Document:

Exhibit
10.2

 

Execution Copy

 

REGISTRATION RIGHTS AGREEMENT

 

REGISTRATION RIGHTS
AGREEMENT (this “Agreement”), dated as of November 11, 2015, by and between ATOSSA GENETICS INC., a
Delaware corporation (the “Company”), and ASPIRE CAPITAL FUND, LLC, an Illinois limited liability company
(together with its permitted assigns, the “Buyer”). Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings set forth in the Common Stock Purchase Agreement by and between the parties hereto, dated
as of the date hereof (as amended, restated, supplemented or otherwise modified from time to time, the “Purchase Agreement”).

 

WHEREAS:

 

A.           Upon
the terms and subject to the conditions of the Purchase Agreement, (i) the Company has agreed to issue to the Buyer, and the
Buyer has agreed to purchase, up to Twenty-Five Million Dollars ($25,000,000) of the Company’s common stock, par value $0.001
per share (the “Common Stock”), pursuant to Section 1 of the Purchase Agreement (such shares, the “Purchase
Shares”), and (ii) the Company has agreed to issue to the Buyer such number of shares of Common Stock as is required
pursuant to Section 4(e) of the Purchase Agreement (the “Commitment Shares”); and

 

B.           To
induce the Buyer to enter into the Purchase 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.

 

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

 

1.            DEFINITIONS.

 

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

 

a.           “Person”
means any person or entity including any 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.

 

b.           “Register,”
“registered,” and “registration” refer to a registration effected by preparing and filing
one or more registration statements of the Company 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 U.S. Securities and Exchange Commission (the “SEC”).

 

c.           “Registrable
Securities” means (i) all of the Commitment Shares, if any, and (ii) such number of Purchase Shares as reasonably determined
by the Company, which may from time to time be, issued or issuable to the Buyer upon purchases of the Available Amount under the
Purchase Agreement, and any shares of capital stock issued or issuable with respect to the Purchase Shares, the Commitment Shares
or the Purchase Agreement as a result of any stock split, stock dividend, recapitalization, exchange or similar event, without
regard to any limitation on purchases under the Purchase Agreement.

 

     

     

    

 

d.           “Registration
Statement” means a registration statement of the Company covering only the sale of the Registrable Securities.

 

2.            REGISTRATION.

 

a.           Mandatory
Registration. The Company shall within Ten (10) Business Days from the date hereof file with the SEC the Registration Statement.
The Registration Statement shall register only the Registrable Securities and no other securities of the Company. The Buyer and
its counsel shall have a reasonable opportunity to review and comment upon such Registration Statement or any amendment to such
Registration Statement and any related prospectus prior to its filing with the SEC. The Buyer shall furnish all information reasonably
requested by the Company for inclusion therein. The Company shall use its commercially reasonable efforts to have the Registration
Statement or any amendment declared effective by the SEC as soon as practicable. Subject to Section 3(e), the Company shall use
commercially reasonable efforts to keep the Registration Statement effective pursuant to Rule 415 promulgated under the 1933 Act
and available for sales of all of the Registrable Securities at all times until the earlier of (i) the date as of which the Buyer
may sell all of the Registrable Securities without restriction pursuant to Rule 144 promulgated under the 1933 Act (or successor
thereto) or (ii) the date on which the Buyer shall have sold all the Registrable Securities and no Available Amount remains under
the Purchase 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 under
which they were made, not misleading.

 

b.           Rule
424 Prospectus. The Company shall, as required by applicable securities regulations, from time to time file with the SEC, pursuant
to Rule 424 promulgated under the 1933 Act, a prospectus and prospectus supplements, if any, to be used in connection with sales
of the Registrable Securities under the Registration Statement. The Buyer and its counsel shall have two (2) Business Days to review
and comment upon such prospectus prior to its filing with the SEC. The Buyer shall use its commercially reasonable efforts to comment
upon such prospectus within two (2) Business Days from the date the Buyer receives the final version of such prospectus.

 

c.           Sufficient
Number of Shares Registered. In the event the number of shares available under the Registration Statement is insufficient to
cover the Registrable Securities, the Company shall, to the extent necessary and permissible, amend the Registration Statement
or file a new registration statement (a “New Registration Statement”), so as to cover all such Registrable Securities
as soon as practicable, but in any event not later than ten (10) Business Days after the necessity therefor arises. The Company
shall use its commercially reasonable efforts to have such amendment and/or New Registration Statement become effective as soon
as reasonably practicable following the filing thereof.

 

    	 	2	 

     

    

 

3.          RELATED
OBLIGATIONS.

 

With respect to the
Registration Statement and whenever any Registrable Securities are to be registered pursuant to Sections 2(a) and (c), including
on any New Registration Statement, the Company shall use its commercially reasonable efforts to effect the registration of the
Registrable Securities in accordance with the intended method of disposition thereof and, pursuant thereto, the Company shall have
the following obligations:

 

a.           The
Company shall prepare and file with the SEC such amendments (including post-effective amendments) and supplements to any Registration
Statement and the prospectus used in connection with such Registration Statement, as may be necessary to keep the Registration
Statement or any New Registration Statement effective at all times during the Registration Period, subject to Section 3(e)
hereof 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 the Registration Statement or any New 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 seller or sellers
thereof as set forth in such Registration Statement. Should the Company file a post-effective amendment to the Registration Statement
or a New Registration Statement, the Company will use its commercially reasonable efforts to have such filing declared effective
by the SEC within thirty (30) consecutive Business Days as of the date of filing, which such period shall be extended for an additional
thirty (30) Business Days if the Company receives a comment letter from the SEC in connection therewith.

 

b.           The
Company shall submit to the Buyer for review and comment any disclosure in the Registration Statement, any New Registration Statement
and all amendments and supplements thereto (other than prospectus supplements that consist only of a copy of a filed Form 10-Q
or a Current Report on Form 8-K or any amendment as a result of the Company’s filing of a document that is incorporated by
reference into the Registration Statement or New Registration Statement) containing information provided by the Buyer for inclusion
in such document and any descriptions or disclosure regarding the Buyer, the Purchase Agreement, including the transaction contemplated
thereby, or this Agreement at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form
to which Buyer reasonably and timely objects. Upon request of the Buyer, the Company shall provide to the Buyer all disclosure
in the Registration Statement or any New Registration Statement and all amendments and supplements thereto (other than prospectus
supplements that consist only of a copy of a filed Form 10-Q or Current Report on Form 8-K or any amendment as a result of the
Company’s filing of a document that is incorporated by reference into the Registration Statement or New Registration Statement)
at least two (2) Business Days prior to their filing with the SEC, and not file any document in a form to which Buyer reasonably
and timely objects, which consent shall not be unreasonably withheld, conditioned or delayed. The Buyer shall use its commercially
reasonable efforts to comment upon the Registration Statement or any New Registration Statement
and any amendments or supplements thereto within two (2) Business Days from the date the Buyer receives the final version thereof.
The Company shall furnish to the Buyer, without charge, any correspondence from the SEC or the staff of the SEC to the Company
or its representatives relating to the Registration Statement or any New Registration Statement.

 

    	 	3	 

     

    

 

c.           Upon
request of the Buyer, the Company shall furnish to the Buyer, (i) promptly after the same is prepared and filed with the SEC, at
least one copy of the Registration Statement and any amendment(s) thereto, including financial statements and schedules, all documents
incorporated therein by reference and all exhibits, (ii) upon the effectiveness of a Registration Statement, a copy of the prospectus
included in such Registration Statement and all amendments and supplements thereto (or such other number of copies as the Buyer
may reasonably request) and (iii) such other documents, including copies of any preliminary or final prospectus, as the Buyer may
reasonably request from time to time in order to facilitate the disposition of the Registrable Securities owned by the Buyer.

 

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

 

e.           As
promptly as practicable after becoming aware of such event or facts, the Company shall notify the Buyer in writing if the Company
has determined that the prospectus included in any Registration Statement, as then in effect, includes an untrue statement of a
material fact or omits 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, and promptly prepare a prospectus supplement or amendment to such
Registration Statement to correct such untrue statement or omission, and, upon the Buyer’s request, deliver a copy of such
prospectus supplement or amendment to the Buyer. In providing this notice to the Buyer, the Company shall not include any other
information about the facts underlying the Company’s determination and shall not in any way communicate any material nonpublic
information about the Company or the Common Stock to the Buyer. The Company shall also promptly notify the Buyer in writing (i)
when a prospectus or any prospectus supplement or post-effective amendment has been filed, and when a Registration Statement or
any post-effective amendment has become effective (notification of such effectiveness shall be delivered to the Buyer by facsimile
or e-mail on the same day of such effectiveness), (ii) of any request by the SEC for amendments or supplements to any Registration
Statement or related prospectus or related information, and (iii) of the Company’s reasonable determination that a post-effective
amendment to a Registration Statement would be appropriate.

 

f.            The
Company shall use its commercially reasonable efforts to prevent the issuance of any stop order or other suspension of effectiveness
of any Registration Statement, or the suspension of the qualification of any 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 practical time
and to notify the Buyer of the issuance of such order and the resolution thereof or its receipt of actual notice of the initiation
or threat of any proceeding for such purpose.

 

    	 	4	 

     

    

 

g.           The
Company shall (i) cause all the Registrable Securities to be listed on each securities exchange 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 (ii) secure designation and quotation of all the Registrable Securities if the Principal Market
(as such term is defined in the Purchase Agreement) is an automated quotation system. The Company shall pay all fees and expenses
in connection with satisfying its obligation under this Section.

 

h.           The
Company shall cooperate with the Buyer to facilitate the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to any Registration Statement and enable such certificates
to be in such denominations or amounts as the Buyer may reasonably request and registered in such names as the Buyer may request.

 

i.            The
Company shall at all times provide a transfer agent and registrar with respect to its Common Stock.

 

j.            If
reasonably requested by the Buyer, the Company shall (i) promptly incorporate in a prospectus supplement or post-effective amendment
to the Registration Statement such information as the Buyer believes should be included therein relating to the sale and distribution
of Registrable Securities, including, without limitation, information with respect to the number of Registrable Securities being
sold, the purchase price being paid therefor and any other terms of the offering of the Registrable Securities; (ii) make all required
filings of such prospectus supplement or post-effective amendment promptly 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
(including by means of any document incorporated therein by reference).

 

k.          The
Company shall use its commercially reasonable efforts to cause the Registrable Securities covered by any Registration Statement
to be registered with or approved by such other governmental agencies or authorities in the United States as may be necessary to
consummate the disposition of such Registrable Securities.

 

l.            Within
one (1) Business Day after any Registration Statement is ordered effective by the SEC, either the Company or Company counsel shall
deliver to the Transfer Agent for such Registrable Securities (with copies to the Buyer) confirmation that such Registration Statement
has been declared effective by the SEC in the form attached hereto as Exhibit A. Thereafter, if reasonably requested by
the Buyer at any time, the Company shall deliver to the Buyer a written confirmation of whether
or not the effectiveness of such Registration Statement has lapsed at any time for any reason (including, without limitation,
the issuance of a stop order) and whether or not the Registration Statement is currently effective and available to the Buyer
for sale of all of the Registrable Securities.

 

m.           The
Company agrees to take all other reasonable actions as necessary and requested by the Buyer to expedite and facilitate disposition
by the Buyer of Registrable Securities pursuant to any Registration Statement.

 

    	 	5	 

     

    

 

4.            OBLIGATIONS
OF THE BUYER.

 

a.           The
Buyer has furnished to the Company in Exhibit B hereto such information regarding itself, the Registrable Securities held
by it and the intended method of disposition of the Registrable Securities held by it as required to effect the registration of
such Registrable Securities and shall execute such documents in connection with such registration as the Company may reasonably
request. The Company shall notify the Buyer in writing of any other information the Company reasonably requires from the Buyer
in connection with any Registration Statement hereunder. The Buyer will as promptly as practicable notify the Company of any material
change in the information set forth in Exhibit B, other than changes in its ownership of the Common Stock.

 

b.           The
Buyer agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing
of any amendments and supplements to any Registration Statement hereunder.

 

c.           The
Buyer agrees that, upon receipt of any notice from the Company of the happening of any event or existence of facts of the kind
described in Section 3(f) or any notice of the kind described in the first sentence of 3(e), the Buyer will immediately discontinue
disposition of Registrable Securities pursuant to any registration statement(s) covering such Registrable Securities until the
Buyer’s receipt (which may be accomplished through electronic delivery) of the copies of the filed supplemented or amended
prospectus contemplated by Section 3(f) or the first sentence of 3(e). In addition, upon receipt of any notice from the Company
of the kind described in the first sentence of Section 3(e), the Buyer will immediately discontinue purchases or sales of any securities
of the Company unless such purchases or sales are in compliance with applicable U.S. securities laws.. Notwithstanding anything
to the contrary, the Company shall cause its Transfer Agent to deliver as promptly as practicable shares of Common Stock without
any restrictive legend in accordance with the terms of the Purchase Agreement in connection with any sale of Registrable Securities
with respect to which the Buyer has received a Purchase Notice or VWAP Purchase Notice (both as defined in the Purchase Agreement)
prior to the Buyer’s receipt of a notice from the Company of the happening of any event of the kind described in Section
3(f) or the first sentence of 3(e) and for which the Buyer has not yet settled.

 

5.            EXPENSES
OF REGISTRATION.

 

All reasonable expenses
of the Company, other than sales or brokerage commissions and fees and disbursements of counsel for the Buyer, incurred in connection
with registrations, filings or qualifications pursuant to Sections 2 and 3, including, without limitation, all registration, listing
and qualifications fees, printers and accounting fees, and fees and disbursements of counsel for the Company, shall be paid by
the Company.

 

    	 	6	 

     

    

 

6.            INDEMNIFICATION.

 

a.           To
the fullest extent permitted by law, the Company will, and hereby does, indemnify, hold harmless and defend the Buyer, each Person,
if any, who controls the Buyer, the members, the directors, officers, partners, employees, agents, representatives of the Buyer
and each Person, if any, who controls the Buyer 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, reasonable attorneys’ fees, amounts paid in settlement (with the consent of
the Company, such consent not to be unreasonably withheld) or reasonable expenses, (collectively, “Claims”)
reasonably 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 or 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, any New 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 Registrable
Securities are offered (“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 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 or any New Registration Statement (the matters in the foregoing clauses (i) through (iii) being, collectively, “Violations”).
The Company shall reimburse each Indemnified Person promptly as such expenses are incurred and are due and payable, for any reasonable
legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding
anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a): (A) shall not apply to
a Claim by an Indemnified Person arising out of or based upon a Violation which occurs in reliance upon and in conformity with
information furnished in writing to the Company by such Indemnified Person expressly for use in connection with the preparation
of the Registration Statement, any New Registration Statement or any such amendment thereof or supplement thereto, if such prospectus
was timely made available by the Company; (B) with respect to any superseded prospectus, shall not inure to the benefit of any
such person from whom the person asserting any such Claim purchased the Registrable Securities that are the subject thereof (or
to the benefit of any other Indemnified Person) if the untrue statement or omission of material fact contained in the superseded
prospectus was corrected in the revised prospectus, as then amended or supplemented, if such revised prospectus was timely made
available by the Company pursuant to Section 3(c) or Section 3(e), and the Buyer was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation; (C) shall not be available to the extent such Claim is based
on a failure of the Buyer to deliver, or to cause to be delivered, the prospectus made available by the Company, if such prospectus
was theretofore made available by the Company pursuant to Section 3(c) or Section 3(e); and (D) shall not apply to 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 transfer of the Registrable Securities by the Buyer pursuant to Section
9.

 

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b.           In
connection with the Registration Statement or any New Registration Statement, the Buyer agrees to indemnify, hold harmless and
defend, to the same extent and in the same manner as is set forth in Section 6(a), the Company, each of its directors, each of
its officers who signs the Registration Statement or any New Registration Statement, each Person, if any, who controls the
Company within the meaning of the 1933 Act or the 1934 Act (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 occurs in reliance upon and in conformity with written information about the
Buyer set forth on Exhibit B attached hereto or updated from time to time in writing by the Buyer and furnished to
the Company by the Buyer expressly for use in the Registration Statement or any New Registration Statement or from the failure
of the Buyer to deliver or to cause to be delivered the prospectus made available by the Company, if such prospectus was timely
made available by the Company pursuant to Section 3(c) or Section 3(e); and, subject to Section 6(d), the Buyer will reimburse
any legal or other expenses reasonably incurred by them in connection with investigating or defending any such Claim; provided,
however, that the indemnity agreement contained in this Section 6(b) and the agreement with respect to 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 Buyer, which consent shall not be unreasonably withheld; provided, further, however, that the Buyer shall be liable under
this Section 6(b) for only that amount of a Claim or Indemnified Damages as does not exceed the net proceeds to the Buyer 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 transfer of the
Registrable Securities by the Buyer pursuant to Section 9.

 

c.           Promptly
after receipt by an Indemnified Person or Indemnified Party under this Section 6 of notice of the commencement of any action or
proceeding (including any governmental action or proceeding) involving a Claim, such Indemnified Person or Indemnified Party shall,
if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party
a written notice of the commencement thereof, and the indemnifying party shall have the right to participate in, and, to the extent
the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense
thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person or the Indemnified Party, as the
case may be, and upon such notice, the indemnifying party shall not be liable to the Indemnified Person or Indemnified Party for
any legal or other expenses subsequently incurred by the Indemnified Person or Indemnified Party in connection with the defense
thereof; 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 indemnifying
party, the representation by such 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 Indemnified Party or Indemnified Person shall cooperate 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 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 effected 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 or litigation. 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.

 

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d.           The
indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation
or defense, as and when bills are received or Indemnified Damages are incurred. Any person receiving a payment pursuant to this
Section 6 which person is later determined to not be entitled to such payment shall return such payment to the person making it.

 

e.           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.

 

7.            CONTRIBUTION.

 

To the extent any indemnification
by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect
to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however,
that: (i) no 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 (ii) 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.

 

8.            REPORTS
AND DISCLOSURE UNDER THE SECURITIES ACTS.

 

With a view to making
available to the Buyer 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 Buyer to sell securities of the Company to the public without registration (“Rule 144”),
the Company agrees, at the Company’s sole expense, to:

 

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

 

b.           file
with the SEC in a timely manner all reports and other documents required of the Company under the 1933 Act and the 1934 Act so
long as the Company remains subject to such requirements and the filing of such reports and other documents is required to satisfy
the current public information requirements of Rule 144; and

 

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c.           furnish
to the Buyer so long as the Buyer owns Registrable Securities, as promptly as practicable at Buyer’s request, (i) a written
statement by the Company that it has complied in all material respects with the requirements of Rule 144(c)(1)(i) and (ii), and
(ii) such other information, if any, as may be reasonably requested to permit the Buyer to sell such securities pursuant to Rule
144 without registration.

 

d.           take
such additional action as is requested by the Buyer to enable the Buyer to sell the Registrable Securities pursuant to Rule 144,
including, without limitation, delivering all such legal opinions, consents, certificates, resolutions and instructions to the
Company’s Transfer Agent as may be reasonably requested from time to time by the Buyer and otherwise fully cooperate with
the Buyer and the Buyer’s broker to effect such sale of securities pursuant to Rule 144.

 

The Company agrees that
damages may be an inadequate remedy for any breach of the terms and provisions of this Section 8 and that Buyer shall, whether
or not it is pursuing any remedies at law, be entitled to equitable relief in the form of a preliminary or permanent injunctions,
without having to post any bond or other security, upon any breach or threatened breach of any such terms or provisions.

 

9.           ASSIGNMENT
OF REGISTRATION RIGHTS.

 

The Company shall not
assign this Agreement or any rights or obligations hereunder without the prior written consent of the Buyer. The Buyer may not
assign its rights under this Agreement without the prior written consent of the Company.

 

10.          AMENDMENT
OF REGISTRATION RIGHTS.

 

Provisions of this Agreement
may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively
or prospectively) only with the written consent of the Company and the Buyer.

 

11.          MISCELLANEOUS.

 

a.           Any
notices, consents, waivers 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) Business 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:

 

Atossa
Genetics Inc.

2345 Eastlake Ave., East, Suite
201

Seattle, Washington 98102

 

    	 	10	 

     

    

 

	Telephone:	800-351-3902
	Facsimile:	206-430-1288
	Attention:  	Kyle Guse, Chief Financial Officer and General Counsel
	Email:	kyle.guse@atossagenetics.com

 

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

 

Gibson, Dunn & Crutcher LLP

555 Mission Street

San Francisco, CA 94105

	Telephone: 	(415) 393-8373
	Facsimile:	(415) 374-8430
	Attention:	Ryan A. Murr, Esq.
	Email:	rmurr@gibsondunn.com

 

If to the Buyer:

 

Aspire Capital Fund,
LLC

155 North Wacker Drive, Suite
1600

Chicago, IL 60606

	Telephone:	312-658-0400
	Facsimile:	312-658-4005
	Attention:	Steven G. Martin
	Email:	smartin@aspirecapital.com

 

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

 

Morrison & Foerster LLP

20000 Pennsylvania Ave. NW, Suite
6000

Washington, DC 20006

	Telephone:	202-778-1611
	Facsimile:	202-887-0763
	Attention:	Martin P. Dunn, Esq.
	Email :	mdunn@mofo.com

 

or at such other address and/or facsimile
number and/or to the attention of such other person as the recipient party has specified by written notice given to each other
party. Written confirmation of receipt (A) given by the recipient of such notice, consent, waiver or other communication, (B) mechanically
or electronically generated by the sender’s facsimile machine containing the time, date, recipient facsimile number and an
image of the first page of such transmission or (C) provided by a nationally recognized overnight delivery service, shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively. Any party to this Agreement may give any notice or other communication hereunder
using any other means (including messenger service, ordinary mail or electronic mail), but no such notice or other communication
shall be deemed to have been duly given unless it actually is received by the party for whom it is intended.

 

    	 	11	 

     

    

 

b.           No
failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver thereof, nor shall any single
or partial exercise of any such power, right or privilege preclude other or further exercise thereof or of any other right, power
or privilege.

 

c.           The
corporate laws of the State of Delaware shall govern all issues
concerning the relative rights of the Company and its stockholders. All other questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Illinois, without giving
effect to any choice of law or conflict of law provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the State of Illinois. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in the City of Chicago for the adjudication of any
dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction
of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action
or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process being served
in any such suit, action or proceeding by mailing a copy thereof to such party at the address for such 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 manner permitted by law. 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. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST,
A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY.

 

d.           This
Agreement, the Purchase Agreement and the other Transaction Documents constitute the entire understanding 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, the Purchase Agreement and the other
Transaction Documents supersede all other prior oral or written agreements between the Buyer, the Company, their affiliates and
persons acting on their behalf with respect to the subject matter hereof and thereof.

 

e.           Subject
to the requirements of Section 9, this Agreement shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

 

f.            The
headings in this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.

 

g.           This
Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and delivered to the other party; provided that a facsimile
or pdf (or other electronic reproduction of a) signature shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not a facsimile or pdf (or other electronic reproduction
of a) signature.

 

    	 	12	 

     

    

 

h.           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.

 

i.            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.

 

j.            This
Agreement is intended for the benefit of the parties hereto and their respective permitted successors and assigns, and is not for
the benefit of, nor may any provision hereof be enforced by, any other Person.

 

* * * * *

 

    	 	13	 

     

    

 

IN WITNESS WHEREOF, the parties have
caused this Registration Rights Agreement to be duly executed as of day and year first above written.

 

	 	THE
    COMPANY:
	 	 
	 	ATOSSA GENETICS INC.
	 	 
	 	By:	/s/
    Steven C. Quay
	 	Name:	Steven C. Quay
	 	Title:	Chairman, Chief Executive Officer and
    President
	 	 
	 	BUYER:
	 	 
	 	ASPIRE CAPITAL FUND,
    LLC
	 	BY: ASPIRE CAPITAL PARTNERS,
    LLC
	 	BY:  SGM HOLDINGS
    CORP.
	 	 	 
	 	By:	/s/
    Steven G. Martin
	 	Name:  	Steven G. Martin
	 	Title:  	President

 

     

     

    

 

EXHIBIT A

 

FORM OF NOTICE OF EFFECTIVENESS OF
REGISTRATION STATEMENT

 

_____, 2015

 

VStock Transfer, LLC

18 Lafayette Place

Woodmere, New York 11598

Attention: Chief Executive Officer

 

RE: ATOSSA GENETICS INC.

 

Ladies and Gentlemen:

 

We refer to that certain
Common Stock Purchase Agreement, dated as of November 11, 2015 (the “Purchase Agreement”), entered into by and
between ATOSSA GENETICS INC., a Delaware corporation (the “Company”) and ASPIRE CAPITAL FUND, LLC
(the “Buyer”) pursuant to which the Company has agreed to issue to the Buyer shares of the Company’s Common
Stock, par value $0.001 per share (the “Common Stock”), in an amount up to Twenty-Five Million Dollars ($25,000,000),
in accordance with the terms of the Purchase Agreement. In connection with the transactions contemplated by the Purchase
Agreement, the Company has registered with the U.S. Securities and Exchange Commission (the “SEC”) the sale
by the Buyer of the following shares of Common Stock:

 

(1)   up
to [Total # of Purchase Shares] shares of Common Stock to be issued upon purchase from the Company by the Buyer from time
to time (the “Purchase Shares.”); and

 

(2)   Zero
(0) shares of Common Stock which have been issued to the Buyer as a commitment fee (the “Commitment Shares”).

 

In connection with
the transactions contemplated by the Purchase Agreement, the Company has filed a registration statement on Form S-1 (File No. 333_________)
(the “Registration Statement”) with the SEC relating to the sale by the Buyer of the Purchase Shares and the
Commitment Shares. Accordingly, we advise you that (i) the SEC has entered an order declaring the Registration Statement effective
under the Securities Act of 1933 Act, as amended (the “1933 Act”) at ___ [A./P.]M. on __________, 2015, (ii) the
Company has 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 (iii) the Purchase Shares
and the Commitment Shares are available for sale under the 1933 Act pursuant to the Registration Statement. Accordingly, and in
reliance on certain covenants made by the Buyer regarding the manner of sale of the Shares, certificates representing the Shares
may be issued without any restrictive legend.

 

	 	Very truly yours,
	 	 	 
	 	By: 	 
	 	 	[Company Counsel]
	 	 	 
	CC:        Aspire Capital Fund, LLC	 	 

 

     

     

    

 

EXHIBIT B

 

Information About The Buyer Furnished
To The Company By The Buyer

Expressly For Use In Connection With
The Registration Statement and Prospectus

 

Aspire Capital Partners, LLC is the managing
member of Aspire Capital Fund, LLC.  SGM Holdings Corp. is the managing member of Aspire Capital Partners, LLC.  Steven
G. Martin is the president and sole shareholder of SGM Holdings Corp.  Erik J. Brown is a principal of Aspire Capital Partners,
LLC.  Christos Komissopoulos is a principal of Aspire Capital Partners, LLC.  Each may be deemed to have shared voting
and investment power over shares owned by Aspire Capital Fund, LLC.  Each of Aspire Capital Partners, LLC, SGM Holdings Corp.,
Mr. Martin, Mr. Brown and Mr. Komissopoulos disclaim beneficial ownership of the shares of common stock held by Aspire Capital
Fund, LLC. Aspire Capital is not a licensed broker dealer or an affiliate of a licensed broker dealer.

 

Plan of Distribution

 

The common stock may be sold or distributed from time to time
by the selling stockholder directly to one or more purchasers or through brokers, dealers, or underwriters who may act solely as
agents at market prices prevailing at the time of sale, at prices related to the prevailing market prices, at negotiated prices,
or at fixed prices, which may be changed. The sale of the common stock offered by this prospectus may be effected in one or more
of the following methods:

 

		·	ordinary brokers’ transactions;

 

		·	transactions involving cross or block trades;

 

		·	through brokers, dealers, or underwriters who may act solely as agents;

 

		·	“at the market” into an existing market for the common
stock;

 

		·	in other ways not involving market makers or established business
markets, including direct sales to purchasers or sales effected through agents;

 

		·	in privately negotiated transactions; or

 

		·	any combination of the foregoing.

 

In order to comply with the securities laws of certain states,
if applicable, the shares may be sold only through registered or licensed brokers or dealers. In addition, in certain states, the
shares may not be sold unless they have been registered or qualified for sale in the state or an exemption from the registration
or qualification requirement is available and complied with.

 

The selling stockholder may also sell shares of common stock
under Rule 144 promulgated under the Securities Act, if available, rather than under this prospectus. In addition, the selling
stockholder may transfer the shares of common stock by other means not described in this prospectus.

 

Brokers, dealers, underwriters, or agents participating in the
distribution of the shares as agents may receive compensation in the form of commissions, discounts, or concessions from the selling
stockholder and/or purchasers of the common stock for whom the broker-dealers may act as agent. Aspire Capital has informed us
that each such broker-dealer will receive commissions from Aspire Capital which will not exceed customary brokerage commissions.

 

     

     

    

 

The selling stockholder and its affiliates have agreed not to
engage in any direct or indirect short selling or hedging of our common stock during the term of the Purchase Agreement.

 

The selling stockholder is an “underwriter” within
the meaning of the Securities Act.

 

We have advised the selling stockholder that while it is engaged
in a distribution of the shares included in this prospectus, it is required to comply with Regulation M promulgated under the Securities
Exchange Act of 1934, as amended. With certain exceptions, Regulation M precludes the selling stockholder, any affiliated purchasers,
and any broker-dealer or other person who participates in the distribution from bidding for or purchasing, or attempting to induce
any person to bid for or purchase any security which is the subject of the distribution until the entire distribution is complete.
Regulation M also prohibits any bids or purchases made in order to stabilize the price of a security in connection with the distribution
of that security. All of the foregoing may affect the marketability of the shares offered hereby this prospectus.

 

We may suspend the sale of shares by the selling stockholder
pursuant to this prospectus for certain periods of time for certain reasons, including if the prospectus is required to be supplemented
or amended to include additional material information.

 

This offering as it relates to Aspire Capital will terminate
on the date that all shares offered by this prospectus have been sold by Aspire Capital.exhibit_10-1.htm

EXHIBIT 10.1

 

 

PURCHASE AND SALE AGREEMENT

 

 

This PURCHASE AND SALE AGREEMENT (this “Agreement”), executed on November 5, 2015 but dated effective as of 12:01 a.m. on June 30, 2015 (the “Effective Date”), is entered into by and among Torchlight Energy Resources, Inc., a Nevada corporation, 5700 W. Plano Pkwy., Ste. 3600, Plano, Texas 75093, Torchlight Energy, Inc., a Nevada corporation, 5700 W. Plano Pkwy., Ste. 3600, Plano, Texas 75093 (collectively “Seller”), and Husky Ventures, Inc., an Oklahoma corporation, whose address is 5800 NW 135th Street NW, Oklahoma City, OK 72142, (“Purchaser”).  Seller and Purchaser are sometimes collectively referred to as the “Parties” and each is referred to individually as a “Party.”

 

RECITALS

 

Seller owns and desires to sell, and Purchaser desires to purchase, all of Seller’s right, title and interest in certain oil and gas leases, wells and related assets, which constitute the Assets, as more fully described and defined below, on the terms and conditions set forth in this Agreement.

 

Purchaser anticipates selling all of its right, title, and interest in the lands that are described in Annex A, (the “Gastar Prospect Area”) to Gastar Exploration Inc., (“Gastar”) pursuant to the terms of a purchase and sale agreement (the “Gastar Transaction”).

 

DEFINITIONS

 

“Assets” means

 

	
  

	
(a)

	
All of Seller’s right, title, and interest in the oil and gas leases, described in the Assignment of Oil & Gas Interests (“Assignment”) attached as Exhibit A (the “Leases”), all associated personal property, including wellbores, and the lands covered by such Leases or otherwise pooled or unitized therewith (the “Lands”), and all mineral fee, royalty, overriding royalty, net profits and other interests in the Lands (collectively the “Assigned Working Interest”).

 

	
  

	
(b)

	
All of Seller’s rights under the Participation Agreement attached as Exhibit B and incorporated by reference (“Participation Rights”).

 

	
  

	
(c)

	
The Assets further described in Exhibits A & B include a proportionate undivided interest in the following:

 

	
  

	
1.

	
The oil and gas wells now located on the Lands or lands pooled or unitized therewith, whether producing or non-producing (the “Wells”), and, subject to all rights of offset or withholding under the Participation Agreement, all Hydrocarbons that may be produced from the Wells after the Closing.

 

	
  

	
2.

	
Subject to all rights of offset or withholding under the Participation Agreement, all Hydrocarbon sales, purchase, gathering, compression, treating, transportation, storage and processing agreements and all other contracts, operating agreements, balancing agreements, joint venture agreements, partnership agreements, farmout agreements and other contracts, agreements and instruments insofar and only insofar as they cover or relate to the Leases and Lands, excluding any insurance contracts.

 

  

1

  

 

	
  

	
3.

	
The geological and geophysical data, studies, surveys, evaluations, maps, plats and information of every form and nature and in every form and manner record, stored or transmitted, pertaining to the Leases and Lands.

 

	
  

	
4.

	
The permits, licenses, approvals, servitudes, rights-of-way, easements, surface use agreements, and other surface rights that are used or held primarily for use in connection with the operation of the Leases and Lands (or lands pooled, communitized or unitized therewith) (collectively, the “Easements”).

 

	
  

	
5.

	
The personal property, equipment, machinery, fixtures and improvements, operational or nonoperational, known or unknown, located on the Lands (or lands pooled, communitized or unitized therewith) or the Easements, including pipelines, gathering systems, manifolds, well equipment, casing, tubing, pumps, motors, compression equipment, flow lines, processing and separation facilities, pads, and structures that, as of the date of this Agreement, are located on the Lands (or lands pooled, communitized or unitized therewith), and to the degree such  are used or held for use primarily in connection with the operation of the Assigned Interest in the Wells or Lands (or lands pooled, communitized or unitized therewith) (collectively, the “Equipment”).

 

	
  

	
6.

	
The rights to any fee surface property, and the surface leases used for Seller yards for operation of the Leases and Lands.

 

	
  

	
7.

	
The pipes, tubulars, fittings, and other materials used or specifically held for use as operating inventory in connection with the operation of the Leases and Lands in the Wells or the Equipment.

 

“Claims” means past, present and future actions and/or causes of action, counter-claims, cross-claims, rights, claims, demands, costs, liabilities, damages, losses, expenses and penalties, whether known or unknown, suspected or unsuspected, liquidated or contingent.  Under this definition, “Claims” includes, but is not limited to, all claims, demands, and causes of action of any nature, whether in contract or in tort or otherwise, or arising under or by virtue of any constitution, statute, regulation, at common law, or in equity, for past, present, future, known, and unknown personal injuries, property damage, and all other losses or damages of any kind, including but not limited to the following: all actual damages, all exemplary and punitive damages, all penalties of any kind, all contract damages, all tort damages, loss of consortium, damage to familial relations, ensuing death, loss of inheritance, loss of companionship, loss of society and affection, loss of enjoyment of life, intentional and/or malicious conduct, actual and/or constructive fraud, statutory and/or common law fraud, class action suit, misrepresentation of any kind or character, libel, slander, negligence, gross negligence, costs, attorney fees, economic loss, and pre-judgment and post- judgment interests. This definition further includes, but is not limited to, all elements of damages, all remedies, all claims, demands, and causes of action that are now recognized by law or that may be created or recognized in the future in any manner, including without limitation by constitution, statute, regulation, or judicial decision.

 

 

  

2

  

 

“Closing” means the execution of all documents necessary to effectuate the sale and transfers of the Assets contemplated under this Agreement, which shall occur on before November 6, 2015 at Purchaser’s offices.

 

“Debt” means all money that Seller owes to Purchaser, regardless of whether those charges arose from the Assets, leasing activities, the JOAs, or anything else relating to the Parties’ relationship in any way, which the Parties agree as of the October 31, 2015 is $2,830,161.17.

 

“Defensible Title” means, with respect to the Assets, such title and ownership by the Seller that (a) entitles the Seller to receive and retain, without reduction, suspension or termination, not less than the Seller’s “Net Revenue Interest,” in the percentage set forth in the Assignment of all Hydrocarbons produced, saved and marketed from the Assets; (b) obligates the Seller to bear not greater than the Seller’s “Working Interest,” in the percentage set forth in the Assignment of the costs and expenses relating to the maintenance, development and operation of such Asset; and (c) is free and clear of all liens, claims and encumbrances, except Permitted Encumbrances, by, through and under Seller.

 

“Gastar Closing” means the closing defined in Article VIII of the Purchase and Sale Agreement between Husky Ventures, Inc., et al. as sellers and Gastar Exploration, Inc. as purchaser dated October 14, 2015.

 

“Hydrocarbons” means all oil, gas, natural gas liquids and other hydrocarbons and products produced in association therewith.

 

“JOAs” means all joint operating agreements, or similar agreements, directly relating to the Assets.

 

“Net Revenue Interest” means the share of production after all burdens, royalties, and overriding royalties, have been deducted from the working interest.

 

“Permitted Encumbrances” means (a) liens for taxes not yet delinquent or which are being contested in good faith by appropriate proceedings; (b) lessors’ royalties, overriding royalties, division orders, reversionary interests and similar burdens that do not operate to reduce the Net Revenue Interest of Seller in any of the Assets; (c) the consents and rights contained in the Contracts or the Leases; (d) production sale contracts, unitization and pooling declarations and agreements, and any operating agreements insofar as such contracts and agreements do not operate to increase the Working Interest or decrease the Net Revenue Interest of Purchaser for any of the Assets; (e) normal and customary liens of co-owners under operating agreements, unitization agreements, and pooling orders relating to the Assets, which obligations are not yet due and pursuant to which Seller is not in default; (f) mechanic’s and materialmen’s liens relating to the Assets, which obligations are not yet due and pursuant to which Seller is not in default; (g) minor defects and irregularities in title or other restrictions that are of the nature customarily accepted by prudent purchasers of oil and gas properties and do not materially affect the value of any Asset encumbered thereby or materially impair the ability of the obligor to use any such Asset in its operations; (h) all approvals required to be obtained in connection with the transactions contemplated herein from governmental authorities which are customarily obtained post-closing; (i) preferential rights to purchase as provided in the Participation Agreement; and (j) liens created or arising by operation of law to secure a Party’s obligations as a purchaser of oil and gas in respect of obligations that are not past due.

 

 

  

3

  

 

“Production Revenue” means Seller’s proportionate share of revenue from the sale of all hydrocarbons produced from the wells listed on Schedule B(4).

 

“Security Instrument” means the lien attached as Exhibit C and incorporated by reference.

 

In this Agreement, unless expressly stated otherwise, the singular includes the plural, and vice versa; likewise, the disjunctive includes the conjunctive, and vice versa.

 

AGREEMENT

 

For and in consideration of the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

	
A.

	
Sale and Purchase.  At the Closing, upon the terms and conditions hereinafter set forth, Seller agrees to sell, assign and convey to Purchaser all of its right, title and interest in the Assets, respectively, effective as of the Effective Date or as otherwise stated in the Assignment, and Purchaser agrees to buy and accept such right, title and interest in such Assets from Seller at such Closing, effective as of the Effective date.

 

	
B.

	
Purchase Price & Consideration for Assets.  Subject to the terms and conditions in this Agreement:

 

	
  

	
1.

	
Purchaser will purchase the Assets by irrevocably retiring and forever discharging the Debt in its entirety (the “Purchase Price”);

 

	
  

	
2.

	
If Purchaser enters into an arm’s length, written agreement, or agreements, to sell all or part of the Assets within one-year from October 31, 2015, then the proceeds from that sale or sales will be distributed as follows:

 

	
  

	
a.

	
First, $2,830,161.17 to Purchaser;

 

	
  

	
b.

	
Second, $1,169,838.83 to Seller;

 

  

4

  

	
  

	
c.

	
Third, all amounts over the $4,000,000 in “a” and “b” above will be split 50/50 between Purchaser on one hand (up to a maximum of $200,000.00), and Seller on the other. By way of example if Purchaser is to receive $4,500,000 from the sale of the Assets, the excess $500,000 over the $4,000,000 would be split $200,000 to Purchaser and $300,000 to Seller.

 

	
  

	
3.

	
If, however, the Gastar Closing occurs, then the proceeds from the Gastar sale attributable to the Assets, which is presently estimated to be $4,607,331.33, subject to final adjustments to the purchase price as set forth in the terms of the Purchase and Sale Agreement between Husky Ventures, Inc., et al. as sellers and Gastar Exploration, Inc. as purchaser dated October 14, 2015, will be distributed between Husky and Torchlight as follows:

 

	
  

	
a.

	
First, $2,830,161.17 to Purchaser;

 

	
  

	
b.

	
Second, $1,169,838.83 to Seller;

 

	
  

	
c.

	
Third, all amounts over the $4,000,000 in “a” and “b” above will be split 50/50 between Purchaser on one hand (up to a maximum of $200,000.00), and Seller on the other. By way of example if Purchaser is to receive $4,500,000 from the sale of the Assets, the excess $500,000 over the $4,000,000 would be split $200,000 to Purchaser and $300,000 to Seller.

 

	
  

	
4.

	
Seller will relinquish and forever surrender all of their Participation Rights as of the Closing.  For the avoidance of doubt, the Parties hereby mutually agree that with respect to the Assets: (A) the Participation Agreement shall be terminated as of the Effective Date and of no further force or effect from and after the Effective Date and (B) as of the execution and delivery of this Agreement, there are no Gastar Prospect Claims against Gastar, Purchaser, or the Assets pursuant to or related to the Participation Agreement.

 

	
  

	
5.

	
From and after the execution of this Agreement, Purchaser will, on a monthly basis and without offset other than monthly operating expenses, release to Seller all Production Revenue that is attributable to hydrocarbons produced and sold from the oil and gas wells listed on Schedule B(4).  To the extent Production Revenue has previously been applied by Purchaser to offset or reduce any debts owed by Seller or claimed by Purchaser, the Parties agree that for all periods prior to the execution of this Agreement, their shall not be any accounting adjustments and that the Parties waive and release all claims against each other related to such offsets of Production Revenue for all periods prior to the execution of this Agreement.

 

	
C.

	
Acquisition of Assets and Conditions of Closing.

 

As conditions to the Closing:

  

5

  

	 	
1. 

	
On or before the Closing, Seller will deliver the Assets to Purchaser free of liens, encumbrances, and clouds on title, other than the Permitted Encumbrances.

 

	
  

	
2.

	
The Parties will execute and deliver the Assignment and the Security Instrument attached as Exhibit A and Exhibit C, respectively.  Provided, however, Seller may not record the Security Instrument until December 1, 2015.

 

	
  

	
3.

	
Seller and Purchaser shall execute and deliver all necessary letters in lieu of transfer orders directing all purchasers of production to pay operator the proceeds attributable to production, which will distribute the net proceeds from production from the Assets from and after the Effective Date to Purchaser.  However, if the Gastar Closing has occurred, Seller and Purchaser shall direct all purchasers of production to pay Gastar the proceeds attributable to production after the Effective Date.

 

	
D.

	
Responsibility for Recordation.  Within three (3) days of the Closing,  Purchaser’s counsel shall record the Assignment in the appropriate real property records, and provide copies of the file-stamped originals of those documents to the Parties as soon as practicable after the Closing.

 

	
E.

	
Representations, Warranties and Covenants.

 

	
  

	
1.

	
Seller’s Representations, Warranties and Covenants. Each of the Sellers hereby, jointly and severally, make the following representations and warranties to the Purchaser as of the date of the Agreement:

 

	
  

	
(a)

	
Seller has all requisite power and authority to carry on his business as presently conducted, to enter into this Agreement and to perform his obligations hereunder.  The consummation of the transactions contemplated by this Agreement will not violate or be in conflict with any provision of any material agreement or instrument to which Seller is a party or by which Seller is bound, or any judgment, decree, order, statute, rule or regulation applicable to Seller.

 

	
  

	
(b)

	
Seller warrants and represents to Purchaser that Seller is authorized to enter into this Agreement, all third-party consents required have been obtained, and that the person executing this Agreement on its behalf has the authority to do so.

 

	
  

	
(c)

	
This Agreement constitutes, and all documents and instruments required hereunder to be executed and delivered by Seller at each Closing will, when duly executed and delivered for value constitute, valid, legal and binding obligations of Seller, enforceable against Seller, in accordance with their respective terms, subject to applicable bankruptcy and other similar laws of general application with respect to creditors as well as the general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

	
  

	
(d)

	
Seller further warrants and represents to Purchaser that it is the owner of all the Assets covered by this Agreement, that there are no other parties with an interest in the Assets.

  

6

  

 

	
  

	
(e)

	
Subject to Permitted Encumbrances, there are no claims which would cause Seller to have less than Defensible Title to the Assets; the Assets are free and clear of all liens, except for Permitted Encumbrances; and Seller shall convey title to Purchaser with a general warranty.

 

	
  

	
(f)

	
Seller warrants and represents to Purchaser that it has not transferred, sold, assigned conveyed, encumbered, pledged or hypothecated any rights, title or interest in or to the Assets, nor is such transfer, sale, assignment, conveyance, encumbrance, pledging or hypothecation pending.

 

	
  

	
(g)

	
Seller further warrants and represents to Purchaser that the leases and assignments covered by this agreement are valid, in effect, and have not lapsed or reverted.

 

	
  

	
2.

	
Purchaser’s Representations and Warranties.

 

	
  

	
(a)

	
Purchaser warrants and represents to Seller that Purchaser is authorized to enter into this Agreement, and that the person executing this Agreement on its behalf has the authority to do so.

 

	
  

	
(b)

	
Purchaser has all requisite company powers and authority to carry on its business as presently conducted, to enter into this Agreement, to purchase the Assets on the terms and conditions described in this Agreement, and to perform its other obligations under this Agreement.  The consummation of the transactions contemplated by this Agreement will not violate nor be in conflict with any provision of Purchaser’s governing documents or any material agreement or instrument to which Purchaser is a party or by which Purchaser is bound, or any judgment, decree, order, statute, rule or regulation applicable to Purchaser.

 

	
  

	
(c)

	
This Agreement and all documents and instruments required or contemplated hereunder to be executed and delivered by Purchaser on each Closing Date will, when duly executed and delivered for value, constitute valid, legal and binding obligations of Purchaser, enforceable against Purchaser, in accordance with their respective terms, subject only to applicable bankruptcy and other similar laws of general application with respect to creditors.

 

	
  

	
(d)

	
Purchaser has had sufficient time to examine the Seller’s records regarding the Assets and believes that the Purchase Price is a fair price to pay for the Assets.

 

	
F.

	
Assumption. From and after a Closing, Purchaser shall be deemed to have assumed and shall have proportionate responsibility and liability for the following, but only insofar as attributable to the Assets acquired under this Agreement, and prior to such Closing shall have assumed no such responsibility or liability:

 

	
  

	
1.

	
Assumed Environmental Liabilities.  The normal and customary pro rata environmental liabilities of a working interest owner. (“Assumed Environmental Liabilities”).

  

7

  

 

	
  

	
2.

	
General Assumption.  Except to the extent covered by Seller’s limited indemnification of Purchaser, upon such Closing, Purchaser shall assume and pay all normal and customary costs, expenses and liabilities assumed by a working interest owner that arise after the Effective Date (the “Assumed Liabilities”).  Notwithstanding the foregoing, the Parties understand and agree that production revenues associated with the Assets after the Effective Date have been applied by Purchaser to offset certain debts owed by Seller to Purchaser and that such offsets have been properly accounted for in arriving at the Purchase Price.

 

	
G.

	
Indemnities.  After a Closing, Purchaser shall indemnify Seller, and Seller (joint and severally between each Seller) shall indemnify Purchaser, as follows:

 

	
  

	
1.

	
Seller’s Indemnification of Purchaser.  Subject to the limitations set forth below, Seller (joint and severally between each Seller) shall indemnify, defend and save and hold harmless Purchaser, its officers, directors, members, managers, employees, representatives, attorneys and agents (the “Purchaser Indemnified Parties”), from and against any and all Losses attributable to or which arise from or in connection with:

 

	
  

	
(a)

	
any breach by such Seller of any of its representations or warranties;

 

	
  

	
(b)

	
any third party claims for Royalties payable by such Seller on or attributable to production from its interests in the Assets transferred at such Closing during the period prior to the Effective Time that such Seller owned such interests;

 

	
  

	
(c)

	
any property expenses incurred by such Seller with respect to its interests in the Assets transferred at such Closing during the period prior to the Effective Time that such Seller owned such interests;

 

	
  

	
(d)

	
any claim by any employee of such Seller or any other person for personal injury or wrongful death which is attributable to events occurring during the period prior to the Effective Time that such Seller owned the Assets transferred at such Closing; and

 

	
  

	
(e)

	
any breach by such Seller of its covenants or agreements under this Agreement.

 

	
  

	
2.

	
Scope.  EXCEPT AS OTHERWISE PROVIDED HEREIN, THE INDEMNIFICATION OBLIGATIONS UNDER THIS AGREEMENT SHALL BE WITHOUT REGARD TO THE INDEMNIFIED PERSON’S SOLE, JOINT OR CONCURRENT NEGLIGENCE, GROSS NEGLIGENCE, STRICT LIABILITY OR OTHER FAULT.

 

	
  

	
3.

	
Waiver of Consequential Damages.  EACH PARTY EXPRESSLY WAIVES ANY AND ALL RIGHTS TO CONSEQUENTIAL (TO THE EXTENT NOT FORESEEABLE), PUNITIVE OR EXEMPLARY DAMAGES; PROVIDED, HOWEVER, THAT THE FOREGOING LIMITATION SHALL NOT APPLY TO ANY SUCH DAMAGES INCURRED IN CONNECTION WITH THIRD PARTY CLAIMS.

  

8

  

 

	
  

	
4.

	
No Insurance; Subrogation.  To the extent of the indemnification obligations in this Agreement, Purchaser and Seller hereby waive for themselves, their successors and assigns, including any insurers, any rights to subrogation for Losses for which each of them is respectively liable or against which each respectively indemnifies the other, and, if required by applicable policies, Purchaser and Seller shall obtain waiver of such subrogation from their respective insurers.

 

	
  

	
5.

	
Reservation as to Non-Parties.  Nothing in this Agreement is intended to limit or otherwise waive any recourse Purchaser or Seller may have against any non-Gastar Person not a party to this Agreement for any obligations or liabilities that may be incurred with respect to the Assets.

 

	
H.

	
Non-Reliance.  The Parties hereby declare and represent that in making this Agreement, they rely wholly upon their respective judgment, belief, and knowledge of their respective liabilities, the subject Leases, and that this Agreement is executed and made without any reliance upon any statement or representation of any other party or of any other party’s representative and Seller acknowledges that it had access to all information and data it deems necessary to evaluate this transaction, including the Purchase Price to be paid by Purchaser and the other terms and conditions herein.

 

	
I.

	
Notices. All notices contemplated under this Agreement shall be made to the following, unless modified by written notice via U.S. mail, fax, or email to the other party(ies):

 

	
  

	
1.

	
Seller:

 

Torchlight Energy Resources, Inc.

Torchlight Energy, Inc.

Attn: John Brda

5700 W. Plano Pkwy., Ste. 3600

Plano, Texas 75093

 

	
  

	
2.

	
Purchaser:

 

Husky Ventures, Inc.

Attn:  Chuck Long

204 North Robinson, Suite 1800

Oklahoma City, Oklahoma 73102

 

	
J.

	
Relationship of Parties.  It is not the purpose or intention of this Agreement to create any joint venture, partnership, mining partnership, or association, and neither this Agreement (including any exhibit attached to this Agreement) nor the operations hereunder shall be construed or considered as creating any such legal relationship. The liabilities of the Parties shall be several and not joint or collective. Furthermore, nothing in this Agreement shall be construed as providing directly or indirectly for any joint or cooperative refining or marketing or sale of any Party’s interest in oil and gas or the products therefrom.

  

9

  

 

	
K.

	
Entire Agreement. This Agreement constitutes the entire, final agreement of the Parties on all matters that are the subject of this Agreement, and this Agreement fully supersedes and replaces any and all prior agreements or understandings, written or oral, between the Parties  relating to the Lease.

 

	
L.

	
Multiple Counterparts. This Agreement may be executed in counterparts by the undersigned and all such counterparts so executed shall together be deemed to constitute one final agreement, as if one document had been signed by all parties hereto; and each such counterpart shall be deemed to be an original, binding the party subscribed thereto, and multiple signature pages (including faxes or other electronic delivery of signature pages) affixed to a single copy of this Agreement shall be deemed to be a fully executed original Agreement. It shall be sufficient in making proof of this Agreement to produce or account for a facsimile or pdf copy of an executed counterpart of this Agreement.

 

	
M.

	
Fees & Costs. Each Party will pay its own legal fees and costs associated with this transaction.

 

	
N.

	
Joint Drafting. The Parties agree that this Agreement was drafted jointly and that this Agreement shall not be construed against the other because of their involvement in drafting this Agreement.

 

	
O.

	
Non-Waiver. No exercise or failure to exercise or delay by any Party in exercising any right or remedy under this Agreement shall constitute a waiver by such Party of such right or remedy in any other instance or any other right or remedy.

 

	
P.

	
Amendment & Modification.   Any amendment or modification to this Agreement must be in writing and executed by the Parties; provided that any such amendment or modification shall require the approval of Gastar if such amendment or modification would affect any of Gastar’s rights, interests, duties, or obligations under this Agreement.

 

	
Q.

	
No Assignments. No obligation or right arising under this Agreement may be assigned or delegated by any Party without the express written consent of the other Parties, which consent shall not be unreasonably withheld.  Any assignment made without prior written consent is void ab initio.

 

	
R.

	
Future Documents.  The Parties shall perform any and all acts and execute and deliver any and all documents that may be or become necessary and proper to give effect to and carry out the terms hereof.

 

	
S.

	
No Third-Party Beneficiary.  Any agreement to perform any obligations herein contained, express or implied, shall be only for the benefit of the Parties and their respective heirs, successors, assigns and legal representatives, and such agreements and obligations shall not inure to the benefit of any indebtedness or any other party, whatsoever; provided however  that Gastar shall be deemed a third party beneficiary of this Agreement with respect to Sections B.4, X, and Y.

  

10

  

 

	
T.

	
Binding Effect. The Parties may plead this Agreement as a full and complete defense to, and may use this Agreement as the basis for, an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted by the other Party, or by the other Party’s respective representatives, agents, executors, decedents, trustees, beneficiaries, successors, heirs, attorneys and assigns, in contravention or breach of this Agreement.

 

	
U.

	
Severability.  Each part of this Agreement is intended to be several.  If any term, covenant, condition or provision violates any applicable law or is declared illegal, invalid or unenforceable, in whole or in part, by a court of last resort, such provision shall be enforced to the greatest extent permitted by law, and such a declaration shall not affect the legality, validity or enforceability of the remaining parts of this Agreement, all of which shall remain in full force and effect.

 

	
V.

	
Review by Counsel.  The Parties have had sufficient opportunity to read this Agreement and to consult with legal counsel of their choosing regarding the meaning and effect of this Agreement and its rights and liabilities under it. Accordingly, each Party and signatory to this Agreement has entered into it freely, voluntarily and without duress.

 

	
W.

	
Disclaimers.  THE PARTIES AGREE THAT, TO THE EXTENT REQUIRED BY APPLICABLE LAW TO BE OPERATIVE, THE DISCLAIMERS OF WARRANTIES CONTAINED IN THIS SECTION ARE “CONSPICUOUS” DISCLAIMERS FOR THE PURPOSES OF ANY APPLICABLE LAW, RULE OR ORDER.  THE EXPRESS REPRESENTATIONS AND WARRANTIES OF SELLER CONTAINED IN THIS AGREEMENT, AND THE TITLE WARRANTIES IN THE CONVEYANCES OF THE CONVEYED INTERESTS TO BE DELIVERED AT EACH CLOSING, (COLLECTIVELY “SELLER’S’ WARRANTIES”) ARE EXCLUSIVE AND ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR OTHERWISE.  SELLER EXPRESSLY DISCLAIMS ANY AND ALL SUCH OTHER REPRESENTATIONS AND WARRANTIES.  WITHOUT LIMITATION OF THE FOREGOING AND EXCEPT FOR SELLER’S WARRANTIES, THE CONVEYED INTERESTS SHALL BE CONVEYED PURSUANT HERETO WITHOUT (A) ANY WARRANTY OR REPRESENTATION, WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, RELATING TO (I) TITLE TO THE CONVEYED INTERESTS, THE CONDITION, QUANTITY, QUALITY, FITNESS FOR A PARTICULAR PURPOSE, CONFORMITY TO THE MODELS OR SAMPLES OF MATERIALS OR MERCHANTABILITY OF ANY EQUIPMENT OR ITS FITNESS FOR ANY PURPOSE, (II) THE ACCURACY OR COMPLETENESS OF ANY DATA, REPORTS, RECORDS, PROJECTIONS, INFORMATION OR MATERIALS NOW, HERETOFORE OR HEREAFTER FURNISHED OR MADE AVAILABLE TO PURCHASER IN CONNECTION WITH THIS AGREEMENT, (III) PRICING ASSUMPTIONS, OR QUALITY OR QUANTITY OF HYDROCARBON RESERVES (IF ANY) ATTRIBUTABLE TO THE CONVEYED INTERESTS OR THE ABILITY OR POTENTIAL OF THE CONVEYED INTERESTS TO PRODUCE HYDROCARBONS, (IV) THE ENVIRONMENTAL CONDITION OF THE CONVEYED INTERESTS, BOTH SURFACE AND SUBSURFACE, (V) ANY IMPLIED OR EXPRESS WARRANTY OF NON-INFRINGEMENT, OR (VI) ANY OTHER MATTERS CONTAINED IN ANY MATERIALS FURNISHED OR MADE AVAILABLE TO PURCHASER BY SELLER OR BY SELLER’S AGENTS OR REPRESENTATIVES, OR (B) ANY OTHER EXPRESS, IMPLIED, STATUTORY OR OTHER WARRANTY OR REPRESENTATION WHATSOEVER.  PURCHASER SHALL HAVE INSPECTED, OR WAIVED (AND UPON EACH CLOSING SHALL BE DEEMED TO HAVE WAIVED) ITS RIGHT TO INSPECT, THE CONVEYED INTERESTS FOR ALL PURPOSES AND SATISFIED ITSELF AS TO THEIR PHYSICAL AND ENVIRONMENTAL CONDITION, BOTH SURFACE AND SUBSURFACE, INCLUDING BUT NOT LIMITED TO CONDITIONS SPECIFICALLY RELATED TO THE PRESENCE, RELEASE OR DISPOSAL OF HAZARDOUS SUBSTANCES, SOLID WASTES, ASBESTOS AND OTHER MAN MADE FIBERS.  PURCHASER IS RELYING SOLELY UPON THE TERMS OF THIS AGREEMENT AND ITS OWN INSPECTION OF THE CONVEYED INTERESTS, AND PURCHASER SHALL ACCEPT ALL OF THE SAME IN THEIR “AS IS, WHERE IS” CONDITION.

  

11

  

 

	
X.

	
Gastar Prospect Claims. The “Gastar Prospect Claims” refer to all existing and future, known and unknown, claims, demands, and causes of action for all existing and future, known and unknown, damages, attorneys' fees, costs, expenses, losses, and remedies related to the Participation Agreement insofar as such claims, demands and causes of action relate to the Gastar Prospect Area and the Assets.  Under this definition, a "Gastar Prospect Claim" includes, but is not limited to, all claims, demands, and causes of action of any nature, whether in contract or in tort, or arising under or by virtue of any statute or regulation for past, present, future, known, and unknown losses and/or damages of any kind, including but not limited to the following:  all actual damages, all consequential damages, all exemplary and punitive damages, all penalties of any kind, and any prejudgment and post judgment interest.  This definition further includes, but is not limited to, all elements of damages, all remedies, all claims, demands, and causes of action that are now recognized by law or that may be created or recognized in the future by any manner, including without limitation by statute, regulation, or judicial decision.

 

	
Y.

	
Release of Gastar.  Effective upon the Effective Date, each Seller, on its own behalf and on behalf of its partners, directors, shareholders, trustees, parents, subsidiaries, insurers, affiliates, owners, predecessors, successors, assigns, and any person (natural, an entity, or otherwise) claiming, by, through, or under such Seller, does hereby fully and forever release, discharge, hold harmless, and acquit Gastar, together with its past, present, and future officers, directors, shareholders, members, owners, employees, agents, representatives of any kind, affiliates, partners, joint venturers, parents, subsidiaries, predecessors, successors, assigns, affiliates, related entities, attorneys, accountants, and insurers from any Gastar Prospect Claim that such Seller has or had as of the Effective Date or could have in the future relating to any events that occurred prior to the Effective Date.  For the avoidance of doubt, this release only applies to the Assets, and does not bar any action to enforce this Agreement.

 

 

 

 

 

 

 

 

 

  

12

  

	
Z. 

	
Release of Purchaser.  Effective upon the Effective Date, each Seller, on its own behalf and on behalf of its partners, directors, shareholders, trustees, parents, subsidiaries, insurers, affiliates, owners, predecessors, successors, assigns, and any person (natural, an entity, or otherwise) claiming, by, through, or under such Seller, does hereby fully and forever release, discharge, hold harmless, and acquit Purchaser, together with its past, present, and future officers, directors, shareholders, members, owners, employees, agents, representatives of any kind, affiliates, partners, joint venturers, parents, subsidiaries, predecessors, successors, assigns, affiliates, related entities, attorneys, accountants, and insurers from any Gastar Prospect Claim that such Seller has or had as of the Effective Date or could have in the future relating to any events that occurred prior to the Effective Date.  For the avoidance of doubt, this release only applies to the Assets, and does not bar any action to enforce this Agreement.

 

	
AA.

	
Release of Seller.  Effective upon the Effective Date, Purchaser and Gastar, each on its own behalf and on behalf of its partners, directors, shareholders, trustees, parents, subsidiaries, insurers, affiliates, owners, predecessors, successors, assigns, and any person (natural, an entity, or otherwise) claiming, by, through, or under Purchaser and/or Gastar, does hereby fully and forever release, discharge, hold harmless, and acquit Purchaser, together with its past, present, and future officers, directors, shareholders, members, owners, employees, agents, representatives of any kind, affiliates, partners, joint venturers, parents, subsidiaries, predecessors, successors, assigns, affiliates, related entities, attorneys, accountants, and insurers from any Gastar Prospect Claim that Purchaser and/or Gastar has or had as of the Effective Date or could have in the future relating to any events that occurred prior to the Effective Date.  For the avoidance of doubt, this release only applies to the Assets, and does not bar any action to enforce this Agreement.

 

 

 

 

 

INTENTIONALLY BLANK—SIGNATURE PAGES FOLLOW

 

 

 

 

 

 

 

 

 

 

 

  

13

  

AGREED AND EXECUTED as of the Effective Date:

 

 

 

Torchlight Energy Resources, Inc.

 

 

/s/ Willard McAndrew III

Willard McAndrew III, COO

 

 

 

Torchlight Energy, Inc.

 

 

/s/ Willard McAndrew III

Willard McAndrew III, COO

 

 

 

Husky Ventures, Inc.

 

 

 

/s/ Charles Long                                                                           

Charles Long, CEO

 

 

 

 

 

 

 

 

 

 

 

 

14

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