number of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect of such subdivision, combination, stock dividend or stock split on the outstanding shares of stock.

	
8.15

	
Legal Fees. If any Action is necessary to enforce or interpret the terms of this Agreement or any of the Transaction Documents, the prevailing party shall be entitled to reasonable attorney's fees, costs and necessary disbursements in addition to any other relief to which such party may be entitled.

 

	
8.16

	
Bankruptcy. Should the Company be placed, either voluntarily or involuntarily, into a bankruptcy proceeding prior to full funds delivery from the Cash Account to the Companies Working Account, such proceeding will have no effect on the delivery of capital and will leave this Agreement and the AMA in full force and effect unless a negotiated alteration to such documents in established and signed by the Investor(s), Intermediary and the Company. The Courts must obtain the Intermediaries and the Investor(s) agreement to any modification of the Use of Proceeds, terms or release schedule.

 

  

19

  

 

IN WITNESS HEREOF, the Company has executed this Unit Subscription Agreement as of the date listed.

 

 

IN WITNESS HEREOF, the Investor(s) have executed this Unit Subscription Agreement as of the date listed.

  

20

  

 

EXHIBIT A

 

US Securities Act of 1933, Regulation D, Rule 501

Rule 501 -- Definitions and Terms Used in Regulation D

As used in Regulation D, the following terms shall have the meaning indicated:

A. Accredited investor. Accredited investor shall mean any person who comes within any of the following categories, or who the issuer reasonably believes comes within any of the following categories, at the time of the sale of the securities to that person:

 

1. Any bank as defined in section 3(a)(2) of the Act, or any savings and loan association or other institution as defined in section 3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity; any broker or dealer registered pursuant to section 15 of the Securities Exchange Act of 1934; any insurance company as defined in section 2(a)(13) of the Act; any investment company registered under the Investment Company Act of 1940 or a business development company as defined in section 2(a)(48) of that Act; any Small Business Investment Company licensed by the U.S. Small Business Administration under section 301(c) or (d) of the Small Business Investment Act of 1958; any plan established and maintained by a state, its political subdivisions, or any agency or instrumentality of a state or its political subdivisions, for the benefit of its employees, if such plan has total assets in excess of $5,000,000; any employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 if the investment decision is made by a plan fiduciary, as defined in section 3(21) of such act, which is either a bank, savings and loan association, insurance company, or registered investment adviser, or if the employee benefit plan has total assets in excess of $5,000,000 or, if a self-directed plan, with investment decisions made solely by persons that are accredited investors;

 

2. Any private business development company as defined in section 202(a)(22) of the Investment Advisers Act of 1940;

 

3. Any organization described in section 501(c)(3) of the Internal Revenue Code, corporation, Massachusetts or similar business trust, or partnership, not formed for the specific purpose of acquiring the securities offered, with total assets in excess of $5,000,000;

 

4. Any director, executive officer, or general partner of the issuer of the securities being offered or sold, or any director, executive officer, or general partner of a general partner of that issuer;

 

5. Any natural person who has individual net worth, or joint net worth with the person's spouse, that exceeds $1 million at the time of the purchase, excluding the value of their primary residence;

 

6. Any natural person who had an individual income in excess of $200,000 in each of the two most recent years or joint income with that person's spouse in excess of $300,000 in each of those years and has a reasonable expectation of reaching the same income level in the current year;

 

7. Any trust, with total assets in excess of $5,000,000, not formed for the specific purpose of acquiring the securities offered, whose purchase is directed by a sophisticated person as described in Rule 506(b)(2)(ii) and

 

8. Any entity in which all of the equity owners are accredited investors

  

21

  

 

Exhibit B

 

Conversion Notice Form

 

  

22

  

 

Exhibit C

Warrant Exercise Notification

 

 

 

23stlt_ex105.htm

EXHIBIT 10.5

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

ACCOUNT MANAGEMENT AGREEMENT

For Management of the Unit Subscription Agreements

USA 849207105 STLT No's: 01-10

Date: June 9, 2014

Between:

Spotlight Innovation

6750 Westown Pkwy Suite200-226

West Des Moines, IA 50266

515-274-9087

A Nevada Company

 

And:

Those Investors Individually Signed in the Investors Blocks of the

Unit Subscription Agreements

(the "Investor(s)")

 

And Managed By:

Elco Securities, Ltd. ("Intermediary")

Loyalist Plaza, Don Mackay Blvd.

P.O. Box AB-20377

Marsh Harbor

Abaco, Bahamas

 

  

1

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

INTRODUCTION.

 

This agreement will serve as the Account Control Agreement between the Investor(s), and Spotlight Innovation (the "Company"). This Agreement to be held and managed by Elco Securities, Ltd. (the “Intermediary”).

RECITALS.

Whereas: Investor(s) have separately and individually agreed to purchase securities from the Company and the Company has agreed to sell said Securities to Investor(s) under separate Unit Subscription Agreement(s) a copy of which is attached hereto in Exhibit B.

Whereas: The Investor(s) wish to monitor and enforce the Use of Proceeds to ensure that it meets the projected Use of Proceeds agreed to in the Memorandum of Terms (the "MOT").

Whereas: The Investor(s) have taken substantial risk in assigning an advanced valuation to the shares of this offering based on the Company's projections and assertions of success. To provide for monitoring the success of these projections and assertions, a detailed Use Of Proceeds with Capital Breakout/Workouts according to those same projections was developed and agreed to in the MOT. In order to administer such Breakout/Workout schedule and monitor the Use of Proceeds, a third party must be engaged to manage and monitor the Agreements and distributions.

Whereas: Elco Securities, Ltd. (the Intermediary"), a registered Investment Bank in The Commonwealth of the Bahamas has agreed to act as Intermediary in the Offering and to provide account management services for the Parties.

Whereas: Having signed the Unit Subscription Agreement, the Company and Investor(s) have each individually agreed to consent to this separate Account Management Agreement to enact certain controls over the monitoring and management of the investment, the management of the Use of Proceeds and the , which controls, the Intermediary shall manage and monitor.

Therefore: This Account Management Agreement (the "AMA") between the parties to provide controls on capital flow, invested capital security, use of proceeds verification, share distribution management and terms management.

 

  

2

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

I. DEFINITIONS & CONSTRUCTION.

 

1.2 Definitions:

 

"Affiliate" means, with respect to a Person, a Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or is under common control with, the first Person. For the purposes of this definition, "control" means, when used with respect to any Person, the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise, and the terms "controlling" and "controlled" have correlative meanings.

"Assets" means:

 

	
(a) 

	
All of the Company's ownership interests in the Company Account; and

	
(b) 

	
All of the Company's interest in the Business, including: easements, rights of way and other matters related thereto or necessary for the operation thereof; and

	
(c) 

	
All of the Company's interest in any and all of the real property forming a part of or in any way associated with the Business together with all buildings, other constructions and component parts thereof; and

	
(d) 

	
All of the Company's interest in all licenses and similar instruments owned by the Company; and

	
(e) 

	
All contracts and agreements of the Company; and

	
(f) 

	
All of the Company's interest in any and all equipment, personal property, fixtures and other improvements; and

	
(g) 

	
All vehicles, motorized equipment, trailers, tractors, dozers and other similar items used in the operation of the Business; and

	
(h) 

	
All permits and licenses; and

	
(i) 

	
The Working Capital of the business, including all Inventory.

"Breakout" means that transfer of cash from the Company Account with the Intermediary to the Working Account, as detailed in Sections 3.4-3.8 of the MOT, while simultaneously uncovering that portion of Common Shares previously purchased by the Investor(s). Breakout/Workouts are delivered once Market and Company milestones are reached as described in the Section(s) 3.5. and 4.10. of the MOT. Breakouts are automatically divided into 30 day "Workout" periods.

"Business" shall mean the commercial activities conducted by the Company utilizing any of the Assets.

"Business Day" means a day, not being a Saturday or Sunday, on which banks are open for business in the Bahamas.

"Business Milestones" means those items called for in the Section 4.10 of the MOT and which includes any reporting and publicly traded status as called for in the MOT.

"Company Account" means the Capital Account formed in the name of Company at Elco Securities, Ltd. to manage the funds disbursal.

 

  

3

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

"Certificate" means those official instruments representing the Common or Ordinary shares and Warrants to purchase Common shares of the Company sold to the Investor(s). Such certificates will be delivered to the Intermediary in the names of the individual investors.

 

"Closing" means that time when cash has been delivered by the Investor(s) to the Company's account with Intermediary, Company's share certificates have been delivered to Intermediary's care and credited to the Investor(s) accounts. Closing is to be determined as the closing date of the purchase agreement between the Investor(s) and the Company. Immediately following Closing, this Account Management Agreement will be enacted by Intermediary and all further instructions will be provided according to this agreement.

"Compliance Check" means that study by Intermediary to ensure that all proper documents have been executed, all accounts are opened properly and all actions conform to local law and the agreements contemplated herein.

"Customer Agreement" means the agreement entered into on or around the date of this Agreement between Company and the Intermediary to open the Company Account.

"Deal" means to sell, dispose of, gift, transfer, assign, mortgage, hold in trust, or otherwise deal with. Does not include the deposit of such securities from certificated form to electronic form or vice a versa.

"Fees" are those fees to be paid pursuant to Article VI.

"GAAP" means U.S. generally accepted accounting principles consistently applied by a specified Person, as in effect on the date hereof.

"Intermediary" means the party who will hold all agreements, cash and securities which is/are part of this agreement. The Intermediary for this transaction is to be Elco Securities Ltd. of Abaco, Bahamas.

"Investor(s)" means the parties which are purchasing (Pre-Close) or have purchased (Post Close) the Company's securities. Herein to be those entities listed in Appendix C.

"Person" means an individual, partnership, limited liability company, corporation, joint stock company, trust, estate, joint venture, association or unincorporated organization, or any other form of business or professional entity.

"Securities" are those instruments of certificated and un-certificated stock and warrants evidencing the Investor(s) ownership in Company.

"Securities Account" are those accounts in the names of the Investor(s) which the uncovered un-certificated (Electronic) Shares are held and/or sold or disbursed (the "Securities Account").

"Memorandum of Terms" means the Final Terms between the Company and the Investor(s) and referred to within this Document as the "MOT". The MOT number for tracking is MOT 849207105 STLT.

"Un-certificated" means Securities of Company owned by the Investor(s) which is held in street (electronic) form by and/or in the name of the Intermediary at its/their designated custodian.

 

  

4

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

"Undertaking" is that authorization from the Company with appropriate resolutions and legal opinions to prove the corporate action is taken in proper compliance and that it is a legal binding obligation of the Company. A form of the Corporate Undertaking is to be located in Exhibit H.

"Unit Subscription Agreement" is that subscription identifying the portion of the Unit Offering to be purchased by the Investor(s) and numbered separately for each investor and referred to in this document as the "USA". The USA number for tracking is USA 849207105 STLT.

1.2 Construction:

 

In construing this Agreement, the following principles shall be followed:

 

	
(a)

	
the terms "herein," "hereof," "hereby," and "hereunder," or other similar terms refer to this Agreement as a whole and not only to the particular Article or other subdivision in which any such terms may be employed;

	
(b)

	
a reference to any Person shall include such Person's predecessors and successors;

	
(c)

	
all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with U.S. GAAP;

	
(d)

	
no consideration shall be given to the captions of the articles, sections, subsections, or clauses, which are inserted for convenience in locating the provisions of this Agreement and not as an aid in its construction;

	
(e)

	
examples shall not be construed to limit, expressly or by implication, the matter they illustrate;

	
(f)

	
the word "includes" and its syntactical variants mean "includes, but is not limited to" and corresponding syntactical variant expressions;

	
(g)

	
a defined term has its defined meaning throughout this Agreement, regardless of whether it appears before or after the place in this Agreement where it is defined;

	
(h)

	
the plural shall be deemed to include the singular, and vice versa;

	
(i)

	
each exhibit, attachment, and schedule to this Agreement is a part of this Agreement, but if there is any conflict or inconsistency between the main body of this Agreement and any exhibit, attachment, or schedule, the provisions of the main body of this Agreement shall prevail; and

	
(j)

	
a reference to the Company shall mean Spotlight Innovation, Inc.; and

	
(k)

	
references to Article headings contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement. All references to Articles contained herein mean Articles of this Agreement unless otherwise stated; and

	
(l)

	
references to Section or Sections contained in this Agreement are inserted for convenience of reference only and will not affect the meaning or interpretation of this Agreement. All references to Section or Sections contained herein mean Sections of either the USA or MOT unless otherwise stated; and

	
(m)

	
for purposes of clarity, the term Article used alone to refer to a location in a document shall, unless modified by the Title of a specific document which is separate from this Agreement, be taken as identifying a location within this Agreement.

	
(n)

	
the Recitals in the preamble are hereby incorporated into this Agreement by this reference.

 

  

5

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

II. INTERMEDIARY INSTRUCTIONS.

 

2.1. Account Formation:

 

2.1.1. Account Opening

 

2.1.1.1. Company

 

Intermediary shall open and style a non-interest bearing account in the name of the Company suitable for management of cash, securities and internal credit, (the "Company Account"), into which, invested undertaking credit will be applied, and, from which account value debits to the Working Account will ensue, according to this Agreement. The account will be opened following receipt of the Customer Agreement and proper account opening documentation and ancillary supporting documentation necessary to meet the Intermediaries know your client (KYC) and anti-money laundering compliance. All such documentation according to Bahamian banking regulations shall be treated as Confidential communications between the Company and the Intermediary. Such documentation must be accompanied by the initial opening fee of $1,500.00.

 

2.1.1.2. Investor(s)

 

Intermediary shall have opened and styled account(s) in the name of the Investor(s) suitable for the management of securities and cash (the "Securities Account(s)") in the name of the Investor(s) into which purchased Securities will be deposited by the Intermediary pursuant to the Unit Subscription Agreement and this Agreement. All such documentation according to Bahamian Banking regulations shall be treated as Confidential communications between the Investor(s) and the Intermediary.

 

2.2. Capital Delivery

 

2.2.1. Capital Undertaking(s)

 

Intermediary will be in receipt of instruction undertaking(s) from the Investor(s). At Closing, the Intermediary shall secure such value from the undertakings, for credit to the Company Account. All such undertaking instructions, according to Bahamian banking regulations, shall be treated as a Confidential communication between the Investor(s) and Intermediary.

 

2.2.2. Evidentiary Letter

 

Intermediary will issue a letter to Investor(s), Advisor and Company in evidence that the Purchase Price value is secured and Pre-Closing is awaiting deposit of Certificated Securities.

 

2.3. Certificated Security Trust

 

2.3.1. Certificate Delivery

 

The Company shall deliver to the Intermediary prior to Closing start, in the Investor(s) name(s) and in the denominations called for in Exhibit A, those share certificates as listed in Exhibit A, evidencing the total purchase according to the Unit Subscription Agreement. The Company must issue certificates as listed in Exhibit A, or the Intermediary is instructed to send back those certificates not according to the certificate schedule for cancellation and reissuance prior to Closing.

 

2.3.2. Evidentiary Letter

 

Upon receipt, the Intermediary shall verify that the certificates delivered by the Company match in denomination and number as those certificates listed in Exhibit A. Should the certificates not match, the Intermediary will return those certificates which are out of sync with Exhibit A and will specify those certificates in the Evidentiary Letter.

 

2.3.3. Certificate Reissuance

 

Should the Evidentiary letter call for it, the Company will cancel those certificates issued in error and reissue the correct securities certificates. Such corrected certificates shall be delivered to the Intermediary as soon as possible.

 

  

6

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.3.4. Secondary Evidentiary Letter

 

Upon receipt and verification of the corrected certificates, the Intermediary shall start the process of Articles 2.3.1.through 2.3.3. anew, until all certificates matching Exhibit A have been issued and delivered to the Intermediary.

 

2.4. Closing Checklist

 

2.4.1 Closing Establishment

 

Following issuance of the Undertaking and Certificate Evidentiary Letters, the Intermediary shall check to ensure that the proper documentation is in place and all actions necessary to approve the close have been delivered before ordering the close of this Agreement.

 

2.4.2. Deficiency

 

Should the Intermediary determine that a deficiency exists in the documentation provided, the Intermediary shall issue a request immediately to the party responsible for the documentation. The Intermediary shall await the delivery of the required documentation before issuing any evidentiary letters.

 

2.4.3. Company Undertaking

 

The Company shall deliver a letter to the Intermediary (the Company "Undertaking" to be lodged with the Intermediary and herein copied in Exhibit H) stating:

 

	
(a)

	
That the Unit Subscription Agreement and this Account Management Agreement are signed and uploaded to the Dropbox folder provided by the Advisor for this transaction; and

	
(b)

	
Confirming that, the Certificated Securities in the possession of the Intermediary as detailed in Exhibit A, have been properly and validly issued with a Legal Opinion stating as such to be included as Exhibit E, and

	
(c)

	
Formally requesting that Intermediary close the transaction contemplated in the Unit Subscription Agreement, and

	
(d)

	
A legal opinion that the signing of the USA and AMA are binding obligations of the Company and were entered into in accordance with Corporate Bylaws and State and Federal regulations. Such legal opinion is to be included as Exhibit I to this AMA.

 

2.1.4.4. Pre-Closing Checklist

 

	
(a)

	
Investor(s) shall have delivered all Unit Subscription Agreement signatures and their cash Undertakings to the Intermediary.

	
(b)

	
Company shall have delivered all Unit Subscription Agreement signatures and the Preferred Share certificates and warrant certificates to the Intermediary.

	
(c)

	
Investor(s) shall have delivered all AMA signatures to the Intermediary.

	
(d)

	
Company shall have delivered all AMA signatures to the Intermediary.

	
(e)

	
Investor(s) shall have delivered all required Undertakings in the proper denomination(s) to the Intermediary.

	
(f)

	
Company shall have delivered all required Undertakings to the Intermediary.

	
(g)

	
Company shall have delivered all Securities Certificates in the required denominations as detailed in Exhibit A to the Intermediary.

	
(h)

	
Company shall have delivered all necessary legal opinions required by the MOT, USA and this Agreement.

	
(i)

	
The Company Compliance Agreement is in full force and effect and a letter from the Compliance Attorney stating so it delivered to the Intermediary.

 

2.4.4. Evidentiary Letter

 

Upon verification and completion of its Compliance and Closing Checklists, Intermediary will issue a letter to Investor(s), Advisor and Company evidencing that the Certificated Securities have been received and start the 72 hour closing window.

 

  

7

  

 

AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.5. Closing Window Compliance

 

During the Closing Window period (72 hours), the Intermediary will confirm the following:

 

(a) Status of Parties

(b) Signature Authorization

(c) Signature Coverage

(d) Legal Opinion Issuance

(e) Corporate Resolution Issuance

(f) Due Diligence List Completion

(g) Conflicts Check

(h) Closing Milestone Accomplishments from Section 4.10.1 of the MOT

(i) Certificate Verification

(j) Money Laundering Compliance

 

2.6. Closing

 

Closing shall take place as follows:

 

2.6.1. Capital and Securities Transfer

 

Intermediary shall credit the Company Account from the undertakings of the Investor(s), and, credit Certificated Securities from the Company to Investor(s) Accounts.

 

2.6.2. AMA Assumption

 

Intermediary will immediately operate those accounts under this Agreement.

 

2.6.3. Closing Fees

 

No Fees will be paid at Closing to any party including the Intermediary. All Account, Annual and Monthly fees shall be paid out of the Breakout/Workouts according to the schedule in Section 3.4. of the MOT.

 

2.7. Reversing Transactions

 

Intermediary shall not from the time of closing forward, entertain requests from Company or Investor(s) individually to "Reverse" the transactions by returning or exchanging monies for purchased securities. Intermediary shall only entertain formally submitted Breakup Agreements as per Article 2.7.

 

2.8. Evidenced Transaction Documents

 

2.8.1. Closing Notice

 

Intermediary shall provide a letter to Advisor, Company and Investor(s) by the end of the same Business Day as Closing, evidencing the closing of the transaction and stating the amount of capital credited to the Company's Account.

 

2.8.2. Agreement Dominance Letter

 

Intermediary shall state in the letter that this Account Management Agreement is in full force and effect.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.9. Post Closing Conversion

 

2.9.1. Certificated Share Status

 

Post Closing, Intermediary will be in possession of restricted convertible Preferred Share Certificates in the name(s) of the Investor(s).

 

2.9.2. Preferred Conversion

 

Preferred Share Certificates will be converted to common shares prior to any registration of the underlying common shares. Such conversion will occur following the delivery of a Conversion Notice to the Company.

 

2.9.3. Company Conversion

 

Company will convert to Common Shares those Preferred Shares which such Conversion Notice describes and deliver those Common Shares to the Intermediary as per the Intermediaries Instructions.

 

2.9.4. Securities Management

 

To enact controls over the converted Common Shares, Intermediary shall hold said Common Shares in its name, in its trust account, on behalf of the Investor(s) until those Common Shares are uncovered. Once uncovered, the Intermediary is instructed to release any encumbrance to the Common Shares and accept instructions for those shares from the appropriate Investor(s). Nothing in this Agreement is meant to act as a control over the Investor(s) right to deal with those securities. Nothing in this Agreement signifies that the Investor(s) are acting together in the sales of the shares. Intermediary may manage the securities in any manner it deems necessary to fulfill this Agreement.

 

2.9.5. Registration or Opinion Letter

 

Intermediary shall await delivery of a Registration Statement or opinion letter from the Company's attorneys providing the Intermediary and its Depository evidence of the free trading status of the shares.

 

2.9.6. Electronic Deposit

 

Once the Intermediary has the Common Shares deposited with its depository as free trading shares, the Breakout/Workout Period(s) attached to those shares will commence.

 

2.9.7. Breakout/Workout Start

 

Once those items called for in this Article 2.9 have been accomplished, the Intermediary shall deliver a letter to the Company, the Advisor and the Investor(s) stating that the Breakout/Workout periods have started.

 

2.10 Breakout/Workouts

 

2.10.1 Breakout/Workout Period

 

Each Breakout/Workout shall encompass that period of time necessary to meet the Market Metric Requirements as established in Section 3.5. of the MOT.

 

2.10.2. Breakout/Workout Period

 

Each Breakout/Workout will be divided up into as many Workout Periods as is/are necessary to fully deliver the Breakout/Workout Cash from the Company Account to the Working Account. Each Workout will be no longer than 30 calendar days, but may be shortened if the Market Metrics have fulfilled that Breakout/Workout before the expiration of the 30 day period. The Intermediary will track the Breakout/Workout Periods for each Breakout/Workout (the "Breakout/Workout").

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.10.3. Breakout/Workout Start Requirements

 

In order for cash to be transferred from the Company Account to the Working Account, the following items must be completed and verified by the Intermediary:

 

(a) Market Metrics have been met

(Stated in Section 3.5. of the MOT)

(b) Business Milestones have been met

(Stated in Section 4.10. of the MOT)

(c) Conversion of Preferred to Common

(d) Deposit of Common Shares as Free Trading

(e) Verification that the Company is in Compliance with the MOT, USA and this Agreement

 

2.10.3.1. Intermediary Accounting

 

The Intermediary will track the daily volume which is above the Minimum Bid Price to calculate the Accountable Volume as per Section 3.5.2. of the MOT.

 

2.10.3.2. Uncovered Shares

 

The Intermediary shall calculate the Available Uncovered Shares as per Section 3.6.2. of the MOT.

 

2.10.3.3. Share Release Percentage

 

The Intermediary shall calculate the Share Release Percentage as per Section 3.6.2. of the MOT.

 

2.10.3.4. Cash Release

 

The Intermediary will calculate the Cash Release amount for the given Breakout/Workout as per Section 3.6.2. of the MOT. The Intermediary will keep a running total of all Cash Released in all Breakout/Workout(s). The Intermediary will continue to produce Breakout/Workouts until such time as the full Breakout Cash Amount as stated in Figure 5 of Section 3.4. of the MOT has been uncovered and released.

 

2.10.4. Rolling Effect

 

Should a Breakout/Workout not occur due to deficiencies of requirements during the current 30 day period, the Breakout/Workout period will continue on a day by day basis until such time as the proceeding 30 day period meets the Breakout/Workout requirements.

 

2.10.4.1. Breakout/Workout Continuity

 

One day following the completion of the current Breakout/Workout, the Intermediary will establish the next Breakout/Workout by following Articles 2.9 through 2.10.3.

 

2.11. Breakout/Workout Payments

 

2.11.1. Cash Delivery

 

One week following the end of a Breakout/Workout, the Intermediary shall deliver via wire transfer from the Company Account to the Working Account the Workout Release Cash amount as determined by the Intermediary as per Article 2.10.3.4. During the given 7 day period, the Intermediary will continue to monitor Company Milestones and Compliance as per Section 4.5. and 4.10. of the MOT.

 

2.11.2. Delivery Instructions

 

The Intermediary shall deliver the Breakout/Workout Cash Amount to the Working Account via the Instructions provided in Exhibit B. Should the Intermediary wish to amend these instructions; they may be permitted to do so with the permission of the Advisor and the Company. Such Amendment will replace the instructions provided in Exhibit B.

 

2.11.3. Confirmation

 

The Intermediary cannot confirm or verify that a wire is received in the Working Account. The Intermediary can only confirm that the wire has pulled monies from the Company Account. The Company must verify the receipt of the wire and notify the Intermediary if the wire was not received within 72 hours of delivery by the Intermediary. In such instances, the Intermediary shall request the wire be investigated and redelivered by their correspondent bank. In instances of faulty instructions, the Intermediary will make every effort to retrieve and redeliver the wire to the correct account. Should it be discovered that the wire was delivered according to the instructions provided in Exhibit B or as provided in Article 2.11.2., and that such instructions were faulty, and the Intermediary is not able to retrieve the wire, the Company and Investor(s) shall hold the Intermediary harmless for any loss. The Company is therefore responsible to deliver to the Intermediary correct wire instructions to the Working Account.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

2.11.4. Market Metric & Milestone Sufficiency and Deficiency

 

2.11.4.1. Sufficiency Verification

 

Should Intermediary determine that the Market Metric Requirements set out in Section 3.5. of the MOT, Business Milestones set out in Section 4.10. of the MOT and the Company is in compliance with Section 4.5. of the MOT have met their respective criteria, there exists a "sufficiency" to deliver said Breakout/Workout (which means that the relevant criteria has been satisfied). Intermediary shall then deliver the cash from the Company Account for that Breakout/Workout to the Working Account according to the instructions in Exhibit B. Any cash transfers are subject to the deduction of any fees and expenses as are due and owing with or without instructions from the Company pursuant to this Agreement, the MOT and the Unit Subscription Agreement.

 

2.11.4.2. Notification of Market Metric Deficiency

 

Should the Market Metric Requirements set out in Section 3.5. of the MOT be at a level where they are not meeting their minimum levels for a period of 15 days, the Intermediary shall provide notification to the Advisor of such deficiency. Intermediary shall continue to monitor the Market Requirements in a daily 30 day rolling period until such time as the Market Requirements have been met.

 

2.11.4.3 Notification of Business Milestone Deficiency

 

Should the Business Milestones listed in Section 4.10. of the MOT be unfulfilled at their appointed time, the Intermediary shall provide notification to the Advisor of such deficiency and the Intermediary shall issue a "Notice of Deficiency" to Company and Investor(s) describing the deficiency. Intermediary will then await a correction to the deficiency by Company or an amendment to the instructions for that period signed by the Investor(s) and Company.

 

2.11.4.3. Deficiency Effect

 

Upon receipt of said "Notice of Deficiency", Company and Investor(s) may make alternate agreements or await the development completion. Should alternate agreements be made, these agreements need to be evidenced in writing signed by both Company and Investor(s).

 

2.12. Breakout/Workout Instructions

 

2.12.1. Breakout/Workout Schedule

 

Intermediary shall follow the Breakout/Workout schedule, as set forth in Figure 5 of Section 3.4. of the MOT to determine when Breakout/Workouts shall be delivered unless amended instructions signed by both Company and Investor(s) have been lodged with Intermediary for that Breakout/Workout.

 

2.12.2. Fee Transfers

 

Any transfers of Fees shall be made from the Company Account at the same time as the Breakout/Workout payment to Company is executed by Intermediary.

 

2.12.3. Company Cash Transfer Rights

 

Company shall have the rights to transfer the cash available for transfer, as per Article 2.10.3.4., only to the Working Account or to any account which is rightfully owned by the Company, or any member (subsidiary) of its corporate Group (as requested by the Company in writing from time to time provided details of the same have been provided and approved in advance to Intermediary), and such ownership can be demonstrated to the Intermediary under the Anti-Money laundering regulations. Third party transfers will not be entertained unless pursuant to Article 2.13.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.12.4. Investor(s) Share Availability

 

Following the completion of any given Breakout/Workout, that portion of Common Shares available for "uncovering", as per Article 2.10.3.2, will become "uncovered" and available to the Investor(s) for sale, transfer or to Deal with in any other way.

 

2.13. Wire Transfers

 

2.13.1. Instructions

 

Any instruction for wire delivery, as included in Exhibit B, may be modified by the respective party through delivery of new instructions evidencing those instructions and requesting to have those instructions modify the existing instructions. Instructions shall be accepted to any account which is rightfully owned by the requesting party and such ownership can be demonstrated to the satisfaction of the Intermediaries Anti-Money laundering compliance. Such proof can be through ownership letters from the current bank, proper instructions evidencing ownership by the requesting party. Third party transfers will not be entertained to any party's solicitor, broker or other party unless a designated client account name and number can verify the ownership. Any such third party transfer must be requested in writing and a statement as to whether it is a onetime transfer or continuous instructions.

 

2.13.2. Requests

 

Any such Transfer Requests and or Instructions must specify whether they are to replace those instructions in Exhibit B, in which case an amendment to Exhibit B must be submitted and agreed to, otherwise, the Instructions must specify that they are one time only.

 

2.13.3. Verification of Receipt

 

Intermediary is not responsible for following up with Company or Investor(s) on any transfers of capital. Once instructions have been executed by Intermediary to transfer, it is up to the Company to verify such wire arrived. Intermediary makes no representations as to the length of time necessary to complete any given wire. Time frames depend on the Bank conduit, international regulations, Anti-Money Laundering controls and any governmental requirements.

 

2.13.4. Troubleshooting

 

In the event that a given wire does not appear, Intermediary shall take all such steps as it has available to it to track such wire through to the Working Account or such other account the money may have been sent to pursuant to Article 2.12.3. or to cancel the previous wire and reissue the wire request.

 

2.14. Breakout/Workout Accounting

 

2.14.1. Audit Request Letters

 

Intermediary will be available to verify account balances through any audit request letter issued by the Company's auditors. Intermediary shall charge $250.00 per audit request letter verification. Intermediary's response will be limited to the amount of capital within any account in the Company's name or in the name of any member of its Group at that given point and any previous account demonstrations previously issued by Intermediary. Intermediary is not responsible for any accounting or financial discrepancies of Company. Intermediary will at no time allow an in office audit of their records by the Company or its auditors.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.14.2. Transfers

 

Intermediary evidences external transfers through debits of cash in an account.

 

2.14.3. Statements

 

Intermediary shall prepare statements showing the cash remaining in the account following any given Breakout/Workout.

 

2.15. Warrants

 

2.15.1. Exercise

 

Intermediary shall act as a conduit for exercise of warrants through an identical methodology as that in the Unit Subscription Agreement. Such exercise shall utilize the Company Account Intermediary has created for Company. Warrant Exercise is not subject to any market conditions and will therefore not require any additional market controls. Additional requirements of capital release and the Warrant Exercise Schedule can be found in Section 2.2.of the MOT and individually for each investor, Figure 1 of the CSW for each investor and series of warrant. All Warrants purchased by the Investor(s) may be exercised at any time up to their expiration date.

 

2.15.2. Notification

 

The Intermediary shall notify the Company of any Investor(s) intention to exercise their warrants. The Warrant Exercise Notification (the "WEN"), as detailed in the USA Exhibit D, must specify the Warrant Series, Investor(s) exercising the Warrant Series, the number of Warrants of the Series being exercised, the number of Certificates and the share amounts of those Certificates and the purchase amount for the exercise.

 

2.15.3. Company Delivery

 

Upon notification, the Company will issue Common Share Certificates, free of restrictive legend, in the name and amounts specified in the Warrant Exercise Notification. These Certificates will be delivered to the Intermediary for deposit.

 

2.15.4. Additional Documentation

 

Should the Intermediary or its Depository require additional documentation from the Company in order to deposit the Certificates, the Company will provide that documentation as requested in a rapid and time efficient manner. Should legal opinions, Registrations or other expenses be necessary to provide the Certificates free of restrictive legend, the Company shall bear these expenses.

 

2.15.5. Cash Transfer

 

Intermediary shall secure monies from the Investor(s). Pending delivery of the underlying share certificates free of restrictive legend and the accompanying legal opinion on the issuance and tradability of the Common Shares, the monies will then be transferred from the Company Account to the Working Account.

 

2.16. Capital Delivery

 

2.16.1. Capital Undertaking(s)

 

Intermediary will be in receipt of capital Undertaking(s) from Investor(s) sufficient to acquire the underlying common shares of that warrant series as identified in Section 2.2 of the MOT and individually for each investor, Figure 1 of the CSW for each investor and series of warrant. At Closing, the Intermediary shall secure such monies for credit to the Company Account. No interest will be applied to monies managed by the Intermediary. Intermediary shall not deal with such monies from Investor(s) in any way save for those instructions within this Agreement. All such undertakings according to Bahamian Banking regulations shall be treated as a confidential communication between the Investor(s) and Intermediary.

 

2.16.2. Evidentiary Letter

 

Intermediary will issue a letter to Investor(s), Advisor and Company in evidence that such monies are secured and Pre-Closing is awaiting deposit of free trading certificates representing the common shares underlying that Warrant Series.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.17. Certificated Security Trust

 

2.17.1. Certificate Delivery

 

The Company shall deliver to the Intermediary prior to Closing start, in the Investor(s) name(s) and in the denominations called for in Exhibit A, those free trading share certificates evidencing the purchase for that Warrant Series which is being exercised as per Article 2.15.2. Along with the certificates, the Company must deliver the required Registration Proxy or opinion letter evidencing the free trading nature of the shares. The Company must issue certificates in the amount requested by the WEN, or the Intermediary is instructed to send back those certificates not according to the certificate schedule for cancellation and reissuance prior to Closing.

 

2.17.2. Evidentiary Letter

 

Upon Receipt, the Intermediary shall verify that the certificates delivered by the Company match in denomination and number as those certificates listed in WEN. Should the certificates not match, the Intermediary will return those certificates which are out of sync with the WEN and will specify those certificates in the Evidentiary Letter.

 

2.17.3. Certificate Reissuance

 

Should the Evidentiary letter call for it, the Company will cancel those certificates issued in error and reissue the correct securities certificates. Such corrected certificates shall be delivered to the Intermediary as soon as possible.

 

2.17.4. Secondary Evidentiary Letter

 

Upon receipt and verification of the corrected certificates, the Intermediary shall start the process of Article 2.3.7. anew, until all certificates matching the WEN have been issued and delivered to the Intermediary.

 

2.18. Closing Checklist

 

2.18.1 Closing Establishment

 

Following issuance of the WEN and Evidentiary Letters, the Intermediary shall check to ensure that the proper documentation is in place and all actions necessary to approve the close of the Warrant purchase identified in that WEN have been delivered before ordering the close.

 

2.18.2. Deficiency

 

Should the Intermediary determine that a deficiency exists in the documentation provided, the Intermediary shall issue a request immediately to the party responsible for the documentation. The Intermediary shall await the delivery of the required documentation before issuing any evidentiary letters.

 

2.19. Closing Window Compliance

 

During the Closing Window period (72 hours), the Intermediary will confirm the following:

 

	
(a)

	
Status of parties

	
(b)

	
Signature authorization

	
(c)

	
Signature Coverage

	
(d)

	
Legal Opinion Issuance

	
(e)

	
Corporate Resolution Issuance

	
(f)

	
Due Diligence List Completion

	
(g)

	
Conflicts Check

	
(h)

	
Certificate Verification

	
(i)

	
Money Laundering Compliance

	
(j)

	
Undertaking Verification

 

2.20. Closing

 

Closing shall take place as follows:

 

2.20.1. Intermediary shall credit monies from Investor(s) to Company Account, and Certificated Securities from Company to Investor(s) Accounts.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.20.2. Upon delivery of capital, the Intermediary will wire transfer that capital, minus the Cash Holdback, as defined in Figure 5, and fees, to the instructions lodged in Exhibit B.

 

2.20.3. Upon transfer of the Securities to the Investor(s) account, the Investors may deal with those Securities at will as they wish.

 

2.20.4. Cash Holdback

 

The Intermediary shall withhold that portion of the Warrant Exercise as called for in Figure 3 of Section 2.2. of the MOT and individually, Figure 1 of the CSW for each investor and series of warrant, for Cash Holdback and Monthly and Annual Account Fee's.

 

2.20.4.1. Cash Holdback Distribution

 

Intermediary is instructed to cover all expenses of the Investors, including general and service expenses and other billable expenses from the Cash Holdback. Any amounts owing to the Intermediary over and above the expenses already covered will be billed to the Cash Holdback. Any amounts not expensed shall be returned to the Company Account within 90 days of the end of the quarter.

 

2.21. Reversing Transactions

 

Intermediary shall not from the time of closing forward, entertain requests from Company or Investor(s) individually to "Reverse" the transactions by returning or exchanging monies for purchased securities.

 

2.21.1. Evidenced Transaction Documents

 

2.21.11. Closing Notice

 

Intermediary shall provide a letter to Advisor, Company and Investor(s) by the end of the same Business Day as Closing, evidencing the closing of the transaction and stating the amount of capital credited to the Company's Account.

 

2.21.12. Agreement Dominance Letter

 

Intermediary shall state in the letter that this Account Management Agreement is in full force and effect.

 

2.22. Windup

 

2.22.1. Completion of this Agreement

 

Following the completion of all Breakout/Workouts, payout of all monies in Company Account, payment of all fees and exercise of all Warrants, this Agreement will cease.

 

2.22.2. Account Windup

 

Intermediary shall not require permission of either Company or Investor(s) to wind up the Company Account following completion of this Agreement. Prior to windup, all cash remaining in the Company Account will be wired to the Company minus any outstanding fees.

 

2.22.3. Notifications

 

Intermediary shall evidence such winding up through notice to Company, Advisor and Investor(s) that this Agreement is no longer in force and effect and that the Company Account has been closed.

 

2.23. Use of Proceeds Accounting

 

2.23.1. Use of Proceeds

 

The Use of Proceeds Agreed to is included in the MOT as Exhibit D.

 

2.23.2. Company Reporting

 

The Company will provide Quarterly and annual reports to the Intermediary on the Use of the Proceeds. The Report must specify the following:

 

a. Where monies in the Working Account were spent

b. Specifying any deviations from the Use of Proceeds listed in the MOT as Exhibit D

c. Quarterly statements from the auditors attesting to a. and b. above

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.23.3. Deviation Communication

 

If the Company is expecting any deviation from the Use of Proceeds in excess of $20,000, the Company must communicate with the Advisor ahead of such deviation to secure an amendment to the Use of Proceeds. Any such request should identify the valuation accretion created by the deviation, or specify the special issues causing the deviation.

 

2.23.4. Deviation Acceptance

 

The Advisor will be appointed to arbitrate the acceptance of a deviation. The Advisor shall notify the Company and the Intermediary of its acceptance or rejection of the Deviation in question. Any rejection should specify the reasons for rejection and offer an alternative to the Deviation.

 

2.23.5. Deviation Negotiation

 

Until the Company and the Advisor come to an agreement on the Deviation, the Company shall refrain from such Deviation. The Advisor will not unnecessarily withhold its agreement to the Deviation, but will utilize value creation as its guide. Nothing herein is a release of Advisors rights to determine whether the Deviation creates value and hence whether it should be approved or denied.

 

2.23.6. Non-Compliant Deviation

 

Should the Company deviate from the Use of Proceeds plan without gaining Advisor approval, the Advisor shall have the right to request the Intermediary to turn the matter over to the Compliance Attorney for resolution. Should the Advisor not make such request, such decision will in no way relieve the Company of its obligation to seek such approval in the future, nor alleviate the Advisors right to challenge the deviation.

 

2.24. Company Compliance

 

The Company will have deposited 500,000 super voting Class C Preferred Shares with the Compliance Attorney. The Compliance Attorney contact information can be found in Exhibit C.

 

2.24.1. Notification

 

Should the Intermediary require assistance from the Compliance Attorney in order to compel the Company to Act, perform or satisfy a rectification of any deviation from the Use of Proceeds, the Intermediary is instructed to communicate the Compliance issue to the Compliance Attorney. Such Notification shall be in writing and be delivered via the Advisor to the Compliance Attorney. The Notification must specify the Compliance issue, the requests made to rectify and the dates of such requests.

 

2.24.2. Breakout/Workout Pause

 

Should the Company not come into Compliance within 30 days, the Intermediary is instructed to pause any Breakout/Workout until such time as the Intermediary is made aware that Compliance has been reestablished by the Compliance Attorney.

 

2.25. Response

 

The Compliance Attorney will be able to force Compliance through the Compliance Attorney Agreement (the "CAA"). Upon attaining Compliance, the Compliance Attorney shall deliver a notification to Intermediary and Advisor notifying them that Compliance has been reestablished and providing any documentation or action requested by the Intermediary. Upon this finding, the Intermediary may continue to carry out instructions.

 

2.25.1. Breakout/Workout Restart

 

The Intermediary is instructed to start the clock on the current Breakout/Workout afresh and not to account for any previous volume or pricing which may have been accounted for before the Compliance Attorney turnover occurred.

 

  

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MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

2.26. Breakup

 

2.26.1. Notification of Breakup

 

Should the Company and Investor(s) decide to enter into a Breakup Agreement, such Agreement must be signed by the Company, each Investor(s) and the Intermediary.

 

2.26.2. Breakup Timing

 

Should a Breakout/Workout be in process of delivery, the Breakup shall occur following the delivery of that Breakout/Workout. If no deliveries are expected to occur, the Intermediary may cease the Breakout/Workout in order to Breakup the transaction.

 

2.26.3. Fees

 

Any Breakup must include the payment of the Intermediaries monthly and annual fees for the next 12 months in cash.

 

2.26.4. Certificates

 

Should the Breakup call for a transfer of Securities to the Investor(s), those Certificates must be delivered with all legal opinions, registrations or other documentation to allow the Investor(s) to deposit the securities. Such delivery of Certificates must occur prior to Breakup Closing. Should the Certificates not be delivered, the Intermediary is instructed to continue to operate according to the Instructions of this Account Management Agreement until such time as those Certificates are delivered and deposited.

 

2.26.5. Non Performance

 

Should the Company fail to deliver the required share Certificates or agreed upon fees within 30 days of signing the Breakup Agreement, the Breakup Agreement shall be considered null and void, and the Intermediary is hereby instructed to continue with the Instructions from this Agreement.

 

2.27. Terms Verification

 

Should the Intermediary be made aware of any breach of the Terms of the Offering as per the Memorandum of Terms, Unit Subscription Agreement or this Agreement, the Intermediary shall notify the Advisor, Compliance Attorney and the Company of such breach immediately.

 

2.27.1. Rectification

 

The Company will have 30 days to return to Compliance with the Terms of the Offering or to obtain an Amendment to the Offering Terms with the Investor(s) which would provide new instructions to the Intermediary.

 

  

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MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

ARTICLE III.

INTERMEDIARY REPS AND WARRANTIES.

 

The undersigned, on behalf of Elco Securities, Ltd. a registered Level 2 Broker Dealer and having an address of Loyalist Plaza, Don Mackay Boulevard Marsh Harbor, Abaco operating under license by the Bahamian Government ("Intermediary"), hereby warrants and represents as follows:

 

3.1 Representations:

 

3.1.1. Intermediary has taken all corporate and legal actions necessary to enact this Agreement and to execute its activities under this Agreement.

 

3.1.2. That Intermediary is licensed to act in this capacity and to offer the services of an Intermediary as the definition describes. That Intermediary is a licensed Broker Dealer with the Securities Commission of the Bahamas. As part of its duties, the Intermediary will provide brokerage services for the Investor(s) and effect share transfers. That Intermediary holds all necessary consents required to accept the cash deposits within the Company Account as a registered broker dealer.

 

3.1.3. As of the date hereof, Intermediary has not received notice of any liens, claims or encumbrances with respect to the Company Account, except with respect to Company pursuant to this Agreement, and Intermediary has not confirmed any interest in the Company Account to any persons other than pursuant to this Agreement.

 

3.1.4. Intermediary agrees that it will not debit the Company Account to satisfy obligations of any party other than the Company and/or not related to this Agreement or the accepted UOP.

 

3.1.5. Intermediary has a first lien and security interest in the Cash and Securities Account(s) as security for the payment and performance of all obligations to Intermediary arising out of the management of this Agreement.

 

3.1.6. Intermediary shall not deliver to Company or the Investor(s) any property whatsoever from the Company Account or Investor(s) Account including, but not limited to (1) cash distributions including cash dividends or interest paid on assets held in the relevant Account; or, (2) stock dividends; or, (3) distributions in property except upon instructions from this Agreement as specifically listed in Article II.

 

3.1.7. Intermediary acting as principle agent provides and gives no assurances as to the legality of this Agreement, marketability of the securities or the tradable volumes and will only act as broker and custodian to facilitate this Agreement.

 

3.1.8. Intermediary shall act as principle agent in addition to its role as Intermediary. Intermediary understands that this means they will be making all decisions regarding this Agreement and executing those transactions.

 

3.1.9. Intermediary shall keep the Company Account as a segregated account where such monies shall not be mixed with any other monies and shall remain clearly identifiable.

 

  

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USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

ARTICLE IV.

COMPANY REPS & WARRANTIES.

The Company warrants as at the date of this Agreement the following:

4.1 Warranties

 

4.1.1. By signing below the Company confirms to Intermediary that Company has instructed Intermediary to open the Company Account.

 

4.1.2. Company further agrees and acknowledges that the rights and obligations of the parties hereto relating to the Company Account are governed by this Agreement executed by Company with Intermediary, regardless of whether Company has executed a customer agreement in connection with the Company Account or not and that this Agreement shall take precedence over the terms of any Customer Agreement.

 

4.1.3. That Company has taken all necessary corporate and legal actions necessary to transact this Agreement. That Company has full right and authority to issue said Securities and to enter into the Unit Subscription Agreement in connection with said Securities.

 

4.1.4. Company represents and warranties that this Agreement is an Account Management Agreement and is not part in any way of illegal or deceptive means of transferring funds.

 

4.1.5. Company hereby agrees that the Intermediary hereof shall not be required first to institute suit or exhaust its remedies hereon against the Company to enforce this agreement.

 

4.1.6. Company hereby agrees to consult and act in a responsible and legal manner in its transactions with Intermediary. Company understands that Intermediary and Investor(s) take no responsibility for breaches of Securities Regulations here or abroad which Company may commit.

 

4.1.7. Company hereby agrees to release, discharge, indemnify and hold harmless Intermediary, its affiliates, officers and employees from and against any and all losses, claims, causes of action, liabilities, lawsuits, demands and/or damages, including, without limitation, any and all court costs and reasonable attorneys' fees and expenses arising out of or incurred in connection with Intermediary complying with instructions from the Company in relation to the Company Account in accordance with this Agreement.

 

4.1.8. Company agrees that it will not act outside of this Agreement to induce any contravention of this Agreement. Company shall not make any attempts to cancel or otherwise reduce the effect of this Agreement upon the Company Account or Investor(s) Securities.

 

4.1.9. In the event that Intermediary becomes involved in litigation as a result of complying with this Agreement, Company agrees that Intermediary shall be entitled to charge all the costs and fees (including reasonable attorneys' fees and expenses) it incurs in connection with such litigation to the assets in the Company Account and to the assets of Company held by Intermediary and to withdraw such sums as the costs and charges accrue, and Company shall be liable to Intermediary and Investor(s) for any deficiency resulting from this indemnity and for any legal fees in the construct, execution or defense of this agreement.

 

4.1.10. Company confirms that the Company Account shall contain cash. Company acknowledges that this entails risk. Intermediary is not instructed to operate any capital appreciation program and the Company Account will not bear interest.

 

4.1.11. Company formally states that as of the date hereof, there is not any notice of liens, claims or encumbrances with respect to the Shares or the Warrants to be issued pursuant to the Unit Subscription Agreement.

 

4.1.12. Company understands and agrees that pursuant to this Agreement, Intermediary has a first lien and security interest in the Company Account as security for the payment and performance of all obligations of Company to Intermediary arising out of the Account. Company agrees to that language in Article II.

 

  

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AMA Control No: AMA 849207105 STLT

 

4.1.13. Company consents and agrees that the only communications that shall be given to Intermediary by Company shall be given by the authorized officer or person of Company. Such Person will have been the person authorized by Company to issue such communication as evidenced by a board resolution and provision of the appropriate documents to Intermediary.

 

4.1.14. Company understands that Intermediary shall not, deliver to Company any property whatsoever from the Company Account including, but not limited to (1) cash distributions including cash dividends or interest paid on assets held in the Account; (2) stock dividends; (3) distributions in property; or (4) cash returns of capital from the Account unless otherwise specified herein.

 

4.1.15. Company further understands that in event that a Breakout/Workout requirement is not met, as evidenced by an opinion letter from Intermediary to Company and Investor(s), that Company shall not be entitled to receive such Breakout/Workout until such time as the requirements are met. If negotiations are undertaken between the Company and Investor(s), any such agreement must be evidenced in writing to the Intermediary and signed by both parties in order to make an alteration to the Instructions of this Agreement.

 

4.1.16. The Company hereby agrees to hold Intermediary harmless in event of loss from misdirection from Intermediary as a result of incorrect instructions from Company or from any loss relating to the currency held in the Company Account pursuant to this Agreement. Should misdirection occur as a result of fraud, theft or other means not as a result of Intermediaries actions, Company and Intermediary agree to cooperate in suit against such responsible party. At no time shall Company institute suit against Intermediary to recover funds from Intermediary which were misdirected through no fault of Intermediary.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

ARTICLE V.

INVESTOR(S) REPS AND WARRANTIES.

 

By signature below, each respective Investor(s), individually, hereby agrees, represents and warrants to Intermediary the following:

5.1. Representations

 

5.1.1. The Investor(s) agree to hold Intermediary harmless in event of loss from misdirection from Intermediary other than illegal misappropriation by Intermediary or from forces outside of the control of the Intermediary.

 

5.1.2. The Investor(s) have taken all necessary corporate action to enable them to enter into this transaction.

 

5.1.3. Investor(s) agree to allow Intermediary to make decisions regarding their security interest in the assets of the account based on this Agreement, and further agree to hold the Intermediary harmless in any matter short of theft, loss of securities or illegal activity on the part of the Intermediary.

 

5.1.4. Investor(s) hereby represent and warranty that this Agreement is not a Securities purchase and sale agreement and not part in any way of illegal or deceptive means of transferring funds.

 

5.1.5. Investor(s) shall deliver all necessary documents and sign all necessary transfer letters on opinion from Intermediary. Investor(s) shall not unnecessarily withhold their signature from any document except in the case of substantive discrepancy in any Breakout/Workout provision, modification of payment or transfer due.

 

5.1.6. Investor(s) agree that only their authorized representatives will be allowed to provide instructions to and communicate with Intermediary.

 

5.1.7. Investor(s) confirm that their accounts will contain securities and that Intermediary makes no claim, guarantee or warrantee on the tradability or market of those securities and that these securities entail risk.

 

5.1.8. Investor(s) hereby agree to consult and act in a responsible and legal manner in its transactions with Intermediary.

 

5.1.9. Investor(s) represent and warranty that this Agreement is an Account Management Agreement and not part in any way of illegal or deceptive means of transferring funds.

 

5.1.10. Investor(s) further agree and acknowledge that the rights and obligations of the parties hereto relating to the Securities Account(s) are governed by the Customer Agreement executed by Investor(s) with the Intermediary, regardless of whether Investor(s) has executed a Customer Agreement in connection with the Account or not.

 

5.1.11. Investor(s) agree to the instructions and requirements of this Agreement.

 

5.1.12. Investor(s) hereby agree that the Intermediary hereof shall not be required first to institute suit or exhaust its remedies hereon against the Investor(s) to enforce this Agreement.

 

5.1.13. Investor(s) shall not make any attempts to cancel or otherwise reduce the effect of this Agreement upon the cash in Company Account or the Securities.

 

  

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AMA Delivery No: 01

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AMA Control No: AMA 849207105 STLT

 

ARTICLE VI.

FEES.

 

6.1.1. Agreement to Pay Fees

 

Company and Investor(s) agree to pay fees as part of the Use of Proceeds. Such payments will be made directly from the Company Account on satisfaction of the respective Breakout/Workout.

 

6.1.2. Cash Holdback

 

Intermediary shall holdback $150,000 per Breakout/Workout on the Equity Breakout/Workouts and that portion of any Warrant exercise described as “Cash Holdback” and detailed in Figure 3 of Section 2.2 of the MOT. Such Holdback shall be retained by the Intermediary and used to cover expenses billed to the Intermediary for the management and execution of the Offering. Any cash not used to cover expenses shall be returned to the Company at the completion of the offering.

 

ARTICLE VII.

FURTHER PROVISIONS.

 

7.1. Modification:

 

This Agreement may not be amended or modified without the written consent of the Company, the Intermediary and the Investor(s). Any such amendments shall be add ended to this agreement and labeled as to (AMA (Title), Addendum # Date).

 

7.2. Adjudication:

 

This Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of the Bahamas, without giving effect to any conflicts of law provisions thereof, and shall be binding upon Company's and Investor(s)' estate, executors and heirs, and upon the successors and assigns of Intermediary, Investor(s) and Company. Any suits brought due to this agreement shall be filed and adjudicated in the Bahamas.

 

7.3. Counterparts:

 

This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

 

7.4. Notices:

 

All notices shall be sent to the addresses listed in Exhibit C.

 

7.5. Confidentiality:

 

This Agreement and all counterparts thereof shall be deemed confidential except any disclosure required by law or any stock exchange or as may be disclosed to any shareholders. All standards of confidentiality shall apply. No party shall discuss this Agreement with any party outside of this Agreement, save for the Advisor, without the written consent of the Company, Intermediary and Investor(s). The following parties are herewith agreed recipients of information regarding this transaction, its agreements and all aspects of said documents. The parties to this Agreement are hereby bound by confidentiality as per these agreements.

 

7.6. Termination:

 

Company and Investor(s) may jointly elect to terminate this Agreement at any time up to 2 hours prior to the Closing of the Offering by the Intermediary.

 

7.7. Severability:

 

If any part of this Agreement is found to be unlawful, the remaining provisions shall inure to the parties and shall continue in full force and effect.

 

7.8. Monetary Equivalent:

 

Any financial values or monetary amounts in this Agreement, and any and all addendums and corollaries shall be construed and represented as being US Dollars ($) unless otherwise specified.

 

7.9. Amendments and Waivers:

 

Any term of this Agreement may be amended, only in a writing signed by the Company and the Investor(s). Any amendment or waiver affected in accordance with this Article shall be binding upon the Company and each Investor(s).

 

  

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7.10. Entire Agreement:

 

This agreement will uphold and will add to the MOT and USA upon closing.

 

7.11. Titles and Subtitles:

 

The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

7.12. Transfer; Successors and Assigns

 

The provisions of this Agreement shall inure to the benefit of, and shall be binding upon, the successors and permitted assigns of the parties hereto. The Company may not assign its rights and obligations hereunder without the consent of the Investor(s), the Advisor and the Intermediary (which consent shall not be unreasonably withheld or delayed). The provisions of this Article 7.12 shall not limit the Investor(s)' ability to assign their rights and obligations under any Transaction Document. The Intermediary shall be notified immediately of any change in ownership, rights or obligations and provided with the new contact for the ownership. Any purchaser, transferee or obligator will be subject to the original Unit Subscription Agreement and this Account Management Agreement.

 

7.13. Survival of Reps and Warranties

 

The Representations and Warranties in this Agreement, including any rights arising out of any breach of such Representations and Warranties, shall survive the Closing for a period of two years.

 

7.14. Adjustments for Stock Splits, Etc.:

 

Where in this Agreement there is a reference to a specific number of Securities or value of such Shares, then, upon the occurrence of any subdivision, combination, stock dividend or stock split, the specific number or value of shares so referenced in this Agreement shall automatically be proportionally adjusted to reflect the effect of such subdivision, combination, stock dividend or stock split on the outstanding shares of stock.

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

IN WITNESS WHEREOF, the undersigned hereby execute this Agreement and cause it to be put in action. Copies of this agreement shall be delivered in triplicate to Company, Intermediary and Investor(s) with a copy uploaded to the Company's Online Portal hosted by the Advisor, as of the dates indicated below.

 

 

	
Spotlight hno.kation, Vic.

	
Cris Grunewald

	
Date: 06.08.2014

	
6750 West Town Pkwy, Ste-226 West Des 

Moines, 1A50266

	
Signature: 

	  

 

 

	
Elco Securities, Ltd.

	
Isaac Collie

	
Date: 06.09.2014

	
Loyalist Plaza, Don Mackay Boulevard Marsh 

Harbor Abaco Bahamas

	
Signature: 

	  

 

  

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AMA Delivery No: 01

MOT Control No: MOT 849207105 STLT

USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

Exhibit A

Certificate List

 

 

  

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AMA Control No: AMA 849207105 STLT

 

Exhibit B

Working Account Wire Instruction

 

 

  

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AMA Delivery No: 01

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USA Control No: USA 849207105 STLT

AMA Control No: AMA 849207105 STLT

 

Exhibit C

Notice Addresses

If to Intermediary:

Elco Securities

Isaac Collie

Loyalist Plaza, Don Mackay Blvd.

P.O. Box AB-20377

Marsh Harbor

Abaco, Bahamas

If to Investor(s):

(Send all correspondence to Intermediary with a copy to Catwalk Capital, LLC.)

If to Company:

Spotlight Innovation, Inc.

6750 Westown Pkwy, Ste-226

West Des Moines, IA 50266

With a copy to:

Catwalk Capital, LLC

1730 LaBounty Rd #213

Ferndale, WA 98248

Compliance Attorney Contact:

Jonathon Kramer

Whitfield & Eddy, PLC

Email: Kramer@whitfieldlaw.com

& Certified Mail To:

317 6th Avenue, Suite 1200

Des Moines, IA 50309

 

  

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