Document:

Exhibit 10.1

 

THIS SUBSCRIPTION AGREEMENT IS EXECUTED
IN RELIANCE UPON THE EXEMPTION PROVIDED BY SECTION 4(2) AND REGULATION D, RULE 506 FOR TRANSACTIONS NOT INVOLVING A PUBLIC OFFERING
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THIS OFFERING IS BEING MADE TO ACCREDITED INVESTORS
PURSUANT TO REGULATION D PROMULGATED UNDER THE SECURITIES ACT. NONE OF THE SECURITIES TO WHICH THIS SUBSCRIPTION RELATES HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD,
DIRECTLY OR INDIRECTLY, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION D OR UNDER THE SECURITIES ACT, PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.
IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE SECURITIES ACT.

 

PLEASE PRINT:

 

	NAME OF SUBSCRIBER:	 	 
	 	 	 
	PRINCIPAL AMOUNT OF SECURITIES PURCHASED: 	USD$	 

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement
(this “Agreement”) is being delivered to you in connection with your investment in shares, par value USD$0.008
per share (the “Securities”) of China Ceramics Co., Ltd., a publicly-traded company registered under the laws
of the British Virgin Islands (the “Company”) in connection with the private placement of such Securities. This
Offering (as defined below) will continue until the earlier of: (i) July 31, 2017 or (ii) the Company’s receipt of the purchase
consideration for the Securities in the total amount of USD$[_], unless extended without notice by the Company for additional thirty
(30) days (the “Termination Date”). All funds received in the Offering shall be, upon fulfillment of the other
conditions precedent set forth herein, delivered to the Company, at which time the Securities subscribed for shall be delivered,
subject to the terms and provisions hereof and as further described below, to the Investor.

 

		1.	Subscription and Purchase Price

 

(a)          Subscription.
Subject to the conditions set forth in Section 2 hereof, the undersigned hereby subscribes for and agrees to purchase the
number of Securities indicated above on the terms and conditions described herein. The principal amount of the Securities purchased
is USD$[_], which purchase price may be paid in accordance with payment instructions set forth in Schedule I. The Company
and the Investor understand and agree that in order for the Company to remain in compliance with the Nasdaq Stock Market continued
listing requirements, the total number of Securities which may be sold by the Company in this Offering (as defined below) shall
not exceed in the aggregate 19.99% of the number of the Company’s shares issued and outstanding as of the date of the Closing
(as defined below).

 

Subscriptions for lesser
amounts may be accepted at the discretion of the Company. The Company may accept this Subscription Agreement at any time for all
or any portion of the Securities subscribed for by executing a copy hereof as provided and notifying me within a reasonable time
thereafter. In the event of the rejection of this subscription, the Investor’s subscription payment will be promptly returned
to him, her or it without interest or deduction and this Subscription Agreement shall have no force or effect.

 

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(b)  Purchase of
Securities. The undersigned understands and acknowledges that the purchase price to be remitted to the Company in exchange
for the Securities shall be USD$[_], for an aggregate purchase price as set forth on Page 10 hereof (the “Purchase Price”).
The undersigned understands and agrees that, subject to Section 2 hereof and applicable laws, by executing this Agreement,
he, she or it is entering into a binding agreement.

 

		2.	Acceptance, Offering Term and Closing Procedures

 

(a)          Acceptance
or Rejection. The obligation of the undersigned to purchase the Securities shall, subject to the investor accreditation process,
applicable securities laws and the closing conditions contained in this Section, be irrevocable and the undersigned shall be legally
bound to purchase the Securities subject to the terms set forth in this Agreement.

 

(b)          Closing.
The closing (“Closing”) of this offering may occur any time and from time to time before the Termination Date.
There is no minimum offering. The Securities subscribed for herein shall not be deemed issued to or owned by me until one copy
of this Subscription Agreement has been executed by the Investors and countersigned by the Company and the Closing with respect
to such Securities has occurred. The Investor understands and acknowledges that (i) no fees or commission are paid in connection
with the purchase of the Securities, and (ii) the Company will utilize the proceeds of this purchase for general corporate and
working capital purposes.

 

		3.	Investor’s Representations and Warranties

 

The undersigned hereby
acknowledges, agrees with and represents and warrants to the Company, as follows:

 

(a)          Because this Offering
is limited to accredited investors as defined in Section 2(15) of the Securities Act, and Rule 501 promulgated thereunder, in reliance
upon the exemption contained in Section 4(2) of the Securities Act and applicable state securities laws, the Investor understands
that the Securities are being sold without registration under the Securities Act. The Investor has received and reviewed all information
and materials regarding the Company that he, she or it has requested, including, without limitation, all reports and other filings
made by the Company with the Securities and Exchange Commission (the “SEC”) that are available through EDGAR
at the SEC’s website (www.sec.gov), including, but not limited to: (i) the Company’s Annual Report on Form 20-F for
the year ended December 31, 2016, (ii) the Company’s GAAP financial information contained in Exhibit 99.1 of the Company’s
Current Reports on Form 6-K furnished to the Commission on June 2, September 28 and December 20, 2016, respectively, (iii) the
Company’s Current Reports on Form 6-K furnished to the Commission on February 8, March 8, March 24, April 29, May 6, June
3, June 30, September 28, December 20, 2016, respectively, and April 4, 2017, with any amendments to any of the foregoing, as well
as the risk factors relating to the Company and purchase of the Securities set forth in the Company’s publicly available
filings, all of which documents are set forth in Schedule II to this agreement.

 

(b)          The
undersigned has full power and authority to enter into and deliver this Agreement and to perform the obligations hereunder, and
the execution, delivery and performance of this Agreement has been duly authorized, if applicable, and this Agreement constitutes
a valid and legally binding obligation of the undersigned.

 

(c)          The
undersigned acknowledges his, her or its understanding that the offering and sale of the Securities is intended to be exempt from
registration under the Securities Act of 1933, as amended (the “Securities Act”), by virtue of Section 4(2)
of the Securities Act and the provisions of Regulation D promulgated thereunder (“Regulation D”). In furtherance
thereof, the undersigned represents and warrants to the Company as follows:

 

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(i)          The
undersigned realizes that the basis for the exemption from registration may not be available if, notwithstanding the undersigned’s
representations contained herein, the undersigned is merely acquiring the Securities for a fixed or determinable period in the
future, or for a market rise, or for sale if the market does not rise. The undersigned does not have any such intention.

 

(ii)         The
undersigned is acquiring the Securities solely for the undersigned’s own beneficial account, for investment purposes, and
not with view to, or resale in connection with, any distribution of the Securities.

 

(iii)        The
undersigned has the financial ability to bear the economic risk of his, her or its investment, has adequate means for providing
for its current needs and contingencies, and has no need for liquidity with respect to the investment in the Company.

 

(iv)        The
undersigned and the undersigned’s attorney, accountant, purchaser representative and/or tax advisor, if any (collectively,
“Advisors”), have received, carefully reviewed and understand the information contained in various documents
and agreements provided by the Company, together with all appendices and exhibits thereto (as such documents may be amended or
supplemented, the “Transaction Documents”), relating to the Offering.

 

(v)         The
undersigned (together with his, her or its Advisors, if any) has such knowledge and experience in financial and business matters
as to be capable of evaluating the merits and risks of the prospective investment in the Securities. If other than an individual,
the undersigned also represents it has not been organized solely for the purpose of acquiring the Securities.

 

(d)          The
information in the Confidential Investor Questionnaire attached hereto as Exhibit A and completed and executed by the undersigned
is true and accurate in all respects, and the undersigned is an “accredited investor,” as that term is defined in Rule
501(a) of Regulation D.

 

(e)          The
undersigned is not relying on the Company or its affiliates or agents with respect to economic considerations involved in this
investment. The undersigned has relied on the advice of, or has consulted with, only his, her or its Advisors. Each Advisor, if
any, is capable of evaluating the merits and risks of an investment in the Securities, and each Advisor, if any, has disclosed
to the undersigned in writing (a copy of which is annexed to this Agreement) the specific details of any and all past, present
or future relationships, actual or contemplated, between the Advisor or any affiliate or sub-agent thereof.

 

(f)          The
undersigned represents, warrants and agrees that he, she or it will not sell or otherwise transfer the Securities without registration
under the Securities Act or an exemption therefrom, and fully understands and agrees that the undersigned must bear the economic
risk of his, her or its purchase because, among other reasons, the Securities have not been registered under the Securities Act
or under the securities laws of any state and, therefore, cannot be resold, pledged, assigned or otherwise disposed of unless they
are subsequently registered under the Securities Act and under the applicable securities laws of such states, or an exemption from
such registration is available. In particular, the undersigned is aware that the Securities are “restricted securities,”
as such term is defined in Rule 144 promulgated under the Securities Act (“Rule 144”), and they may not be sold
pursuant to Rule 144 unless all of the conditions of Rule 144 are met. The undersigned understands that any sales or transfers
of the Securities are further restricted by state securities laws and the provisions of this Agreement.

 

(g)          The
undersigned understands and agrees that the certificates for the Securities shall bear substantially the following legend until
(i) the Securities shall have been registered under the Securities Act and effectively disposed of in accordance with a registration
statement that has been declared effective or (ii) in the opinion of counsel for the Company, the Securities may be sold without
registration under the Securities Act, as well as any applicable “blue sky” or state securities laws:

 

    	 	3	 

     

    

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE
SECURITIES LAWS. SUCH SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT PURPOSES AND MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER
SALE, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED BY THE ISSUER WITH THE U.S.
SECURITIES AND EXCHANGE COMMISSION COVERING SUCH SECURITIES UNDER THE SECURITIES ACT OR AN OPINION OF COUNSEL SATISFACTORY TO THE
ISSUER THAT SUCH REGISTRATION IS NOT REQUIRED.

 

(h)          No
representations or warranties have been made to the undersigned by the Company or any of its respective officers, employees, counsel,
agents, sub-agents, affiliates or subsidiaries, other than any representations of the Company contained in the transaction agreements
in connection with the Offering, and in subscribing for the Securities the undersigned is not relying upon any representations
other than those contained in the transaction agreements in connection with the Offering.

 

(i)          The
undersigned understands and acknowledges that his, her or its purchase of the Securities is a speculative investment that involves
a high degree of risk and the potential loss of the undersigned’s entire investment and has carefully read and considered
the matters set forth in the agreements in connection with the Offering, and, in particular, acknowledges that the Company has
a limited operating history.

 

(j)          The
undersigned’s overall commitment to investments that are not readily marketable is not disproportionate to the undersigned’s
net worth, and an investment in the Securities will not cause such overall commitment to become excessive.

 

(k)          Neither
the SEC nor any state securities commission has approved the Securities or passed upon or endorsed the merits of the Offering or
confirmed the accuracy or determined the adequacy of the in the agreements in connection with the Offering. The agreements in connection
with the Offering have not been reviewed by any federal, state or other regulatory authority. Any representation to the contrary
is a crime.

 

(l)          The
undersigned and his, her or its Advisors, if any, have had a reasonable opportunity to ask questions of and receive answers from
a person or persons acting on behalf of the Company concerning the offering of the Securities and the business, financial condition,
results of operations and prospects of the Company, and all such questions have been answered to the full satisfaction of the undersigned
and his, her or its Advisors, if any. The undersigned believes that the investment in the Securities is suitable for him, her or
it based upon his, her or its investment objectives and financial needs, and he, she or it has adequate means for providing for
his, her or its current financial needs and contingencies and have no need for liquidity with respect to such investment in the
Company.

 

(m)          The
undersigned is unaware of, is in no way relying on, and did not become aware of the offering of the Securities through or as a
result of, any form of general solicitation or general advertising including, without limitation, any article, notice, advertisement
or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or electronic
mail over the Internet, in connection with the offering and sale of the Securities and is not subscribing for Securities and did
not become aware of the offering of the Securities through or as a result of any seminar or meeting to which the undersigned was
invited by, or any solicitation of a subscription by, a person not previously known to the undersigned in connection with investments
in securities generally.

 

    	 	4	 

     

    

 

(n)          The undersigned
has taken no action which would give rise to any claim by any person for brokerage commissions, finders, fees or the like relating
to this Agreement or the transactions contemplated hereby.

 

(o)          The undersigned
is not relying on the Company or any of its respective employees, agents or sub-agents with respect to the legal, tax, economic
and related considerations of an investment in the Securities, and the undersigned has relied on the advice of, or has consulted
with, only his, her or its own Advisors.

 

(p)          The
undersigned acknowledges that any estimates or forward-looking statements or projections included in the Transaction Documents
were prepared by the future management of the Company in good faith, but that the attainment of any such projections, estimates
or forward-looking statements cannot be guaranteed by the Company or its respective management and should not be relied upon.

 

(q)          No
oral or written representations have been made, or oral or written information furnished, to the undersigned or his, her or its
Advisors, if any, in connection with the offering of the Securities which are in any way inconsistent with the information contained
in the agreements in connection with the Offering.

 

(r)          The
Investor is an “accredited investor” as defined in Section 2(15) of the Securities Act and in Rule 501 promulgated
thereunder and have attached the completed Confidential Investor Questionnaire to indicate an appropriate “accredited investor”
category. The Investor can bear the entire economic risk of the investment in the Securities for an indefinite period of time and
is knowledgeable about and experienced in investments in the equity securities of early stage publicly traded companies. The Investor
is not acting as an underwriter or a conduit for sale to the public or to others of unregistered securities, directly or indirectly,
on behalf of the Company or any person with respect to such securities.

 

(s)          The
Investor is not a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”); the Investor is not
and has not, for a period of 12 months prior to the date of this Subscription Agreement, been affiliated or associated with any
company, firm, or other entity which is a member of FINRA; and the Investor does not own any stock or other interest in any member
of FINRA (other than interests acquired in open market purchases).

 

(t)          The
information contained in the Confidential Investor Questionnaire, as well as any information which the Investor has furnished to
the Company with respect to his, her or its financial position and business experience, is correct and complete as of the date
of this Subscription Agreement and, if there should be any material change in such information prior to the Closing of the offering,
the Investor will furnish such revised or corrected information to the Company.

 

		4.	Registration Rights

 

No
later than 270 days following the Closing, the Company shall file with the SEC, a registration statement (the “Resale
Registration Statement”) covering the resale to the public by the Investors of the Securities purchased in this Offering
(the “Registrable Securities”). Notwithstanding the foregoing, if the SEC informs the Company that any of the
Registrable Securities to be covered by the Resale Registration Statement cannot, as a result of the application of Rule 415 of
the Securities Act, be registered for resale as a secondary offering on a single registration statement, the number of Registrable
Securities to be covered by the Resale Registration Statement shall be reduced by such number of shares (if any) as may be required
by the SEC (the “Reduction Securities”), and in such event, the Company shall file a subsequent registration
statement, as described above, as soon as practicable thereafter covering the Reduction Securities (the “Reduction Securities
Registration Statement”). The Company shall use its best commercially reasonable efforts to cause the Resale Registration
Statement and the Reduction Securities Registration Statement, if any, to be declared effective by the SEC as soon as practicable
after their respective initial filing dates and shall cause the Resale Registration Statement and the Reduction Securities Registration
Statement, if any, to remain effective for at least twelve (12) months. All fees, costs and expenses of and incidental to any such
registration, including, without limitation, all registration, filing, and FINRA fees, printing expenses, fees and disbursements
of counsel and accountants for the Company shall be paid by the Company. Fees and disbursements of counsel and accountants for
the holders of Registrable Securities and any other expenses incurred by such holders not expressly included above shall be borne
by such holders.

 

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If
Registrable Securities held by or issuable to any holder of Registrable Securities are included in a registration pursuant to the
provisions of this Section, each such holder of Registrable Securities will, severally and not jointly, indemnify and hold harmless
the Company, its directors and officers, any controlling person and any underwriter from and against, and will reimburse the Company,
its directors and officers, any controlling person and any underwriter with respect to, any and all loss, damage, liability, cost
or expense to which parent or any controlling person and/or any underwriter may become subject under the Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses are caused by any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, any prospectus contained therein or any amendment or supplement thereto, or arise
out of or are based upon the omission or alleged omission to state therein 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, in each case to the extent,
but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by or on behalf of such holder specifically for use in the preparation
thereof. The Company will indemnify and hold harmless each holder of Registrable Securities and such holder’s directors and
officers, managers and members, any controlling person and any underwriter (collectively, “Holder Indemnitees”)
from and against, and will reimburse such Holder Indemnitees with respect to, any and all loss, damage, liability, cost or expense
to which any such Holder Indemnitee may become subject under the Act or otherwise, insofar as such losses, damages, liabilities,
costs or expenses are caused by (i) any untrue statement or alleged untrue statement of any material fact contained in such registration
statement, any prospectus contained therein or any amendment or supplement thereto, or arise out of or are based upon the omission
or alleged omission to state therein 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, and (ii) any violation by the Company of any federal, state
or common law rule or regulation applicable to the Company and relating to any action or inaction required of the Company in connection
with any such registration; provided that the Company will not be liable under this Section in any such case to the extent, but
only to the extent, that any such untrue statement or alleged untrue statement or omission or alleged omission was so made in reliance
upon and in strict conformity with written information furnished by or on behalf of such holder specifically for use in the preparation
of such registration statement.

 

		5.	Insider Trading Prohibition

 

Until the filing by the
Company of a Current Report on Form 6-K describing, among other things, the Offering, the undersigned hereby agrees to refrain
from (A) engaging in any transactions with respect to the capital stock of the Company or securities exercisable or convertible
into or exchangeable for any shares of capital stock of the Company, and (B) entering into any transaction which would have the
same effect, or entering into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences
of ownership of the capital stock of the Company.

 

		6.	Indemnification.

 

The
Investor hereby agrees to indemnify and hold harmless the Company and its officers, directors, stockholders, employees, agents,
and counsel against any and all losses, claims, demands, liabilities, and expenses (including reasonable legal or other expenses,
including reasonable attorneys’ fees) incurred by each such person in connection with defending or investigating any such
claims or liabilities, whether or not resulting in any liability to such person, to which any such indemnified party may become
subject under the Securities Act, under any other statute, at common law or otherwise, insofar as such losses, claims, demands,
liabilities and expenses (a) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact
made by me and contained in this Subscription Agreement or Confidential Investor Questionnaire, or (b) arise out of or are based
upon any breach by the Investor of any representation, warranty, or agreement made by the Investor contained herein or therein..

 

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		7.	Notices to Subscribers

 

THE SECURITIES HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OR THE SECURITIES LAWS OF ANY STATE AND ARE BEING OFFERED AND SOLD IN RELIANCE ON EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SEC, ANY STATE SECURITIES COMMISSION OR OTHER REGULATORY AUTHORITY, NOR HAVE ANY OF THE FOREGOING AUTHORITIES PASSED UPON OR
ENDORSED THE MERITS OF THIS OFFERING OR THE ACCURACY OR ADEQUACY OF THE OFFERING DOCUMENTATION. ANY REPRESENTATION TO THE CONTRARY
IS UNLAWFUL.

 

IN MAKING AN INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE PERSON OR ENTITY CREATING THE SECURITIES AND THE TERMS OF THE OFFERING,
INCLUDING THE MERITS AND RISKS INVOLVED. THE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES COMMISSION
OR REGULATORY AUTHORITY. FURTHERMORE, THE FOREGOING AUTHORITIES HAVE NOT CONFIRMED THE ACCURACY OR DETERMINED THE ADEQUACY OF THE
OFFERING DOCUMENTS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE UNITS ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY
AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT, AND THE APPLICABLE STATE SECURITIES
LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE MADE AWARE THAT THEY ARE REQUIRED TO BEAR THE FINANCIAL
RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.

 

THE PRESENCE OF A LEGEND
FOR ANY GIVEN STATE REFLECTS ONLY THAT A LEGEND MAY BE REQUIRED BY THAT STATE AND SHOULD NOT BE CONSTRUED TO MEAN AN OFFER OR SALE
MAY BE MADE IN ANY PARTICULAR STATE. THE OFFERING DOCUMENTS MAY BE SUPPLEMENTED BY ADDITIONAL STATE LEGENDS. IF YOU ARE UNCERTAIN
AS TO WHETHER OR NOT OFFERS OR SALES MAY BE LAWFULLY MADE IN ANY GIVEN STATE, YOU ARE ADVISED TO CONTACT THE COMPANY FOR A CURRENT
LIST OF STATES IN WHICH OFFERS OR SALES MAY BE LAWFULLY MADE. AN INVESTMENT IN THIS OFFERING IS SPECULATIVE AND INVOLVES A HIGH
DEGREE OF FINANCIAL RISK. ACCORDINGLY, PROSPECTIVE INVESTORS SHOULD CONSIDER ALL OF THE RISK FACTORS DESCRIBED HEREIN.

 

		8.	Miscellaneous Provisions

 

(a)          Confidential
Information. The subscriber agrees that no portion of the Confidential Information (as defined below) shall be disclosed to
third parties, except as may be required by law, without the prior express written consent of the Company; provided, however,
that the subscriber may share such information with such of its officers and professional advisors as may need to know such information
to assist the subscriber in its evaluation thereof on the condition that such parties agree to be bound by the terms hereof. “Confidential
Information” means the existence and terms of this Agreement, the transactions contemplated hereby, and the disclosures
and other information contained herein or in the agreements in connection with the Offering, excluding any disclosures or other
information that are publicly available.

 

(b)          Modification.
Neither this Agreement, nor any provisions hereof, shall be waived, modified, discharged or terminated except by an instrument
in writing signed by the party against whom any waiver, modification, discharge or termination is sought.

 

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(c)          Survival.
The undersigned’s representations and warranties made in this Agreement shall survive the execution and delivery of this
Agreement and the delivery of the Securities.

 

(d)          Notices.
Any party may send any notice, request, demand, claim or other communication hereunder to the undersigned at the address set forth
on the signature page of this Agreement or to the Company at the address set forth above using any means (including personal delivery,
expedited courier, messenger service, fax, ordinary mail or electronic mail), but no such notice, request, demand, claim or other
communication will be deemed to have been duly given unless and until it actually is received by the intended recipient. Any party
may change the address to which notices, requests, demands, claims and other communications hereunder are to be delivered by giving
the other parties written notice in the manner herein set forth.

 

(e)          Binding
Effect. Except as otherwise provided herein, this Agreement shall be binding upon, and inure to the benefit of, the parties
to this Agreement and their heirs, executors, administrators, successors, legal representatives and permitted assigns. If the undersigned
is more than one person or entity, the obligation of the undersigned shall be joint and several and the agreements, representations,
warranties and acknowledgments contained herein shall be deemed to be made by, and be binding upon, each such person or entity
and his or its heirs, executors, administrators, successors, legal representatives and permitted assigns. This Agreement sets forth
the entire agreement and understanding between the parties as to the subject matter thereof and merges and supersedes all prior
discussions, agreements and understandings of any and every nature among them, as to the subject matter hereof.

 

(f)          Assignability.
This Agreement is not transferable or assignable by the undersigned.

 

(g)         Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts of law principles.

 

(h)         Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument.

 

(i)          Further
Assurances. Each of the parties shall execute such documents and perform such further acts (including, without limitation,
obtaining any consents, exemptions, authorizations, or other actions by, or giving any notices to, or making any filings with,
any governmental authority or any other person) as may be reasonably required or desirable to carry out or to perform the provisions
of this Agreement.

 

(j)          Severability.
If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal
or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other
respect and of the remaining provisions hereof shall not be in any way impaired, unless the provisions held invalid, illegal or
unenforceable shall substantially impair the benefits of the remaining provisions hereof.

 

[Remainder of page left intentionally blank
- signature pages follow]

 

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Signature Page to the Subscription Agreement

 

ALL SUBSCRIBERS MUST COMPLETE THIS PAGE

 

IN WITNESS WHEREOF, the undersigned has executed
this Agreement on the ___ day of _______ 2017.

 

	________________________	x $____ 	= $_____________________
	Securities subscribed for	 	     Aggregate Purchase Price

 

Manner in which title is to be held (please check one):

 

	1.	  ̈	Individual	7.	  ̈	
        Trust/Estate/Pension or Profit sharing Plan

        Date Opened:______________

	2.	 ̈	Joint Tenants with Right of Survivorship	8.	 ̈	
        As a Custodian for

        ________________________________

        Under the Uniform Gift to Minors Act of the State of

        ________________________________

	3.	 ̈	Community Property	9.	  ̈	Married with Separate Property
	4.	 ̈	Tenants in Common	10.	 ̈	Keogh
	5.	 ̈	Corporation/Partnership/ Limited Liability Company	11.	 ̈	Tenants by the Entirety
	6.	 ̈	IRA	 	 	 

 

IF MORE THAN ONE SUBSCRIBER, EACH SUBSCRIBER
MUST SIGN.

INDIVIDUAL SUBSCRIBERS MUST COMPLETE PAGE 11.

SUBSCRIBERS WHICH ARE ENTITIES MUST COMPLETE
PAGE 12.

 

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EXECUTION BY NATURAL PERSONS

 

	 
	Exact Name in Which Title is to be Held

 

	 	 	 
	Name (Please Print)	 	Name of Additional Purchaser
	 	 	 
	 	 	 
	Residence: Number and Street	 	Address of Additional Purchaser
	 	 	 
	 	 	 
	City, State and Zip Code	 	City, State and Zip Code
	 	 	 
	 	 	 
	Social Security Number	 	Social Security Number
	 	 	 
	 	 	 
	Telephone Number	 	Telephone Number
	 	 	 
	 	 	 
	Fax Number (if available)	 	Fax Number (if available)
	 	 	 
	 	 	 
	E-Mail (if available)	 	E-Mail (if available)
	 	 	 
	 	 	 
	(Signature)	 	(Signature of Additional Purchaser)

 

ACCEPTED this __ day of _________ 2017, on behalf of the Company.

 

	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	 	10	 

     

    

 

EXECUTION BY SUBSCRIBER WHICH IS AN ENTITY

(Corporation, Partnership, LLC, Trust, Etc.)

	 
	Name of Entity (Please Print)

 

Date of Incorporation or Organization: ____________________________________________

 

State of Principal Office: _______________________________________________________

 

Federal Taxpayer Identification Number:  ___________________________________________

 

	 	 
	Office Address	 
	 	 
	 	 
	City, State and Zip Code	 
	 	 
	 	 
	Telephone Number	 
	 	 
	 	 
	Fax Number (if available)	 
	 	 
	 	 
	E-Mail (if available)	 

 

	By: 	 	 
	 	Name:	 
	 	Title:	 

 

ACCEPTED this ___ day of _________ 2017, on behalf of
the Company.

 

	 	By: 	 
	 	 	Name:
	 	 	Title:

 

    	 	11	 

     

    

 

Exhibit A

 

CONFIDENTIAL INVESTOR QUESTIONNAIRE

 

Purpose of this Questionnaire

 

The Securities of China
Ceramics Co., Ltd., (the “Company”) are being offered in a private offering under the Securities Act of 1933, as amended
(the “1933 Act”), or the securities laws of any state, in reliance on the exemptions contained in Sections 4(2) and
4(6) and Regulation D Rule 506 of the 1933 Act and on similar exemptions under applicable state laws. Under Sections 4(2) and 4(6)
and Regulation D Rule 506 and/or certain state laws, the Company may be required to determine that an individual, or an individual
together with a “purchaser representative,” or each individual equity owner of an investing entity meets certain suitability
requirements before selling the Securities to such individual or entity.  THE COMPANY MAY, AT ITS ELECTION, NOT SELL SECURITIES
TO A SUBSCRIBER WHO HAS NOT COMPLETELY FILLED OUT THIS QUESTIONNAIRE.  This Questionnaire does not constitute an offer to
sell or a solicitation of an offer to buy the Securities or any other security.

 

Instructions

 

One (1) copy of this Questionnaire
should be completed, signed, dated, and delivered to the Company.

 

Please Answer All Questions

 

If the appropriate answer
is “None” or “Not Applicable,” so state.  Please print or type your answers to all questions.  Attach
additional sheets if necessary to complete your answers to any item.

 

Your answers will be kept
strictly confidential at all times; however, the Company may present this Questionnaire to such parties as it deems appropriate,
including its counsel, in order to assure itself that the offer and sale of the Securities will not result in a violation of the
registration provisions of the 1933 Act or a violation of the securities laws of any state.

 

(1)           Please
provide the following personal information:

 

	Name: __________________________________	 	Age:_____________________
	 	 	 
	Residence Address

(including zip code):  ___________________________________________________________
	 	 	 
	Telephone Numbers:	 	 
	 	 	 
	Residence: ______________________________	 	Business: ________________
	 	 	 
	Email Address:____________________________	 	Cell Phone:_______________

 

    	 	12	 

     

    

 

(2)          Please
describe your present or most recent business or occupation and indicate such information as the nature of your employment, the
principal business of your employer, the principal activities under your management or supervision, and the scope (e.g., dollar
volume, industry rank, etc.) of such activities.

 

(3)          Please
provide the following information concerning your financial experience.

 

3.1           Indicate
by check mark which of the following categories best describes the extent of your prior experience in the areas of investment listed
below:

 

	 	
        Substantial

        Experience
	 	
        Limited

        Experience
	 	
        No

        Experience

	Marketable Securities	 	 	 	 	 
	Private Placements	 	 	 	 	 
	Limited Partnerships	 	 	 	 	 
	Initial Public Offering	 	 	 	 	 

 

3.2           Indicate
by check mark whether or not you maintain any of the following types of accounts over which you, rather than a third party, exercise
investment discretion, and the length of time you have maintained each type of account.

 

	Securities (cash)	Yes   ̈	 	No   ̈
	 	 	 	 
	Number of years	_____	 	 
	 	 	 	 
	Securities (margin)	Yes   ̈	 	No   ̈
	 	 	 	 
	Number of years	______	 	 

 

(4)          I am an
accredited investor (as defined in Rule 501 (a) of Reg. D) because (check each appropriate description):

 

		  ̈	I am a natural person whose individual net worth, or joint net worth with my spouse, exceeds $1,000,000 (excluding the value
of my residence).

 

		  ̈	I am a natural person who had individual income exceeding $200,000 in each of the two most recent years or joint income with
my spouse exceeding $300,000 in each of those years and I have a reasonable expectation of reaching the same income level in the
current year.

 

		  ̈	I am a broker-dealer registered pursuant to Section 15 of the Securities Exchange Act of 1934.

 

		  ̈	I am an organization described in Section 501(c)(3) of the Internal Revenue Code, not formed for the specific purpose of acquiring
the Securities, with total assets exceeding $5,000,000.

 

    	 	13	 

     

    

 

		  ̈	I am a corporation, Massachusetts or similar business trust or partnership, not formed for the specific purpose of acquiring
the Securities, with total assets exceeding $5,000,000.

 

		  ̈	I am a trust, not formed for the specific purpose of acquiring the Securities, with total assets exceeding $5,000,000 and whose
purchase is directed by a “sophisticated person,” as defined in Rule 506(b)(2)(ii) of Reg. D.

 

(For the purposes of this questionnaire, a “sophisticated
person” means any person who has such knowledge and experience in financial and business matters that he or she is capable
of evaluating the merits and risks of the prospective investment.)

 

		  ̈	I am an employee benefit plan within the meaning of the Employee Retirement Income Security Act of 1974 and (i) investment
decisions for such plan are made by a plan fiduciary, as defined in Section 3(21) of such Act, which is a bank, savings and loan
association, insurance company or registered investment advisor or (ii) such plan has total assets exceeding $5,000,000 or (iii)
if a self directed plan, investment decisions are made solely by accredited investors.

 

		  ̈	I am an entity in which all of the equity owners are accredited investors.

 

(5)          Check,
if appropriate:

 

		  ̈	I hereby represent and warrant that I have such knowledge and experience in financial and business matters that I am capable
of evaluating the merits and risks of any prospective investment in the Company.

 

(6)          If you
did not check the box to Question 5, please answer the following additional questions:

 

6.1           Please
describe any pre-existing personal or business relationship that you have with the Company or any of its officers and directors.

 

6.2           Please
describe any business or financial experience that you have had that would allow the Company to reasonably conclude that you are
capable of protecting your interests in connection with your prospective investment in the Company.  If none, so state.

 

6.3           If
your answer to Question 6.2 above was “None,” in order to evaluate the merits and risks of the investment, will you
be relying upon the advice of any other person(s) who will be acting as your purchaser representative(s)?  Yes    ̈   No    ̈

 

If “yes,” please identify each such
person and indicate his business address and telephone number in the space below (each such person must complete, and you must
review and acknowledge, a separate purchaser representative questionnaire which will be supplied at your request and which must
be returned to the Company prior to the sale of any Securities to you).

 

(7)          By signing
this Questionnaire, I hereby confirm the following statements:

 

I am aware that the offering of the Securities
will involve securities for which no market currently exists, thereby requiring any investment to be maintained for an indefinite
period of time, and I have no need to liquidate the investment.

 

    	 	14	 

     

    

 

I acknowledge that any
delivery to me of any documentation relating to the Securities prior to the determination by the Company of my suitability as an
investor shall not constitute an offer of the Securities until such determination of suitability shall be made, and I agree that
I shall promptly return all such documentation to the Company upon request.

 

Neither I nor any of my
associates or affiliates: (i) are a member or a person associated with a member firm of FINRA, (ii) own any stock or other securities
of any FINRA member, or (iii) made subordinated loans to any FINRA member.

 

My answers to the foregoing
questions are true and complete to the best of my information and belief, and I will promptly notify the Company of any changes
in the information I have provided.

 

I also understand and agree
that, although the Company will use its best efforts to keep the information provided in answers to this Questionnaire strictly
confidential, the Company may present this Questionnaire and the information provided in answers to it to such parties as it may
deem advisable if called upon to establish the availability under any federal or state securities laws of an exemption from registration
of the private placement or if the contents thereof are relevant to any issue in any action, suit, or proceeding to which the Company
is a party or by which it or they are or may be bound.

 

I realize that this Questionnaire
does not constitute an offer by the Company to sell the Securities but is merely a request for information.

 

	 	 	 
	Printed Name	 	 
	 	 	 
	 	 	 
	Signature	 	 
	 	 	 
	 	 	 
	Social Security Number or	 	 
	 	 	 
	Employee Identification Number	 	 
	 	 	 
	Date and Place Executed:	 	 
	 	 	 
	Date:_________________________________	 	Place:______________________________

 

    	 	15	 

     

    

 

Schedule I

 

Purchase Price Payment Instructions

 

The Purchase Price for
the Securities purchased hereunder shall be paid pursuant to the following wire transfer instructions:

[_]

 

Schedule II

 

SEC Filed Documents

 

    	 	16Exhibit 10.1

 

EXCHANGE AGREEMENT

 

This Exchange Agreement (this “Agreement”) is made and entered into as of July 16, 2017, by and between Marathon Patent Group, Inc. a Nevada corporation (the “Company”), and the holder of warrants to purchase shares of common stock of the Company named on the signature pages hereto (the “Holder”).

 

RECITALS

 

WHEREAS, the Holder currently holds warrants (the “Warrants”) to purchase an aggregate of 760,000 shares of common stock of the Company that the Company issued under a securities purchase agreement dated April 18, 2017 (the “Purchase Agreement”);

 

WHEREAS, the Holder set forth on the signature page hereto desires to exchange the Warrants for shares of common stock of the Company (the “Shares”), such that, subject to the terms and conditions set forth herein, the Holder will be issued (i) one share of common stock for each Warrant being exchanged by such Holder plus (ii) 38,000 shares;

 

NOW, THEREFORE, in consideration of the premises and the agreements set forth below, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows:

 

ARTICLE I

 

Exchange and Waivers

 

Section 1.1                                    Waiver of Certain Rights under Purchase Agreement. Effective upon the date hereof, the Holder hereby irrevocably waives (i) its rights under Section 4.15 of the Purchase Agreement, such that the Holder consents and agrees to any reverse or forward stock split undertaken by the Company since the date of the Purchase Agreement and (ii) any rights of the Holder under Section 4.11 of the Purchase Agreement with respect to any Subsequent Financing (as defined under the Purchase Agreement) of the Company of convertible preferred stock described by the Company in its next proxy statement filed with the Securities and Exchange Commission (the “SEC”) (collectively, the “Waivers”). For the avoidance of doubt, the Waivers are irrevocably effective upon execution of this Agreement and will not be subject to the conditions to Closing set forth in Section 1.4.

 

Section 1.2                                    Exchange of Warrants for Shares.

 

(a)               Upon the terms and subject to the conditions of this Agreement, on the Closing Date (as defined below), the Holder, severally and not jointly, shall exchange the Warrants for the Shares (the “Exchange”), such that Holder will be issued (i) one share of common stock for each Warrant being exchanged by such Holder plus (ii) 38,000 shares (collectively, the “Shares”).

 

(b)                                 Definitions:

 

“Action” means any action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against

 

 

the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign).

 

“Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and a government or any department or agency thereof.

 

“Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened.

 

“Rule 144” means Rule 144 under the Securities Act.

 

“Subsidiaries” means any Person in which the Company, directly or indirectly, (I) owns any of the outstanding capital stock or holds any equity or similar interest of such Person or (II) controls or operates all or any part of the business, operations or administration of such Person, and each of the foregoing, is individually referred to herein as a “Subsidiary.”

 

“Trading Day” means a day on which the principal Trading Market for the Company’s common stock is open for trading.

 

“Trading Market” means any of the following markets or exchanges on which the common stock is listed or quoted for trading on the date in question: the Nasdaq Capital Market, the NYSE MKT, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, or the OTC Markets (or any successors to any of the foregoing).

 

Section 1.3                                    Section 3(a)(9) Exchange.  Pursuant to the Exchange, the Holder irrevocably agrees that the Holder shall return the Warrants to the Company for cancellation in exchange for the issuance by the Company of the Shares in accordance with Section 1.1. The

 

2

 

issuance of the Shares to the Holder in the Exchange will be made without registration of any of the Shares under the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”), in reliance upon the exemption therefrom provided by Section 3(a)(9) of the Securities Act. The Holder acknowledges that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, its representations, warranties, agreements, acknowledgments and understandings set forth herein in order to determine the availability of such exemption and the eligibility of the Holder for the Exchange. Neither the Company nor the Holder shall take any position contrary to this Section 1.3.

 

Section 1.4                                    Closing.  The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on 9:00 a.m., New York City Time, on the first (1st) Trading Day on which the conditions to the Closing set forth in Section 1.5 below are satisfied or, where legally permissible, waived, or at such other time on the same date hereof or such other date as the parties may agree in writing (such time and date, the “Closing Date”). On the Closing Date, the Warrants shall be cancelled. The Company shall issue the Shares in accordance with the terms hereof. On the Closing, Holder shall return the Warrants being exchanged to the Company or execute whatever documents of conveyance or transfer may be necessary or reasonably desirable to confirm to the Company that such Warrants have all been cancelled. On the Closing Date, the Company agrees to deliver to the Holder the Shares.

 

Section 1.5                                    Conditions to Closing.

 

(a)               The obligation of the Holder hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Holder’s sole benefit and may, where legally permissible, be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:

 

(i)                                     The Company shall have duly executed and delivered to the Holder this Agreement.

 

(ii)                                  The representations and warranties of the Company in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Company has complied in all material respects with all the agreements and satisfied all the conditions on its part to be performed or satisfied at or prior to the Closing Date.

 

(iii)                               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 that prohibits the consummation of any of the transactions contemplated by this Agreement.

 

(iv)                              The Exchange shall have been duly approved by the Company’s shareholders.

 

(b)               The obligation of the Company hereunder to consummate the transactions contemplated hereby at the Closing is subject to the satisfaction, at or before the Closing Date, of each of the following conditions, provided that these conditions are for the Company’s sole benefit

 

3

 

and may, where legally permissible, be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:

 

(i)                                     The representations and warranties of the Holder in this Agreement shall be true and correct in all material respects on and as of the Closing Date with the same effect as if made on the Closing Date and the Holder shall have complied in all material respects with all the agreements and satisfied all the conditions on their part to be performed or satisfied at or prior to the Closing Date.

 

(ii)                               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 that prohibits the consummation of any of the transactions contemplated by this Agreement.

 

(iii)                               The Exchange shall have been duly approved by the Company’s shareholders.

 

Section 1.6                                    Right of Holder. Notwithstanding any provision in this Agreement to the contrary, the Holder maintains its right to Exercise the Warrants until the Exchange has been approved by the Shareholders.

 

ARTICLE II

 

Representations and Warranties of the Holder

 

The Holder hereby makes the following representations and warranties, each of which is true and correct on and as of the date hereof and the Closing Date:

 

Section 2.1                                    Existence and Power.

 

(a)               The Holder is an individual or, if it is an entity, it is duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization and has the power, authority and capacity to execute and deliver this Agreement, to perform its obligations hereunder, and to consummate the transactions contemplated hereby.

 

(b)               The execution of this Agreement by the Holder and the consummation by the Holder of the transactions contemplated hereby do not and will not constitute or result in a breach, violation, conflict or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license to which the Holder is a party, whether written or oral, express or implied, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Holder or on the part of any other party thereto or cause the acceleration or termination of any obligation or right of the Holder, except for such breaches, conflicts, defaults, rights or violations which would not, individually or in the aggregate, reasonably be expected to have a material adverse effect on the ability of the Holder to perform its obligations hereunder.

 

4

 

Section 2.2                                    Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Holder and constitutes a legal, valid and binding obligation of the Holder, enforceable against the Holder in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

Section 2.3                                    Title to Warrants.  The Holder has good and valid title to the Warrants as set forth on the signature pages hereto, free and clear of any mortgage, lien, pledge, charge, security interest, encumbrance, title retention agreement, option, equity or other adverse claim thereto. The Holder has not, in whole or in part, (i) assigned, transferred, hypothecated, pledged or otherwise disposed of the Warrants or its rights in such Warrants, or (ii) given any person or entity any transfer order, power of attorney or other authority of any nature whatsoever with respect to such Warrants which would limit the Holder’s power to transfer the Warrants hereunder.

 

Section 2.4                                    Investment Decision.  The Holder is an “accredited investor” within the meaning of Rule 501(a)(3) under the Securities Act and was not organized for the purpose of acquiring the Shares. The Holder is knowledgeable, sophisticated and experienced in business and financial matters and has previously invested in securities similar to the Shares. The Holder is able to bear the economic risk of its investment in the Shares and is presently able to afford the complete loss of such investment.

 

The Holder (or its authorized representative) has had the opportunity to review the SEC Reports. The Holder has had such opportunity to ask questions of the Company and its representative and to obtain from representatives of the Company such information as is necessary to permit it to evaluate the merits and risks of its investment in the Company. The Holder has independently, without reliance upon any representatives of the Company and based on such information as the Holder deemed appropriate, made its own analysis and decision to enter into this Agreement. The Holder has had the opportunity to consult with its accounting, tax, financial and legal advisors to be able to evaluate the risks involved in the Exchange pursuant hereto and to make an informed investment decision with respect to such exchange.

 

The Holder acknowledges that the Company is relying on the truth and accuracy of the foregoing representations and warranties in the offering of the Shares to the Holder without having first registered the Shares under the Securities Act.

 

Section 2.5                                    Understandings or Arrangements.  Such Holder is acquiring the Shares as principal for its own account and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Shares (this representation and warranty not limiting such Holder’s right to sell the Shares in compliance with applicable federal and state securities laws). Such Holder understands that the Shares are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring such Shares as principal for his, her or its own account and not with a view to or for distributing or reselling such Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Shares in violation of the Securities Act or any applicable state securities law and has no

 

5

 

direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Holder in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Holder’s right to sell such Holder pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws). The Holder agrees to the imprinting of a legend on the Shares in substantially the following form:

 

THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER SAID ACT.

 

Section 2.6                                    Affiliate Status.  The Holder is not, and has not been during the preceding three months, an “affiliate” of the Company as such term is defined in Rule 144 under the Securities Act.

 

Section 2.7                                    Professional Advice.  With respect to the tax, accounting and other economic considerations involved in the Exchange, the Holder is not relying on the Company or any of its affiliates, and the Holder has carefully considered and has, to the extent the Holder believes such discussion is necessary, discussed with the Holder’s professional legal, tax, accounting and financial advisors the implications of the Exchange for the Holder’s particular tax, accounting and financial situation.

 

Section 2.8                                    No Solicitation.  The Holder was not solicited by anyone on behalf of the Company to enter into this transaction. The Holder has not engaged any third party as broker or finder or incurred or become obligated to pay any broker’s commission or finder’s fee in connection with the transactions contemplated by this Agreement.

 

ARTICLE III

 

Representations, Warranties and Covenants of the Company

 

The Company hereby makes the following representations, warranties, and covenants each of which is true and correct on and as of the date hereof and the Closing Date and shall survive the Closing Date and the transactions contemplated hereby to the extent set forth herein.

 

Section 3.1                                    Existence and Power.

 

(a)               The Company is duly incorporated, validly existing and in good standing under the laws of the state of Nevada, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. The Company has the requisite power and authority to execute and deliver this Agreement, to perform its obligations hereunder and consummate the transactions contemplated hereby. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions

 

6

 

contemplated hereby and thereby, including, without limitation, the issuance of the Shares hereunder and thereunder, have been duly authorized by the Board of Directors of the Company, and, subject to the satisfaction of the closing conditions set forth in this Agreement (including, without limitation, approval of the Exchange by the Company’s shareholders), no further consent, approval or authorization is required by the Company or of its Board of Directors or shareholders in order for the Company to perform its obligations hereunder and thereunder and to consummate the transactions contemplated hereby and thereby, including, without limitation, the issuance of the Shares hereunder and thereunder.

 

(b)               The execution of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (i) do not require the consent, approval, authorization, order, registration or qualification of, or filing with, any governmental authority or court, or body or arbitrator having jurisdiction over the Company, except for any filings required under state securities laws or with the SEC; and (ii) do not and will not constitute or result in a breach, violation or default under any note, bond, mortgage, deed, indenture, lien, instrument, contract, agreement, lease or license, whether written or oral, express or implied, or with the articles of incorporation or bylaws of the Company, or any statute, law, ordinance, decree, order, injunction, rule, directive, judgment or regulation of any court, administrative or regulatory body, governmental authority, arbitrator, mediator or similar body on the part of the Company or on the part of any other party thereto or cause the acceleration or termination of any obligation or right of the Company or any other party thereto, except for such breaches, violations or defaults which would not reasonably be expected to, singly or in the aggregate, result in (i) a material adverse effect on the legality, validity or enforceability of this Agreement, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”)

 

Section 3.2                                    Valid and Enforceable Agreement; Authorization.  This Agreement has been duly executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except that such enforcement may be subject to (a) bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting or relating to enforcement of creditors’ rights generally, and (b) general principles of equity.

 

Section 3.3                                    Valid Issuance of Securities.  The issuance of the Shares is duly authorized and, upon issuance in accordance with the terms of this Agreement, the Shares will be validly issued, fully paid and non-assessable. Assuming the accuracy of the representations of the Holder in Article II of this Agreement, the Shares will be issued in compliance with all applicable federal and state securities laws. The offer and issuance of the Shares is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof and is exempt under any applicable state securities or “blue sky” laws. The Company has a sufficient number of authorized and unissued shares of common stock to consummate the Exchange.

 

7

 

Section 3.4                                    No Broker.  The Company has not engaged any third party as broker or finder or incurred or become obligated to pay any broker’s commission or finder’s fee in connection with the transactions contemplated by this Agreement.

 

Section 3.5.                                 Capitalization. The capitalization of the Company is as set forth in its SEC Reports. Except as set forth in the SEC Reports, no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by this Agreement. Except as set forth in the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of common stock or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents or capital stock of any Subsidiary. The issuance and sale of the Shares will not obligate the Company or any Subsidiary to issue shares of Common Stock or other securities to any Person (other than the Holder) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Shares except as contemplated under this Agreement.

 

Section 3.6                                    SEC Reports; Financial Statements.  The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension.  As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the SEC with respect thereto as in effect at the time of filing.  Such financial statements have been prepared in accordance with United States generally accepted

 

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accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments.

 

Section 3.7.                                 Material Changes; Undisclosed Events, Liabilities or Developments.  Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholder or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company stock option plans.  The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Shares contemplated by this Agreement no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made.

 

Section 3.8.                                 Litigation.  Except in the ordinary course of the Company’s business, as a patent infringement monetization company, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of this Agreement or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect.  Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the SEC involving the Company or any current or former director or officer of the Company.  The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

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Section 3.9.                                 Labor Relations.  No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. To the knowledge of the Company, the Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 3.10                             Compliance.  Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

 

Section 3.11                             Environmental Laws. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

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Section 3.12                             Regulatory Permits.  The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.

 

Section 3.13                             Title to Assets.  The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries;  (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties and (iii) Liens disclosed in the Company’s SEC Reports. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.

 

Section 3.14                             Intellectual Property.  The Company and the Subsidiaries have, or have rights to use, all material patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). Other than as disclosed in the SEC Reports, none of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect or as is an inherent part of its business as a patent infringement monetization company. To the knowledge of the Company, all such Intellectual Property Rights are enforceable. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 3.15                             Insurance.  The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such

 

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coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

Section 3.16                             Transactions With Affiliates and Employees.  Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

Section 3.17                             Sarbanes-Oxley; Internal Accounting Controls.  The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

Section 3.18.                       Investment Company. The Company is not, and is not an Affiliate of an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

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Section 3.19                             Registration Rights.  Other than the Purchase Agreement Holder or as set forth in the SEC Reports, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

Section 3.20                             Listing and Maintenance Requirements.  The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration.  The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market, except as set forth in the SEC Reports. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

 

Section 3.21.                          Application of Takeover Protections.  The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti takeover provision under the Company’s certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Holder as a result of the Holder and the Company fulfilling their obligations or exercising their rights under this Agreement, including without limitation as a result of the Company’s issuance of the Shares and the Holder’s ownership of the Shares.

 

Section 3.22.                          Disclosure.  Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms that neither it nor any other Person acting on its behalf has provided the Holder or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information which is not otherwise disclosed in the SEC Reports. The Company understands and confirms that the Holder will rely on the foregoing representation in effecting transactions in securities of the Company.  All of the disclosure furnished by or on behalf of the Company to the Holder regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Holder makes no and has made no representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Article II hereof.

 

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Section 3.23                             Tax Status.  Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) 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 and (iii) has set aside on its books provisions reasonably adequate for the payment of all material 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 or of any Subsidiary know of no basis for any such claim.

 

Section 3.24                             Foreign Corrupt Practices.  Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of the FCPA.

 

Section 3.25                             Accountants.  The Company’s accounting firm is BDO USA, LLP.  To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2017.

 

Section 3.26                             Acknowledgment Regarding Holder’s Acquisition of Shares. The Company acknowledges and agrees that the Holder is acting solely in the capacity of an arm’s length party with respect to this Agreement and the transactions contemplated thereby.  The Company further acknowledges that the Holder is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated thereby and any advice given by the Holder or any of its representatives or agents in connection with this Agreement and the transactions contemplated thereby is merely incidental to the Holder’s acquisition of the Shares. The Company further represents to the Holder that the Company’s decision to enter into this Agreement has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

Section 3.27                          Regulation M Compliance.  The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Shares, (ii) sold, bid for, purchased, or, paid any compensation for soliciting the Exchange of any of the Shares.

 

Section 3.28                          Office of Foreign Assets Control.  Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the

 

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Company  or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

Section 3.29                             U.S. Real Property Holding Corporation.  The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Holder’s request.

 

Section 3.30                             Bank Holding Company Act.  Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”).  Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.  Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

Section 3.31                             Money Laundering.  The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

ARTICLE IV

 

Additional Agreements

 

Section 4.1                                    Reasonable Best Efforts.  The Holder shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 1.4(b) of this Agreement. The Company shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 1.5(a) of this Agreement.

 

Section 4.2                                    Registration Rights. The Shares shall be included in the first Registration Statemen the Company prepares and files with the SEC subsequent to the execution of this agreement.  The Company shall prepare and file, by October 15, 2017, a registration statement with the SEC for the resale of the Shares to be made on a continuous basis pursuant to Rule 415 under the Securities Act (the “Registration Statement”). The Registration Statement shall be on Form S-1 or, if the Company is so eligible, on Form S-3 (except if the Company is not then eligible to register for resale the Shares on Form S-1 or Form S-3, as the case may be, in which case such registration shall be on another appropriate form in accordance herewith). The Company shall use its reasonable best efforts to have such Registration Statement declared effective by the SEC as soon as practicable thereafter, and no later than November 1, 2017 (the “Effectiveness Deadline”). The Holder shall furnish to the Company such information regarding

 

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such Holder as reasonably requested by the Company to effect the registration of such Holder’s Shares. In the event that the Registration Statement is not declared effective by the Effectiveness Deadline, then, in addition to any other rights the Holder may have hereunder or under applicable law, the Company shall pay to the Holder on each monthly anniversary of the Effectiveness Deadline (if the Registration Statement has not been declared effective) until the Registration Statement has been declared effective an amount, as partial liquidated damages and not as a penalty, equal to 1.0% of the Subscription Amount (pro rated for any partial month in which the Registration Statement in not effective) by such Holder under the Purchase Agreement, provided, however, the Company shall not pay to the Holder more than 6.0% of the Subscription Amount for such Holder pursuant to this Section 4.2.

 

Section 4.3                                    Disclosure of Transactions and Other Material Information.  The Company shall by 9:00 a.m. (New York City time) on the Trading Day immediately following the date of execution of this Agreement, and the Closing Date, respectively, issue a press release (the “Current Report”) disclosing the material terms of the transactions contemplated hereby and the closing thereof, as applicable. From and after the issuance of such press release, the Company represents to the Holder that the Company shall have publicly disclosed all material, non-public information delivered to the Holder as of such time by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by this Agreement. The Company shall file a Current Report on Form 8-K disclosing all material terms of this Agreement and including the form of this Agreement as an exhibit thereto simultaneously with the filing of the Company’s proxy statement for approval of the Exchange.

 

Section 4.4                                    Removal of Legends. The Company shall cause certificates evidencing the Shares to not contain any legend: (i) while a registration statement covering the resale of such Shares is effective under the Securities Act, or (ii) following any sale of such Shares pursuant to Rule 144, (iii) if such Shares are eligible for sale under Rule 144 without regard to the current information requirements under Rule 144(c). The Company agrees that following such time as such legend is no longer required under this Section 4.4, the Company will upon written request of the Holder, no later than the earlier of (i) three Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined below) following the delivery by the Holder of a written request for legend removal and a certificate representing Shares eligible for such legend removal issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), deliver or cause to be delivered to such Holder a certificate representing such shares that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4.4. The Company shall cause certificates for Shares subject to legend removal hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s prime broker with the Depository Trust Company System as directed by such Holder. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Stock as in effect on the date of delivery of a certificate representing Warrant Shares issued with a restrictive legend.

 

Section 4.5.                                 Shareholder Approval of Exchange. The Company shall hold a shareholder meeting within 45 days of the date hereof at which the Company shall present to shareholders a

 

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proposal for approval of the Exchange. In the event the Exchange is not approved at such shareholder meeting, the Company shall hold an additional shareholder meeting, within 90 days of the first such shareholder meeting, at which the Company shall present to shareholders a proposal for approval of the Exchange. Until such time as the Exchange is approved by shareholders of the Company, the Company shall continue to hold shareholder meetings, each held within 90 days of the prior shareholder meeting. In the event that the Exchange has not been approved by shareholders of the Company within 45 days of the date hereof (the “Shareholder Approval Deadline”), then, in addition to any other rights the Holder may have hereunder or under applicable law, the Company shall pay to the Holder on each 45-day anniversary of the Shareholder Approval Deadline (if such shareholder approval has not been obtained) until such shareholder approval has been obtained as partial liquidated damages and not as a penalty, equal to 1.0% of the Subscription Amount by such Holder under the Purchase Agreement for each month past the Shareholder Approval Deadline that the shareholder approval has not been obtained (pro rated for any partial month in which such shareholder approval has not been obtained), provided, however, the Company shall not pay to the Holder more than 12.0% of the Subscription Amount for such Holder pursuant to this Section 4.5.

 

ARTICLE V

 

Miscellaneous Provisions

 

Section 5.1                                    Survival of Representations and Warranties.  The agreements of the Company, as set forth herein, and the respective representations and warranties of the Holder and the Company as set forth herein in Articles II and III, respectively, shall survive until the Closing Date.

 

Section 5.2                                    Notice.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email at the email address as set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or email at the email address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

 

Section 5.3                                    Entire Agreement.  This Agreement and the other documents and agreements executed in connection with the Exchange embody the entire agreement and understanding of the parties hereto with respect to the subject matter hereof and supersede all prior and contemporaneous oral or written agreements, representations, warranties, contracts, correspondence, conversations, memoranda and understandings between or among the parties or any of their agents, representatives or affiliates relative to such subject matter, including, without limitation, any term sheets, emails or draft documents.

 

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Section 5.4                                    Assignment; Binding Agreement.  This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Holder (other than by merger). Any Holder may assign any or all of its rights under this Agreement to any Person to whom such Holder assigns or transfers any Warrants, provided that such transferee agrees in writing to be bound, with respect to the transferred Warrants, by the provisions of this Agreement.

 

Section 5.5                                    Counterparts.  This Agreement may be executed in multiple counterparts, and on separate counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. Any counterpart or other signature hereupon delivered by facsimile shall be deemed for all purposes as constituting good and valid execution and delivery of this Agreement by such party.

 

Section 5.6                                    Remedies Cumulative.  Except as otherwise provided herein, all rights and remedies of the parties under this Agreement are cumulative and without prejudice to any other rights or remedies available at law.

 

Section 5.7                                    Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal Proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of this Agreement), and hereby irrevocably waives, and agrees not to assert in any Action or Proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such Action or Proceeding is improper or is an inconvenient venue for such Proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such Action or Proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If any party shall commence an Action or Proceeding to enforce any provisions of this Agreement, then, the prevailing party in such Action or Proceeding shall be reimbursed by the non-prevailing party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such Action or Proceeding.

 

Section 5.8                                    No Third Party Beneficiaries or Other Rights.  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.

 

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Section 5.9                                    Amendments; Waivers.  No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Holder. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right..

 

Section 5.10                             Word Meanings.  The words such as “herein,” “hereinafter,” “hereof” and “hereunder” refer to this Agreement as a whole and not merely to a subdivision in which such words appear unless the context otherwise requires. The singular shall include the plural, and vice versa, unless the context otherwise requires. The masculine shall include the feminine and neuter, and vice versa, unless the context otherwise requires.

 

Section 5.11                             Further Assurances.  The Holder and the Company each hereby agree to execute and deliver, or cause to be executed and delivered, such other documents, instruments and agreements, and take such other actions, as either party may reasonably request in connection with the transactions contemplated by this Agreement.

 

Section 5.12                             Costs and Expenses.  The Holder and the Company shall each pay their own respective costs and expenses incurred in connection with the negotiation, preparation, execution and performance of this Agreement, including, but not limited to, attorneys’ fees.

 

Section 5.13                             Headings.  The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the meaning hereof.

 

Section 5.14                             Severability. If any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provision in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

 

Section 5.16 Holder.

 

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IN WITNESS WHEREOF, the parties hereto have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	
MARATHON   PATENT GROUP, INC.
    	
Address   for Notice: 
   11100 Santa Monica Blvd., Ste. 380
   Los Angeles, CA
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
E-Mail: 
    
	
 
    	
Title:
    	
Fax:
    
	
 
    	
 
    
	
With   a copy to (which shall not constitute notice):
    	
 
    
				

 

 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR HOLDER FOLLOWS]

 

Signature Page to Exchange Agreement

 

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IN WITNESS WHEREOF, the undersigned have caused this Exchange Agreement to be duly executed by their respective authorized signatories as of the date first indicated above.

 

 

	
Name   of Holder:
    	
 
    
	
 
    
	
Signature   of Authorized Signatory of Holder:
    	
 
    
	
 
    
	
Name   of Authorized Signatory:
    	
 
    
	
 
    
	
Title   of Authorized Signatory:
    	
 
    
	
 
    
	
Email   Address of Authorized Signatory:
    	
 
    
	
 
    
	
Facsimile   Number of Authorized Signatory:
    	
 
    
	
 
    
	
Address for Notice to Holder:
    
	
 
    
	
 
    
	
Number of Warrants Exchanged:
    
	
 
    
	
Address for Delivery of Shares to Holder (if not   same as address for notice):
    
	
 
    
	
 
    
	
EIN   Number:
    	
 
    	
 
    
								

 

Signature Page to Exchange Agreement

 

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