Document:

cool_ex1062.htm

EXHIBIT 10.62
 
NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
Original Issue Date: December 6, 2016
 
$100,000
 
5% CONVERTIBLE NOTE
 
THIS 5% CONVERTIBLE NOTE is one of a series of duly authorized and validly issued 5% Senior Convertible Notes issued at a 5% original issue discount by Cool Technologies, Inc., a Nevada corporation (the “Company”) (this note, the “Note” and, collectively with the other notes of such series, the “Notes”).
 
FOR VALUE RECEIVED, the Company promises to pay to Bellridge Capital, LP its registered assigns (the “Holder”), or shall have paid pursuant to the terms hereunder, the principal sum of $100,000 (“Original Principal Amount”) on December 5, 2017 (the “Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder, and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in accordance with the provisions hereof. This Note is subject to the following additional provisions:
 
Section 1. Definitions. For the purposes hereof, (a) capitalized terms not otherwise defined herein shall have the meanings set forth in the Purchase Agreement and (b) the following terms shall have the following meanings:
 
“Alternate Consideration” shall have the meaning set forth in Section 5(e).
 
“Bankruptcy Event” means any of the following events: (a) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) thereof commences a case or other proceeding under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction relating to the Company or any Significant Subsidiary thereof, (b) there is commenced against the Company or any Significant Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) the Company or any Significant Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding is entered, (d) the Company or any Significant Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) the Company or any Significant Subsidiary thereof makes a general assignment for the benefit of creditors, or (f) the Company or any Significant Subsidiary thereof, by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes any corporate or other action for the purpose of effecting any of the foregoing.
 
	 
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“Base Conversion Price” shall have the meaning set forth in Section 5(b).
 
“Beneficial Ownership Limitation” shall have the meaning set forth in Section 4(d). 
 
“Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
 
“Buy-In” shall have the meaning set forth in Section 4(c)(v).
 
“Change of Control Transaction” means the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control (whether through legal or beneficial ownership of capital stock of the Company, by contract or otherwise) of in excess of 50% of the voting securities of the Company (other than by means of conversion, exercise or exchange of the Notes or the Securities issued together with the Notes), (b) the Company merges into or consolidates with any other Person, or any Person merges into or consolidates with the Company and, after giving effect to such transaction, the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the Company or the successor entity of such transaction, (c) the Company sells or transfers all or substantially all of its assets to another Person and the shareholders of the Company immediately prior to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction, (d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors of the Company (the “Board of Directors”) which is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution by the Company of an agreement to which the Company is a party or by which it is bound, providing for any of the events set forth in clauses (a) through (d) above.
 
“Conversion” shall have the meaning ascribed to such term in Section 4. 
 
“Conversion Date” shall have the meaning set forth in Section 4(a).
 
“Conversion Floor” means $0.06 per share.
 
“Conversion Price” shall have the meaning set forth in Section 4(b).
 
“Conversion Schedule” means the Conversion Schedule in the form of Schedule 1 attached hereto.
 
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the terms hereof.
 
“Default Interest Rate” shall have the meaning set forth in Section 2(a).
 
“Dilutive Issuance” shall have the meaning set forth in Section 5(b).
 
“Dilutive Issuance Notice” shall have the meaning set forth in Section 5(b).
 
“DWAC” means the Deposit or Withdrawal at Custodian system at The Depository Trust Company.
 
“Event of Default” shall have the meaning set forth in Section 7(a).
 
	 
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“Fundamental Transaction” shall have the meaning set forth in Section 5(e).
 
“Mandatory Default Amount” means the sum of (a) 125% of the outstanding principal amount of this Note, plus 125% of accrued and unpaid interest hereon, and (b) all other amounts, costs, expenses and liquidated damages due in respect of this Note.
 
“New York Courts” shall have the meaning set forth in Section 8(e).
 
“Note Register” shall mean the note register maintained by the Company.
 
“Notice of Conversion” shall have the meaning set forth in Section 4(a).
 
“Option Value” means the value of a Common Stock Equivalent based on the Black Scholes Option Pricing model obtained from the "OV" function on Bloomberg determined as of (A) the Trading Day prior to the public announcement of the issuance of the applicable Common Stock Equivalent, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly announced, for pricing purposes and reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the applicable Common Stock Equivalent as of the applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg as of (A) the Trading Day immediately following the public announcement of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly announced, (iii) the underlying price per share used in such calculation shall be the highest VWAP of the Common Stock during the period beginning on the Trading Day prior to the execution of definitive documentation relating to the issuance of the applicable Common Stock Equivalent and ending on (A) the Trading Day immediately following the public announcement of such issuance, if the issuance of such Common Stock Equivalent is publicly announced or (B) the Trading Day immediately following the issuance of the applicable Common Stock Equivalent if the issuance of such Common Stock Equivalent is not publicly announced, (iv) a zero cost of borrow and (v) a 360 day annualization factor.
 
“Original Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless of the number of instruments which may be issued to evidence such Notes.
 
“Payment Date” shall have the meaning set forth in Section 2(b).
 
“Permitted Indebtedness” means (a) Indebtedness outstanding as of the Original Issue Date, (b) the indebtedness evidenced by the Notes, and (c) capital lease obligations and purchase money indebtedness incurred in connection with the acquisition of machinery and equipment.
 
“Purchase Agreement” means the Securities Purchase Agreement, dated as of December 5, 2016 among the Company and the original Holders, as amended, modified or supplemented from time to time in accordance with its terms.
 
“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
“Share Delivery Date” shall have the meaning set forth in Section 4(c)(ii).
 
“Successor Entity” shall have the meaning set forth in Section 5(e).
 
	 
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“Trading Day” means a day on which the principal Trading Market is open for trading.
 
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or any market of the OTC Markets, Inc. (or any successors to any of the foregoing).
 
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Stock is not then listed or quoted for trading on the OTCQB or OTCQX and if prices for the Common Stock are then reported by the OTC Pink marketplace published by OTC Markets, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (c) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Notes then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
 
Section 2. Interest; Payments.
 
(a) Interest. Interest shall accrue to the Holder on the aggregate unconverted and then outstanding principal amount of this Note at the rate of five percent (5%) per annum, calculated on the basis of a 365-day year and shall accrue daily commencing on the Original Issue Date until payment in full of the outstanding principal (or conversion to the extent applicable), together with all accrued and unpaid interest, liquidated damages and other amounts which may become due hereunder, has been made. Following an Event of Default, until such Event of Default has been cured, interest shall accrue at the lesser of (i) the rate of 22% per annum, or (ii) the maximum amount permitted by law (the lesser of clause (i) or (ii), the “Default Interest Rate”). In the event that such Event of Default is subsequently cured, the adjustment referred to in the preceding sentence shall cease to be effective as of the calendar day immediately following the date of such cure; provided that the interest as calculated and unpaid at the Default Interest Rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence of such Event of Default through and including the date of such cure of such Event of Default.
 
(b) Payments. Interest payments are due and payable on the sooner to occur of the date of any conversion of this Note (as to the portion of the Note being converted) on any Prepayment Date (as to such portion that is being prepaid) and on the Maturity Date, except as otherwise set forth in this Note. If any Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day. Each Monthly Payment shall be equal to all accrued but unpaid interest. The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Note on the Maturity Date (the “Payment Date”) except as otherwise set forth in this Note. If any Payment Date is not a Business Day, then the applicable payment shall be due on the next succeeding Business Day. Each Monthly Payment shall be equal to all accrued but unpaid interest. 
 
(c) Payment in Cash. All payments shall be made in cash on any Payment Date.
 
(d) Prepayment and Redemption. At any time while this note may be converted by the Holder, upon 10 days prior written notice to the Holder, the Company may prepay any portion of the principal amount of this Note and any accrued and unpaid interest. If the Company exercises its right to prepay any portion of this Note, the Company shall make payment to the Holder of an amount in cash equal to the sum of the then outstanding principal amount of this Note being prepaid and accrued interest thereon multiplied by 115% if the Note is prepaid within 120 days of the issue date of this Note or 125% of this Note is prepaid after 120 days of the date of this Note. The Holder may continue to convert the Note from the date notice of the prepayment is given until the date of the prepayment. 
 
	 
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Section 3. Registration of Transfers and Exchanges. 
 
(a) Different Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations (of no less than $1,000 in principal amount), as requested by the Holder surrendering the same. No service charge will be payable for such registration of transfer or exchange.
 
(b) Investor Representations. This Note has been issued subject to certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.
 
(c) Reliance on Note Register. Prior to due presentment for transfer to the Company of this Note, the Company and any agent of the Company may treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither the Company nor any such agent shall be affected by notice to the contrary.
 
Section 4.Conversion.
 
(a) Voluntary Conversion. After the Original Issue Date until this Note is no longer outstanding, but subject to Section 4(d), this Note shall be convertible, in whole or in part, at any time, and from time to time, into shares of Common Stock at the option of the Holder. The Holder shall effect conversions by delivering to the Company a Notice of Conversion, the form of which is attached hereto as Annex A (each, a “Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered hereunder. No ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required.To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to the Company unless the entire principal amount of this Note, plus all accrued and unpaid interest thereon, has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and the Company shall maintain records showing the principal amount(s) converted in each conversion, the date of each conversion, and the Conversion Price in effect at the time of each conversion. The Company may deliver an objection to any Notice of Conversion within one Business Day of delivery of such Notice of Conversion. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder, and any assignee by acceptance of this Note, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and unconverted principal amount of this Note may be less than the amount stated on the face hereof. The Holder may assign or sell a portion or all of this Debenture.
 
	 
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(b) Conversion Price. The “Conversion Price” in effect on any Conversion Date means, as of any Conversion Date or other date of determination, shall be 70% of the lowest trading price for the Company’s Common Stock during the ten Trading Days immediately preceding the delivery by the Holder of a Notice of Conversion, provided that the Conversion Price shall not be less than Conversion Floor other than as set forth herein. Notwithstanding anything to the contrary herein, the Conversion Price and Conversion Floor will not be adjusted for any reverse splits of the Company’s Common Stock. The applicable prices shall be as reported by Bloomberg L.P. Notwithstanding the foregoing, in no event shall the Conversion Price be less then the par value of the Common Stock or less than the Conversion Floor (whichever is less) provided however, if the price per share of the Company’s Common Stock closes less at less than $0.06 for any five out of ten consecutive trading days after the sooner to occur of the filing of the Registration Statement (the “Market Price Decline Period”) or six months from the date of this Note, then the Company shall have the right to pre-pay the outstanding Principal and all accrued interest thereon at an amount equal to 125% of the then Principal and Interest due on the Note (for avoidance of doubt the amount will be all accrued interested due on the Note, plus any other amounts due on the Note, plus the principal amount outstanding multiplied by 125%), provided however, if the Company fails to prepay the Note in its entirety during the thirty business days following a Market Price Decline Period, then there shall be no limit on the Conversion Price (i.e., the floor of $0.06 per share shall no longer be applicable). 
 
(c) Mechanics of Conversion or Prepayment.
 
(i) Conversion Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted by (y) the Conversion Price in effect at the time of such conversion.
 
(ii) Delivery of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share Delivery Date”), the Company shall deliver, or cause to be delivered, to the Holder any certificate or certificates required to be delivered by the Company under this Section 4(c). 
 
(iii) Failure to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder pursuant to the rescinded Conversion Notice. 
 
(iv) Partial Liquidated Damages. If the Company fails for any reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount being converted, $10 per Trading Day (increasing to $20 per Trading Day on the tenth Trading Day after such Conversion Date) for each Trading Day after such Share Delivery Date until such certificates are delivered or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an Event of Default pursuant to Section 7 hereof for the Company’s failure to deliver Conversion Shares or, if applicable, cash, within the period specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at Law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable Law.
 
	 
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(v) Compensation for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the Holder, if the Company fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase (in an open market transaction or otherwise), or the Holder’s brokerage firm otherwise purchases, shares of Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then the Company shall (A) pay in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which (x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds (y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if the Company had timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at Law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms hereof.
 
(vi) Reservation of Shares Issuable Upon Conversion. Effective upon the contemplated reverse stock split, but in any event no later than January 15, 2017, the Company covenants that it will reserve and keep available out of its authorized and unissued shares of Common Stock for the purpose of issuances upon conversion of this Note and the issued with this Note, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and the other holders of the Notes), not less than the greater of 1,000,000 shares or 300% of the Required Minimum; and if at any time the number of authorized but unissued shares of Common Stock shall be insufficient to effect the conversion of this note or shall be less than the Required Minimum, the Company shall take such corporate action as may, in the opinion of its counsel, be necessary to increase its authorized but unissued shares of Common Stock to such number of shares as shall be sufficient for such purpose. The Company covenants that all shares of Common Stock that shall be issuable upon conversion of this Note shall, upon issue, be duly authorized, validly issued, fully paid and nonassessable. 
 
(vii) Fractional Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, the Company shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Conversion Price or round up to the next whole share.
 
(viii) Transfer Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificates, provided that, the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Note so converted and the Company shall not be required to issue or deliver such certificates unless or until the Person or Persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Conversion and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Conversion Shares.
 
	 
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(d) Holder’s Conversion Limitations. The Company shall not effect any conversion of this Note, and a Holder shall not have the right to convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of the Company subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to the Company each time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following: (i) the Company’s most recent periodic or annual report filed with the SEC, as the case may be, (ii) a more recent public announcement by the Company, or (iii) a more recent written notice by the Company or the Company’s transfer agent setting forth the number of shares of Common Stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding. In any case, the number of outstanding shares of Common Stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Note, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Holder. The Holder, upon not less than 61 days’ prior notice to the Company, may increase the Beneficial Ownership Limitation provisions of this Section 4(d) solely with respect to the Holder’s Note, provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by the Holder and the provisions of this Section 4(d) shall continue to apply. Any such increase or decrease will not be effective until the 61st day after such notice is delivered to the Company. The Holder may also decrease the Beneficial Ownership Limitation provisions of this Section 4(d) solely with respect to the Holder’s Note at any time, which decrease shall be effectively immediately upon delivery of notice to the Company. The Beneficial Ownership Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.
 
Section 5. Certain Adjustments.
 
(a) Reserved. 
 
(b) Subsequent Equity Sales. If, at any time,for so long as the Note or any amounts accrued and payable thereunder remain outstanding, the Company or any Subsidiary, as applicable, sells or grants any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues, any Common Stock or Common Stock Equivalents entitling any Person to acquire shares of Common Stock at an effective price per share that is lower than the Conversion Price then in effect (such lower price, the “Base Conversion Price” and each such issuance a “Dilutive Issuance”), then the Conversion Price shall be immediately reduced to equal the Base Conversion Price. 
 
	 
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If the holder of Common Stock or Common Stock Equivalents outstanding on the Original Issue Date or issued thereafter shall at any time, whether by operation of purchase price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants, options or rights per share which are issued in connection with such issuance, receive or be entitled to receive shares of Common Stock at an effective price per share that is lower than the Conversion Price then in effect, such issuance shall be deemed to have occurred for less than the Conversion Price on such date and such issuance shall be deemed to be a Dilutive Issuance.
 
If after any Dilutive Issuance of Common Stock Equivalents, the price per share for which shares of Common Stock may be issuable thereafter is amended or adjusted, and such price as so amended shall be less than the Conversion Price in effect at the time of such amendment or adjustment, then the Conversion Price shall be adjusted upon each such issuance or amendment as provided in this Section 5(b). 
 
In case any Common Stock Equivalent is issued in connection with the issue or sale of other securities of the Company, together comprising one integrated transaction, (x) the Common Stock Equivalents will be deemed to have been issued for the Option Value of such Common Stock Equivalents and (y) the other securities issued or sold in such integrated transaction shall be deemed to have been issued or sold for the difference of (I) the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock or Common Stock Equivalents are issued or sold or deemed to have been issued or sold for cash, the amount of such consideration received by the Company will be deemed to be the net amount received by the Company therefor. If any shares of Common Stock or Common Stock Equivalents are issued or sold for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration, except where such consideration consists of publicly traded securities, in which case the amount of consideration received by the Company will be the VWAP of such public traded securities on the date of receipt. If any shares of Common Stock or Common Stock Equivalents are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity, the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the non-surviving entity as is attributable to such shares of Common Stock or Common Stock Equivalents, as the case may be.
 
If the Company enters into a Variable Rate Transaction despite the prohibition set forth in the Purchase Agreement, the Company shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such securities may be converted or exercised under the terms of such Variable Rate Transaction. 
 
The Company shall notify the Holder in writing, no later than the Trading Day following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice, the “Dilutive Issuance Notice”). For purposes of clarification, whether or not the Company provides a Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance, regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.
 
The provisions of this Section 5(b) shall apply each time a Dilutive Issuance occurs after the Original Issue Date for so long as the Note or any amounts accrued and payable thereunder remain outstanding, but any adjustment of the Conversion Price pursuant to this Section 5(b) shall be downward only. 
 
	 
	9

	

	 

 
Notwithstanding anything in this Section 5(b), no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. 
 
(c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time the Company grants, issues or sells any Common Stock, Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on conversion hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)).
 
(d) Pro Rata Distributions. During such time as this Note is outstanding, if the Company shall declare or make any dividend or other distribution of its assets or rights or warrants to acquire its assets, or subscribe for or purchase any security other than Common Stock, to holders of shares of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation subject to Section 13(d) of the Exchange Act, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution to such extent)).) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation with respect to the Company or any other publicly-traded corporation subject to Section 13(d) of the Exchange Act).).
 
	 
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(e) Fundamental Transaction. If, at any time while this Note is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Stock, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent conversion of this Note, the Holder shall have the right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the occurrence of such Fundamental Transaction (without regard to any limitation on the conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction that is (1) an all cash transaction, (2) a “Rule 13e-3 transaction” as defined in Rule 13e-3 under the Exchange Act, or (3) a Fundamental Transaction involving a person or entity not traded on a Trading Market, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable concurrently with the consummation of the Fundamental Transaction, purchase this Note from the Holder by paying to the Holder the product of (a) the number of Conversion Shares issuable upon full conversion of this Note (without regard to any limitation on conversion of this Note) and (b) the positive difference between the cash per share paid in such Fundamental Transaction minus the then in effect Conversion Price. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Note and the other Transaction Documents in accordance with the provisions of this Section 5(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note (without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a conversion price which applies the Conversion Price hereunder to such shares of capital stock (but taking into account the relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein. Notwithstanding anything in this Section 5(e), an Exempt Issuance shall not be deemed a Fundamental Transaction.
 
(f) Calculations. All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of the Company) issued and outstanding.
 
	 
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(g) Notice to the Holder.
 
(i) Adjustment to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, the Company shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a brief statement of the facts requiring such adjustment.
 
(ii) Notice to Allow Conversion by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the Holder at its last address as it shall appear upon the Note Register, at least ten calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries (as determined in good faith by the Company), the Company or its successor shall simultaneously file such notice with the SEC pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day period commencing on the date of such notice through the effective date of the event triggering such notice except as may otherwise be expressly set forth herein. 
 
Section 6. Negative Covenants. As long as any portion of this Note remains outstanding, unless the holders of a majority in principal amount of the then outstanding Notes shall have otherwise given prior written consent, the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:
 
(a) other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist any Indebtedness for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom that is not expressly junior to the Note;
 
	 
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(b) amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that materially and adversely affects any rights of the Holder, other than the contemplated reverse stock split, which shall be completed by January 15, 2017; 
 
(c) enter into any transaction with any Affiliate of the Company which would be required to be disclosed in any public filing with the SEC assuming that the Company is subject to the Securities Act or the Exchange Act, unless such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company (even if less than a quorum otherwise required for board approval); or
 
(d) enter into any agreement with respect to any of the foregoing.
 
Section 7. Events of Default. 
 
(a) “Event of Default” means, wherever used herein, any of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of Law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):
 
(i) any default in the payment of (A) the principal amount of any Note or (B) interest, late fees, liquidated damages and other amounts owing to a Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default, solely in the case of an interest payment or other default under clause (B) above, is not cured within three Trading Days;
 
(ii) the Company shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by the Company of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in clause (x) below) or any Transaction Document which failure is not cured, if possible to cure, within the earlier to occur of (A) 3 Trading Days after notice of such failure sent by the Holder or by any other Holder to the Company and (B) 5 Trading Days after the Company has become aware of such failure;
 
(iii) If after two hundred ten (210) days from the date hereof while the Holder owns any Registrable Securities, the Registration Statement is not effective under the Securities Act registering the Registrable Securities; 
 
(iv) RESERVED;
 
(v) any representation or warranty made in this Note, any other Transaction Document, any written statement pursuant hereto or thereto or any other report, financial statement or certificate made or delivered to the Holder or any other Holder pursuant hereto or thereto shall be untrue or incorrect in any material respect as of the date when made or deemed made;
 
	 
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(vi) the Company or any Significant Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy Event;
 
(vii) the Company or any Subsidiary shall default on any of its obligations under any, mortgage, credit agreement or other facility, indenture agreement, factoring agreement or other instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness for borrowed money, including debentures or promissory notes or money due under any long term leasing or factoring arrangement that (a) involves an obligation greater than $5,000, whether such indebtedness now exists or shall hereafter be created, and (b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise become due and payable and such default is not cured within three Trading Days;
 
(viii) the Common Stock shall not be eligible for listing or quotation for trading on its Trading Market for a period longer than 10 Trading Days;
 
(ix) the Company shall have consummated a Change of Control Transaction or/Fundamental Transaction without paying in full all amounts owed under the Note at or prior to such consummation; 
 
(x) a final judgment for the payment of money aggregating in excess of $50,000 is rendered against the Company and/or any of its Subsidiaries and which judgment is not, within 45 days after the entry thereof, bonded, discharged or stayed pending appeal, or is not discharged within 60 days after the expiration of such stay; provided, however, any judgment that is covered by insurance or an indemnity from a credit-worthy party will not be included in calculating the amount of the judgment so long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company or such Subsidiary (as the case may be) will receive the proceeds of such insurance or indemnity within 30 days of the issuance of such judgment.
 
(xi) the Company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s intention to not honor requests for conversions of any Notes in accordance with the terms hereof or the Company does not honor a request for conversion of any Notes as required by the Notes
 
(xii) the Company shall be in breach of any material contract or agreement which breach or default the Company has reported in a filing it has made with the Securities and Exchange Commission. 
 
(b) Remedies Upon Event of Default. If any Event of Default occurs, the outstanding principal amount of this Note, plus accrued but unpaid interest, liquidated damages and other amounts owing in respect thereof through the date of acceleration, shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Upon the payment in full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by the Company. In connection with such acceleration described herein, the Holder need not provide, and the Company hereby waives, any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable Law. Such acceleration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until such time, if any, as the Holder receives full payment pursuant to this Section 7(b). No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.
 
	 
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(c) Interest Rate Upon Event of Default. Commencing on the occurrence of any Event of Default and until such Event of Default is cured, this Note shall accrue interest at an interest rate equal to the Default Interest Rate. 
 
Section 8. Miscellaneous.
 
(a) No Rights as Stockholder Until Conversion. This Note does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the conversion hereof other than as explicitly set forth in Section 4.
 
(b) Notices. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar receipted next business day delivery, as follows:
 
	If to the Company:
	 
	Cool Technologies, Inc. 
8875 Hidden River Parkway, Suite 300
Tampa, Florida 33637

	  
	 
	 

	with a copy to: 
(which shall not constitute Notice) 
	 
	 

	 
	 
	 

	 
	 
	 

	 
	 
	 

	If to Holder:
Address on signature page
	 
	 

 
or to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted to, or from, as the case may be, the date of delivery.
 
(c) Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest and late fees, as applicable, on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation of the Company. This Note ranks paripassu with all other Notes now or hereafter issued under the Purchase Agreement.
 
(d) Lost or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to the Company.The applicant for a new Note under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of the new Note.
 
	 
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(e) Exclusive Jurisdiction; Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its respective Affiliates, directors, officers, shareholders, employees or agents) shall only be commenced in the state and federal courts sitting in New York, New York (the “New York Courts”). Each party hereto hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by applicable Law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable Law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated hereby.
 
(f) Waiver. Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on any other occasion. Any waiver by the Company or the Holder must be in writing. 
 
(g) Severability. If any provision of this Note is invalid, illegal or unenforceable, the balance of this Note shall remain in effect, as long as the essential terms and conditions of this Note for each party remain valid, binding, and enforceable. If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable Law governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest permitted under applicable Law. 
 
(h) Remedies, Characterizations, Other Obligations, Breaches and Injunctive Relief. The remedies provided in this Note shall be cumulative and in addition to all other remedies available under this Note and any of the other Transaction Documents at Law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at Law for any such breach would be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an injunction restraining any such breach or any such threatened breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is reasonably requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Note.
 
(i) Next Business Day. Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.
 
(Signature Pages Follow)

	 
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IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by a duly authorized officer as of the date first above indicated.
 
		COOL TECHNOLOGIES, INC. 
	
	 
	  
	 

		By:	/s/ Timothy Hassett
	
		Name:	Timothy Hassett
	
		Title:	Chairman and Chief Executive Officer
	

 
	 
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ANNEX A
NOTICE OF CONVERSION
 
The undersigned hereby elects to convert principal under the 5% Convertible Note due ________ ___, 2017 issued by Cool technologies, Inc. , a Nevada corporation (the “Company”), into shares of common stock (the “Common Stock”), of the Company according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as reasonably requested by the Company in accordance therewith. No fee will be charged to the holder for any conversion, except for such transfer taxes, if any.
 
By the delivery of this Notice of Conversion the undersigned represents and warrants to the Company that its ownership of the Common Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the Exchange Act.
 
The undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with any transfer of the aforesaid shares of Common Stock. 
 
	Conversion calculations: 
	 
	 

	 
	Date to Effect Conversion:
	 

	 
	  
	 

	 
	Principal Amount of Note to be Converted:
	 

	 
	  
	 

	 
	Payment of Interest in Common Stock __ yes __ no
If yes, $_____ of Interest Accrued on Account of Conversion at Issue.
	 

	 
	  
	 

	 
	Number of shares of Common Stock to be issued:
	 

	 
	  
	 

	 
	Signature:
	 

	 
	 
	 

	 
	Name:
	 

	 
	  
	 

	 
	DWAC Instructions:
	 

	 
	 
	 

	 
	Broker No: ______________
	 

	 
	 
	 

	 
	Account No: _________________________
	 

 
	 
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Schedule 1
CONVERSION SCHEDULE
 
The 5% Convertible Note due on __________ ___, 2017 in the original principal amount of $____________ are issued by Cool Technologies, Inc., a Nevada corporation. This Conversion Schedule reflects conversions made under Section 4 of the above referenced Note.
 
Dated: 
 
	
Date of Conversion
(or for first entry,
Original Issue Date)
		
Amount of
Converted Principal
		
Aggregate Principal
Amount Remaining
Subsequent to Conversion
(or original Principal Amount)
		
Applicable
Conversion Price
		
Company
Attest

									
									
									
									
									
									
									
									
									

 
 
	19cool_ex1063.htm

EXHIBIT 10.63
 
SECURITIES PURCHASE AGREEMENT
 
This Securities Purchase Agreement (this "Agreement") is dated as of December 6, 2016 by and between Cool Technologies, Inc., a Nevada corporation (the "Company") and Bellridge Capital, LP a Delaware Limited Partnership the "Purchaser). Capitalized terms used in this Agreement and not otherwise defined shall have the meanings ascribed to them in Article 1.
 
WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall have the right to issue and sell to Purchaser from time to time as provided herein, and Purchaser shall be obligated to purchase from the Company up to $5,000,000 worth of shares of the Company's Common Stock on a private placement basis pursuant to an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended; and
 
WHEREAS, the Purchaser shall be entitled to resell shares of Common Stock acquired hereunder pursuant to a resale registration statement established by the Company pursuant to the terms of the Registration Rights Agreement between the Company and the Purchaser which shall be declared effective by the Commission prior to the delivery of the first Draw Down Notice.
 
NOW, THEREFORE, in consideration of the foregoing premises, and the promises and covenants herein contained, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties, intending to be legally bound, hereby agree as follows:
 
ARTICLE I.
DEFINITIONS
 
1.1 Definitions. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings indicated in this Section 1.1:
 
"Action" shall have the meaning ascribed to such term in Section 3.1(j).
 
"Affiliate" means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person as such terms are used in and construed under Rule 144 under the Securities Act. With respect to the Purchaser, any investment fund or managed account that is managed on a discretionary basis by the same investment manager as the Purchaser will be deemed to be an Affiliate of the Purchaser.
 
"Business Day" means any day except Saturday, Sunday, any day which shall be a federal legal holiday in the United States or any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to close.
 
"Closing Price" means the price of the Common Stock on the last Trading Day of the respective Draw Down Period.
 
"Commission" means the Securities and Exchange Commission.
 
"Commencement Date" shall mean the Trading Day immediately following the date on which the applicable Draw Down Notice is delivered to the Purchaser. 
 
"Commitment Amount" shall have the meaning assigned to such term in Section 2.1 hereof.
 
"Commitment Period" shall mean the period of 24 consecutivemonths commencing on the four Trading Days after the Effective Date of the final Registration Statement, or until such time that the Purchaser has purchased $5,000,000 of the Common Stock, whichever is earlier.
 
"Common Stock" means the common stock of the Company, par value $0.001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed into.
 
	 
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"Common Stock Equivalents" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
 
"Company Counsel" means David Lubin & Associates, PLLC.
 
"Consolidation Event" shall mean a sale of all or substantially all of the Company's assets or a merger pursuant to which the holders of the voting securities of the Company prior to the merger do not own a majority of the voting securities of the surviving entity.
 
"Disclosure Schedules" means the Disclosure Schedules of the Company delivered concurrently herewith.
 
"Draw Down" shall have the meaning assigned to such term in Section 6.1(a) hereof.
 
"Draw Down Notice" shall have the meaning assigned to such term in Section 6.1(e) hereof.
 
"Draw Down Pricing Period" shall mean each period of 15 consecutive Trading Days following the delivery by the Company of a Draw Down Notice, the first of such periods commencing on the date specified in the Draw Down Notice; provided, however, the first Draw Down Pricing Period and any subsequent Draw Down Pricing Period commencing after a suspension notice is delivered, shall not begin before the day on which receipt of such notice is delivered to Purchaser pursuant to Section 8.3 herein.
 
"Draw Down Shares" shall mean the shares of Common Stock issuable pursuant to a Draw Down.
 
"DTC" shall have the meaning assigned to such term in Section 6.1(f).
 
"DWAC" shall have the meaning assigned to such term in Section 6.1(f).
 
"Effective Date" means the date that the initial Registration Statement filed by the Company pursuant to the Registration Rights Agreement is first declared effective by the Commission and the date that each subsequent Registration Statement filed by the Company pursuant to the Registration Rights Agreement is declared effective by the Commission.
 
"Equity Conditions" shall mean, during the period in question, (i) all liquidated damages and other amounts owing to the Purchaser pursuant to the Transaction Documents have been paid, (ii) there is an effective Registration Statement pursuant to which the Purchaser is permitted to utilize the prospectus thereunder to resell all of the Draw Down Shares (issued and to be issued pursuant to the applicable Draw Down and the Company believes, in good faith, that such effectiveness will continue uninterrupted for the foreseeable future), (iii) the Common Stock is trading on the Trading Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted (if applicable) for trading on a Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the foreseeable future such that no stop order or suspension of trading shall have been imposed by the SEC or any other governmental or regulatory body with respect to public trading in the Common Stock), (iv) there is a sufficient number of authorized but unissued and otherwise unreserved shares of Common Stock for the issuance of all of the Draw Down Shares (issued and to be issued pursuant to the applicable Draw Down), (v) the issuance of the Draw Down Shares subject to the applicable Draw Down would not violate the limitations set forth in Section 4.12, and (vi) the Company, directly or indirectly, has not provided the Purchaser with any material, non-public information that has not been made publicly available in a widely disseminated release.
 
"Evaluation Date" shall have the meaning ascribed to such term in Section 3.1(r).
 
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
 
	 
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"GAAP" shall have the meaning ascribed to such term in Section 3.1(h).
 
"Initial Closing" shall have the meaning assigned to such term in Section 2.2 hereof.
 
"Initial Closing Date" shall have the meaning assigned to such term in Section 2.2 hereof.
 
"Intellectual Property Rights" shall have the meaning ascribed to such term in Section 3.1(o).
 
"Investment Amount" shall have the meaning assigned to such term in Section 6.1(c) hereof.
 
"Legend Removal Date" shall have the meaning ascribed to such term in Section 4.1(c).
 
"Liens" means a lien, charge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
 
"Material Adverse Effect" shall have the meaning assigned to such term in Section 3.1(b).
 
"Material Permits" shall have the meaning ascribed to such term in Section 3.1(m).
 
"Person" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
 
"Proceeding" means an action, claim, suit, investigation or proceeding (including, without limitation, an investigation or partial proceeding, such as a deposition), whether commenced or threatened.
 
"Purchase Price" shall mean, with respect to Draw Down Shares purchased during each applicable Settlement Period, the average of the lowest trade price of the Common Stock during the ten Trading Days immediately prior to each Draw Down Notice plus a 20% discount. 
 
"Purchaser Party" shall have the meaning ascribed to such term in Section 4.7.
 
"Registration Rights Agreement" means the Registration Rights Agreement, dated the date hereof, between the Company and the Purchaser, in the form of Exhibit A attached hereto.
 
"Registration Statement" means a registration statement meeting the requirements set forth in the Registration Rights Agreement and covering the resale by the Purchaser of the Draw Down Shares.
 
"Required Approvals" shall have the meaning ascribed to such term in Section 3.1(e).
 
"Rule 144" means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
 
"Rule 424" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.
 
"SEC Reports" shall have the meaning ascribed to such term in Section 3.1(h).
 
"Securities" means the Draw Down Shares.
 
"Securities Act" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.
 
	 
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"Settlement" shall mean the delivery of the Draw Down Shares into the Purchaser's DTC account via DTC's DWAC system and the Purchaser's delivery of payment therefor.
 
"Settlement Date" shall have the meaning assigned to such term in Section 6.1(b).
 
"Settlement Period" shall have the meaning assigned to such term in Section 6.1(b).
 
"Short Sales" shall include all "short sales" as defined in Rule 200 of Regulation SHO under the Exchange Act; provided, however, that in no event shall either the sale of Draw Down Shares to be received but not yet delivered pursuant to a pending Draw Down during a Draw Down Pricing Period be deemed a Short Sale or the sale of any Securities issued under this Agreement after the date hereof be deemed a Short Sale.
 
"Subsidiary" shall have the meaning ascribed to such term in Section 3.1(a).
 
"Trading Cushion" shall mean the 15Trading Days between Draw Down Pricing Periods.
 
"Trading Day" means a day on which the Common Stock is traded on a Trading Market.
 
"Trading Market" means the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the NYSE MKT, the New York Stock Exchange, the Nasdaq National Market, the OTCQB or the OTCQX.
 
"Transaction Documents" means this Agreement, and the Registration Rights Agreement and any other documents or agreements executed in connection with the transactions contemplated hereunder.
 
"VWAP" means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock is then listed or quoted for trading as reported by Bloomberg Financial L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time or (b) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the Holder and reasonably acceptable to the Company.
 
ARTICLE II.
PURCHASE AND SALE
 
2.1 Purchase and Sale of Draw Down Shares. Upon the terms and subject to the conditions of this Agreement, the Company may sell and issue to the Purchaser and the Purchaser shall be obligated to purchase from the Company, up to an aggregate of $5,000,000 worth of shares of Common Stock (the "Commitment Amount").
 
2.2 Initial Closing. The execution and delivery of this Agreement and the other agreements referred to herein (the "Initial Closing") shall take place at the offices of counsel to the Company or at such other time and place or on such date as the Purchaser and the Company may agree upon (the "Initial Closing Date"). Each party shall deliver the following documents, instruments and writings at or prior to the Initial Closing:
 
(a) The Company shall deliver or cause to be delivered to the Purchaser the following:
 
i. this Agreement duly executed by the Company; 
 
ii. the Registration Rights Agreement duly executed by the Company; 
 
iii. an opinion of counsel to the Company in form that is reasonably acceptable to the Purchaser and
 
iv. a stock certificate or irrevocable letter to the Company’s transfer agent to issue 1,317,176 shares of Common Stock as a commitment fee. 
 
	 
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(b) The Purchaser shall deliver or cause to be delivered to the Company the following:
 
i. this Agreement duly executed by the Purchaser; and
 
ii. the Registration Rights Agreement duly executed by the Purchaser.
 
ARTICLE III.
REPRESENTATIONS AND WARRANTIES
 
3.1 Representations and Warranties of the Company. Except as set forth under the corresponding section of the Disclosure Schedules which Disclosure Schedules shall be deemed a part hereof and to qualify any representation or warranty otherwise made herein to the extent of such disclosure, the Company hereby makes the representations and warranties set forth below to the Purchaser:
 
(a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a). The Company owns, directly or indirectly, the capital stock or other equity interests of each Subsidiary, in the amounts set forth on Schedule 3.1(a), free and clear of any Liens, and all the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. If the Company has no subsidiaries, then all other references in the Transaction Documents to the Subsidiaries or any of them will be disregarded.
 
(b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization (as applicable), with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation or default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a "Material Adverse Effect") and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
 
(c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by each of the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of each of the Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, its board of directors or its stockholders in connection therewith other than in connection with the Required Approvals. Each Transaction Document has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
 
(d) No Conflicts. The execution, delivery and performance of the Transaction Documents by the Company, the issuance and sale of the Securities and the consummation by the Company of the other transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
 
	 
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(e) Filings, Consents and Approvals. Except as set forth on Schedule 3.1(e), the Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) filings required pursuant to Section 4.4 of this Agreement, (ii) the filing with the Commission of the Registration Statement, (iii) application(s) to each applicable Trading Market for the listing of the Securities for trading thereon in the time and manner required thereby, and (iv) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the "Required Approvals").
 
(f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement.
 
(g) Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g). The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the Company's stock option plans and pursuant to the conversion or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except pursuant to the Securities Purchase Agreement dated the date hereof, as a result of the purchase and sale of the Securities, there are no outstanding options, warrants, script rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. As of the date hereof, the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital stock of the Company are validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors of the Company or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.
 
(h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by it under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the "SEC Reports") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved ("GAAP"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.
 
	 
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(i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) except as set forth in the SEC Reports, the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement or as set forth on Schedule 3.1(i), no event, liability or development has occurred or exists with respect to the Company or its Subsidiaries or their respective business, properties, operations or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.
 
(j) Litigation. Except as set forth on Schedule 3.1(j) and other than as disclosed in the SEC Reports, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "Action") which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
 
(k) Labor Relations. No material labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries' employees is a member of a union that relates to such employee's relationship with the Company, and neither the Company or any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. No executive officer, to the knowledge of the Company, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
	 
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(l) Compliance. Except as set forth on Schedule 3.1(l), neither the Company nor any Subsidiary (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any order of any court, arbitrator or governmental body, or (iii) is or has been in violation of any statute, rule or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws applicable to its business and all such laws that affect the environment, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
 
(m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not have or reasonably be expected to result in a Material Adverse Effect ("Material Permits"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
 
(n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them that is material to the business of the Company and the Subsidiaries and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and Liens for the payment of federal, state or other taxes, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
 
(o) Patents and Trademarks. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or material for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the "Intellectual Property Rights"). Neither the Company nor any Subsidiary has received a notice (written or otherwise) that the Intellectual Property Rights used by the Company or any Subsidiary violates or infringes upon the rights of any Person. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
 
(p) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Commitment Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.
 
(q) Transactions With Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company and, to the knowledge of the Company, none of the employees of the Company is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee or partner, in each case in excess of $50,000 other than (i) for payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) for other employee benefits, including stock option agreements under any stock option plan of the Company.
 
	 
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(r) Sarbanes-Oxley; Internal Accounting Controls. The Company is in compliance with all provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. Except as set forth in the SEC Reports, the Company has established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by the Company's most recently filed periodic report under the Exchange Act (such date, the "Evaluation Date"). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the Company's internal control over financial reporting (as such term is defined in the Exchange Act) that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.
 
(s) Certain Fees. Except as disclosed on Schedule 3.1(s), no brokerage or finder's fees or commissions are or will be payable by the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents.
 
(t) Private Placement. Assuming the accuracy of the Purchaser representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
 
(u) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become subject to the Investment Company Act.
 
(v) Registration Rights. Other than as set forth on Schedule 3.1(v), the Purchaser, and pursuant to the Securities Purchase Agreement dated the date hereof, and the transaction documents associated therewith, between the Company and certain purchasers set forth therein, no Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company.
 
(w) Listing and Maintenance Requirements. The Company's Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
 
	 
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(x) Application of Takeover Protections. The Company and its Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's Certificate of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company's issuance of the Securities and the Purchaser's ownership of the Securities.
 
(y) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that, neither it nor any other Person acting on its behalf has provided any of the Purchaser or their agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company. All disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company, its business and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, with respect to the representations and warranties made herein are true and correct with respect to such representations and warranties and do not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
 
(z) No Integrated Offering. Assuming the accuracy of the Purchaser's representations and warranties set forth in Section 3.2, neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of the Securities Act or any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
 
(aa) Solvency. Based on the financial condition of the Company as of the Closing Date after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature; (ii) the Company's assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, and projected capital requirements and capital availability thereof; and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth as of the dates thereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, "Indebtedness" shall mean (a) any liabilities for borrowed money or amounts owed in excess of $20,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of Indebtedness of others, whether or not the same are or should be reflected in the Company's balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $25,000 due under leases required to be capitalized in accordance with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.
 
	 
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(bb) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and each Subsidiary has filed all necessary federal, state and foreign income and franchise tax returns and has paid or accrued all taxes shown as due thereon, and the Company has no knowledge of a tax deficiency which has been asserted or threatened against the Company or any Subsidiary.
 
(cc) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser and certain other "accredited investors" within the meaning of Rule 501 under the Securities Act.
 
(dd) Foreign Corrupt Practices. Neither the Company, nor to the knowledge of the Company, any agent or other person acting on behalf of the Company, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the Foreign Corrupt Practices Act of 1977, as amended.
 
(ee) Accountants. The Company's accountants are set forth on Schedule 3.1(ee) of the Disclosure Schedule. To the knowledge of the Company, such accountants, who the Company expects will express their opinion with respect to the financial statements to be included in the Company's Annual Report on Form 10-K for the year ended December 31, 2016, are a registered public accounting firm as required by the Exchange Act.
 
(ff) Acknowledgment Regarding Purchaser's Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm's length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that Purchaser not is acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by Purchaser or any of Purchaser's respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser's purchase of the Securities. The Company further represents to the Purchaser that the Company's decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
 
(gg) Acknowledgement Regarding Purchaser's Trading Activity. Anything in this Agreement or elsewhere herein to the contrary notwithstanding (except for Section 4.10 and 4.16 hereof), it is understood and acknowledged by the Company (i) that the Purchaser has not been asked to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short, securities of the Company, or "derivative" securities based on securities issued by the Company or to hold the Securities for any specified term; (ii) that past or future open market or other transactions by Purchaser, including Short Sales, and specifically including, without limitation, Short Sales or "derivative" transactions, before or after the closing of this or future private placement transactions, may negatively impact the market price of the Company's publicly-traded securities; and (iii) that the Purchaser shall not be deemed to have any affiliation with or control over any arm's length counter-party in any "derivative" transaction. The Company further understands and acknowledges that (a) the Purchaser may engage in hedging activities at various times during the period that the Securities are outstanding, including, without limitation, during the periods that the value of the Draw Down Shares deliverable with respect to Securities are being determined and (b) such hedging activities (if any) could reduce the value of the existing stockholders' equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.
 
	 
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(hh) Regulation M Compliance. The Company has not, and will not during the term of this Agreement, and to its knowledge no one acting on its behalf has, or will during the term of this Agreement, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay to any person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company's placement agent in connection with the placement of the Securities.
 
3.2 Representations and Warranties of the Purchaser. Purchaser hereby represents and warrants as of the date hereof and as of each Closing Date to the Company as follows:
 
(a) Organization; Authority. Purchaser is an entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization with full right, corporate or partnership power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution, delivery and performance by the Purchaser of the transactions contemplated by this Agreement have been duly authorized by all necessary corporate or similar action on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
 
(b) Own Account. Purchaser understands that the Securities are "restricted securities" and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities at the Initial Closing as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities (this representation and warranty not limiting the Purchaser's right to sell the Securities pursuant to the Registration Statement or otherwise in compliance with applicable federal and state securities laws) in violation of the Securities Act or any applicable state securities law. Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
 
(c) Purchaser Status. At the time the Purchaser was offered the Securities, it was, and at the date hereof it is, either: (i) an "accredited investor" as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act or (ii) a "qualified institutional buyer" as defined in Rule 144A(a) under the Securities Act. 
 
(d) Experience of Purchaser. Purchaser has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
 
(e) General Solicitation. Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
 
(f) No Bad Actor Disqualification. With respect to the Securities to be offered and sold hereunder in reliance on Rule 506(b) under the Securities Act, neither the Company nor, to the knowledge of the Company, any of its predecessors, any affiliated issuer, any director, executive officer, other officer of the Company participating in the offering hereunder, any beneficial owner of 20% or more of the Company’s outstanding voting equity securities, calculated on the basis of voting power, or any promoter (as that term is defined in Rule 405 under the Securities Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person” and, together, “Issuer Covered Persons”) is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the Securities Act (a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3). The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification Event. The Company has complied, to the extent applicable, with its disclosure obligations under Rule 506(e), and has made available to the Purchaser a copy of any disclosures provided thereunder.
 
	 
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ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES
 
4.1 Transfer Restrictions. 
 
(a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement, Rule 144, to the Company or to an affiliate of the Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights of the Purchaser under this Agreement and the Registration Rights Agreement, as to issued Securities only.
 
(b) The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Draw Down Shares in the following form:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN "ACCREDITED INVESTOR" AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.
 
The Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an "accredited investor" as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and the Registration Rights Agreement and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the Purchaser's expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities are subject to registration pursuant to the Registration Rights Agreement, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities Act or other applicable provision of the Securities Act to appropriately amend the list of Selling Stockholders thereunder.
 
(c) Certificates (or electronic transfer, at the election of the Company) evidencing the Draw Down Shares shall not contain any legend (including the legend set forth in Section 4.1(b)), (i) while a registration statement (including the Registration Statement) covering the resale of such security is effective under the Securities Act, or (ii) following any sale of such Draw Down Shares pursuant to Rule 144, or (iii) if such Draw Down Shares are eligible for sale under Rule 144, or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Company's transfer agent promptly after the applicable Effective Date if required by the Company's transfer agent to effect the removal of the legend hereunder. The Company agrees that following the applicable Effective Date or at such time as such legend is no longer required under this Section 4.1(c), it will, no later than three Trading Days following the delivery by the Purchaser to the Company or the Company's transfer agent of a certificate representing Draw Down Shares as the case may be, issued with a restrictive legend (such third Trading Day, the "Legend Removal Date"), deliver or cause to be delivered to the Purchaser a certificate representing such shares that is free from all restrictive and other legends. All Draw Down Shares shall be delivered without any restrictive legends. The Company may not make any notation on its records or give instructions to any transfer agent of the Company that enlarge the restrictions on transfer set forth in this Section. Certificates for Securities subject to legend removal hereunder shall be transmitted by the transfer agent of the Company to the Purchaser by crediting the account of the Purchaser's prime broker with the Depository Trust Company System.
 
	 
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(d) In addition to the Purchaser's other available remedies, the Company shall pay to the Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Draw Down Shares (based on the VWAP of the Common Stock on the date such Securities are submitted to the Company's transfer agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $100 per Trading Day (increasing to $200 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit the Purchaser's right to pursue actual damages for the Company's failure to deliver certificates representing any Securities as required by the Transaction Documents, and the Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
 
(e) Purchaser agrees that the removal of the restrictive legend from certificates representing Securities as set forth in this Section 4.1 is predicated upon the Company's reliance that the Purchaser will sell any Securities pursuant to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with the plan of distribution set forth therein.
 
4.2 Furnishing of Information. As long as Purchaser owns any Securities, the Company covenants to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act. As long as the Purchaser owns any Securities, if the Company is not required to file reports pursuant to the Exchange Act, it will prepare and furnish to the Purchaser and make publicly available in accordance with Rule 144(c) such information as is required for the Purchaser to sell the Securities under Rule 144. The Company further covenants that it will take such further action as any holder of Securities may reasonably request, to the extent required from time to time to enable such Person to sell such Securities without registration under the Securities Act within the requirements of the exemption provided by Rule 144.
 
4.3 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities to the Purchaser or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.
 
4.4 Securities Laws Disclosure; Publicity. By the fourth Trading Day immediately following the date hereof, the Company shall file with the Commission a Current Report on Form 8-K, disclosing the material terms of the transactions contemplated hereby, and shall attach the Transaction Documents thereto. The Company and the Purchaser shall consult with each other in issuing any other press releases with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser shall issue any such press release or otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. 
 
	 
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4.5 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser is an "Acquiring Person" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.
 
4.6 Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it nor any other Person acting on its behalf will provide the Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto the Purchaser shall have executed a written agreement regarding the confidentiality and use of such information. The Company understands and confirms that the Purchaser shall be relying on the foregoing representations in effecting transactions in securities of the Company.
 
4.7 Indemnification of Purchaser. Subject to the provisions of this Section 4.7, the Company will indemnify and hold the Purchaser and its directors, officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a "Purchaser Party") harmless from any and all losses, liabilities, or other obligations.
 
4.8 Reservation of Common Stock. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a number of shares of Common Stock, for the purpose of enabling the Company to issue Draw Down Shares pursuant to this Agreement.
 
4.9 Listing of Common Stock. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on a Trading Market, and as soon as reasonably practicable following the Initial Closing (but not later than the Effective Date of the initial Registration Statement) to list or quote all of the Draw Down Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will include in such application all of the Draw Down Shares, and will take such other action as is necessary to cause all of the Draw Down Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Trading Market. claims, contingencies, damages, costs and expenses, including all judgments, amounts paid in settlements, court costs and reasonable attorneys' fees and costs of investigation that any Purchaser Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the Purchaser, or any of its Affiliates, by any stockholder of the Company who is not an Affiliate of the Purchaser, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of the Purchaser's representations, warranties or covenants under the Transaction Documents or any agreements or understandings the Purchaser may have with any such stockholder or any violations by the Purchaser of state or federal securities laws or any conduct by the Purchaser which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser Party shall promptly notify the Company in writing, and the Company shall have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of the Purchaser Party except to the extent that (i) the employment thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of such separate counsel, a material conflict on any material issue between the position of the Company and the position of the Purchaser Party, in which case the Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not be liable to any Purchaser Party under this Agreement (i) for any settlement by the Purchaser Party effected without the Company's prior written consent, which shall not be unreasonably withheld or delayed; or (ii) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party's breach of any of the representations, warranties, covenants or agreements made by the Purchaser Party in this Agreement or in the other Transaction Documents.
 
	 
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4.10 Confidentiality After The Date Hereof. Purchaser covenants that until such time as the transactions contemplated by this Agreement are publicly disclosed by the Company as described in Section 4.4, the Purchaser will maintain the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction.
 
4.11 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closing under applicable securities or "Blue Sky" laws of the states of the United States, and shall provide evidence of such actions promptly upon request of Purchaser.
 
4.12 The Shares. Notwithstanding, anything in this Agreement to the contrary, (i) the Company may not make a Draw Down to the extent that such Draw Down exceeds 4.99% of the then outstanding shares of Common Stock, and (ii) at no time will the Company request a Draw Down which would result in the issuance of an aggregate number of shares of Common Stock pursuant to this Agreement which exceeds 19.9% of the number of shares of Common Stock issued and outstanding on the date hereof without first obtaining stockholder approval of such excess issuance, or such other amount as would require stockholder approval under rules of the principal Trading Market or otherwise without first obtaining stockholder approval, if any, of such excess issuance. Furthermore, in no event shall the number of shares issuable to Purchaser cause the Purchaser to beneficially own in excess of 4.99% of the then outstanding Common Stock, provided however, the 4.99% limitation set forth herein may be increased by the Purchaser to up to 9.99% of the number of shares of Common Stock outstanding immediately after giving effect to the issuance of any shares of Common Stock to the Purchaser upon not less than 61 days' prior notice to the Company. For purposes of this Section beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder. 
 
4.13 Accuracy of Registration Statement. On each Settlement Date, the Registration Statement and the prospectus therein (including any prospectus supplement) shall not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein not misleading in light of the circumstances under which they were made; and on such Settlement Date the Registration Statement and the prospectus therein will not include any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, the Company makes no representations or warranties as to the information contained in or omitted from the Registration Statement and the prospectus therein in reliance upon and in conformity with the information furnished in writing to the Company by the Purchaser specifically for inclusion in the Registration Statement and the prospectus therein.
 
4.14 Notice of Certain Events Affecting Registration; Suspension of Right to Request a Draw Down. The Company will promptly notify the Purchaser in writing upon the occurrence of any of the events set forth in Section 3(d) of the Registration Rights Agreement. The Company shall not deliver to the Purchaser any Draw Down Notice during the continuation of any of the foregoing events. The Company shall promptly make available to the Purchaser any such supplements or amendments to the related prospectus, at which time, provided that the registration statement and any supplements and amendments thereto are then effective, the Company may recommence the delivery of Draw Down Notices.
 
4.15 Reserved. 
 
4.16 Short Sales. After the date hereof and prior to the termination of this Agreement, the Purchaser hereby agrees not to execute any Short Sales of the Common Stock. 
 
	 
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ARTICLE V.
CONDITIONS TO INITIAL CLOSING AND DRAW DOWNS
 
5.1 Conditions Precedent to the Obligation of the Company to Sell the Draw Down Shares. The obligation hereunder of the Company to proceed to close this Agreement and to issue and sell the Draw Down Shares to the Purchaser is subject to the satisfaction or waiver, at or before the Initial Closing, and as of each Settlement Date of each of the conditions set forth below. These conditions are for the Company's sole benefit and may be waived by the Company in writing at any time in its sole discretion.
 
(a) Accuracy of the Purchaser's Representations and Warranties. The representations and warranties of the Purchaser shall be true and correct in all material respects as of the date when made and as of the Initial Closing and as of each Settlement Date as though made at that time (except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such dates).
 
(b) Performance by the Purchaser. The Purchaser shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Purchaser at or prior to the Initial Closing and as of each Settlement Date.
 
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
 
(d) No Proceedings or Litigation. No material Action shall have been commenced against the Purchaser or the Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any subsidiary, seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
 
(e) Initial Closing Deliveries. The delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.
 
5.2 Conditions Precedent to the Obligation of the Purchaser to Close. The obligation hereunder of the Purchaser to perform its obligations under this Agreement and to purchase the Draw Down Shares is subject to the satisfaction or waiver, at or before the Initial Closing, of each of the conditions set forth below. These conditions are for the Purchaser's sole benefit and may be waived by the Purchaser in writing at any time in its sole discretion.
 
(a) Accuracy of the Company's Representations and Warranties. Each of the representations and warranties of the Company shall be true and correct in all material respects as of the date when made and as of the Initial Closing as though made at that time (except for representations and warranties that speak as of a particular date, which shall be true and correct in all material respects as of such date).
 
(b) Performance by the Company. The Company shall have performed, satisfied and complied in all material respects with all material covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company at or prior to the Initial Closing.
 
(c) No Injunction. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction which prohibits the consummation of any of the transactions contemplated by this Agreement.
 
(d) No Proceedings or Litigation. No material Action shall have been commenced, against the Purchaser or the Company or any subsidiary, or any of the officers, directors or affiliates of the Company or any subsidiary seeking to restrain, prevent or change the transactions contemplated by this Agreement, or seeking damages in connection with such transactions.
 
	 
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(e) Initial Closing Deliveries. The delivery by the Company of the items set forth in Section 2.2(a) of this Agreement.
 
5.3 Conditions Precedent to the Obligation of the Purchaser to Accept a Draw Down and Purchase the Draw Down Shares. The obligation hereunder of the Purchaser to accept a Draw Down request and to acquire and pay for the Draw Down Shares is subject to the satisfaction at or before each Settlement Date, of each of the conditions set forth below.
 
(a) Satisfaction of Conditions to Initial Closing. The Company shall have satisfied at the Initial Closing, or the Purchaser shall have waived at the Initial Closing, the conditions set forth in Section 5.2 hereof.
 
(b) No Suspension. Trading in the Common Stock shall not have been suspended by the Commission or the principal Trading Market (except for any suspension of trading of limited duration agreed to by the Company, which suspension shall be terminated prior to the delivery of each Draw Down Notice), and, at any time prior to such Draw Down Notice, trading in securities generally as reported on the principal Trading Market shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported on the principal Trading Market unless the general suspension or limitation shall have been terminated prior to the delivery of such Draw Down Notice.
 
(c) Material Adverse Effect. No Material Adverse Effect and no Consolidation Event where the successor entity has not agreed to deliver to the Purchaser such shares of stock and/or securities as the Purchaser is entitled to receive pursuant to this Agreement.
 
(d) Threshold Price. During the Draw Down Pricing Period through the Settlement Date, the Common Stock shall have a price of at least $0.06 per share as quoted on the relevant Trading Market.
 
(e) Equity Conditions. During the Draw Down Pricing Period through the Settlement Date, all of the Equity Conditions shall have been met.
 
ARTICLE VI.
DRAW DOWN TERMS
 
6.1 Draw Down Terms. Subject to the satisfaction of the conditions set forth in this Agreement, the parties agree as follows:
 
(a) The Company may, in its sole discretion, issue and exercise draw downs against the Commitment Amount (each a "Draw Down") during the Commitment Period, which Draw Downs the Purchaser shall be obligated to accept, subject to the terms and conditions of this Agreement. Before the Company shall exercise a Draw Down, the Company shall have caused a sufficient number of shares of Common Stock to be registered to cover the Draw Down Shares to be issued in connection with such Draw Down.
 
(b) Only one Draw Down shall be allowed in each Draw Down Pricing Period and any subsequent Draw Down Pricing Period shall not commence until the Trading Cushion has elapsed since the end of the previous Draw Down Pricing Period. The number of shares of Common Stock purchased by the Purchaser with respect to each Draw Down shall be determined as set forth in Section 6.1(d) herein and settled on the second Trading Day immediately following the end of the applicable Draw Down Pricing period (each such settlement period and each such settlement date shall be referred to as a "Settlement Period" and a "Settlement Date", respectively)
 
(c) The quantity of Draw Down Shares as to each Draw Down shall be limited to the lesser of: (i) 4.99% of the then-current shares outstanding, (ii) the 10-day average trading volume of the Draw Down Shares immediately prior to the Draw Down multiplied by 300%. There shall be a minimum Draw Down Investment Amount (the "Investment Amount") of $25,000 and (iii) a maximum Draw Down Investment Amount of $500,000 unless otherwise agreed upon by the Company and the Purchaser, provided this amount may not be increased to an amount that would cause the Purchaser to beneficially own more than 4.99% of the Company’s Common Stock. For avoidance of doubt, the calculation provided for herein shall be done at the beginning of the Draw Down Pricing Period.
 
	 
	18

	

	 

 
(d) The issuance of Draw Down Shares of Common Stock to be issued on each Settlement Date shall subject to the following adjustments:
 
i. if during any Trading Day during the Draw Down Pricing Period trading of the Common Stock on the Trading Market is suspended for more than 3 hours, in the aggregate, or if any Trading Day during the Draw Down Pricing Period is shortened because of a public holiday, then such Trading Day shall be withdrawn from the Draw Down Pricing Period; and
 
(e) The Company must inform the Purchaser as to the Investment Amount of the Draw Down the Company wishes to exercise by delivering a draw down notice, in the form of Exhibit B hereto (the "Draw Down Notice"), via facsimile or email transmission in accordance with Section 8.3. The Draw Down Notice shall also inform the Purchaser of the first day of the Draw Down Pricing Period, which, unless otherwise agreed to in writing by the parties, shall be the first Trading Day following the date such Draw Down Notice is received (the "Commencement Date"). At no time shall the Purchaser be required to purchase more than the maximum Investment Amount for a given Draw Down Pricing Period. On or before any Trading Day that a Draw Down Notice is delivered, the Company shall have filed with the Commission a prospectus supplement pursuant to Rule 424 under the Securities Act setting forth the terms of the Draw Down Notice. Draw Down Notices shall be made no less than 10 Business Days apart, unless otherwise agreed upon by the Company and the Purchaser.
 
(f) On the Trading Day immediately following the last day of the Settlement Period, the Company shall deliver, and the Purchaser shall acknowledge receipt of, a settlement statement (the "Settlement Statement") setting forth the number of Draw Down Shares issuable and the aggregate Purchase Price as to such Settlement Period. On the Settlement Date as to such Draw Down, the Draw Down Shares purchased pursuant to such Settlement Statement shall be delivered to the Depository Trust Company ("DTC") account of the Purchaser, or its designees, as designated by the Purchaser in the Settlement Statement, via DTC's Deposit Withdrawal Agent Commission system ("DWAC"). Upon the Company electronically delivering such Draw Down Shares to the DTC account of the Purchaser, or its designees, via DWAC by 1:00 p.m. ET, the Purchaser shall, on the same day (or the next Business Day if such day is not a Business Day) wire transfer immediately available funds to the Company's bank account, as designated by the Company in the Settlement Statement, for the amount of the aggregate Purchase Price of such Draw Down Shares. Upon the Company electronically delivering the Draw Down Shares to the Purchaser or its designee's DTC account via DWAC after 1:00 p.m. ET, the Purchaser shall wire transfer next day available funds to the Company's designated account on such day. At the sole election of the Purchaser, the Purchaser may elect to pay any broker fees disclosed in the schedules attached to this Agreement directly to the brokers pursuant to written instructions from any such broker.
 
(g) The Company understands that a delay in the delivery of the Draw Down Shares to the Purchaser beyond the Settlement Date could result in economic loss to the Purchaser. In addition to the Purchaser's other available remedies, the Company shall pay to the Purchaser, in cash, as partial liquidated damages and not as a penalty, for each $1,000 of Draw Down Shares (based on the Closing Price of the Common Stock on the applicable Settlement Date) required to be delivered on the Settlement Date, $100 per Trading Day (increasing to $200 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after the Settlement Date until such Draw Down Shares are delivered pursuant to this Article VI. Nothing herein shall limit the Purchaser's right to pursue actual damages for the Company's failure to deliver certificates (via DWAC) representing any Securities as required by the Transaction Documents, including but not limited to the cost of any buy-in to the Purchaser, and the Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief.
 
	 
	19

	

	 

 
ARTICLE VII.
TERMINATION
 
7.1 Term. The term of this Agreement shall begin on the date hereof and shall end at the earlier of: 36 months from the Effective Date of the Registration Statement or when the Purchaser has purchased $5,000,000 of Common Stock, or as otherwise set forth in Section 7.2.
 
7.2 Other Termination. 
 
(a) This Agreement shall terminate if (i) the Common Stock is de-listed from a Trading Market unless such de-listing is in connection with a subsequent listing on another Trading Market, (ii) the Company files for protection from creditors under any applicable law or (iii) the Registration Statement is not declared effective by the Commission on the 210 days from the date hereof.
 
(b) The Company may terminate this Agreement upon 5 Trading Days' notice if the Purchaser shall fail to fund a properly noticed Draw Down within 10 Trading Days of the end of the applicable Settlement Period.
 
7.3 Effect of Termination. In the event of termination of this Agreement pursuant to Section 7.2 herein, written notice thereof shall forthwith be given to the other party and the transactions contemplated by this Agreement shall be terminated without further action by either party. If this Agreement is terminated as provided in Section 7.1 or 7.2 herein, this Agreement shall become void and of no further force and effect, except for Section 4.7 and Article 8 herein, which shall survive the termination of this Agreement. Nothing in this Section 7.3 shall be deemed to release the Company or the Purchaser from any liability for any breach under this Agreement, or to impair the rights of the Company or the Purchaser to compel specific performance by the other party of its obligations under this Agreement.
 
ARTICLE VIII.
MISCELLANEOUS
 
8.1 Fees and Expenses. Each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts, if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance of this Agreement. The Company shall pay all transfer agent fees, stamp taxes and other taxes and duties levied in connection with the delivery of any Securities to the Purchaser.
 
8.2 Reserved. 
 
8.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with respect to the subject matter hereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.
 
8.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of (a) the date of transmission, if such notice or communication is delivered via facsimile or email at the facsimile number or email address set forth on the signature pages attached hereto prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the 2nd Trading Day following the date of transmission if sent by U.S. nationally recognized overnight courier service, or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
 
	 
	20

	

	 

 
8.5 Amendments; Waivers. No provision of this Agreement may be waived or amended except in a written instrument signed, in the case of an amendment, by the Company and the Purchaser or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.
 
8.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
 
8.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their successors. Neither party may assign this Agreement or any rights or obligations hereunder (other than by merger). 
 
8.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.7.
 
8.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. The parties hereby waive all rights to a trial by jury. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
 
8.10 Survival. The representations and warranties contained herein shall survive the Closing and the delivery of the Draw Down Shares.
 
8.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party, it being understood that both parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.
 
	 
	21

	

	 

 
8.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
 
8.13 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
 
8.14 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agrees to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
 
8.15 Liquidated Damages. The Company's obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.
 
8.16 Construction. The parties agree that each of them and/or their respective counsel has reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments hereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement
 
(Signature Pages Follow)

	 
	22

	

	 

 
IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
 
	COOL TECHNOLOGIES, ICNC. 
	8875 Hidden River Parkway, Suite 300, Tampa, Florida 33637

	   
	  

	By:	/s/Timothy Hassett
		Fax: +_________

	Name: 
	Timothy Hassett
		 

	Title: 	Chairman and Chief Executive Officer
		 

	    
	 

	With a copy to (which shall not constitute notice):
	 

 
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
SIGNATURE PAGE FOR PURCHASER FOLLOWS]

	 
	23

	

	 

 
[PURCHASER SIGNATURE PAGES TO COOL TECHNOLOGIES, INC. ELOC PURCHASE AGREEMENT]
 
IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.
 
Name of Purchaser: Bellridge Capital LP.
 
Signature of Authorized Signatory of Purchaser: /s/ Robert Klimov
 
Name of Authorized Signatory: Robert Klimov
 
Title of Authorized Signatory: Managing Partner
 
Email Address of Purchaser: Robertk@gmail.com
 
Fax Number of Purchaser:_________________
 
Address for Notice of Purchaser:
 
Address for Delivery of Securities for Purchaser (if not same as above):
 
Brokerage Identification Code (if delivered via DWAC)
 
Commitment Amount:
 
EIN Number: 81-3006329
 
	 
	24

	

	 

 
EXHIBIT B
 
DRAW DOWN NOTICE/COMPLIANCE CERTIFICATE
 
COOL TECHNOLOGES, INC. 
 
The undersigned hereby certifies, with respect to shares of Common Stock of Cool Technologies, Inc. . (the "Company") issuable in connection with this Draw Down Notice and Compliance Certificate dated _____________ (the "Notice"), delivered pursuant to the Securities Purchase Agreement dated as of ___, 2016 (the "Agreement"), as follows:
 
1. The undersigned is the duly appointed Chief Executive Officer or Chief Financial Officer of the Company.
 
2. Except as set forth on the schedules attached hereto or in the SEC Reports (as defined in the Agreement), the representations and warranties of the Company set forth in the Agreement are true and correct in all material respects as though made on and as of the date hereof, except for representations and warranties are expressly made as of a particular date.
 
3. The Company has performed in all material respects all covenants and agreements and conditions required under the Agreement to be performed by the Company on or prior to the date of this Draw Down Notice.
 
4. The Investment Amount is $___________.
 
5. Draw Downs shall commence on ____________.
 
The undersigned has executed this Certificate this ____ day of ________, _____.
 
	
	COOL TECHNOLOGIES, INC. 

	 
	  

		
By:
		
	
	Name:
		
	
	Title:
		

 
	 
	25

	

	 

 
DISCLOSURE SCHEDULE
 
This Disclosure Schedule (the “Disclosure Schedule”) is provided by Cool Technologies, Inc. (the “Company”), pursuant to the Securities Purchase Agreement (the “Agreement”), dated as of December 6, 2016, between the Company and Bellridge Capital, LP (“Purchaser”)
 
Capitalized terms used in this Disclosure Schedule and not defined herein shall have the same meanings ascribed thereto in the Agreement.
 
Each representation and warranty of the Company in the Agreement shall be subject to: (i) any exception or disclosure set forth in the section of this Disclosure Schedule corresponding to the section in Article III of the Agreement in which such representation or warranty appears; (ii) any exception or disclosure cross-referenced in such part of this Disclosure Schedule by reference to another section of this Disclosure Schedule; and (iii) any exception or disclosure set forth in any other section of this Disclosure Schedule, if it is readily apparent on the face of the disclosure that it is applicable to such representation or warranty. 
 
Matters, items and documents set forth in this Disclosure Schedule are not necessarily limited to matters, items and documents required by the Agreement to be set forth in this Disclosure Schedule. Such additional matters, items and documents are set forth for informational purposes only and do not necessarily include other matters, items or documents of similar nature. Matters, items and documents set forth in this Disclosure Schedule in response to representations and warranties in the Agreement that are qualified by “materiality,” “material adverse effect” or similar qualifications are not necessarily material. Accordingly, no reference to or disclosure of any matter, item or document in this Disclosure Schedule shall: (i) be construed as an admission or indication that such matter, item or document is material, that such matter, item or document has had, or would reasonably be expected to result in, a Material Adverse Effect, or that such matter, item or document is required to be referred to or disclosed herein; or (ii) otherwise establish a standard of materiality. 
 
No disclosure in this Disclosure Schedule relating to any breach or violation of any agreement, law or regulation shall be construed vis-a-vis any third party as an admission or indication that any such breach or violation exists or has actually occurred. No disclosure in this Disclosure Schedule shall be construed as an admission against interest by the Company to any third party regarding any matter whatsoever, including without limitation: (i) that any agreement, law or regulation has been breached or violated; or (ii) that any agreement or document is enforceable or currently in effect or that there are any obligations remaining to be performed or any rights that may be exercised under such agreement or document. 
 
To the extent that any information included or referenced in this Disclosure Schedule is subject to the attorney-client privilege, work product doctrine or any other applicable privilege concerning pending or threatened legal proceedings or governmental investigations, the parties understand and agree that they have a commonality of interest with respect to such matters and it is their desire, intention and mutual understanding that the sharing of such information is not intended to, and shall not, waive or diminish in any way the confidentiality of such information or its continued protection under the attorney-client privilege, work product doctrine or other applicable privilege. All information included or referenced in this Disclosure Schedule or provided by the Company that is entitled to protection under the attorney-client privilege, work product doctrine or other applicable privilege shall remain entitled to such protection under these privileges and under the joint defense doctrine.
 
This Disclosure Schedule and the disclosures and information contained in or attached to this Disclosure Schedule: (i) are disclosed solely for the purposes of the Agreement, (ii) are intended only to disclose information pursuant to, or qualify and limit, the representations and warranties of Company contained in the Agreement, and (iii) shall not be deemed to expand the scope of such representations and warranties. Where a summary or description of a matter is included in this Disclosure Schedule, such summary or description is qualified by reference to the complete documents, but only if and to the extent that the relevant portions of the documents have been made available to the Purchaser. 
 
The headings contained in this Disclosure Schedule are included for convenience only, and are not intended to limit the effect of the disclosures contained in this Disclosure Schedule or to expand the scope of the information required to be disclosed in this Disclosure Schedule. The contents of all schedules, annexes and attachments to this Disclosure Schedule are incorporated by reference in this Disclosure Schedule as though fully set forth in this Disclosure Schedule.
 
This Disclosure Schedule and the disclosures and information contained in or attached to this Disclosure Schedule are confidential information of the Company, subject to the terms of Section 4.16 of the Agreement.
    	 
	26

	

	 

 
SCHEDULE 3.1(a)
 
SUBSIDIARIES
 
	Name of subsidiary
	 
	Jurisdiction
	 
	Ownership Percentage
	 

	 
	 
	 
	 
	 
	 
	 

	Ultimate Power Truck, LLC
	 
	Florida
	 
	 
	95	%
	HPEV, Inc.
	 
	Delaware
	 
	 
	100	%

    	 
	27

	

	 

 
SCHEDULE 3.1(e)
 
CONSENTS AND APPROVALS
 
	1.	Securities Purchase Agreement with KHIC, Inc., dated August 24, 2016 [Section 1.c. which provides that the Note ranks senior to all Indebtedness and Section 7.i. which states that there is no Indebtedness which is “senior to or otherwise has rights or payment priority over the Note without prior written consent.”]
	 
	 

	2.	Securities Purchase Agreement with Lucas Hoppel, dated November 9, 2016 [Section 1(b)(iii) provides that notification is required of any more favorable security or favorable terms granted]
	 
	 

	3.	Securities Purchase Agreement with SBI Investments LLC dated December 2, 2015 [Section 4.15 provides that the Company cannot enter into any variable rate transaction]

 
	 
	28

	

	 

 
SCHEDULE 3.1(g)   
    
CAPITALIZATION
 
Capitalization table is attached as Exhibit 3.1(g) hereto 
 
	 
	 
	Issue Date 
	 
	# Shares 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	George Tweddel
	 
	11/8/2011
	 
	 
	150,000	 
	 
	$	0.3300	 
	 
	$	49,500	 

	Lagoon Labs
	 
	3/23/2012
	 
	 
	1,000,000	 
	 
	 
	 
	 
	 
	$	0	 

	Ted Kaminski 
	 
	6/12/2012
	 
	 
	10,000	 
	 
	$	0.5000	 
	 
	$	5,000	 

	Wayne Wilcox
	 
	6/12/2012
	 
	 
	26,666	 
	 
	 
	 
	 
	 
	$	0	 

	Mark Crone 
	 
	2/27/2013
	 
	 
	25,000	 
	 
	 
	 
	 
	 
	$	0	 

	Crone Law Group 
	 
	2/27/2013
	 
	 
	90,000	 
	 
	 
	 
	 
	 
	$	0	 

	Alex Bankhead
	 
	6/13/2013
	 
	 
	750,000	 
	 
	$	0.3330	 
	 
	$	249,750	 

	Monarch Bay Securities
	 
	7/23/2013
	 
	 
	200,000	 
	 
	 
	 
	 
	 
	$	0	 

	John Carlson
	 
	7/3/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	John Carlson
	 
	10/10/2013
	 
	 
	388,889	 
	 
	$	0.4500	 
	 
	$	175,000	 

	Gabriel Wright
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	David Geske
	 
	9/20/2013
	 
	 
	225,000	 
	 
	$	0.2300	 
	 
	$	51,750	 

	Bruce Jaeger
	 
	7/12/2013
	 
	 
	50,000	 
	 
	 
	 
	 
	 
	$	0	 

	Al Carlson
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Loubet Family Trust
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Frank Fakinos
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Alvin Cohn
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Tracy Maddock
	 
	9/23/2013
	 
	 
	166,666	 
	 
	$	0.4500	 
	 
	$	75,000	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Tracy Maddock
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Bill Laske
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Derek Goulette
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	George Selekman
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Glenn Hetzel
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	David Geske
	 
	9/20/2013
	 
	 
	166,667	 
	 
	$	0.4500	 
	 
	$	75,000	 

	John Carlson
	 
	8/12/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Alex Bankhead
	 
	8/14/2013
	 
	 
	336,956	 
	 
	$	0.3300	 
	 
	$	111,195	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	David Serepca
	 
	8/19/2013
	 
	 
	48,328	 
	 
	 
	 
	 
	 
	$	0	 

	James Burke
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Donald Geske
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	David Geske 
	 
	10/8/2013
	 
	 
	196,875	 
	 
	$	0.2300	 
	 
	$	45,281	 

	Jame Ballidis
	 
	10/16/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Robert Mercer
	 
	1/29/2014
	 
	 
	166,667	 
	 
	$	0.3000	 
	 
	$	50,000	 

	Robert English
	 
	1/29/2014
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Jeffrey Blume
	 
	1/29/2014
	 
	 
	166,667	 
	 
	$	0.5000	 
	 
	$	83,334	 

	William Hobi
	 
	1/29/2014
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Tom Jeffries
	 
	1/29/2014
	 
	 
	125,000	 
	 
	$	0.4000	 
	 
	$	50,000	 

	John Karns
	 
	1/29/2014
	 
	 
	125,000	 
	 
	$	0.4000	 
	 
	$	50,000	 

	James Burke
	 
	1/31/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Rod Rickenbach
	 
	1/31/2014
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Dennis Franco
	 
	2/1/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Don Evenson 
	 
	2/5/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Lincoln Park Capital Fund, LLC 
	 
	2/5/2014
	 
	 
	444,445	 
	 
	$	0.4500	 
	 
	$	200,000	 

	Equitec
	 
	3/6/2014
	 
	 
	44,445	 
	 
	$	0.4500	 
	 
	$	20,000	 

	Cranshire Capital 
	 
	3/6/2014
	 
	 
	177,778	 
	 
	$	0.4500	 
	 
	$	80,000	 

	Anne H. Ross
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

    
	 
	29

	

	 

    	 
	 
		 
	 
	 
	 
		 
	 
		 

	Bard Fund
	 
	3/6/2014
	 
	 
	200,000	 
	 
	$	0.4500	 
	 
	$	90,000	 

	Bourquin Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Dale Snavely Trust
	 
	3/6/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Deb. Dewing Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Mark, Katherine Dickson
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Michael, Patricia Johnson
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Seville Enterprises
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Sydney Herman
	 
	3/6/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Timothy Johnson
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Edward Sellers, Susan Boyd
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Underwood Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Kellogg Trust
	 
	3/6/2014
	 
	 
	200,000	 
	 
	$	0.4500	 
	 
	$	90,000	 

	Leonard Herman Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Jack Battalion 
	 
	2/10/2014
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Eduardo Lepe
	 
	2/10/2014
	 
	 
	88,889	 
	 
	$	0.4500	 
	 
	$	40,000	 

	Lori Lepe
	 
	2/14/2014
	 
	 
	88,889	 
	 
	$	0.4500	 
	 
	$	40,000	 

	William Laske
	 
	2/24/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Ace Equity Group 
	 
	2/24/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Sue Noyes
	 
	2/24/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Sagiv Israeli
	 
	2/25/2014
	 
	 
	418,333	 
	 
	$	0.6000	 
	 
	$	251,000	 

	Dawn Contreras
	 
	2/25/2014
	 
	 
	40,000	 
	 
	$	0.4500	 
	 
	$	18,000	 

	Lincoln Park Capital Fund, LLC 
	 
	2/25/2014
	 
	 
	671,785	 
	 
	 
	 
	 
	 
	$	0	 

	Tennant Securities
	 
	2/27/2014
	 
	 
	144,444	 
	 
	$	0.4500	 
	 
	$	65,000	 

	Phillip Caramico
	 
	2/28/2014
	 
	 
	133,334	 
	 
	$	0.4500	 
	 
	$	60,000	 

	Alfred Cullere
	 
	2/28/2014
	 
	 
	444,445	 
	 
	$	0.4500	 
	 
	$	200,000	 

	Lorraine Kouvatsos
	 
	2/28/2014
	 
	 
	40,000	 
	 
	$	0.4500	 
	 
	$	18,000	 

	Jimmy Shao
	 
	2/28/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Joseph Gomes 
	 
	2/28/2014
	 
	 
	333,333	 
	 
	$	0.4500	 
	 
	$	150,000	 

	Irwin Schwartz
	 
	2/28/2014
	 
	 
	112,000	 
	 
	$	0.4500	 
	 
	$	50,400	 

	Trinity Outreach
	 
	2.24.2014
	 
	 
	11,111	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Kristi Lefferts
	 
	2/24/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Stanley Kam
	 
	3/1/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Fortune Plus, Inc.
	 
	3/1/2014
	 
	 
	666,666	 
	 
	$	0.4500	 
	 
	$	300,000	 

	Lin Xiu Ying
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Yeung Wang
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Li Xin
	 
	3/8/2014
	 
	 
	33,334	 
	 
	$	0.4500	 
	 
	$	15,000	 

	Cai Zhi-Feng
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Tommy Chang
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Sze Ping Cheng
	 
	3/8/2014
	 
	 
	33,334	 
	 
	$	0.4500	 
	 
	$	15,000	 

	Gary Kong
	 
	3/8/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Lin Chi-Chu
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Kam Chow Kong
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Fia Lam
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Avery Ellis LLC
	 
	3/11/2014
	 
	 
	166,667	 
	 
	$	0.6000	 
	 
	$	100,000	 

	David Serepca 
	 
	3/14/2014
	 
	 
	172,688	 
	 
	 
	 
	 
	 
	$	0	 

	Monarch Bay
	 
	3/14/2014
	 
	 
	128,986	 
	 
	 
	 
	 
	 
	$	0	 

	 
	30

	

	 

 
	David Serepca 
	 
	3/18/2014
	 
	 
	273,043	 
	 
	 
	 
	 
	 
	$	0	 

	Michael Kahn
	 
	3/28/2014
	 
	 
	250,000	 
	 
	 
	 
	 
	 
	$	0	 

	Spirit Bear, Ltd 
	 
	3/28/2014
	 
	 
	500,000	 
	 
	 
	 
	 
	 
	$	0	 

	Bruce Jaeger
	 
	3/28/2014
	 
	 
	1,200,000	 
	 
	 
	 
	 
	 
	$	0	 

	Tasman Corporation 
	 
	4/1/2014
	 
	 
	200,000	 
	 
	 
	 
	 
	 
	$	0	 

	Stacy Bankhead 
	 
	4/16/2014
	 
	 
	12,147	 
	 
	 
	 
	 
	 
	$	0	 

	Leonora Lorenzo
	 
	4/22/2014
	 
	 
	500,000	 
	 
	 
	 
	 
	 
	$	0	 

	Sagiv Israeli
	 
	4/23/2014
	 
	 
	195,000	 
	 
	 
	 
	 
	 
	$	0	 

	Laurel Brown 
	 
	5/1/2014
	 
	 
	40,441	 
	 
	 
	 
	 
	 
	$	0	 

	Robert Knoll 
	 
	5/6/2014
	 
	 
	81,055	 
	 
	 
	 
	 
	 
	$	0	 

	Elite Bay LLC
	 
	6/26/2014
	 
	 
	60,000	 
	 
	$	0.5500	 
	 
	$	0	 

	Sagiv Israeli
	 
	6/26/2014
	 
	 
	250,000	 
	 
	$	0.5500	 
	 
	$	0	 

	Spencer Brown
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Eric Brown
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Bill Sterba
	 
	10/1/2014
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	Christopher J. Jones
	 
	10/1/2014
	 
	 
	363,636	 
	 
	$	0.5500	 
	 
	$	200,000	 

	Zach Johnson
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Nikola Zaric
	 
	 
	 
	 
	16,667	 
	 
	$	0.5500	 
	 
	$	9,167	 

	David Anthony
	 
	10/7/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Doug Rothschild
	 
	11/4/2014
	 
	 
	454,545	 
	 
	$	0.5500	 
	 
	$	250,000	 

	Michael Callans
	 
	11/6/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Tom Welch
	 
	10/1/2014
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	Kenneth Stickney
	 
	3/27/2015
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	Abdalla Bamashmus
	 
	3/27/2015
	 
	 
	50,000	 
	 
	$	0.5500	 
	 
	$	27,500	 

	Aldo Bonfiglio
	 
	3/27/2015
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Lorraine Kouvatsos
	 
	3/27/2015
	 
	 
	6,000	 
	 
	$	0.5500	 
	 
	$	3,300	 

	Phillip Caramico
	 
	3/27/2015
	 
	 
	18,182	 
	 
	$	0.5500	 
	 
	$	10,000	 

	Linda Cullere
	 
	3/27/2015
	 
	 
	54,546	 
	 
	$	0.5500	 
	 
	$	30,000	 

	Frank Finetto
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.5500	 
	 
	$	20,000	 

	Guy Fava
	 
	3/27/2015
	 
	 
	100,000	 
	 
	$	0.5500	 
	 
	$	55,000	 

	Richard Marchesi
	 
	3/27/2015
	 
	 
	81,818	 
	 
	$	0.5500	 
	 
	$	45,000	 

	Roger Howells
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.5500	 
	 
	$	20,000	 

	Jennifer Esno 
	 
	1/7/2016
	 
	 
	27,273	 
	 
	$	0.5500	 
	 
	$	15,000	 

	William Laske
	 
	3/27/2015
	 
	 
	18,181	 
	 
	$	0.5500	 
	 
	$	10,000	 

	Irwin Schwartz
	 
	3/27/2015
	 
	 
	37,000	 
	 
	$	0.5500	 
	 
	$	20,350	 

	Spirit Bear, Ltd 
	 
	3/2/2015
	 
	 
	288,968	 
	 
	 
	 
	 
	 
	$	0	 

	Elite Bay, LLc 
	 
	3/24/2015
	 
	 
	60,000	 
	 
	 
	 
	 
	 
	$	0	 

	Elite Bay, LLc 
	 
	3/24/2015
	 
	 
	60,000	 
	 
	 
	 
	 
	 
	$	0	 

	Carl Willey (Cornerstone)
	 
	5/7/2015
	 
	 
	333,333	 
	 
	$	0.5500	 
	 
	$	183,333	 

	Lincoln Park Capital Fund, LLC (A)
	 
	5/5/2015
	 
	 
	555,556	 
	 
	$	0.4500	 
	 
	$	250,000	 

	Christopher McKee
	 
	5/12/2015
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	D. Ustian
	 
	5/12/2015
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	JFS Investment s
	 
	5/5/2015
	 
	 
	250,004	 
	 
	 
	 
	 
	 
	$	0	 

	Manufacturers Hanover
	 
	5/5/2015
	 
	 
	500,006	 
	 
	 
	 
	 
	 
	$	0	 

	Garden State Securities
	 
	5/5/2015
	 
	 
	250,003	 
	 
	 
	 
	 
	 
	$	0	 

    
	 
	31

	

	 

    	 
	 
	 
	 
	 
	 
	 
		 
	 
		 

	Abdalla Bamashmus
	 
	5/12/2015
	 
	 
	66,666	 
	 
	$	0.4500	 
	 
	$	30,000	 

	Anthony Hansel
	 
	5/12/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Robert Barnes
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Scott Livingston
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Bernard Marcus
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Aldo Bonfiglio
	 
	5/26/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Glen Biener (aka GB Financial)
	 
	5/26/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Carl Willey
	 
	7/29/2015
	 
	 
	142,857	 
	 
	$	0.3500	 
	 
	$	50,000	 

	Abdalla Bamashmus
	 
	7/29/2015
	 
	 
	62,500	 
	 
	$	0.4000	 
	 
	$	25,000	 

	Garden State Securities
	 
	6/25/2015
	 
	 
	50,001	 
	 
	 
	 
	 
	 
	$	0	 

	Daniel J. Walsh
	 
	6/25/2015
	 
	 
	100,001	 
	 
	 
	 
	 
	 
	$	0	 

	Ernest Pelligrino
	 
	6/25/2015
	 
	 
	100,001	 
	 
	 
	 
	 
	 
	$	0	 

	John Nicholson 
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Peter Vaccaro
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.3000	 
	 
	$	25,000	 

	Rosenberg Family Trust
	 
	7/22/2015
	 
	 
	166,667	 
	 
	$	0.3000	 
	 
	$	50,000	 

	Robert Mercer
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.3000	 
	 
	$	25,000	 

	Jeffrey Blume
	 
	7/22/2015
	 
	 
	333,333	 
	 
	$	0.3000	 
	 
	$	100,000	 

	Nabil Hanna
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Spirit Bear, Ltd 
	 
	8/12/2015
	 
	 
	200,000	 
	 
	$	0.0500	 
	 
	$	0	 

	Monarch Bay Securities 
	 
	11/2/2015
	 
	 
	50,000	 
	 
	$	0.2800	 
	 
	$	0	 

	James Mattiello
	 
	12/17/2015
	 
	 
	85,714	 
	 
	$	0.3500	 
	 
	$	30,000	 

	Monarch Bay Securities 
	 
	1/8/2016
	 
	 
	50,000	 
	 
	$	0.2800	 
	 
	$	0	 

	Addalla Bamashmus
	 
	1/11/2016
	 
	 
	115,385	 
	 
	$	0.1300	 
	 
	$	15,000	 

	Aldo Bonfiglio
	 
	1/11/2016
	 
	 
	115,385	 
	 
	$	0.1300	 
	 
	$	15,000	 

	Richard Schul 
	 
	2/22/2016
	 
	 
	100,000	 
	 
	$	0.1600	 
	 
	$	16,000	 

	Daniel Ustian 
	 
	2/3/2016
	 
	 
	1,000,000	 
	 
	$	0.1600	 
	 
	$	160,000	 

	Tim Hassett
	 
	2/3/2016
	 
	 
	625,000	 
	 
	$	0.1600	 
	 
	$	100,000	 

	Judson Bibb
	 
	2/3/2016
	 
	 
	750,000	 
	 
	$	0.1600	 
	 
	$	120,000	 

	Quentin Ponder 
	 
	2/3/2016
	 
	 
	400,000	 
	 
	$	0.1600	 
	 
	$	64,000	 

	Theodore Banzhaf
	 
	2/3/2016
	 
	 
	500,000	 
	 
	$	0.1600	 
	 
	$	80,000	 

	Spirit Bear, Ltd 
	 
	3/2/2016
	 
	 
	675,146	 
	 
	 
	 
	 
	 
	$	0	 

	Spirit Bear, Ltd 
	 
	3/2/2016
	 
	 
	24,854	 
	 
	 
	 
	 
	 
	$	0	 

	Aldo Bonfiglio
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Abdalla Bamashmus
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Betsy Budzinski
	 
	3/24/2016
	 
	 
	150,000	 
	 
	$	0.2000	 
	 
	$	30,000	 

	Michael Greenburg
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Monica Loubet Family Trust
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Lucas Hoppel 
	 
	4/5/2016
	 
	 
	50,000	 
	 
	$	0.1500	 
	 
	$	0	 

	Lucas Hoppel 
	 
	4/14/2016
	 
	 
	60,000	 
	 
	$	0.1500	 
	 
	$	0	 

	Lucas Hoppel 
	 
	4/21/2016
	 
	 
	100,000	 
	 
	$	0.1300	 
	 
	$	0	 

	Lucas Hoppel 
	 
	4/29/2016
	 
	 
	200,000	 
	 
	$	0.1200	 
	 
	$	0	 

	Lucas Hoppel 
	 
	5/5/2016
	 
	 
	200,000	 
	 
	$	0.1100	 
	 
	$	0	 

	SRS Consulting 
	 
	5/9/2016
	 
	 
	25,000	 
	 
	$	0.2000	 
	 
	$	0	 

	Lucas Hoppel 
	 
	5/10/2016
	 
	 
	161,429	 
	 
	$	0.1100	 
	 
	$	0	 

	Lucas Hoppel 
	 
	5/18/2016
	 
	 
	300,000	 
	 
	$	0.1000	 
	 
	$	0	 

    
	 
	32

	

	 

    
	 
	 
	 
	 
	 
	 
	 
		 
	 
		 

	Tangiers Global LLC
	 
	6/2/2016
	 
	 
	100,553	 
	 
	$	0.0995	 
	 
	$	0	 

	Bratislav Kovacevic 
	 
	6/6/2016
	 
	 
	238,095	 
	 
	$	0.2100	 
	 
	$	50,000	 

	Avraham Taragan
	 
	6/9/2016
	 
	 
	95,238	 
	 
	$	0.2100	 
	 
	$	20,000	 

	Gemini Master Fund 
	 
	6/10/2016
	 
	 
	471,549	 
	 
	$	0.1072	 
	 
	$	0	 

	Lucas Hoppel 
	 
	6/20/2017
	 
	 
	99,450	 
	 
	$	0.0745	 
	 
	$	0	 

	Gemini Master Fund 
	 
	6/21/2017
	 
	 
	647,959	 
	 
	$	0.0784	 
	 
	$	0	 

	Gemini Master Fund 
	 
	6/29/2016
	 
	 
	842,409	 
	 
	$	0.0606	 
	 
	$	0	 

	SBI Investments 
	 
	6/29/2016
	 
	 
	855,432	 
	 
	$	0.0585	 
	 
	$	0	 

	Tangiers Global LLC
	 
	7/8/2016
	 
	 
	194,250	 
	 
	$	0.0515	 
	 
	$	0	 

	Gemini Master Fund 
	 
	7/12/2016
	 
	 
	1,094,350	 
	 
	$	0.0500	 
	 
	$	0	 

	SBI Investments 
	 
	7/19/2016
	 
	 
	1,284,687	 
	 
	$	0.0400	 
	 
	$	0	 

	Tangiers Global LLC
	 
	7/20/2016
	 
	 
	405,036	 
	 
	$	0.0400	 
	 
	$	0	 

	Gemini Master Fund 
	 
	7/20/2016
	 
	 
	2,540,640	 
	 
	$	0.0400	 
	 
	$	0	 

	SBI Investments 
	 
	8/8/2016
	 
	 
	1,479,728	 
	 
	$	0.0337	 
	 
	$	0	 

	Gemini Master Fund 
	 
	8/8/2016
	 
	 
	2,179,818	 
	 
	$	0.0358	 
	 
	$	0	 

	Tangiers Global LLC
	 
	8/9/2016
	 
	 
	498,422	 
	 
	$	0.030095	 
	 
	$	0	 

	SBI Investments 
	 
	8/15/2016
	 
	 
	2,388,988	 
	 
	$	0.0169	 
	 
	$	0	 

	Gemini Master Fund 
	 
	8/15/2016
	 
	 
	2,936,798	 
	 
	$	0.0178	 
	 
	$	0	 

	Tangiers Global LLC
	 
	8/17/2016
	 
	 
	637,207	 
	 
	$	0.0301	 
	 
	$	0	 

	St. George Investments
	 
	8/30/2016
	 
	 
	1,953,125	 
	 
	$	0.0128	 
	 
	$	0	 

	SBI Investments 
	 
	8/30/2016
	 
	 
	4,313,229	 
	 
	$	0.0127	 
	 
	$	0	 

	Gemini Master Fund 
	 
	10/5/2016
	 
	 
	5,469,113	 
	 
	$	0.0200	 
	 
	$	0	 

	Black Mountain Equities
	 
	10/5/2016
	 
	 
	4,304,229	 
	 
	$	0.0200	 
	 
	$	0	 

	Todd Van de Putte 
	 
	11/7/2016
	 
	 
	100,000	 
	 
	$	0.0550	 
	 
	$	5,500	 

	Spirit Bear Ltd
	 
	11/7/2016
	 
	 
	300,000	 
	 
	$	0.5000	 
	 
	$	0	 

	Gemini Master Fund 
	 
	11/10/2016
	 
	 
	800,000	 
	 
	$	0.1100	 
	 
	$	0	 

	Black Mountain Equities
	 
	11/10/2016
	 
	 
	200,000	 
	 
	$	0.1100	 
	 
	$	0	 

	Lucas Hoppel
	 
	11/14/2016
	 
	 
	350,000	 
	 
	$	0.1300	 
	 
	$	0	 

	Nikola Zaric
	 
	11/16/2016
	 
	 
	119,048	 
	 
	$	0.2100	 
	 
	$	25,000	 

    	 
	33

	

	 

 
Warrants
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	Leonora Lorenzo - A
	 
	1/29/2015
	 
	 
	200,000 	 
	 
	$	0.10 	 
	 
	24 
	 
	 
	1/29/2020
	 
	Leonora Lorenzo - B
	 
	1/29/2015
	 
	 
	200,000 	 
	 
	$	0.10 	 
	 
	24 
	 
	 
	1/29/2020
	 
	Leonora Lorenzo - C
	 
	1/29/2015
	 
	 
	200,000 	 
	 
	$	0.10 	 
	 
	24 
	 
	 
	1/29/2020
	 
	Peter Vaccaro
	 
	7/22/2015
	 
	 
	83,333 	 
	 
	$	0.40 	 
	 
	60 
	 
	 
	7/15/2020
	 
	John Nicholson 
	 
	7/22/2015
	 
	 
	100,000 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Rosenberg Family Trust
	 
	7/22/2015
	 
	 
	166,667 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Robert Mercer
	 
	7/22/2015
	 
	 
	83,333 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Jeffrey Blume
	 
	7/22/2015
	 
	 
	333,333 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Nabil Hanna
	 
	7/22/2015
	 
	 
	100,000 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Carl Willey
	 
	5/26/2015
	 
	 
	142,857 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	10/26/2020
	 
	Intracoastal Capital LLC
	 
	7/28/2015
	 
	 
	44,445 	 
	 
	$	0.60 	 
	 
	44
	 
	 
	2/14/2019
	 
	Monarch Bay
	 
	7/15/2015
	 
	 
	69,333 	 
	 
	$	0.40 	 
	 
	60
	 
	 
	7/15/2020
	 
	Terry Tennant
	 
	7/20/2015
	 
	 
	200,000 	 
	 
	$	0.27 	 
	 
	37
	 
	 
	8/20/2018
	 
	Avaraham Taragan
	 
	10/13/2015
	 
	 
	47,619 	 
	 
	$	0.24 	 
	 
	36
	 
	 
	10/13/2018
	 
	James Mattiello
	 
	11/25/2015
	 
	 
	30,000 	 
	 
	$	0.60 	 
	 
	30 
	 
	 
	2/28/2018
	 
	SBI Investments LLC
	 
	12/2/2015
	 
	 
	250,000 	 
	 
	$	0.17 	 
	 
	36 
	 
	 
	12/2/2018
	 
	SBI Investments LLC
	 
	12/2/2015
	 
	 
	250,000 	 
	 
	$	0.14 	 
	 
	36 
	 
	 
	12/2/2018
	 
	Abdalla Bamashmus
	 
	1/9/2016
	 
	 
	115,385 	 
	 
	$	0.18 	 
	 
	60 
	 
	 
	1/9/2021
	 
	Aldo Bonfiglio
	 
	1/9/2016
	 
	 
	115,385 	 
	 
	$	0.18 	 
	 
	60 
	 
	 
	1/9/2021
	 
	Daniel Ustian 
	 
	2/3/2016
	 
	 
	100,000 	 
	 
	$	0.27 	 
	 
	36 
	 
	 
	2/3/2019
	 
	Richard Schul 
	 
	2/3/2016
	 
	 
	100,000 	 
	 
	$	0.27 	 
	 
	36 
	 
	 
	2/3/2019
	 
	Scott Van Dorn
	 
	2/3/2016
	 
	 
	100,000 	 
	 
	$	0.27 	 
	 
	36 
	 
	 
	2/4/2019
	 
	Chris McKee 
	 
	2/3/2016
	 
	 
	100,000 	 
	 
	$	0.27 	 
	 
	36 
	 
	 
	2/5/2019
	 
	Gurminder Beti
	 
	2/3/2016
	 
	 
	200,000 	 
	 
	$	0.35 	 
	 
	30 
	 
	 
	7/31/2018
	 
	Richard Schul 
	 
	2/22/2016
	 
	 
	100,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Daniel Ustian 
	 
	2/3/2016
	 
	 
	1,000,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Tim Hassett
	 
	2/3/2016
	 
	 
	625,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Judson Bibb
	 
	2/3/2016
	 
	 
	750,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Quentin Ponder 
	 
	2/3/2016
	 
	 
	400,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Theodore Banzhaf 
	 
	2/3/2016
	 
	 
	500,000 	 
	 
	$	0.22 	 
	 
	60 
	 
	 
	2/3/2021
	 
	Aldo Bonfiglio
	 
	3/24/2016
	 
	 
	62,500 	 
	 
	$	0.32 	 
	 
	60 
	 
	 
	3/24/2021
	 

    
	 
	34

	

	 

 
	Abdalla Bamashmus
	 
	3/24/2016
	 
	 
	62,500 	 
	 
	$	0.32 	 
	 
	60 
	 
	 
	3/24/2021
	 
	Betsy Budzinski
	 
	3/24/2016
	 
	 
	75,000 	 
	 
	$	0.32 	 
	 
	60 
	 
	 
	3/24/2021
	 
	Michael Greenburg
	 
	3/24/2016
	 
	 
	62,500 	 
	 
	$	0.34 	 
	 
	60 
	 
	 
	3/24/2021
	 
	Monica Loubet Family Trust
	 
	3/24/2016
	 
	 
	62,500 	 
	 
	$	0.32 	 
	 
	60 
	 
	 
	3/24/2021
	 
	SRS Consulting, Ltd
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.18 	 
	 
	12 
	 
	 
	1/1/2017
	 
	Radius Consulting
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.18 	 
	 
	12 
	 
	 
	1/1/2017
	 
	SRS Consulting, Ltd
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.22 	 
	 
	12 
	 
	 
	2/1/2017
	 
	Radius Consulting
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.22 	 
	 
	12 
	 
	 
	2/1/2017
	 
	SRS Consulting, Ltd
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.40 	 
	 
	12 
	 
	 
	3/1/2017
	 
	Radius Consulting
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.40 	 
	 
	12 
	 
	 
	3/1/2017
	 
	SRS Consulting, Ltd
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.30 	 
	 
	12 
	 
	 
	4/1/2017
	 
	Radius Consulting
	 
	5/2/2016
	 
	 
	75,000 	 
	 
	$	0.30 	 
	 
	12 
	 
	 
	4/1/2017
	 
	SBI Investments LLC
	 
	5/30/2016
	 
	 
	250,000 	 
	 
	$	0.17 	 
	 
	24 
	 
	 
	5/30/2018
	 
	Dan Ustian 
	 
	8/12/2016
	 
	 
	909,090 	 
	 
	$	0.07 	 
	 
	60 
	 
	 
	8/12/2021
	 
	Christopher Jones
	 
	8/12/2016
	 
	 
	909,090 	 
	 
	$	0.07 	 
	 
	60 
	 
	 
	8/12/2021
	 
	Inverom Corporation
	 
	8/12/2016
	 
	 
	909,090 	 
	 
	$	0.07 	 
	 
	60 
	 
	 
	8/12/2021
	 
	Eric Brown
	 
	8/12/2016
	 
	 
	909,090 	 
	 
	$	0.07 	 
	 
	60 
	 
	 
	8/12/2021
	 
	Todd Van De Putte 
	 
	8/16/2016
	 
	 
	100,000 	 
	 
	$	0.07 	 
	 
	36 
	 
	 
	8/16/2019
	 
	Gemini Master Fund 
	 
	8/22/2016
	 
	 
	15,452,266 	 
	 
	$	0.0169 	 
	 
	60
	 
	 
	10/9/2021
	 
	Black Mountain Equities
	 
	8/22/2016
	 
	 
	1,401,611 	 
	 
	$	0.0169 	 
	 
	60
	 
	 
	10/9/2021
	 
	KHIC, Inc.
	 
	8/24/2016
	 
	 
	4,000,000 	 
	 
	$	0.06 	 
	 
	60
	 
	 
	8/24/2021
	 
	Nicola Zaric
	 
	11/22/2016
	 
	 
	59,524 	 
	 
	$	0.24 	 
	 
	36
	 
	 
	10/27/2018
	 
	Kovacevic Bratislav
	 
	11/22/2016
	 
	 
	119,048 	 
	 
	$	0.24 	 
	 
	36 
	 
	 
	10/27/2018
	 

    	 
	35

	

	 

 
Preferred Stock:
 
	 
	 
	Series 
	 
	Date
	 
	# of
Shares
	 
	 
	Conversion
Ratio
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	Spirit Bear Ltd
	 
	A
	 
	12/14/12
	 
	 
	113	 
	 
	1:50,000
	 
	KHIC, LLC 
	 
	A
	 
	3/9/2016
	 
	 
	3	 
	 
	1:50,000
	 
	Daniel Ustian 
	 
	B
	 
	8/12/2016
	 
	 
	909,090	 
	 
	1:1
	 
	Christopher Jones
	 
	B
	 
	8/12/2016
	 
	 
	909,090	 
	 
	1:1
	 
	Inverom Corporation
	 
	B
	 
	8/12/2016
	 
	 
	909,090	 
	 
	1:1
	 
	Eric Brown
	 
	B
	 
	8/12/2016
	 
	 
	909,090	 
	 
	1:1
	 

     
	 
	36

	

	 

 
SCHEDULE 3.1(i)
 
UNDISCLOSED EVENTS, LIABILITIES OR DEVELOPMENTS
 
None 
  
	 
	37

	

	 

 
SCHEDULE 3.1(j)
 
LITIGATION
 
On October 7, 2016, the Company received a complaint, Wang et al v. Cool Technologies, Inc. et al, filed on July 28, 2016 in the U.S. District Court for the Eastern District of New York (Brooklyn) Civil docket #1:16-CV-04101-RRM-PK against the Company and Timothy Hassett, the Company’s Chief Executive Office alleging damages of $1,100,000 for breach of contract for failing to register shares sold to the Plaintiffs in February and March 2014.
     	 
	38

	

	 

 
SCHEDULE 3.1(l)
 
COMPLIANCE
 
Default under the agreements with the persons and entities provided on Schedule 3.1(v) which have registration rights and for which a Registration Statement on Form S-1 is not yet effective. 
 
In addition, the Company agreed to file a Form D subsequent to the closing of each of the transactions provided for on Schedule 3(e).
 
In addition, the Company also agreed to reserve sufficient shares for each of the transactions provided for on Schedule 3(e); until the effectiveness of the 1:15 reverse stock split, the Company is in breach of said agreements.
    	 
	39

	

	 

 
SCHEDULE 3.1(o)
 
INTELLECTUAL PROPERTY
 
(iii)
 
License of Company Intellectual Property to third parties: None 
 
The Company has the following trademark:
 
TEHPC – Issued April 1, 2014
 
The Company has five patents outstanding:
 
	Name
	 
	Serial/Patent Number
	 
	 
	Issue Date
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Motor w/ Heat Pipes (US App)
	 
	 
	7,569,955 	 
	 
	8/4/09
	 
	Motor w/ Heat Pipes (Cont App) - Hermetic
	 
	 
	8,283,818 	 
	 
	10/9/12
	 
	Motor w/ Heat Pipes (CIP App) - new submersible
	 
	 
	8,134,260 	 
	 
	3/13/12
	 
	Bearing Cooler (US App)
	 
	 
	8,198,770 	 
	 
	6/12/12
	 
	Tot Encl'd Air-HP-Air Cooled (US App)
	 
	 
	8,148,858 	 
	 
	4/3/12
	 

 
(iv)
 
Third Party Intellectual Property Used or Licensed by Company: None
    	 
	40

	

	 

 
SCHEDULE 3.1(q)
 
TRANSACTIONS WITH AFFILIATES
 
Al Cullere loaned $250,000 to Ultimate Power Truck, LLC, the Company’s 95% owned subsidiary.
 
	 
	41

	

	 

 
SCHEDULE 3.1(v)   

 
REGISTRATION RIGHTS
 
The following lists the common stock that have registration rights:
 
	 
	 
	Date of
Pricing/
Issuance
	 
	Shares 
	 
	 
	Share
Price
	 
	 
	Amount
Paid
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	COMMON SHARES
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	George Tweddel
	 
	11/8/2011
	 
	 
	150,000	 
	 
	$	0.3300	 
	 
	$	49,500	 

	Ted Kaminski 
	 
	6/12/2012
	 
	 
	10,000	 
	 
	$	0.5000	 
	 
	$	5,000	 

	Alex Bankhead
	 
	6/13/2013
	 
	 
	750,000	 
	 
	$	0.3330	 
	 
	$	249,750	 

	John Carlson
	 
	7/3/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	John Carlson
	 
	8/12/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Alex Bankhead
	 
	8/14/2013
	 
	 
	336,956	 
	 
	$	0.3300	 
	 
	$	111,195	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Gabriel Wright
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	David Geske
	 
	9/20/2013
	 
	 
	225,000	 
	 
	$	0.2300	 
	 
	$	51,750	 

	Al Carlson
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Loubet Family Trust
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Frank Fakinos
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Alvin Cohn
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Tracy Maddock
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Bill Laske
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Derek Goulette
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	George Selekman
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Glenn Hetzel
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	David Geske
	 
	9/20/2013
	 
	 
	166,667	 
	 
	$	0.4500	 
	 
	$	75,000	 

	Bruce Bayless
	 
	9/20/2013
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	James Burke
	 
	9/20/2013
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Donald Geske
	 
	9/20/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Tracy Maddock
	 
	9/23/2013
	 
	 
	166,666	 
	 
	$	0.4500	 
	 
	$	75,000	 

	David Geske 
	 
	10/8/2013
	 
	 
	196,875	 
	 
	$	0.2300	 
	 
	$	45,281	 

	John Carlson
	 
	10/10/2013
	 
	 
	388,889	 
	 
	$	0.4500	 
	 
	$	175,000	 

	Jame Ballidis
	 
	10/16/2013
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Robert Mercer
	 
	1/29/2014
	 
	 
	166,667	 
	 
	$	0.3000	 
	 
	$	50,000	 

	Robert English
	 
	1/29/2014
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Jeffrey Blume
	 
	1/29/2014
	 
	 
	166,667	 
	 
	$	0.5000	 
	 
	$	83,334	 

	William Hobi
	 
	1/29/2014
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	 
	42

	

	 

	 
	 
	 
	 
	 
	 
	 
		 
	 
		 

	Tom Jeffries
	 
	1/29/2014
	 
	 
	125,000	 
	 
	$	0.4000	 
	 
	$	50,000	 

	John Karns
	 
	1/29/2014
	 
	 
	125,000	 
	 
	$	0.4000	 
	 
	$	50,000	 

	James & Lisa Burke
	 
	1/31/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Rod Rickenbach
	 
	1/31/2014
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Dennis Franco
	 
	2/1/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Don Evenson 
	 
	2/5/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Lincoln Park Capital 
	 
	2/5/2014
	 
	 
	444,445	 
	 
	$	0.4500	 
	 
	$	200,000	 

	Jack Battalion 
	 
	2/10/2014
	 
	 
	55,555	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Eduardo Lepe
	 
	2/10/2014
	 
	 
	88,889	 
	 
	$	0.4500	 
	 
	$	40,000	 

	Lori Lepe
	 
	2/14/2014
	 
	 
	88,889	 
	 
	$	0.4500	 
	 
	$	40,000	 

	William Laske
	 
	2/24/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Ace Equity Group 
	 
	2/24/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Sue Noyes
	 
	2/24/2014
	 
	 
	111,111	 
	 
	$	0.4500	 
	 
	$	50,000	 

	Kristi Lefferts
	 
	2/24/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Trinity Outreach
	 
	2/24/2014
	 
	 
	11,111	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Sagiv Israeli
	 
	2/25/2014
	 
	 
	418,333	 
	 
	$	0.6000	 
	 
	$	251,000	 

	Dawn Contreras
	 
	2/25/2014
	 
	 
	40,000	 
	 
	$	0.4500	 
	 
	$	18,000	 

	Tennant Securities
	 
	2/27/2014
	 
	 
	144,444	 
	 
	$	0.4500	 
	 
	$	65,000	 

	Phillip Caramico
	 
	2/28/2014
	 
	 
	133,334	 
	 
	$	0.4500	 
	 
	$	60,000	 

	Alfred Cullere
	 
	2/28/2014
	 
	 
	444,445	 
	 
	$	0.4500	 
	 
	$	200,000	 

	Lorraine Kouvatsos
	 
	2/28/2014
	 
	 
	40,000	 
	 
	$	0.4500	 
	 
	$	18,000	 

	Jimmy Shao
	 
	2/28/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Joseph Gomes 
	 
	2/28/2014
	 
	 
	333,333	 
	 
	$	0.4500	 
	 
	$	150,000	 

	Irwin Schwartz
	 
	2/28/2014
	 
	 
	112,000	 
	 
	$	0.4500	 
	 
	$	50,400	 

	Stanley Kam
	 
	3/1/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Fortune Plus, Inc.
	 
	3/1/2014
	 
	 
	666,666	 
	 
	$	0.4500	 
	 
	$	300,000	 

	Equitec
	 
	3/6/2014
	 
	 
	44,445	 
	 
	$	0.4500	 
	 
	$	20,000	 

	Cranshire Capital 
	 
	3/6/2014
	 
	 
	177,778	 
	 
	$	0.4500	 
	 
	$	80,000	 

	Anne H. Ross
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Bard Micro-Cap Value Fund
	 
	3/6/2014
	 
	 
	200,000	 
	 
	$	0.4500	 
	 
	$	90,000	 

	Bourquin Family Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Dale Snavely Trust
	 
	3/6/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Deb. Dewing Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Mark, Katherine Dickson
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Michael, Patricia Johnson
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Seville Enterprises
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Sydney Herman
	 
	3/6/2014
	 
	 
	100,000	 
	 
	$	0.4500	 
	 
	$	45,000	 

	Timothy Johnson
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Edward Sellers, Susan Boyd
	 
	3/6/2014
	 
	 
	150,000	 
	 
	$	0.4500	 
	 
	$	67,500	 

	Janet J. Underwood Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	William K Kellogg Trust
	 
	3/6/2014
	 
	 
	200,000	 
	 
	$	0.4500	 
	 
	$	90,000	 

	Leonard Herman Trust
	 
	3/6/2014
	 
	 
	50,000	 
	 
	$	0.4500	 
	 
	$	22,500	 

	Lin Xiu Ying
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Yeung Wang
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Li Xin
	 
	3/8/2014
	 
	 
	33,334	 
	 
	$	0.4500	 
	 
	$	15,000	 

    
	 
	43

	

	 

	 
	 
	 
	 
	 
	 
	 
		 
	 
		 

	Cai Zhi-Feng
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Tommy Chang
	 
	3/8/2014
	 
	 
	22,223	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Sze Ping Cheng
	 
	3/8/2014
	 
	 
	33,334	 
	 
	$	0.4500	 
	 
	$	15,000	 

	Gary Kong
	 
	3/8/2014
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Lin Chi-Chu
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Kam Chow Kong
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Fia Lam
	 
	3/8/2014
	 
	 
	11,112	 
	 
	$	0.4500	 
	 
	$	5,000	 

	Avery Ellis LLC
	 
	3/11/2014
	 
	 
	166,667	 
	 
	$	0.6000	 
	 
	$	100,000	 

	Sagiv Israeli
	 
	4/23/2014
	 
	 
	195,000	 
	 
	$	1.8000	 
	 
	$	0	 

	Sagiv Israeli
	 
	6/26/2014
	 
	 
	250,000	 
	 
	$	0.5500	 
	 
	$	0	 

	Nikola Zaric
	 
	9/18/2014
	 
	 
	16,667	 
	 
	$	0.5500	 
	 
	$	9,167	 

	Spencer Brown
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Eric Brown
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	William Bill Sterba
	 
	10/1/2014
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	Christopher J. Jones
	 
	10/1/2014
	 
	 
	363,636	 
	 
	$	0.5500	 
	 
	$	200,000	 

	Zach Johnson
	 
	10/1/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Tom Welch
	 
	10/1/2014
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	David Anthony
	 
	10/7/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Doug Rothschild
	 
	11/4/2014
	 
	 
	454,545	 
	 
	$	0.5500	 
	 
	$	250,000	 

	Michael Callans
	 
	11/6/2014
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Kenneth Stickney
	 
	3/27/2015
	 
	 
	181,818	 
	 
	$	0.5500	 
	 
	$	100,000	 

	Abdalla Bamashmus
	 
	3/27/2015
	 
	 
	50,000	 
	 
	$	0.5500	 
	 
	$	27,500	 

	Aldo Bonfiglio
	 
	3/27/2015
	 
	 
	90,909	 
	 
	$	0.5500	 
	 
	$	50,000	 

	Lorraine Kouvatsos
	 
	3/27/2015
	 
	 
	6,000	 
	 
	$	0.5500	 
	 
	$	3,300	 

	Phillip Caramico
	 
	3/27/2015
	 
	 
	18,182	 
	 
	$	0.5500	 
	 
	$	10,000	 

	Linda Cullere
	 
	3/27/2015
	 
	 
	54,546	 
	 
	$	0.5500	 
	 
	$	30,000	 

	Frank Finetto
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.5500	 
	 
	$	20,000	 

	Guy Fava
	 
	3/27/2015
	 
	 
	100,000	 
	 
	$	0.5500	 
	 
	$	55,000	 

	Richard Marchesi
	 
	3/27/2015
	 
	 
	81,818	 
	 
	$	0.5500	 
	 
	$	45,000	 

	Roger Howells
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.5500	 
	 
	$	20,000	 

	William Laske
	 
	3/27/2015
	 
	 
	18,181	 
	 
	$	0.5500	 
	 
	$	10,000	 

	Irwin Schwartz
	 
	3/27/2015
	 
	 
	37,000	 
	 
	$	0.5500	 
	 
	$	20,350	 

	Lincoln Park (A)
	 
	5/5/2015
	 
	 
	555,556	 
	 
	$	0.4500	 
	 
	$	250,000	 

	Carl Willey (Cornerstone)
	 
	5/7/2015
	 
	 
	333,333	 
	 
	$	0.5500	 
	 
	$	183,333	 

	Christopher McKee
	 
	5/12/2015
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	D. Ustian
	 
	5/12/2015
	 
	 
	222,222	 
	 
	$	0.4500	 
	 
	$	100,000	 

	Abdalla Bamashmus
	 
	5/12/2015
	 
	 
	66,666	 
	 
	$	0.4500	 
	 
	$	30,000	 

	Anthony Hansel
	 
	5/12/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Robert Barnes
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Scott Livingston
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Bernard Marcus
	 
	5/12/2015
	 
	 
	22,222	 
	 
	$	0.4500	 
	 
	$	10,000	 

	Aldo Bonfiglio
	 
	5/26/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	Glen Biener (aka GB Financial)
	 
	5/26/2015
	 
	 
	55,556	 
	 
	$	0.4500	 
	 
	$	25,000	 

	John Nicholson 
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

    
	 
	44

	

	 

 
	Peter Vaccaro
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.3000	 
	 
	$	25,000	 

	Rosenberg Family Trust
	 
	7/22/2015
	 
	 
	166,667	 
	 
	$	0.3000	 
	 
	$	50,000	 

	Robert Mercer
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.3000	 
	 
	$	25,000	 

	Jeffrey Blume
	 
	7/22/2015
	 
	 
	333,333	 
	 
	$	0.3000	 
	 
	$	100,000	 

	Nabil Hanna
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.3000	 
	 
	$	30,000	 

	Carl Willey
	 
	7/29/2015
	 
	 
	142,857	 
	 
	$	0.3500	 
	 
	$	50,000	 

	Abdalla Bamashmus
	 
	7/29/2015
	 
	 
	62,500	 
	 
	$	0.4000	 
	 
	$	25,000	 

	James Mattiello
	 
	12/17/2015
	 
	 
	85,714	 
	 
	$	0.3500	 
	 
	$	30,000	 

	Jennifer Esno 
	 
	1/7/2016
	 
	 
	27,273	 
	 
	$	0.5500	 
	 
	$	15,000	 

	Addalla Bamashmus
	 
	1/11/2016
	 
	 
	115,385	 
	 
	$	0.1300	 
	 
	$	15,000	 

	Aldo Bonfiglio
	 
	1/11/2016
	 
	 
	115,385	 
	 
	$	0.1300	 
	 
	$	15,000	 

	Daniel Ustian 
	 
	2/3/2016
	 
	 
	1,000,000	 
	 
	$	0.1600	 
	 
	$	160,000	 

	Tim Hassett
	 
	2/3/2016
	 
	 
	625,000	 
	 
	$	0.1600	 
	 
	$	100,000	 

	Judson Bibb
	 
	2/3/2016
	 
	 
	750,000	 
	 
	$	0.1600	 
	 
	$	120,000	 

	Quentin Ponder 
	 
	2/3/2016
	 
	 
	400,000	 
	 
	$	0.1600	 
	 
	$	64,000	 

	Theodore Banzhaf
	 
	2/3/2016
	 
	 
	500,000	 
	 
	$	0.1600	 
	 
	$	80,000	 

	Richard Schul 
	 
	2/22/2016
	 
	 
	100,000	 
	 
	$	0.1600	 
	 
	$	16,000	 

	Aldo Bonfiglio
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Abdalla Bamashmus
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Betsy Budzinski
	 
	3/24/2016
	 
	 
	150,000	 
	 
	$	0.2000	 
	 
	$	30,000	 

	Michael Greenburg
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Monica Loubet Family Trust
	 
	3/24/2016
	 
	 
	125,000	 
	 
	$	0.2000	 
	 
	$	25,000	 

	Lucas Hoppel
	 
	3/24/2016
	 
	 
	50,000	 
	 
	$	0.151578	 
	 
	$	0	 

	Lucas Hoppel
	 
	4/11/2016
	 
	 
	60,000	 
	 
	$	0.154665	 
	 
	$	0	 

	Lucas Hoppel
	 
	4/19/2016
	 
	 
	100,000	 
	 
	$	0.132048	 
	 
	$	0	 

	Lucas Hoppel
	 
	4/27/2016
	 
	 
	200,000	 
	 
	$	0.117432	 
	 
	$	0	 

	Lucas Hoppel
	 
	5/3/2016
	 
	 
	200,000	 
	 
	$	0.105462	 
	 
	$	0	 

	Lucas Hoppel
	 
	5/6/2016
	 
	 
	161,429	 
	 
	$	0.105462	 
	 
	$	0	 

	Lucas Hoppel
	 
	5/16/2016
	 
	 
	300,000	 
	 
	$	0.099792	 
	 
	$	0	 

	Lucas Hoppel
	 
	5/27/2016
	 
	 
	250,000	 
	 
	$	0.092547	 
	 
	$	0	 

	Bratislav Kovacevic 
	 
	6/6/2016
	 
	 
	238,095	 
	 
	$	0.2100	 
	 
	$	50,000	 

	Avraham Taragan
	 
	6/9/2016
	 
	 
	95,238	 
	 
	$	0.2100	 
	 
	$	20,000	 

	SBI Investments, LLC
	 
	6/10/2016
	 
	 
	486,681	 
	 
	$	0.10270	 
	 
	$	0	 

	Lucas Hoppel
	 
	6/16/2016
	 
	 
	99,450	 
	 
	$	0.074466	 
	 
	$	0	 

	SBI Investments, LLC
	 
	6/29/2016
	 
	 
	855,432	 
	 
	$	0.05845	 
	 
	$	0	 

	SBI Investments, LLC
	 
	7/19/2016
	 
	 
	1,284,687	 
	 
	$	0.03892	 
	 
	$	0	 

	SBI Investments, LLC
	 
	8/8/2016
	 
	 
	1,479,728	 
	 
	$	0.03379	 
	 
	$	0	 

	SBI Investments, LLC
	 
	8/16/2016
	 
	 
	2,388,988	 
	 
	$	0.01689	 
	 
	$	0	 

	SBI Investments, LLC
	 
	8/30/2016
	 
	 
	4,313,339	 
	 
	$	0.01267	 
	 
	$	0	 

	Todd Van de Putte 
	 
	11/7/2016
	 
	 
	100,000	 
	 
	$	0.0550	 
	 
	$	5,500	 

	Lucas Hoppel
	 
	11/14/2016
	 
	 
	350,000	 
	 
	$	0.1300	 
	 
	$	0	 

	Nikola Zaric
	 
	11/16/2016
	 
	 
	119,048	 
	 
	$	0.2100	 
	 
	$	25,000	 

	TOTAL 
	 
	 
	 
	 
	34,539,053	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	PREFERRED SHARES
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	Christopher Jones
	 
	10/4/2016
	 
	 
	909,090	 
	 
	$	0.0550	 
	 
	$	50,000	 

	Eric Brown
	 
	10/4/2016
	 
	 
	909,090	 
	 
	$	0.0550	 
	 
	$	50,000	 

	TOTAL
	 
	 
	 
	 
	1,818,180	 
	 
	 
	 
	 
	 
	 
	 
	 

    	 
	45

	

	 

 
	11.27.2016 Warrants
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	Date of
Pricing /
Issuance
	 
	Shares 
	 
	 
	Strike Price 
	 
	 
	Expiration
(Months)
	 
	 
	Expiration
Date
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	David Geske
	 
	9/16/2013
	 
	 
	225,000	 
	 
	$	0.66	 
	 
	30
	 
	 
	3/8/2017
	 
	David Geske
	 
	7/11/2013
	 
	 
	337,500	 
	 
	$	0.60	 
	 
	30
	 
	 
	1/12/2017
	 
	John Carlson
	 
	7/3/2013
	 
	 
	111,111	 
	 
	$	0.66	 
	 
	30
	 
	 
	1/3/2017
	 
	Bruce Bayless
	 
	7/2/2013
	 
	 
	222,222	 
	 
	$	0.60	 
	 
	30
	 
	 
	1/2/2017
	 
	Gabriel Wright
	 
	7/15/2013
	 
	 
	111,111	 
	 
	$	0.69	 
	 
	30
	 
	 
	1/15/2017
	 
	Loubet Family Trust
	 
	7/15/2013
	 
	 
	222,222	 
	 
	$	0.69	 
	 
	30
	 
	 
	1/15/2017
	 
	Al Carlson
	 
	7/16/2013
	 
	 
	111,111	 
	 
	$	0.66	 
	 
	30
	 
	 
	1/17/2017
	 
	Alvin Cohn
	 
	7/18/2013
	 
	 
	111,111	 
	 
	$	0.59	 
	 
	30
	 
	 
	1/18/2017
	 
	Bill Laske
	 
	7/24/2013
	 
	 
	83,333	 
	 
	$	0.49	 
	 
	30
	 
	 
	1/24/2017
	 
	Derek Goulette
	 
	7/24/2013
	 
	 
	55,555	 
	 
	$	0.54	 
	 
	30
	 
	 
	1/24/2017
	 
	Frank Fakinos
	 
	7/24/2013
	 
	 
	222,222	 
	 
	$	0.54	 
	 
	30
	 
	 
	1/24/2017
	 
	Tracy Maddock
	 
	7/24/2013
	 
	 
	222,222	 
	 
	$	0.54	 
	 
	30
	 
	 
	1/24/2017
	 
	Bruce Bayless
	 
	7/24/2013
	 
	 
	111,111	 
	 
	$	0.54	 
	 
	30
	 
	 
	1/24/2017
	 
	John Carlson
	 
	7/25/2013
	 
	 
	388,889	 
	 
	$	0.54	 
	 
	30
	 
	 
	1/25/2017
	 
	Glenn Hetzel
	 
	8/6/2013
	 
	 
	111,111	 
	 
	$	0.56	 
	 
	30
	 
	 
	2/6/2017
	 
	David Geske
	 
	8/12/2013
	 
	 
	250,000	 
	 
	$	0.58	 
	 
	30
	 
	 
	2/12/2017
	 
	John Carlson
	 
	8/12/2013
	 
	 
	166,667	 
	 
	$	0.58	 
	 
	30
	 
	 
	2/12/2017
	 
	Bruce Bayless
	 
	8/23/2013
	 
	 
	111,111	 
	 
	$	0.37	 
	 
	30
	 
	 
	2/23/2017
	 
	Donald Geske
	 
	9/9/2013
	 
	 
	222,222	 
	 
	$	0.43	 
	 
	30
	 
	 
	3/9/2017
	 
	Jame Ballidis
	 
	10/16/2013
	 
	 
	333,333	 
	 
	$	0.52	 
	 
	30
	 
	 
	4/16/2017
	 
	James & Lisa Burke
	 
	2/14/2014
	 
	 
	111,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Rod Rickenbach
	 
	2/14/2014
	 
	 
	222,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Dennis Franco
	 
	2/14/2014
	 
	 
	111,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Don Evenson
	 
	2/14/2014
	 
	 
	111,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Cranshire Capital Master Fund, LTD
	 
	2/14/2014
	 
	 
	177,778	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Anne H. Ross
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Bard Micro-Cap Value Fund, LP
	 
	2/14/2014
	 
	 
	200,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	The Bourquen Family Trust 
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Dale F. Snavely Trust
	 
	2/14/2014
	 
	 
	100,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Deborah B. Dewing Trust 
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Katherine B. & Mark A. Dickson
	 
	2/14/2014
	 
	 
	150,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Leonard M. Herman Trust
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 

    
	 
	46

	

	 

 
	T. Michael & Patricia Johnson
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	M. Edward Sellers & Susan D. Boyd JTWROS
	 
	2/14/2014
	 
	 
	150,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Seville Enterprises, LP
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Sydney N. Herman
	 
	2/14/2014
	 
	 
	100,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Timothy B. Johnson
	 
	2/14/2014
	 
	 
	150,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Janet J. Underwood Trust 
	 
	2/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	William K. Kellogg 1992 Trust 
	 
	2/14/2014
	 
	 
	200,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Eduardo Lepe
	 
	2/14/2014
	 
	 
	88,889	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Jack Batalion
	 
	2/14/2014
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Lori Lepe
	 
	2/14/2014
	 
	 
	88,889	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Joseph Gomes
	 
	2/14/2014
	 
	 
	222,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Lincoln Park Capital Fund, LLC
	 
	2/14/2014
	 
	 
	444,445	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Sue Noyes 
	 
	2/14/2014
	 
	 
	11,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	William Laske
	 
	2/14/2014
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Ace Equity Group 
	 
	3/14/2014
	 
	 
	100,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Trinity Outreach
	 
	3/14/2014
	 
	 
	111,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Dawn Contreras
	 
	2/15/2014
	 
	 
	40,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Tennant Securities
	 
	3/14/2014
	 
	 
	144,444	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Jimmy Shao 
	 
	3/14/2014
	 
	 
	100,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Phillip Caramico
	 
	3/14/2014
	 
	 
	133,334	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Alfred Cullere
	 
	3/14/2014
	 
	 
	444,445	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Lorraine Kuovatsos
	 
	3/14/2014
	 
	 
	40,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Joseph Gomes 
	 
	2/14/2014
	 
	 
	111,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Irwin Schwartz
	 
	3/14/2014
	 
	 
	112,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Stanley Kam 
	 
	3/14/2014
	 
	 
	50,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Fortune Plus / LAC THI Hoilien
	 
	3/14/2014
	 
	 
	666,667	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Lin Xiu Ying
	 
	3/14/2014
	 
	 
	11,112	 
	 
	$	0.60	 
	 
	60
	 
	 
	3/14/2019
	 
	Yeung Wang
	 
	3/14/2014
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Li Xin
	 
	3/14/2014
	 
	 
	33,333	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Cai Zhi-Feng
	 
	3/14/2014
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Tommy Chang
	 
	3/14/2014
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Sze Ping Cheng
	 
	3/14/2014
	 
	 
	33,333	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Gary Kong
	 
	3/14/2014
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Lin Chi-Chu
	 
	3/14/2014
	 
	 
	11,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Kam Chow Kong
	 
	3/14/2014
	 
	 
	11,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Fia Lam
	 
	3/14/2014
	 
	 
	11,111	 
	 
	$	0.60	 
	 
	60
	 
	 
	2/14/2019
	 
	Paul Hodowanec
	 
	3/14/2014
	 
	 
	400,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	3/14/2019
	 
	Sagiv Israeli
	 
	3/14/2014
	 
	 
	780,000	 
	 
	$	0.60	 
	 
	60
	 
	 
	3/14/2019
	 
	Scott Van Dorn
	 
	3/21/14
	 
	 
	200,000	 
	 
	$	0.80	 
	 
	30
	 
	 
	9/21/2017
	 
	Andrew Scherr
	 
	5/21/2014
	 
	 
	200,000	 
	 
	$	0.80	 
	 
	30
	 
	 
	11/18/2016
	 
	Spencer Brown
	 
	9/24/14
	 
	 
	60,909	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	William Sterba
	 
	9/24/14
	 
	 
	121,818	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	Christopher Jones
	 
	9/24/14
	 
	 
	243,636	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	Eric Brown
	 
	9/24/14
	 
	 
	60,909	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 

    
	 
	47

	

	 

 
	Zach Johnson
	 
	9/24/14
	 
	 
	60,909	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	David Anthony
	 
	9/24/14
	 
	 
	60,909	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	Tom Welch
	 
	9/24/14
	 
	 
	121,818	 
	 
	$	0.75	 
	 
	36
	 
	 
	9/24/2017
	 
	William Finley
	 
	7/30/2014
	 
	 
	200,000	 
	 
	$	0.80	 
	 
	30
	 
	 
	1/27/2017
	 
	Roman Kuropas
	 
	9/18/2014
	 
	 
	200,000	 
	 
	$	0.80	 
	 
	30
	 
	 
	3/18/2017
	 
	John Storer
	 
	8/25/2014
	 
	 
	750,000	 
	 
	$	0.83	 
	 
	36
	 
	 
	8/24/2017
	 
	UPT - Management Agmt
	 
	9/30/2014
	 
	 
	60,000	 
	 
	$	1.00	 
	 
	36
	 
	 
	9/29/2017
	 
	Doug Rothschild
	 
	10/3/2014
	 
	 
	304,545	 
	 
	$	0.75	 
	 
	36
	 
	 
	10/2/2017
	 
	Michael Callans
	 
	10/31/2014
	 
	 
	90,909	 
	 
	$	0.70	 
	 
	60
	 
	 
	10/30/2019
	 
	Richard Marchesi
	 
	3/27/2014
	 
	 
	81,819	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2017
	 
	UPT - Management Agmt
	 
	12/31/2014
	 
	 
	60,000	 
	 
	$	1.00	 
	 
	36
	 
	 
	12/30/2017
	 
	Kenneth Stickney
	 
	3/27/2015
	 
	 
	181,818	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Lorraine Kouvatsos
	 
	3/27/2015
	 
	 
	6,000	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Phillip Caramico
	 
	3/27/2015
	 
	 
	18,182	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Linda Cullere
	 
	3/27/2015
	 
	 
	54,546	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Frank Finetto
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Abdalla Bamashmus
	 
	3/27/2015
	 
	 
	50,000	 
	 
	$	0.70	 
	 
	60
	 
	 
	3/25/2020
	 
	Aldo Bonfiglio
	 
	3/27/2015
	 
	 
	90,909	 
	 
	$	0.70	 
	 
	60
	 
	 
	3/25/2020
	 
	Irwin Schwartz
	 
	3/13/2015
	 
	 
	37,000	 
	 
	$	0.55	 
	 
	36
	 
	 
	3/12/2018
	 
	Guy Fava
	 
	3/27/2015
	 
	 
	100,000	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Roger Howells
	 
	3/27/2015
	 
	 
	36,364	 
	 
	$	0.75	 
	 
	36
	 
	 
	3/26/2018
	 
	Jennifer Esno
	 
	3/1/2015
	 
	 
	27,273	 
	 
	$	0.65	 
	 
	36
	 
	 
	2/28/2018
	 
	William Laske
	 
	2/6/2015
	 
	 
	18,181	 
	 
	$	0.65	 
	 
	36
	 
	 
	2/5/2018
	 
	UPT - Management Agmt
	 
	3/31/2015
	 
	 
	60,000	 
	 
	$	1.00	 
	 
	36
	 
	 
	3/30/2018
	 
	Carl Willey
	 
	4/21/2015
	 
	 
	333,333	 
	 
	$	0.57	 
	 
	60
	 
	 
	4/19/2020
	 
	Lincoln Park
	 
	4/22/2015
	 
	 
	555,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	4/20/2020
	 
	Abdalla Bamashmus
	 
	5/11/2015
	 
	 
	66,666	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/9/2020
	 
	Anthony Hansel
	 
	5/11/2015
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/9/2020
	 
	Robert Barnes
	 
	5/11/2015
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/9/2020
	 
	Scott Livingston
	 
	5/11/2015
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/9/2020
	 
	Bernard Marcus
	 
	5/11/2015
	 
	 
	22,222	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/9/2020
	 
	Dan Ustian
	 
	4/29/2015
	 
	 
	222,222	 
	 
	$	0.57	 
	 
	60
	 
	 
	4/27/2020
	 
	Christopher McKee
	 
	4/29/2015
	 
	 
	222,222	 
	 
	$	0.57	 
	 
	60
	 
	 
	4/27/2020
	 
	Aldo Bonfiglio
	 
	5/19/2015
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/17/2020
	 
	Glen Biener (aka GB Financial)
	 
	5/20/2015
	 
	 
	55,556	 
	 
	$	0.60	 
	 
	60
	 
	 
	5/18/2020
	 
	Howard Isaacs
	 
	6/15/2015
	 
	 
	25,000	 
	 
	$	0.70	 
	 
	48
	 
	 
	6/14/2019
	 
	UPT - Management Agmt
	 
	6/30/2015
	 
	 
	60,000	 
	 
	$	1.00	 
	 
	36
	 
	 
	6/29/2018
	 
	Peter Vaccaro
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	John Nicholson 
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Rosenberg Family Trust
	 
	7/22/2015
	 
	 
	166,667	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Robert Mercer
	 
	7/22/2015
	 
	 
	83,333	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Jeffrey Blume
	 
	7/22/2015
	 
	 
	333,333	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Nabil Hanna
	 
	7/22/2015
	 
	 
	100,000	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Carl Willey
	 
	5/26/2015
	 
	 
	142,857	 
	 
	$	0.40	 
	 
	60
	 
	 
	10/26/2020
	 
	Intracoastal Capital LLC
	 
	7/28/2015
	 
	 
	44,445	 
	 
	$	0.60	 
	 
	44
	 
	 
	2/14/2019
	 

    
	 
	48

	

	 

 
	Monarch Bay
	 
	7/15/2015
	 
	 
	69,333	 
	 
	$	0.40	 
	 
	60
	 
	 
	7/15/2020
	 
	Terry Tennant
	 
	7/20/2015
	 
	 
	200,000	 
	 
	$	0.27	 
	 
	37
	 
	 
	8/20/2018
	 
	Avaraham Taragan
	 
	10/13/2015
	 
	 
	47,619	 
	 
	$	0.24	 
	 
	36
	 
	 
	10/13/2018
	 
	James Mattiello
	 
	11/25/2015
	 
	 
	30,000	 
	 
	$	0.60	 
	 
	30
	 
	 
	2/28/2018
	 
	SBI Investments LLC
	 
	12/2/2015
	 
	 
	250,000	 
	 
	$	0.17	 
	 
	36
	 
	 
	12/2/2018
	 
	SBI Investments LLC
	 
	12/2/2015
	 
	 
	250,000	 
	 
	$	0.14	 
	 
	36
	 
	 
	12/2/2018
	 
	Abdalla Bamashmus
	 
	1/9/2016
	 
	 
	115,385	 
	 
	$	0.18	 
	 
	60
	 
	 
	1/9/2021
	 
	Aldo Bonfiglio
	 
	1/9/2016
	 
	 
	115,385	 
	 
	$	0.18	 
	 
	60
	 
	 
	1/9/2021
	 
	Richard Schul 
	 
	2/22/2016
	 
	 
	100,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Daniel Ustian 
	 
	2/3/2016
	 
	 
	1,000,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Tim Hassett
	 
	2/3/2016
	 
	 
	625,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Judson Bibb
	 
	2/3/2016
	 
	 
	750,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Quentin Ponder 
	 
	2/3/2016
	 
	 
	400,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Theodore Banzhaf 
	 
	2/3/2016
	 
	 
	500,000	 
	 
	$	0.22	 
	 
	60
	 
	 
	2/3/2021
	 
	Aldo Bonfiglio
	 
	3/24/2016
	 
	 
	62,500	 
	 
	$	0.32	 
	 
	60
	 
	 
	3/24/2021
	 
	Abdalla Bamashmus
	 
	3/24/2016
	 
	 
	62,500	 
	 
	$	0.32	 
	 
	60
	 
	 
	3/24/2021
	 
	Betsy Budzinski
	 
	3/24/2016
	 
	 
	75,000	 
	 
	$	0.32	 
	 
	60
	 
	 
	3/24/2021
	 
	Michael Greenburg
	 
	3/24/2016
	 
	 
	62,500	 
	 
	$	0.34	 
	 
	60
	 
	 
	3/24/2021
	 
	Monica Loubet Family Trust
	 
	3/24/2016
	 
	 
	62,500	 
	 
	$	0.32	 
	 
	60
	 
	 
	3/24/2021
	 
	SBI Investments LLC
	 
	5/30/2016
	 
	 
	250,000	 
	 
	$	0.17	 
	 
	24
	 
	 
	5/30/2018
	 
	Dan Ustian 
	 
	8/12/2016
	 
	 
	909,090	 
	 
	$	0.07	 
	 
	60
	 
	 
	8/12/2021
	 
	Christopher Jones
	 
	8/12/2016
	 
	 
	909,090	 
	 
	$	0.07	 
	 
	60
	 
	 
	8/12/2021
	 
	Inverom Corporation
	 
	8/12/2016
	 
	 
	909,090	 
	 
	$	0.07	 
	 
	60
	 
	 
	8/12/2021
	 
	Eric Brown
	 
	8/12/2016
	 
	 
	909,090	 
	 
	$	0.07	 
	 
	60
	 
	 
	8/12/2021
	 
	Todd Van De Putte 
	 
	8/16/2016
	 
	 
	100,000	 
	 
	$	0.07	 
	 
	36
	 
	 
	8/16/2019
	 
	KHIC, LLC
	 
	8/24/2016
	 
	 
	4,000,000	 
	 
	$	0.06	 
	 
	60
	 
	 
	8/24/2021
	 
	Nicola Zaric
	 
	11/22/2016
	 
	 
	59,524	 
	 
	$	0.24	 
	 
	36
	 
	 
	10/27/2018
	 
	Kovacevic Bratislav
	 
	11/22/2016
	 
	 
	119,048	 
	 
	$	0.24	 
	 
	36
	 
	 
	10/27/2018
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	29,605,384	 
	 
	 
	 
	 
	 
	 
	 
	 
	 
	 

	 
	49

	

	 

 
SCHEDULE 3.1(aa)
 
INDEBTEDNESS
 
1. On September 30, 2016, the Company issued Gemini Master Fund, Ltd. a Secured Promissory Note in the original principal amount of $180,000. The Note accrues interest at 5% (18% in the event of an event of default) and matures on June 30, 2017. 
 
2. On September 30, 2016, the Company issued Black Mountain Equities, Inc. a Secured Promissory Note in the principal amount of $45,000. The Note accrues interest at 5% (18% in the event of an event of default) and matures on June 30, 2017. 
 
3. On August 24, 2016, the Company issued KHIC, LLC a Senior Convertible Promissory Note in the principal amount of $400,000. The Note accrues interest at 3% and matures on August 24, 2018. The Note is convertible into shares of common stock of the Company at a conversion price of $0.025 per share and is senior to all other indebtedness of the Company and its Subsidiaries. The conversion shares have registration rights. There is currently $368,703 outstanding under the Note.
 
4. On November 9, 2016, the Company issued Lucas Hoppel a convertible promissory note in the principal amount of $110,000. The Note accrues interest at the rate of 5% and matures on June 9, 2017 and is convertible into shares of common stock at $0.07 per share.
 
5. On May 24, 2016, the Company issued a 10% Convertible Exchange Note to Tangiers Global, LLC which matures on May 24, 2017. There is currently $10.57 outstanding under the Note.
 
The Company’s subsidiary, Ultimate Power Truck, LLC (“UPT”) has the following indebtedness: 
 
	 
	1.	Loan of $250,000 from Al Cullere.
	 
	 
	 

	 
	2.	Ford Motor Credit secured loan for three vehicles, $68,009 outstanding at 6% interest rate, due October 1, 2019.

 
 
	50

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