Document:

Blueprint

 

Exhibit 10.91

 

EQUITY FINANCING AGREEMENT

 

This EQUITY FINANCING AGREEMENT (the
“Agreement”), dated as of August 23, 2019 (the
“Execution Date”), is entered into by and
between NaturalShrimp Incorporated., a
Nevada corporation with its principal executive office at
5080 Spectrum Dr. Suite 1000, Addison TX 75001 (the “Company”), and GHS Investments LLC, a
Nevada limited liability company, with offices at 420 Jericho
Turnpike, Suite 102, Jericho, NY 11753 (the“Investor”).

 

RECITALS:

 

WHEREAS, the parties desire to terminate that
certain Equity Financing Agreement and Registration Rights
Agreement dated August 21, 2018 and enter into this Equity
Financing Agreement upon the terms and subject to the conditions
contained herein, whereby the Investor shall invest up to Eleven
Million Dollars ($11,000,000) (the “Commitment
Amount”), from time to
time over the course of thirty six (36) months after an effective
registration of the underlying shares (the
“Contract
Period”) to purchase the
Company’s Common Stock;

 

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

 

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

 

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

 

SECTION I.

DEFINITIONS

 

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

 

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

 

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

 

“Affiliate” shall have the meaning set forth
inSection
5.7.

 

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

 

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

 

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

 

“Closing” shall have the meaning set forth
inSection
2.4.

 

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

 

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

 

 

1

 

 

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

 

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

 

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

 

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

 

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

 

“Indemnitees” shall have the meaning set forth
inSection
10.

 

“Indemnitor” shall have the meaning set forth
inSection
10.

 

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

 

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

 

“Market Price”shall
mean the lowest traded price of the Company's Common Stock during
the Pricing Period.

 

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

 

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

 

“Open
Period” shall mean the
period beginning on and including the Trading Day immediately
following the Effective Date and ending on the earlier to occur of
(i) the date which is thirty six (36) months from the Effective
Date; or (ii) termination of the Agreement in accordance
withSection
8.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

2

 

 

“Put
Amount” shall mean the
total dollar amount requested by the Company pursuant to an
applicable Put. The timing and amounts of each Put shall be at the
discretion of the Company. The maximum dollar amount of each Put
will not exceed two hundred percent (200%) of the average daily
trading dollar volume for the Company’s Common Stock during
the ten (10) trading days preceding the Put Date. No Put will be
made in an amount greater than five hundred thousand dollars
($500,000). Puts are further limited to the Investor owning no more
than 4.99% of the outstanding stock of the Company at any given
time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Resolution” shall have the meaning set forth
inSection
7.5.

 

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

 

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

 

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

 

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

 

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

 

“Subsidiaries” shall have the meaning set forth
inSection
4.1.

 

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

 

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

   

 

3

 

 

SECTION II

PURCHASE AND SALE OF COMMON STOCK

 

2.1 PURCHASE AND SALE OF
COMMON STOCK. Subject to the
terms and conditions set forth herein, the Company shall issue and
sell to the Investor, and the Investor shall purchase from the
Company, up to that number of Shares having an aggregate Purchase
Price of Eleven Million Dollars ($11,000,000).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

2.4 MECHANICS OF PURCHASE
OF SHARES BY INVESTOR.Subject
to the satisfaction of the conditions set forth in Sections 2.5, 7
and 8 of this Agreement, at the end of the Pricing Period,
the Purchase Price shall be established, and the number of Put
Shares shall be delivered for a particular Put. In the event that
(i) the lowest volume-weighted average price (the
“VWAP”) of the
Company’s Common Stock for any given trading day during the
ten (10) trading days following a Put Notice (the
“Trading
Period”) is less than 80% of the Market Price used to
determine the Purchase Price in connection with the Put and (ii) as
of the end of such Trading Period, the Investor holds Shares issued
pursuant to such Put Notice (the “Trading Period Shares”), then the
Company shall issue such additional Shares, on the Trading Day
immediately following the Trading Period, as may be necessary to
adjust the Purchase Price for that portion of the Put represented
by the Trading Period Shares to equal the lowest VWAP during the
Trading Period. The Closing of a Put shall occur upon the first
Trading Day following the receipt and approval by Investor's broker
of the Put Shares, whereby the Company shall have caused the
Transfer Agent to electronically transmit, prior to the applicable
Closing Date, the applicable Put Shares by crediting the account of
the Investor's broker with DTC through its Deposit Withdrawal Agent
Commission (“DWAC”) system. The Investor shall
deliver the Investment Amount specified in the Put Notice by wire
transfer of immediately available funds to an account designated by
the Company if the aforementioned receipt and approval are
confirmed before 9:30 AM EST or on the following Trading day if
receipt and approval by the Investor's Broker is made after 9:30 AM
EST (“Closing
Date” or “Closing”). In addition, on or
prior to such Closing Date, each of the Company and Investor shall
deliver to each other all documents, instruments and writings
required to be delivered or reasonably requested by either of them
pursuant to this Agreement in order to implement and effect the
transactions contemplated herein.

 

 

4

 

 

2.5 OVERALL LIMIT ON
COMMON STOCK ISSUABLE.
Notwithstanding anything contained herein to the contrary, if
during the Open Period the Company becomes listed on an exchange
which limits the number of shares of Common Stock that may be
issued without shareholder approval, then the number of Shares
issuable by the Company and purchasable by the Investor, shall not
exceed that number of the shares of Common Stock that may be
issuable without shareholder approval (the
“Maximum Common Stock
Issuance”). If such
issuance of shares of Common Stock could cause a delisting on the
Principal Market, then the Maximum Common Stock Issuance shall
first be approved by the Company’s shareholders in accordance
with applicable law and the By-laws and the Articles of
Incorporation of the Company, if such issuance of shares of Common
Stock could cause a delisting on the Principal Market. The parties
understand and agree that the Company’s failure to seek or
obtain such shareholder approval shall in no way adversely affect
the validity and due authorization of the issuance and sale of
Securities or the Investor’s obligation in accordance with
the terms and conditions hereof to purchase a number of Shares in
the aggregate up to the Maximum Common Stock Issuance, and that
such approval pertains only to the applicability of the Maximum
Common Stock Issuance limitation provided in
thisSection
2.5.

 

2.6 LIMITATION ON AMOUNT OF
OWNERSHIP. Notwithstanding anything to the contrary in this
Agreement, in no event shall the Investor be entitled to purchase
that number of Shares, which when added to the sum of the number of
shares of Common Stock beneficially owned (as such term is defined
under Section 13(d) and Rule 13d-3 of the 1934 Act), by the
Investor, would exceed 4.99% of the number of shares of Common
Stock outstanding on the Closing Date, as determined in accordance
with Rule 13d-1(j) of the 1934 Act.

 

SECTION III

INVESTOR’S REPRESENTATIONS, WARRANTIES AND
COVENANTS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

5

 

 

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

 

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

 

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

 

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

 

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

 

SECTION IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

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

 

4.1 ORGANIZATION AND
QUALIFICATION. The Company is a
corporation duly organized and validly existing in good standing
under the laws of the State of Nevada and has the requisite
corporate power and authorization to own its properties and to
carry on its business as now being conducted. Both the Company and
the companies it owns or controls (“Subsidiaries”) are duly qualified to do business and are
in good standing in every jurisdiction in which its ownership of
property or the nature of the business conducted by it makes such
qualification necessary, except to the extent that the failure to
be so qualified or be in good standing would not have a Material
Adverse Effect. As used in this Agreement,
“Material Adverse
Effect” means a change,
event, circumstance, effect or state of facts that has had or is
reasonably likely to have, a material adverse effect on the
business, properties, assets, operations, results of operations,
financial condition or prospects of the Company and its
Subsidiaries, if any, taken as a whole, or on the transactions
contemplated hereby or by the agreements and instruments to be
entered into in connection herewith, or on the authority or ability
of the Company to perform its obligations under the Registered
offering Transaction Documents.

 

4.2 AUTHORIZATION;
ENFORCEMENT; COMPLIANCE WITH OTHER INSTRUMENTS.

 

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

 

ii.The execution and delivery of the Registered Offering
Transaction Documents by the Company and the consummation by it of
the transactions contemplated hereby and thereby, including without
limitation the issuance of the Securities pursuant to this
Agreement, have been duly and validly authorized by the
Company’s Board of Directors and no further consent or
authorization is required by the Company, its Board of Directors,
or its shareholders.

 

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

 

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

 

 

6

 

 

4.3 CAPITALIZATION.
As of the date hereof, the authorized capital stock of the Company
consists of 900,000,000 shares of the Common Stock, par value
$0.0001 per share, of which as of the date hereof approximately
323,516,074shares are issued and outstanding. All of such
outstanding shares have been, or upon issuance will be, validly
issued and are fully paid and nonassessable.

 

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

 

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

 

ii.there are no outstanding debt securities;

 

iii.there are no outstanding shares of capital stock, options,
warrants, scrip, rights to subscribe to, calls or commitments of
any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any
of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or
may become bound to issue additional shares of capital stock of the
Company or any of its Subsidiaries or options, warrants, scrip,
rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into,
any shares of capital stock of the Company or any of its
Subsidiaries;

 

iv.there are no agreements or arrangements under which the Company
or any of its Subsidiaries is obligated to register the sale of any
of their securities under the 1933 Act (except the Registration
Rights Agreement);

 

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

 

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

 

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

 

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

 

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

 

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

 

 

7

 

 

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

 

4.6  SEC DOCUMENTS;
FINANCIAL STATEMENTS. As of the
date hereof, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the
SEC pursuant to the reporting requirements of the 1934 Act (all of
the foregoing filed prior to the date hereof and all exhibits
included therein and financial statements and schedules thereto and
documents incorporated by reference therein, and amendments
thereto, being hereinafter referred to as the
“SEC
Documents”). The Company
has delivered to the Investor or its representatives, or they have
had access through EDGAR to, true and complete copies of the SEC
Documents. As of their respective filing dates, the SEC Documents
complied in all material respects with the requirements of the 1934
Act and the rules and regulations of the SEC promulgated thereunder
applicable to the SEC Documents, and none of the SEC Documents, at
the time they were filed with the SEC or the time they were
amended, if amended, contained any untrue statement of a material
fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. As of
their respective dates, the financial statements of the Company
included in the SEC Documents complied as to form in all material
respects with applicable accounting requirements and the published
rules and regulations of the SEC with respect thereto. Such
financial statements have been prepared in accordance with
generally accepted accounting principles, by a firm that is a
member of the Public Companies Accounting Oversight Board
(“PCAOB”) consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such
financial statements or the notes thereto, or (ii) in the case of
unaudited interim statements, to the extent they may exclude
footnotes or may be condensed or summary statements) and fairly
present in all material respects the financial position of the
Company as of the dates thereof and the results of its operations
and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No
other written information provided by or on behalf of the Company
to the Investor which is not included in the SEC Documents,
including, without limitation, information referred to
inSection
4.3of this Agreement, contains
any untrue statement of a material fact or omits to state any
material fact necessary to make the statements therein, in the
light of the circumstance under which they are or were made, not
misleading. Neither the Company nor any of its Subsidiaries or any
of their officers, directors, employees or agents have provided the
Investor with any material, nonpublic information which was not
publicly disclosed prior to the date hereof and any material,
nonpublic information provided to the Investor by the Company or
its Subsidiaries or any of their officers, directors, employees or
agents prior to any Closing Date shall be publicly disclosed by the
Company prior to such Closing Date.

 

 

8

 

 

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

 

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

 

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

 

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

 

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

 

4.12 INTELLECTUAL PROPERTY
RIGHTS. The Company and its
Subsidiaries own or possess adequate rights or licenses to use all
trademarks, trade names, service marks, service mark registrations,
service names, patents, patent rights, copyrights, inventions,
licenses, approvals, governmental authorizations, trade secrets and
rights necessary to conduct their respective businesses as now
conducted. Except as set forth in the SEC Documents, none of the
Company’s trademarks, trade names, service marks, service
mark registrations, service names, patents, patent rights,
copyrights, inventions, licenses, approvals, government
authorizations, trade secrets or other intellectual property rights
necessary to conduct its business as now or as proposed to be
conducted have expired or terminated, or are expected to expire or
terminate within two (2) years from the date of this Agreement. The
Company and its Subsidiaries do not have any knowledge of any
infringement by the Company or its Subsidiaries of trademark, trade
name rights, patents, patent rights, copyrights, inventions,
licenses, service names, service marks, service mark registrations,
trade secret or other similar rights of others, or of any such
development of similar or identical trade secrets or technical
information by others and, except as set forth in the SEC
Documents, there is no claim, action or proceeding being made or
brought against, or to the Company’s knowledge, being
threatened against, the Company or its Subsidiaries regarding
trademark, trade name, patents, patent rights, invention,
copyright, license, service names, service marks, service mark
registrations, trade secret or other infringement; and the Company
and its Subsidiaries are unaware of any facts or circumstances
which might give rise to any of the foregoing. The Company and its
Subsidiaries have taken commercially reasonable security measures
to protect the secrecy, confidentiality and value of all of their
intellectual properties.

 

 

9

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

10

 

 

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

 

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

 

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

 

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

 

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

 

SECTION V

COVENANTS OF THE COMPANY

 

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

 

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

 

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

 

 

11

 

 

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

 

5.5 RESERVATION OF SHARES. The
Company shall take all action necessary to at all times have
authorized, and reserved the amount of
Shares included in the Company’s registration statement for
issuance pursuant to the Registered Offering Transaction
Documents. In the event that the Company determines that it
does not have a sufficient number of authorized shares of Common
Stock to reserve and keep available for issuance as described in
this Section 5.5,
the Company shall use all commercially reasonable efforts to
increase the number of authorized shares of Common Stock by seeking
shareholder approval for the authorization of such additional
shares.

 

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

 

5.7 TRANSACTIONS WITH AFFILIATES.
The Company shall not, and shall cause each of its Subsidiaries not
to, enter into, amend, modify or supplement, or permit any
Subsidiary to enter into, amend, modify or supplement, any
agreement, transaction, commitment or arrangement with any of its
or any Subsidiary’s officers, directors, persons who were
officers or directors at any time during the previous two (2)
years, shareholders who beneficially own 5% or more of the Common
Stock, or Affiliates or with any individual related by blood,
marriage or adoption to any such individual or with any entity in
which any such entity or individual owns a 5% or more beneficial
interest (each a “Related
Party”), except for (i) customary employment
arrangements and benefit programs on reasonable terms, (ii) any
agreement, transaction, commitment or arrangement on an arms-length
basis on terms no less favorable than terms which would have been
obtainable from a disinterested third party other than such Related
Party, or (iii) any agreement, transaction, commitment or
arrangement which is approved by a majority of the disinterested
directors of the Company. For purposes hereof, any director who is
also an officer of the Company or any Subsidiary of the Company
shall not be a disinterested director with respect to any such
agreement, transaction, commitment or arrangement.
“Affiliate” for
purposes hereof means, with respect to any person or entity,
another person or entity that, directly or indirectly, (i) has a 5%
or more equity interest in that person or entity, (ii) has 5% or
more common ownership with that person or entity, (iii) controls
that person or entity, or (iv) is under common control with that
person or entity. “Control” or “Controls” for purposes hereof
means that a person or entity has the power, directly or
indirectly, to conduct or govern the policies of another person or
entity.

 

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

 

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

 

 

12

 

 

5.10 NOTICE OF CERTAIN EVENTS AFFECTING
REGISTRATION; SUSPENSION OF RIGHT TO MAKE A PUT. The Company
shall promptly notify the Investor upon the occurrence of any of
the following events in respect of a Registration Statement or
related prospectus in respect of an offering of the Securities: (i)
receipt of any request for additional information by the SEC or any
other federal or state governmental authority during the period of
effectiveness of the Registration Statement for amendments or
supplements to the Registration Statement or related prospectus;
(ii) the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the
effectiveness of any Registration Statement or the initiation of
any proceedings for that purpose; (iii) receipt of any notification
with respect to the suspension of the qualification or exemption
from qualification of any of the Securities for sale in any
jurisdiction or the initiation or notice of any proceeding for such
purpose; (iv) the happening of any event that makes any statement
made in such Registration Statement or related prospectus or any
document incorporated or deemed to be incorporated therein by
reference untrue in any material respect or that requires the
making of any changes in the Registration Statement, related
prospectus or documents so that, in the case of a Registration
Statement, it will not contain any untrue statement of a material
fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading,
and that in the case of the related prospectus, it will not contain
any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading; and (v) the Company’s
reasonable determination that a post-effective amendment or
supplement to the Registration Statement would be appropriate, and
the Company shall promptly make available to Investor any such
supplement or amendment to the related prospectus. The Company
shall not deliver to Investor any Put Notice during the
continuation of any of the foregoing events in this Section 5.10.

 

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

 

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

 

SECTION VI

CONDITIONS OF THE COMPANY’S OBLIGATION TO SELL

 

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

 

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

 

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

 

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

 

SECTION VII

FURTHER CONDITIONS OF THE INVESTOR’S OBLIGATION TO
PURCHASE

 

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

 

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

 

 

13

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

   

 

14

 

 

SECTION VIII

TERMINATION

 

This
Agreement shall terminate upon any of the following
events:

 

8.1 when the Investor has purchased an
aggregate of Eleven Million Dollars ($11,000,000) in the Common
Stock of the Company pursuant to this Agreement; or

 

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

 

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

 

8.4 30 day notice by the Company if the
Investor has not fulfilled Put request.

 

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

 

SECTION IX

SUSPENSION

 

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

 

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

 

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

 

SECTION X

INDEMNIFICATION

 

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

 

 

15

 

 

SECTION XI

GOVERNING LAW; DISPUTES SUBMITTED TO ARBITRATION.

 

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

 

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

 

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

 

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

 

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

 

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

 

 

16

 

 

 

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

 

	

If to
the Company:

	

NaturalShrimp
Incorporated

	
 

	

5080
Spectrum Dr., Suite 1000

	
 

	

Addison,
TX 75001

	
 

	
 

	

With a
copy to:

	

Lucosky
Brookman LLP

	
 

	

101
Wood Avenue South, Fifth Floor

	
 

	

Woodbridge,
NJ 08830

	
 

	
 

	

If to
the Investor:

	

GHS
Investments, LLC

	
 

	

420
Jericho Turnpike, Suite 102

Jericho,
NY 11753

 

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

 

11.8 NO ASSIGNMENT. This Agreement
may not be assigned.

 

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

 

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

 

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

 

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

 

11.13 PLACEMENT AGENT. If so
required, the Company agrees to pay a registered broker dealer, to
act as placement agent, a percentage of the Put Amount on each Put
toward the fee as outlined in that certain placement agent
agreement entered into between the Company and the placement agent.
The Investor shall have no obligation with respect to any fees or
with respect to any claims made by or on behalf of other persons or
entities for fees of a type contemplated in this Section that may
be due in connection with the transactions contemplated by the
Registered Offering Transaction
Documents. The Company shall indemnify and hold harmless the
Investor, their employees, officers, directors, agents, and
partners, and their respective affiliates, from and against all
claims, losses, damages, costs (including the costs of preparation
and attorney’s fees) and expenses incurred in respect of any
such claimed or existing fees, as such fees and expenses are
incurred.

 

 

 

17

 

 

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

 

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

 

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

 

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

 

SECTION XII

NON-DISCLOSURE OF NON-PUBLIC INFORMATION

 

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

 

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

 

 

SECTION XIII

ACKNOWLEDGEMENTS OF THE PARTIES

 

Notwithstanding
anything in this Agreement to the contrary, the parties hereto
hereby acknowledge and agree to the following: (i) the Investor
makes no representations or covenants that it will not engage in
trading in the securities of the Company, other than the Investor
will not short the Company’s common stock at any time during
this Agreement; (ii) the Company shall, by 8:30 a.m. EST on the
second Trading Day following the date hereof, file a current report
on Form 8-K disclosing the material terms of the transactions
contemplated hereby and in the other Registered Offering
Transaction Documents; (iii) the Company has not and shall not
provide material non-public information to the Investor unless
prior thereto the Investor shall have executed a written agreement
regarding the confidentiality and use of such information; and (iv)
the Company understands and confirms that the Investor will be
relying on the acknowledgements set forth in clauses (i) through
(iii) above if the Investor effects any transactions in the
securities of the Company.

 

[Signature page follows]

   

 

18

 

 

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

 

GHS
INVESTMENTS, LLC

 

 

 

By:
_________________________________

Name:

Title:
Member

 

 

NATURALSHRIMP
INCORPORATED

 

 

 

By:
__________________________________

Name:
Gerald Easterling

Title:
President

 

 

 

[SIGNATURE PAGE OF EQUITY FINANCING AGREEMENT]

 

 

 

19

 

 

LIST OF EXHIBITS

 

EXHIBIT A    Registration Rights
Agreement

 

EXHIBIT B    Notice of Effectiveness

 

EXHIBIT C    Put Notice

 

EXHIBIT D    Put Settlement Sheet

 

 

 

 

20

 

 

EXHIBIT A

 

REGISTRATION RIGHTS AGREEMENT

 

See attached.

 

 

 

 

 

 

21

 

   

EXHIBIT B

 

FORM OF NOTICE OF EFFECTIVENESS

OF REGISTRATION STATEMENT

 

	
 

	
 

	

Date: __________

 

[TRANSFER AGENT]

 

Re: NaturalShrimp
Incorporated,

 

Ladies and Gentlemen:

 

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

 

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

 

 

                                                                            

Very truly yours,

 

                                                                            

[Company Counsel]

 

 

 

 

22

 

   

EXHIBIT C

 

FORM OF PUT NOTICE

 

Date:

 

RE: Put Notice Number __

 

Dear Mr./Ms.__________,

 

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

 

The amount of this put is $__________.

 

The Pricing Period runs from _______________ until
_______________.

 

The Purchase Price is: $_______________

 

The number of Put Shares Due:___________________.

 

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

 

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

 

Regards,

 

NaturalShrimp
Incorporated

 

By:
__________________________________

Name:
Gerald Easterling

Title:
President

 

 

 

23

 

   

EXHIBIT D

 

PUT SETTLEMENT SHEET

 

Date: ________________

 

Dear Mr. ________,

 

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

 

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

 

[INSERT]

 

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

 

[INSERT ADDRESS]

 

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

 

Regards,

 

GHS INVESTMENTS LLC

 

 

 

By:
_________________________________

Name:

Title

 

 

24Blueprint

  Exhibit 10.92

 

REGISTRATION RIGHTS AGREEMENT

 

This
REGISTRATION RIGHTS AGREEMENT (the
“Agreement”), dated as of August 23, 2019 (the
“Execution Date”), is entered into by and
between NaturalShrimp Incorporated., a
Nevada corporation with its principal executive office at
5080 Spectrum Dr., Suite 1000, Addison, TX 75001 (the “Company”), and GHS Investments LLC, a
Nevada limited liability company, with offices at 420 Jericho
Turnpike, Suite 102 Jericho, NY 11753
(the“Investor”).

 

RECITALS:

 

WHEREAS,
the parties desire to terminate that
certain Equity Financing Agreement and Registration Rights
Agreement dated August 21, 2018;

 

WHEREAS, pursuant to the Equity Financing
Agreement entered into by and between the Company and the Investor
as of this even date (the “Equity Financing Agreement”), the
Company has agreed to issue and sell to the Investor an
indeterminate number of shares of the Company’s common stock,
par value $0.0001 per share
(the “Common
Stock”), up to an aggregate purchase price of Eleven
Million Dollars
($11,000,000);

 

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

 

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

 

SECTION I

DEFINITIONS

 

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

 

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

 

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

 

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

 

“Potential
Material Event” means any of the following: (i) the
possession by the Company of material information not ripe for
disclosure in the Registration Statement, which shall be evidenced
by determinations in good faith by the Board of Directors of the
Company that disclosure of such information in the Registration
Statement would be detrimental to the business and affairs of the
Company, or (ii) any material engagement or activity by the Company
which would, in the good faith determination of the Board of
Directors of the Company, be adversely affected by disclosure in
the Registration Statement at such time, which determination shall
be accompanied by a good faith determination by the Board of
Directors of the Company that the Registration Statement would be
materially misleading absent the inclusion of such
information.

 

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

 

“Registrable
Securities” means (i) the shares of Common Stock
issued or issuable pursuant to the Equity Financing Agreement, and
(ii) any shares of capital stock issued or issuable with respect to
such shares of Common Stock, if any, as a result of any stock
split, stock dividend, recapitalization, exchange or similar event
or otherwise, which have not been (x) included in the Registration
Statement that has been declared effective by the SEC, or (y) sold
under circumstances meeting all of the applicable conditions of
Rule 144 (or any similar provision then in force) under the 1933
Act.

 

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

 

“Registered Offering Transaction
Documents” shall mean
this Agreement and the Equity Financing Agreement between the
Company and the Investor as of the date hereof.

 

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

 

 

1

 

 

SECTION II

REGISTRATION

 

2.1 The Company shall, within thirty (30)
calendar days upon the date of execution of this Agreement, use its
best efforts to file with the SEC a Registration Statement or
Registration Statements (as is necessary) on Form S-1 (or, if such
form is unavailable for such a registration, on such other form as
is available for such registration), covering the resale of all of
the Registrable Securities, which Registration Statement(s) shall
state that, in accordance with Rule 416 promulgated under the 1933
Act, such Registration Statement also covers such indeterminate
number of additional shares of Common Stock as may become issuable
upon stock splits, stock dividends or similar transactions. The
Company shall initially register for resale all of the Registrable
Securities which would be issuable on the date preceding the filing
of the Registration Statement based on the closing bid price of the
Company’s Common Stock on such date and the amount reasonably
calculated that represents Common Stock issuable to other parties
as set forth in the Equity Financing Agreement except to the extent
that the SEC requires the share amount to be reduced as a condition
of effectiveness.

 

2.2 The Company shall use all
commercially reasonable efforts to have the Registration
Statement(s) declared effective by the SEC within thirty (30)
calendar days, but no more than ninety (90) calendar days after the
Company has filed the registration statement.

 

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

 

2.4 Notwithstanding the registration
obligations set forth in this Section 2.1, if the staff of the SEC
(the “Staff”) or
the SEC informs the Company that all of the unregistered
Registrable Securities cannot, as a result of the application of
Rule 415, be registered for resale as a secondary offering on a
single Registration Statement, the Company agrees to promptly (i)
inform each of the holders thereof and use its commercially
reasonable efforts to file amendments to the Registration Statement
as required by the SEC and/or (ii) withdraw the Registration
Statement and file a new registration statement (the
“New Registration
Statement”), in either case covering the maximum
number of Registrable Securities permitted to be registered by the
SEC, on Form S-1 to register for resale the Registrable Securities
as a secondary offering. If the Company amends the Registration
Statement or files a New Registration Statement, as the case may
be, under clauses (i) or (ii) above, the Company will use its
commercially reasonable efforts to file with the SEC, as promptly
as allowed by the Staff or SEC, one or more registration statements
on Form S-1 to register for resale those Registrable Securities
that were not registered for resale on the Registration Statement,
as amended, or the New Registration Statement (each, an
“Additional Registration
Statement”).

 

SECTION III

RELATED OBLIGATIONS

 

At such
time as the Company is obligated to prepare and file the
Registration Statement with the SEC pursuant to Section 2, the
Company will affect the registration of the Registrable Securities
in accordance with the intended method of disposition thereof and,
with respect thereto, the Company shall have the following
obligations:

 

3.1 The Company shall use all
commercially reasonable efforts to cause such Registration
Statement relating to the Registrable Securities to become
effective and shall keep such Registration Statement effective
until the earlier to occur of the date on which (A) the Investor
shall have sold all the Registrable Securities; or (B) the Investor
has no right to acquire any additional shares of Common Stock under
the Equity Financing Agreement (the “Registration Period”).
The Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any
untrue statement of a material fact or omit to state a material
fact required to be stated therein, or necessary to make the
statements therein, in light of the circumstances in which they
were made, not misleading. The Company shall use all commercially
reasonable efforts to respond to all SEC comments within ten (10)
business days from receipt of such comments by the Company. The
Company shall use all commercially reasonable efforts to cause the
Registration Statement relating to the Registrable Securities to
become effective no later than three (3) business days after notice
from the SEC that the Registration Statement may be declared
effective. The Investor agrees to provide all information which is
required by law to provide to the Company, including the intended
method of disposition of the Registrable Securities, and the
Company’s obligations set forth above shall be conditioned on
the receipt of such information.

 

3.2 The Company shall prepare and file
with the SEC such amendments (including post-effective amendments)
and supplements to the Registration Statement and the prospectus
used in connection with such Registration Statement, which
prospectus is to be filed pursuant to Rule 424 promulgated under
the 1933 Act, as may be necessary to keep such Registration
Statement effective during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with
respect to the disposition of all Registrable Securities of the
Company covered by such Registration Statement until such time as
all of such Registrable Securities shall have been disposed of in
accordance with the intended methods of disposition by the Investor
thereof as set forth in such Registration Statement. In the event
the number of shares of Common Stock covered by the Registration
Statement filed pursuant to this Agreement is at any time
insufficient to cover all of the Registrable Securities, the
Company shall amend such Registration Statement, or file a new
Registration Statement (on the short form available therefor, if
applicable), or both, so as to cover all of the Registrable
Securities, in each case, as soon as practicable, but in any event
within thirty (30) calendar days after the necessity therefor
arises (based on the then Purchase Price of the Common Stock and
other relevant factors on which the Company reasonably elects to
rely), assuming the Company has sufficient authorized shares at
that time, and if it does not, within thirty (30) calendar days
after such shares are authorized. The Company shall use
commercially reasonable efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable
following the filing thereof.

 

 

2

 

 

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

 

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

 

3.5 As promptly as practicable after
becoming aware of such event, the Company shall notify Investor in
writing of the happening of any event as a result of which the
prospectus included in the Registration Statement, as then in
effect, includes an untrue statement of a material fact or omission
to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under
which they were made, not misleading (“Registration Default”)
and use all diligent efforts to promptly prepare a supplement or
amendment to such Registration Statement and take any other
necessary steps to cure the Registration Default (which, if such
Registration Statement is on Form S-3, may consist of a document to
be filed by the Company with the SEC pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act (as defined below) and to be
incorporated by reference in the prospectus) to correct such untrue
statement or omission, and make available copies of such supplement
or amendment to the Investor. The Company shall also promptly
notify the Investor (i) when a prospectus or any prospectus
supplement or post-effective amendment has been filed, and when the
Registration Statement or any post-effective amendment has become
effective (the Company will prepare notification of such
effectiveness which shall be delivered to the Investor on the same
day of such effectiveness and by overnight mail), additionally, the
Company will promptly provide to the Investor, a copy of the
effectiveness order prepared by the SEC once it is received by the
Company; (ii) of any request by the SEC for amendments or
supplements to the Registration Statement or related prospectus or
related information, (iii) of the Company’s reasonable
determination that a post-effective amendment to the Registration
Statement would be appropriate, (iv) in the event the Registration
Statement is no longer effective, or (v) if the Registration
Statement is stale as a result of the Company’s failure to
timely file its financials or otherwise

 

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

 

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

 

3.8 At the request of the Investor, the
Company’s counsel shall furnish to the Investor, within two
(2) business days, an opinion letter confirming the effectiveness
of the registration statement. Such opinion letter shall be issued
as of the date of the effectiveness of the registration statement,
in a form suitable to the Investor.

 

3.9 The Company shall hold in confidence
and not make any disclosure of information concerning the Investor
unless (i) disclosure of such information is necessary to comply
with federal or state securities laws, (ii) the disclosure of such
information is necessary to avoid or correct a misstatement or
omission in any Registration Statement, or (iii) the release of
such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction. The Company agrees that it shall, upon learning that
disclosure of such information concerning the Investor is sought in
or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to the Investor and
allow the Investor, at the Investor’s expense, to undertake
appropriate action to prevent disclosure of, or to obtain a
protective order covering such information.

 

 

3

 

 

3.10 The Company shall use all
commercially reasonable efforts to maintain designation and
quotation of all the Registrable Securities covered by any
Registration Statement on the Principal Market. If, despite the
Company’s commercially reasonable efforts, the Company is
unsuccessful in satisfying the preceding sentence, it shall use
commercially reasonable efforts to cause all the Registrable
Securities covered by any Registration Statement to be listed on
each other national securities exchange and automated quotation
system, if any, on which securities of the same class or series
issued by the Company are then listed, if any, if the listing of
such Registrable Securities is then permitted under the rules of
such exchange or system. The Company shall pay all fees and
expenses in connection with satisfying its obligation under this
Section 3.10.

 

3.11 The Company shall cooperate with the
Investor to facilitate the prompt preparation and delivery the
Registrable Securities to be offered pursuant to the Registration
Statement and enable such Registrable Securities to be in such
denominations or amounts, as the case may be, as the Investor may
reasonably request.

 

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

 

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

 

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

 

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

 

3.16 Within three (3) business day after
the Registration Statement which includes Registrable Securities is
declared effective by the SEC, the Company shall deliver to the
transfer agent for such Registrable Securities, with copies to the
Investor, confirmation that such Registration Statement has been
declared effective by the SEC.

 

3.17 The Company shall take all other
reasonable actions necessary to expedite and facilitate disposition
by the Investor of Registrable Securities pursuant to the
Registration Statement.

 

 

4

 

 

SECTION IV

OBLIGATIONS OF THE INVESTOR

 

4.1 At least five (5) calendar days prior
to the first anticipated filing date of the Registration Statement,
the Company shall notify the Investor in writing of the information
the Company requires from the Investor for the Registration
Statement. It shall be a condition precedent to the obligations of
the Company to complete the registration pursuant to this Agreement
with respect to the Registrable Securities and the Investor agrees
to furnish to the Company that information regarding itself, the
Registrable Securities and the intended method of disposition of
the Registrable Securities as shall reasonably be required to
effect the registration of such Registrable Securities and the
Investor shall execute such documents in connection with such
registration as the Company may reasonably request. The Investor
covenants and agrees that, in connection with any sale of
Registrable Securities by it pursuant to the Registration
Statement, it shall comply with the “Plan of
Distribution” section of the then current prospectus relating
to such Registration Statement.

 

4.2 The Investor, by its acceptance of
the Registrable Securities, agrees to cooperate with the Company as
reasonably requested by the Company in connection with the
preparation and filing of any Registration Statement hereunder,
unless the Investor has notified the Company in writing of an
election to exclude all of the Investor’s Registrable
Securities from such Registration Statement.

 

4.3 The Investor agrees that, upon
receipt of written notice from the Company of the happening of any
event of the kind described in Section 3.6 or the first sentence of
3.5, the Investor will immediately discontinue disposition of
Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until the Investor’s
receipt of the copies of the supplemented or amended prospectus
contemplated by Section 3.6 or the first sentence of
3.5.

 

 

SECTION V

EXPENSES OF REGISTRATION

 

All
legal expenses, other than underwriting discounts and commissions
and other than as set forth in the Equity Financing Agreement,
incurred in connection with registrations including comments,
filings or qualifications pursuant to Sections 2 and 3, including,
without limitation, all registration, listing and qualifications
fees, and printing fees shall be paid by the Company.

 

SECTION VI

INDEMNIFICATION

 

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

 

6.1 To the fullest extent permitted by
law, the Company, under this Agreement, will, and hereby does,
indemnify, hold harmless and defend the Investor who holds
Registrable Securities, the directors, officers, partners,
employees, counsel, agents, representatives of, and each Person, if
any, who controls, any Investor within the meaning of the 1933 Act
or the Securities Exchange Act of 1934, as amended (the
“1934 Act”)
(each, an “Indemnified
Person”), against any losses, claims, damages,
liabilities, judgments, fines, penalties, charges, costs,
attorneys’ fees, amounts paid in settlement or expenses,
joint or several (collectively, “Claims”), incurred in
investigating, preparing or defending any action, claim, suit,
inquiry, proceeding, investigation or appeal taken from the
foregoing by or before any court or governmental, administrative or
other regulatory agency, body or the SEC, whether pending or
threatened, whether or not an indemnified party is or may be a
party thereto (“Indemnified
Damages”), to which any of them may become subject
insofar as such Claims (or actions or proceedings, whether
commenced or threatened, in respect thereof) arise out of or are
based upon: (i) any untrue statement or alleged untrue statement of
a material fact in the Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the
qualification of the offering under the securities or other
“blue sky” laws of any jurisdiction in which the
Investor has requested in writing that the Company register or
qualify the Shares (“Blue Sky
Filing”), or the omission or alleged omission to state
a material fact required to be stated therein or necessary to make
the statements therein, in light of the circumstances under which
the statements therein were made, not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained
in the final prospectus (as amended or supplemented, if the Company
files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact
necessary to make the statements made therein, in light of the
circumstances under which the statements therein were made, not
misleading, or (iii) any violation or alleged violation by the
Company of the 1933 Act, the 1934 Act, any other law, including,
without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the
Registrable Securities pursuant to the Registration Statement (the
matters in the foregoing clauses (I) through (iii) being,
collectively, “Violations”). Subject to the
restrictions set forth in Section 6.3 the Company shall reimburse
the Investor and each such controlling person, promptly as such
expenses are incurred and are due and payable, for any reasonable
legal fees or other reasonable expenses incurred by them in
connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6.1: (I) shall
not apply to a Claim arising out of or based upon a Violation which
is due to the inclusion in the Registration Statement of the
information furnished to the Company by any Indemnified Person
expressly for use in connection with the preparation of the
Registration Statement or any such amendment thereof or supplement
thereto; (ii) shall not be available to the extent such Claim is
based on (a) a failure of the Investor to deliver or to cause to be
delivered the prospectus made available by the Company or (b) the
Indemnified Person’s use of an incorrect prospectus despite
being promptly advised in advance by the Company in writing not to
use such incorrect prospectus; (iii) any claims based on the manner
of sale of the Registrable Securities by the Investor or of the
Investor’s failure to register as a dealer under applicable
securities laws; (iv) any omission of the Investor to notify the
Company of any material fact that should be stated in the
Registration Statement or prospectus relating to the Investor or
the manner of sale; and (v) any amounts paid in settlement of any
Claim if such settlement is effected without the prior written
consent of the Company, which consent shall not be unreasonably
withheld. Such indemnity shall remain in full force and effect
regardless of any investigation made by or on behalf of the
Indemnified Person and shall survive the resale of the Registrable
Securities by the Investor pursuant to the Registration
Statement.

 

 

5

 

 

6.2 In connection with any Registration
Statement in which Investor is participating, the Investor agrees
to severally and jointly indemnify, hold harmless and defend, to
the same extent and in the same manner as is set forth in Section
6.1, the Company, each of its directors, each of its officers who
signs the Registration Statement, each Person, if any, who controls
the Company within the meaning of the 1933 Act or the 1934 Act and
the Company’s agents (collectively and together with an
Indemnified Person, an “Indemnified Party”), against any
Claim or Indemnified Damages to which any of them may become
subject, under the 1933 Act, the 1934 Act or otherwise, insofar as
such Claim or Indemnified Damages arise out of or are based upon
any Violation, in each case to the extent, and only to the extent,
that such Violation is due to the inclusion in the Registration
Statement of the written information furnished to the Company by
the Investor expressly for use in connection with such Registration
Statement; and, subject to Section 6.3, the Investor will reimburse
any legal or other expenses reasonably incurred by them in
connection with investigating or defending any such Claim;
provided, however, that the
indemnity agreement contained in this Section 6.2 and the agreement
with respect to contribution contained in Section 7 shall not apply
to amounts paid in settlement of any Claim if such settlement is
effected without the prior written consent of the Investor, which
consent shall not be unreasonably withheld; provided, further,
however, that the Investor shall only be liable under this Section
6.2 for that amount of a Claim or Indemnified Damages as does not
exceed the net proceeds to such Investor as a result of the sale of
Registrable Securities pursuant to such Registration Statement.
Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party
and shall survive the resale of the Registrable Securities by the
Investor pursuant to the Registration Statement. Notwithstanding
anything to the contrary contained herein, the indemnification
agreement contained in this Section 6.2 with respect to any
preliminary prospectus shall not inure to the benefit of any
Indemnified Party if the untrue statement or omission of material
fact contained in the preliminary prospectus were corrected on a
timely basis in the prospectus, as then amended or supplemented.
This indemnification provision shall apply separately to each
Investor and liability hereunder shall not be joint and
several.

 

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

 

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

 

SECTIONVII

CONTRIBUTION

 

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

 

 

6

 

 

SECTION VIII

REPORTS UNDER THE 1934 ACT

 

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

 

a.

make and keep
adequate current public information available, as those terms are
understood and defined in Rule 144;

 

b.

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

 

c.

furnish to the
Investor, promptly upon request, (I) a written statement by the
Company that it has complied with the reporting requirements of
Rule 144, the 1933 Act and the 1934 Act, (ii) a copy of the most
recent annual or quarterly report of the Company and such other
reports and documents so filed by the Company, and (iii) such other
information as may be reasonably requested to permit the Investor
to sell such securities pursuant to Rule 144 without
registration.

 

 

SECTION X

MISCELLANEOUS

 

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

 

 

	

If to
the Company:

	

NaturalShrimp
Incorporated

	
 

	

5080
Spectrum Dr., Suite 1000

	
 

	

Addison,
TX 75001

	
 

	
 

	

With a
copy to:

	

Lucosky
Brookman LLP

	
 

	

101
Wood Avenue South, Fifth Floor

	
 

	

Woodbridge,
NJ 08830

	
 

	
 

	

If to
the Investor:

	

GHS
Investments, LLC

	
 

	

420
Jericho Turnpike, Suite 102 Jericho, NY 11753

 

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

  

 

7

 

 

9.2 NO WAIVERS. Failure of any
party to exercise any right or remedy under this Agreement or
otherwise, or delay by a party in exercising such right or remedy,
shall not operate as a waiver thereof.

 

9.3 NO ASSIGNMENTS. The rights and
obligations under this Agreement shall not be
assignable.

 

9.4 ENTIRE AGREEMENT/AMENDMENT.
This Agreement and the Registered Offering Transaction Documents
constitute the entire agreement among the parties hereto with
respect to the subject matter hereof and thereof. There are no
restrictions, promises, warranties or undertakings, other than
those set forth or referred to herein and therein. This Agreement
and the Registered Offering Transaction Documents supersede all
prior agreements and understandings among the parties hereto with
respect to the subject matter hereof and thereof. The provisions of
this Agreement may be amended only with the written consent of the
Company and Investor.

 

9.5 HEADINGS. The headings in this
Agreement are for convenience of reference only and shall not limit
or otherwise affect the meaning hereof. Whenever required by the
context of this Agreement, the singular shall include the plural
and masculine shall include the feminine. This Agreement shall not
be construed as if it had been prepared by one of the parties, but
rather as if all the parties had prepared the same.

 

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

 

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

 

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

 

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

 

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

 

[Signature page follows]

 

 

 

8

 

 

 

 

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

 

GHS
INVESTMENTS, LLC

 

By:
_________________________________

Name:

Title:
Member

 

 

NATURALSHRIMP INCORPORATED

 

By:__________________________________

Name:
Gerald Easterling

Title:
President

 

 

[SIGNATURE PAGE OF REGISTRATION RIGHTS AGREEMENT]

 

 

 

 

9

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