Document:

gtph_ex1031

  Exhibit 10.31

 

 PROMISSORY NOTE

 

	
Original Issuance
Date: February 15,2019

	
 Principal Amount: $50,000.00

 

                                                                                                                                                                 

THIS PROMISSORY NOTE is
duly authorized and validly
Note of Guided
Therapeutics,
Inc.,
a Delaware corporation, (the "Company"), having
its principal
place of business
at 5835 Peachtree Corners
East, Suite
B, Norcross, Georgia 30092.

 

FOR VALUE
RECEIVED, the undersigned
promises to pay
to John W.
Gould ("Holder") the
principal sum of
FIFTY THOUSAND DOLLARS AND 
00/100 CENTS ($50,000.00),
and no fee or interest,
for the total of FIFTY THOUSAND DOLLARS AND 
00/

100 CENTS
($50,000.00), in lawful
money of the United States of
America, at such
place as Holder may designate
in writing.

 

The entire unpaid principal balance due
on this
Promissory
Note (this "Note"),
together with all accrued and unpaid interest and
fees, if any, at the choice
of the
Holder, shall be due and payable in
full from the funds received
by the Company
from a financing of
at least $1
,000,000.00
DOLLARS (one
million U.S.
dollars, zero
cents) or to be included
as part of
the Company's financing. Should the Company not
complete a financing of
at least $1,000,000 within 90 days of
the execution of thi s
Promissory Note, any
unpaid amounts shall
be due in full to the Holder
and shall
accrue 6% annual interest from the date
thereof if not paid in full.

 

In addition, the
Holder of this Note
shall be granted 10 (ten)
warrants for each dollar
loaned to the Company under
this Promissory
Note. The warrants shall
vest upon the financing of
at least
$1,000,000.00 DOLLARS and
expire on the third
anniversary of said
financing. The warrant exercise price shall be set
at market price
as defined by the five
day volume adjusted weighted price (VW
AP), or alternatively the same
as for
warrants granted to
investors
as part of any
$1 million dollar
or more financing of the
Company.

 

All parties to thi s Note,
including maker and any
sureties, endorsers, or
guarantors, hereby waive protest,
presentment,
notice of dishonor,
and notice of acceleration
of maturity and agree to continue to
remain bound for the
payment of principal, interest and
all other sums due under
this Note, notwithstanding any change or changes by way
of release,
surrender, exchange,
modification or substitution of any security for
this Note or by way of
any extension or extensions of time for the payment of
principal and interest, if
any; and all such parties waive
all and every kind
of notice of such
change or changes and agree that the same
may be
made without
notice or consent
ofany of them.

 

This Note shall be governed by,
and construed in accordance with, the laws
of the State of
Georgia, regardless of
laws that might otherwise govern under applicable principles of conflicts
of law.

 

IN WITNESS WHEREOF, the
undersigned has caused this
instrument to be duly executed the
day and year first above
written.

 

GUIDED
THERAPEUTICS, INC.

 

/s/ Mark Faupel

Mark
Faupel

COOgtph_ex1032

  Exhibit 10.32

 

 SECURITIES PURCHASE
AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT (the "Agreement"), dated as of March
29, 2019, by and between GUIDED THERAPEUTICS, INC., a Delaware
corporation, with headquarters located at 5835 Peachtree Comers
East, Suite B, Norcross, GA 30092 (the "Company"), and AUCTUS FUND,
LLC, a Delaware limited liability company, with its address at 545
Boylston Street, 2nd Floor, Boston, MA 02116 (the
"Buyer").

 

WHEREAS:

 

A.
The Company and the Buyer are executing and delivering this
Agreement in reliance upon the exemption from securities
registration afforded by the rules and regulations as promulgated
by the United States Securities and Exchange Commission (the "SEC")
under the Securities Act of 1933, as amended (the "1933
Act");

 

B.
Buyer desires to purchase and the Company desires to issue and
sell, upon the terms and conditions set forth in this Agreement the
12% convertible note of the Company, in the form attached hereto as
Exhibit A, in the aggregate principal amount of US$65,000.00
(together with any note(s) issued in replacement thereof or as a
dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the "Note"), convertible into shares of
common stock, $0.001 par value per share, of the Company (the
"Common Stock"), upon the terms and subject to the limitations and
conditions set forth in such Note.

 

C.
The Buyer wishes to purchase, upon the terms and conditions stated
in this Agreement, such principal amount of Note as is set forth
immediately below its name on the signature pages hereto;
and

 

NOW
THEREFORE, the Company and the Buyer severally (and not jointly)
hereby agree as follows:

 

I.
PURCHASE AND SALE OF NOTE.

 

a.
Purchase of Note. On the Closing Date (as defined below), the
Company shall issue and sell to the Buyer and the Buyer agrees to
purchase from the Company such principal amount of Note as is set
forth immediately below the Buyer's name on the signature pages
hereto. In connection with the issuance of the Note, the Company
shall issue warrants to Buyer to purchase 325,000 shares of common
stock.

 

b.
Form of Payment. On the Closing Date (as defined below), (i) the
Buyer shall pay the purchase price for the Note to be issued and
sold to it at the Closing (as defined below) (the "Purchase Price")
by wire transfer of immediately available funds to the Company, in
accordance with the Company's written wiring instructions, against
delivery of the Note in the principal amount equal to the Purchase
Price as is set forth immediately below the Buyer's name on the
signature pages hereto, and (ii) the Company shall deliver such
duly executed Note on behalf of the Company, to the Buyer, against
delivery of such Purchase Price.

 

c.
Closing Date. Subject to the satisfaction (or written waiver) of
the conditions thereto set forth in Section 7 and Section 8 below,
the date and time of the issuance and sale of the Note pursuant to
this Agreement (the "Closing Date") shall be 12:00 noon, Eastern
Standard Time on or about March 29,2019, or such other mutually
agreed upon time. The closing of the transactions contemplated by
this Agreement (the "Closing") shall occur on the Closing Date at
such location as may be agreed to by the parties.

 

2.
REPRESENTATIONS AND WARRANTIES OF THE BUYER The Buyer represents
and warrants to the Company that:

 

a.
Investment Purpose. As of the date hereof, the Buyer is purchasing
the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note (including, without limitation,
such additional shares of Common Stock, if any, as are issuable (i)
on account of interest on the Note (ii) as a result of the events
described in Sections 1.3 and 1.4(g) of the Note or (iii) in
payment of the Standard Liquidated Damages Amount (as defined in
Section 2(i) below) pursuant to this Agreement, such shares of
Common Stock being collectively referred to herein as the
"Conversion Shares" and, collectively with the Note, the
"Securities") for its own account and not with a present view
towards the public sale or distribution thereof, except pursuant to
sales registered or exempted from registration under the 1933 Act
and Buyer is able to bear the economic risk of holding the
Conversion Shares for an indefinite period (including total loss of
its investment), and has sufficient knowledge and experience in
financial and business matters so as to be capable of evaluating
the merits and risk of its investment. provided, however, that by
making the representations herein, the Buyer does not agree to hold
any of the Securities for any minimum or other specific term and
reserves the right to dispose of the Securities at any time in
accordance with or pursuant to a registration statement or an
exemption under the 1933 Act.

 

 

1

 

 

b.
Accredited Investor Status. The Buyer is an "accredited investor"
as that term is defined in Rule 501(a) of Regulation D (an
"Accredited Investor").

 

c.
Reliance on Exemptions. The Buyer understands that the Securities
are being offered and sold to it in reliance upon specific
exemptions from the registration requirements of United States
federal and state securities laws and that the Company is relying
upon the truth and accuracy of, and the Buyer's compliance with,
the representations, warranties, agreements, acknowledgments and
understandings of the Buyer set forth herein in order to determine
the availability of such exemptions and the eligibility of the
Buyer to acquire the· Securities.

 

d.
Information. The Buyer and its advisors, if any, have been, and for
so long as the Note remains outstanding will continue to be,
furnished with all materials relating to the business, finances and
operations of the Company and materials relating to the offer and
sale of the Securities which have been requested by the Buyer or
its advisors. The Buyer and its advisors, if any, have been, and
for so long as the Note remains outstanding will continue to be,
afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the
Buyer any material nonpublic information and will not disclose such
information unless such information is disclosed to the public
prior to or promptly following such disclosure to the Buyer.
Neither such inquiries nor any other due diligence investigation
conducted by Buyer or any of its advisors or representatives shall
modify, amend or affect Buyer's right to rely on the Company's
representations and warranties contained in Section 3 below. The
Buyer understands that its investment in the Securities involves a
significant degree of risk. The Buyer is not aware of any facts
that may constitute a breach of any of the Company's
representations and warranties made herein.

 

e.
Governmental Review. The Buyer understands that no United States
federal or state agency or any other government or governmental
agency has passed upon or made any recommendation or endorsement of
the Securities.

 

f.
Transfer or Re-sale. The Buyer understands that (i) the sale or
re-sale of the Securities has not been and is not being registered
under the 1933 Act or any applicable state securities laws, and the
Securities may not be transferred unless (a) the Securities are
sold pursuant to an effective registration statement under the 1933
Act, (b) the Buyer shall have delivered to the Company an opinion
of counsel of Buyer reasonably satisfactory to the Company's
transfer agent that shall be in form, substance and scope customary
for opinions of counsel in comparable transactions to the effect
that the Securities to be sold or transferred may be sold or
transferred pursuant to an exemption from such registration, which
opinion shall be accepted by the Company, (c) the Securities are
sold or transferred to an "affiliate" (as defined in Rule 144
promulgated under the 1933 Act (or a successor rule) ("Rule 144"))
of the Buyer who agrees in writing to be bound by this Agreement
and who is an Accredited Investor, (d) the Securities are sold
pursuant to Rule 144, or (e) the Securities are sold pursuant to
Regulation S under the 1933 Act (or a successor rule) ("Regulation
S"), and the Buyer shall have delivered to the Company an opinion
of counsel of Buyer reasonably satisfactory to the Company's
transfer agent that shall be in form, substance and scope customary
for opinions of counsel in corporate transactions, which opinion
shall be accepted by the Company; (ii) any sale of such Securities
made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable,
any re-sale of such Securities under circumstances in which the
seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined in the 1933 Act) may
require compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to
register such Securities under the 1933 Act or any state securities
laws or to comply with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or
anything else contained herein to the contrary, the Securities may
be pledged as collateral in connection with a bona fide margin
account or other lending arrangement.

 

g.
Legends. The Buyer understands that the Note and, until such time
as the Conversion Shares have been registered under the 1933 Act
may be sold pursuant to Rule 144 or Regulation S without any
restriction as to the number of securities as of a particular date
that can then be immediately sold, the Conversion Shares may bear a
restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of the
certificates for such Securities):

"NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY TEUS
CERTWICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED

(I)
IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN
OPINION OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RVLE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A
REGISTERED BROKER DEALER OR OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THE SECURITIES WITH A FINANCIAL INSTITUTION THAT IS AN
"ACCREDITED INVESTOR" AS DEFINED IN RVLE 501(a) UNDER THE
SECURITIES ACT."

 

 

2

 

 

The
legend set forth above shall be removed and the Company shall issue
a certificate without such legend to the holder of any Security
upon which it is stamped, if, unless otherwise required by
applicable state securities laws, (a) such Security is registered
for sale under an effective registration statement filed under the
1933 Act or otherwise may be sold pursuant to Rule 144 or
Regulation S without any restriction as to the number of securities
as of a particular date that can then be immediately sold, or (b)
such holder provides the Company with an opinion of counsel
reasonably satisfactory to the Borrower's transfer agent, in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such
Security may be made without registration under the 1933 Act, which
opinion shall be accepted by the Company so that the sale or
transfer is effected. The Buyer agrees to sell all Securities,
including those represented by a certificate(s) from which the
legend has been removed, in compliance with applicable prospectus
delivery requirements, if any.

 

h.
Authorization; Enforcement. Buyer has all necessary company power
and authority to enter into this Agreement, to carry out its
obligations hereunder and to consummate the transactions
contemplated hereby. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on
behalf of the Buyer, and this Agreement constitutes a valid and
binding agreement of the Buyer enforceable in accordance with its
terms.

 

i.
Residency. The Buyer is a limited liability company duly organized,
validly existing and in good standing under the laws of the state
of Delaware.

 

3.
REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to the Buyer that, except as otherwise
disclosed in the SEC Documents (as defined below):

 

a.
Organization and Qualification. The Company and each of its
Subsidiaries (as defined below), if any, is a corporation duly
organized, validly existing and in good standing under the laws of
the jurisdiction in which it is incorporated, with full power and
authority (corporate and other) to own, lease, use and operate its
properties and to carryon its business as and where now owned,
leased, used, operated and conducted. The Company and each of its
Subsidiaries is duly qualified as a foreign corporation to do
business and is in good standing in every jurisdiction in which its
ownership or use of property or the nature of the business
conducted by it makes such qualification necessary except where the
failure to be so qualified or in good standing would not have a
Material Adverse Effect (except with respect to the re-registration
of the Company's ISO certification and CE Mark). "Material Adverse
Effect" means any material adverse effect on the business,
operations, assets, financial condition or prospects of the Company
or its Subsidiaries, if any, taken as a whole, or on the
transactions contemplated hereby or by the agreements or
instruments to be entered into in connection herewith provided,
however, that "Material Adverse Effect" shall not include any
event, occurrence, fact, condition or change, directly or
indirectly, arising out of or attributable to: (i) general economic
or political conditions; (ii) conditions generally affecting the
industries in which the Company operates; (iii) any changes in
financial, banking or securities markets in general, including any
disruption thereof and any decline in the price of any security or
any market index or any change in prevailing interest rates; (iv)
acts of war (whether or not declared), armed hostilities or
terrorism, or the escalation or worsening thereof; (v) any action
required or permitted by this Agreement or any action taken (or
omitted to be taken) with the written consent of or at the written
request of Buyer; (vi) any matter of which Buyer is aware on the
date hereof; (vii) any changes in applicable Laws or accounting
rules (including GAAP) or the enforcement, implementation or
interpretation thereof; (viii) the announcement, pendency or
completion of the transactions contemplated by this Agreement,
including losses or threatened losses of employees, customers,
suppliers, distributors or others having relationships with the
Company; (ix) any natural or man-made disaster or acts of God; or
(x) any failure by the Company to meet any internal or published
projections, forecasts or revenue or earnings predictions (provided
that the underlying causes of such failures (subject to the other
provisions of this definition) shall not be excluded).
"Subsidiaries" means any corporation or other organization, whether
incorporated or unincorporated, in which the Company owns, directly
or indirectly, any equity or other ownership interest.

 

b.
Authorization; Enforcement. (i) The Company has all requisite
corporate power and authority to enter into and perform this
Agreement, the Note and to consummate the transactions contemplated
hereby and thereby and to issue the Securities, in accordance with
the terms hereof and thereof, (ii) the execution and delivery of
this Agreement, the Note by the Company and the consummation by it
of the transactions contemplated hereby and thereby (including
without limitation, the issuance of the Note and the issuance and
reservation for issuance of the Conversion Shares issuable upon
conversion or exercise thereof) have been duly authorized by the
Company's Board of Directors and no further consent or
authorization of the Company, its Board of Directors, or its
shareholders is required, (iii) this Agreement has been duly
executed and delivered by the Company by its authorized
representative, and such authorized representative is the true and
official representative with authority to sign this Agreement and
the other documents executed in connection herewith and bind the
Company accordingly, and (iv) this Agreement constitutes, and upon
execution and delivery by the Company of the Note, each of such
instruments will constitute, a legal, valid and binding obligation
of the Company enforceable against the Company in accordance with
its terms.

 

 

3

 

 

c.
Capitalization. 15,000,000 shares (initially) are reserved for
issuance upon conversion of the Note. All of such outstanding
shares of capital stock are, or upon issuance will be, duly
authorized, validly issued, fully paid and non-assessable. No
shares of capital stock of the Company are subject to preemptive
rights or any other similar rights of the shareholders of the
Company or any liens or encumbrances imposed through the actions or
failure to act of the Company. As of the effective date of this
Agreement, (i) there are no outstanding options, warrants, scrip,
rights to subscribe for, puts, calls, rights of first refusal,
agreements, understandings, claims or other commitments or rights
of any character whatsoever relating to, or securities or rights
convertible into or exchangeable for any shares of capital stock of
the Company or any of its Subsidiaries, or arrangements by which
the Company or any of its Subsidiaries is or may become bound to
issue additional shares of capital stock of the Company or any of
its Subsidiaries, (ii) there are no agreements or arrangements
under which the Company or any of its Subsidiaries is obligated to
register the sale of any of its or their securities under the 1933
Act and (iii) there are no anti-dilution or price adjustment
provisions contained in any security issued by the Company (or in
any agreement providing rights to security holders) that will be
triggered by the issuance of the Note or the Conversion Shares. The
Company has filed in its SEC Documents true and correct copies of
the Company's Certificate of Incorporation as in effect on the date
hereof ("Certificate of Incorporation"), the Company's By-laws, as
in effect on the date hereof (the "By-laws"), and the terms of all
securities convertible into or exercisable for Common Stock of the
Company and the material rights of the holders thereof in respect
thereto. The Company shall provide the Buyer with a written update
of this representation signed by the Company's Chief Executive on
behalf of the Company as of the Closing Date.

 

d.
Issuance of Shares. The issuance of the Note is duly authorized
and, upon issuance in accordance with the terms of this Agreement,
will be validly issued, fully paid and non-assessable and free from
all preemptive or similar rights, taxes, liens, charges and other
encumbrances with respect to the issue thereof. The Conversion
Shares are duly authorized and reserved for issuance and, upon
conversion of the Note in accordance with its respective terms,
will be validly issued, fully paid and non-assessable, and free
from all taxes, liens, claims and encumbrances with respect to the
issue thereof and shall not be subject to preemptive rights or
other similar rights of shareholders of the Company and will not
impose personal liability upon the holder thereof.

 

e.
Acknowledgement of Dilution. The Company understands and
acknowledges the potentially dilutive effect to the Common Stock
upon the issuance of the Conversion Shares upon conversion of the
Note. The Company further acknowledges that its obligation to issue
Conversion Shares upon conversion of the Note in accordance with
this Agreement, the Note is absolute and unconditional regardless
of the dilutive effect that such issuance may have on the ownership
interests of other shareholders of the Company.

 

f.
No Conflicts. The execution, delivery and performance of this
Agreement and the Note by the Company and the consummation by the
Company of the transactions contemplated hereby and thereby
(including, without limitation, the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with or
result in a violation of any provision of the Certificate of
Incorporation or By-laws, or (ii) violate or conflict with, or
result in a breach of any provision of, or constitute a default (or
an event which with notice or lapse of time or both could become a
default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement,
indenture, patent, patent license or instrument to which the
Company or any of its Subsidiaries is a party, or (iii) result in a
violation of any law, rule, regulation, order, judgment or decree
(including federal and state securities laws and regulations and
regulations of any self-regulatory organizations to which the
Company or its securities are subject) applicable to the Company or
any of its Subsidiaries or by which any property or asset of the
Company or any of its Subsidiaries is bound or affected (except for
such conflicts, defaults, terminations, amendments, accelerations,
cancellations and violations as would not, individually or in the
aggregate, have a Material Adverse Effect). Neither the Company nor
any of its Subsidiaries is in violation of its Certificate of
Incorporation, By-laws or other organizational documents and
neither the Company nor any of its Subsidiaries is in default (and
no event has occurred which with notice or lapse of time or both
could put the Company or any of its Subsidiaries in default) under,
and neither the Company nor any of its Subsidiaries has taken any
action or failed to take any action that would give to others any
rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture or instrument to which the Company or any
of its Subsidiaries is a party or by which any property or assets
of the Company or any of its Subsidiaries is bound or affected,
except for possible defaults as would not, individually or in the
aggregate, have a Material Adverse Effect. The businesses of the
Company and its Subsidiaries, if any, are not being conducted, and
shall not be conducted so long as the Buyer owns any of the
Securities, in violation of any law, ordinance or regulation of any
governmental entity, the result of which would have a Material
Adverse Effect. Except as specifically contemplated by this
Agreement and as required under the 1933 Act and any applicable
state securities laws, the Company is not required to obtain any
consent, authorization or order of, or make any filing or
registration with, any court, governmental agency, regulatory
agency, self-regulatory organization or stock market or any third
party in order for it to execute, deliver or perform any of its
obligations under this Agreement, the Note in accordance with the
terms hereof or thereof or to issue and sell the Note in accordance
with the terms hereof and to issue the Conversion Shares upon
conversion of the Note. All consents, authorizations, orders,
filings and registrations which the Company is required to obtain
pursuant to the preceding sentence have been obtained or effected
on or prior to the date hereof. The Company is not in violation of
the listing requirements of the OTC Pink (the "OTC Pink"), the
OTCQB or any similar quotation system, and does not reasonably
anticipate that the Common Stock will be delisted by the OTC Pink,
the OTCQB or any similar quotation system, in the foreseeable
future nor are the Company's securities "chilled" by DTC. The
Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the
foregoing.

 

 

4

 

 

g.
SEC Documents; Financial Statements. The Company has filed all
reports, schedules, forms, statements and other documents required
to be filed by it with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934, as amended
(the "1934 Act") (all of the foregoing filed prior to the date
hereof and all exhibits included therein and financial statements
and schedules thereto and documents (other than exhibits to such
documents) incorporated by reference therein, being hereinafter
referred to herein as the "SEC Documents"). The Company has
delivered to the Buyer true and complete copies of the SEC
Documents, except for such exhibits and incorporated documents. As
of their respective dates, the SEC Documents complied in all
material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable
to the SEC Documents, and none of the SEC Documents, at the time
they were filed with the SEC, 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 light of the circumstances under which they were made,
not misleading. None of the statements made in any such SEC
Documents is, or has been, required to be amended or updated under
applicable law (except for such statements as have been amended or
updated in subsequent filings prior the date hereof). As of their
respective dates, the financial statements of the Company included
in the SEC Documents complied as to form in all material respects
with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto. Such financial
statements complied with all respects with United States generally
accepted accounting principles ("GAAP"), consistently applied,
during the periods involved, except as may otherwise be 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
consolidated financial position of the Company and its consolidated
Subsidiaries as of the dates thereof and the consolidated results
of their operations and cash flows for the periods then ended
(subject, in the case of unaudited statements, to normal year-end
audit adjustments). Except as set forth in the financial statements
of the Company included in the SEC Documents, the Company has no
liabilities, contingent Of otherwise, other than (i) liabilities
incurred in the ordinary course of business subsequent to September
30, 2018, and (ii) obligations under contracts and commitments
incurred in the ordinary course of business and not required under
GAAP to be reflected in such financial statements, which,
individually or in the aggregate, are not material to the financial
condition or operating results of the Company. The Company is
subject to the reporting requirements of the 1934 Act. For the
avoidance of doubt, filing of the documents required in this
Section 3(g) via the SEC's Electronic Data Gathering, Analysis, and
Retrieval system ("EDGAR") shall satisfy all delivery requirements
of this Section 3(g).

 

h.
Absence of Certain Changes. Since September 30, 2018, there has
been no Material Adverse Effect and 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 SEC. Except
for the issuance of the Securities 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 that has not been publicly disclosed prior to the date of this
Agreement.

 

i.
Absence of Litigation. There is no action, suit, claim, proceeding,
inquiry or investigation before or by any court, public board,
government agency, self-regulatory organization or body pending or,
to the knowledge of the Company or any of its Subsidiaries,
threatened against or affecting the Company or any of its
Subsidiaries, or their officers or directors in their capacity as
such, that could have a Material Adverse Effect (except with
respect to the lawsuit brought against the Company by its previous
controller). Schedule 3(i) contains a complete list and summary
description of any pending or, to the knowledge of the Company,
threatened proceeding against or affecting the Company or any of
its Subsidiaries involving estimated damages in excess of $200,000,
without regard to whether it would have a Material Adverse Effect.
The Company and its Subsidiaries are unaware of any facts or
circumstances which might give rise to any of the
foregoing.

 

j.
Patents, Copyrights, etc. The Company and each of its Subsidiaries
owns or possesses the requisite licenses or rights to use all
patents, patent applications, patent rights, inventions, know-how,
trade secrets, trademarks, trademark applications, service marks,
service names, trade names and copyrights ("Intellectual Property")
necessary to enable it to conduct its business as now operated
(and, as presently contemplated to be operated in the future).
There is no claim or action by any person pertaining to, or
proceeding pending, or to the Company's knowledge threatened, which
challenges the right of the Company or of a Subsidiary with respect
to any Intellectual Property necessary to enable it to conduct its
business as now operated (and, as presently contemplated to be
operated in the future); to the best of the Company's knowledge,
the Company's or its Subsidiaries' current and intended products,
services and processes do not infringe on any Intellectual Property
or other rights held by any person; and the Company is unaware of
any facts or circumstances which might give rise to any of the
foregoing. The Company and each of its Subsidiaries have taken
reasonable security measures to protect the secrecy,
confidentiality and value of their Intellectual
Property.

 

k.
No Materially Adverse Contracts, Etc. Neither the Company nor any
of its Subsidiaries is subject to any charter, corporate or other
legal restriction, or any judgment, decree, order, rule or
regulation which in the judgment of the Company's officers has or
is expected in the future to have a Material Adverse Effect.
Neither the Company nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Company's
officers has or is expected to have a Material Adverse
Effect.

 

 

5

 

 

1.
Tax Status. Except as would not reasonably be expected to have
Material Adverse Effect, the Company and each of its Subsidiaries
has made or filed all federal, state and foreign income and all
other tax returns, reports and declarations required by any
jurisdiction to which it is subject (unless and only to the extent
that the Company and each of its Subsidiaries has set aside on its
books provisions reasonably adequate for the payment of all unpaid
and unreported taxes) and has paid all taxes and other governmental
assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations,
except those being contested in good faith and has set aside on its
books provisions reasonably adequate for the payment of all taxes
for periods subsequent to the periods to which such returns,
reports or declarations apply. There are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company know of no basis for
any such claim. The Company has not executed a waiver with respect
to the statute of limitations relating to the assessment or
collection of any foreign, federal, state or local tax. None of the
Company's tax returns is presently being audited by any taxing
authority.

 

m.
Certain Transactions. Except for arm's length transactions pursuant
to which the Company or any of its Subsidiaries makes payments in
the ordinary course of business upon terms no less favorable than
the Company or any of its Subsidiaries could obtain from third
parties and other than the grant of stock options described in
Schedule 3( c), none of the officers, directors, or employees of
the Company is presently a party to any transaction with the
Company or any of its Subsidiaries (other than for services as
employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any
officer, director or such employee or, to the knowledge of the
Company, any corporation, partnership, trust or other entity in
which any officer, director, or any such employee has a substantial
interest or is an officer, director, trustee or
partner.

 

n.
Disclosure. All information relating to or concerning the Company
or any of its Subsidiaries set forth in this Agreement and provided
to the Buyer pursuant to Section 2(d) hereof and otherwise in
connection with the transactions contemplated hereby is true and
correct in all material respects and the Company has not omitted to
state any material fact necessary in order to make the statements
made herein or therein, in light of the circumstances under which
they were made, not misleading. No event or circumstance has
occurred or exists with respect to the Company or any of its
Subsidiaries or its or their business, properties, prospects,
operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by
the Company but which has not been so publicly announced or
disclosed.

 

o.
Acknowledgment Regarding Buyer' Purchase of Securities. The Company
acknowledges and agrees that the Buyer is acting solely in the
capacity of arm's length purchasers with respect to this Agreement
and the transactions contemplated hereby. The Company further
acknowledges that the Buyer 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 hereby and any
statement made by the Buyer or any of its respective
representatives or agents in connection with this Agreement and the
transactions contemplated hereby is not advice or a recommendation
and is merely incidental to the Buyer' purchase of the Securities.
The Company further represents to the Buyer that the Company's
decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its
representatives.

 

p.
No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has
directly or indirectly made any offers or sales in any security or
solicited any offers to buy any security under circumstances that
would require registration under the 1933 Act of the issuance of
the Securities to the Buyer. The issuance of the Securities to the
Buyer will not be integrated with any other issuance of the
Company's securities (past, current or future) for purposes of any
shareholder approval provisions applicable to the Company or its
securities.

 

q.
No Brokers. Except with respect to payments to Moody Capital
Solutions, Inc., the Company has taken no action which would give
rise to any claim by any person for brokerage commissions,
transaction fees or similar payments relating to this Agreement or
the transactions contemplated hereby.

 

r.
Permits; Compliance. Except as would not reasonably be expected to
have Material Adverse Effect, the Company and each of its
Subsidiaries is in possession of all franchises, grants,
authorizations, licenses, permits, easements, variances,
exemptions, consents, certificates, approvals and orders necessary
to own, lease and operate its properties and to carry on its
business as it is now being conducted (collectively, the "Company
Permits"), and there is no action pending or, to the knowledge of
the Company, threatened regarding suspension or cancellation of any
of the Company Permits. Neither the Company nor any of its
Subsidiaries is in conflict with, or in default or violation of,
any of the Company Permits, except for any such conflicts, defaults
or violations which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect. Since
September 30, 2018, neither the Company nor any of its Subsidiaries
has received any notification with respect to possible conflicts,
defaults or violations of applicable laws, except for notices
relating to possible conflicts, defaults or violations, which
conflicts, defaults or violations would not have a Material Adverse
Effect.

 

 

6

 

 

s.
Environmental Matters.

 

(i)
Except as would not reasonably be expected to have Material Adverse
Effect, there are, to the Company's knowledge, with respect to the
Company or any of its Subsidiaries or any predecessor of the
Company, no past or present violations of Environmental Laws (as
defined below), releases of any material into the environment,
actions, activities, circumstances, conditions, events, incidents,
or contractual obligations which may give rise to any common law
environmental liability or any liability under the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 or
similar federal, state, local or foreign laws and neither the
Company nor any of its Subsidiaries has received any notice with
respect to any of the foregoing, nor is any action pending or, to
the Company's knowledge, threatened in connection with any of the
foregoing. The term "Environmental Laws" means all federal, state,
local or foreign laws relating to pollution or protection of human
health or the environment (including, without limitation, ambient
air, surface water, groundwater, land surface or subsurface
strata), including, without limitation, 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.

 

(ii)
Other than those that are or were stored, used or disposed of in
compliance with applicable law, no Hazardous Materials are
contained on or about any real property currently owned, leased or
used by the Company or any of its Subsidiaries, and no Hazardous
Materials were released on or about any real property previously
owned, leased or used by the Company or any of its Subsidiaries
during the period the property was owned, leased or used by the
Company or any of its Subsidiaries, except in the normal course of
the Company's or any of its Subsidiaries' business.

(iii)
To the Company's knowledge, there are no underground storage tanks
on or under any real property owned, leased or used by the Company
or any of its Subsidiaries that are not in compliance with
applicable law.

 

t.
Title to Property. The Company and its Subsidiaries have good and
marketable title in fee simple to all real property and good and
marketable title to all personal property owned by them which is
material to the business of the Company and its Subsidiaries, in
each case free and clear of all liens, encumbrances and defects or
such as would not have a Material Adverse Effect. Any real property
and facilities held under lease by the Company and its Subsidiaries
are held by them under valid, subsisting and enforceable leases
with such exceptions as would not have a Material Adverse
Effect.

 

u.
Internal Accounting Controls. The Company and each of its
Subsidiaries maintain a system of internal accounting controls
sufficient, in the judgment of the Company's board of directors, to
provide reasonable assurance that (i) transactions are executed in
accordance with management's general or specific authorizations,
(ii) transactions are recorded as necessary to permit preparation
of financial statements in conformity with generally accepted
accounting principles 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.

 

v.
Foreign Corrupt Practices. Except as would not be reasonably
expected to have a Material Adverse Effect, neither the Company,
nor any of its Subsidiaries, nor any director, officer, agent,
employee or other person acting on behalf of the Company or any
Subsidiary has, in the course of his actions for, or on behalf of,
the Company, used any corporate funds for any unlawful
contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or
employee from corporate funds; violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as
amended, or made any bribe, rebate, payoff, influence payment,
kickback or other unlawful payment to any foreign or domestic
government official or employee.

 

w.
Solvency. The Company (after giving effect to the transactions
contemplated by this Agreement) is solvent (i.e., its assets have a
fair market value in excess of the amount required to pay its
probable liabilities on its existing debts as they become absolute
and matured) and currently the Company has no information that
would lead it to reasonably conclude that the Company would not,
after giving effect to the transaction contemplated by this
Agreement, have the ability to, nor does it intend to take any
action that would impair its ability to, pay its debts from time to
time incurred in connection therewith as such debts mature. The
Company did not receive a qualified opinion from its auditors with
respect to its most recent fiscal year end and, after giving effect
to the transactions contemplated by this Agreement, does not
anticipate or know of any basis upon which its auditors might issue
a qualified opinion in respect of its current fiscal year. For the
avoidance of doubt any disclosure of the Borrower's ability to
continue as a "going concern" shall not, by itself, be a violation
of this Section 3(w).

 

x.
No Investment Company. The Company is not, and upon the issuance
and sale of the Securities as contemplated by this Agreement will
not be an "investment company" required to be registered under the
Investment Company Act of 1940 (an "Investment Company"). The
Company is not controlled by an Investment Company.

 

 

7

 

 

y.
Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses
and risks and in such amounts as management of the Company believes
to be prudent and customary in the businesses in which the Company
and its Subsidiaries are engaged. Neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage
expires or to obtain similar coverage from similar insurers as may
be necessary to continue its business at a cost that would not have
a Material Adverse Effect. Upon written request the Company will
provide to the Buyer true and correct copies of an policies
relating to directors' and officers' liability coverage, errors and
omissions coverage, and commercial general liability
coverage.

z.
Bad Actor. To the Company's knowledge, no officer or director of
the Company would be disqualified under Rule 506( d) of the
Securities Act as amended on the basis of being a "bad actor" as
that term is established in the September 19, 2013 Small Entity
Compliance Guide published by the SEC.

 

aa.
Shell Status. The Company is not a "shell" issuer and has never
been a "shell" issuer, or that if it previously has been a "shell"
issuer, that at least twelve (12) months have passed since the
Company has reported Form 10 type information indicating that it is
no longer a "shell" issuer.

bb.
No-Off Balance Sheet Arrangements. There is no transaction,
arrangement, or other relationship between the Company or any of
its Subsidiaries and an unconsolidated or other off balance sheet
entity that is required to be disclosed by the Company in its 1934
Act filings and is not so disclosed or that otherwise could be
reasonably likely to have a Material Adverse Effect.

 

cc.
Manipulation of Price. 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, or that could reasonably
be expected to cause or result, in the stabilization or
manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold,
bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase
any other securities of the Company.

 

dd.
[Intentionally Omitted]

 

ee.
Employee Relations. Neither the Company nor any of its Subsidiaries
is a party to any collective bargaining agreement or employs any
member of a union. The Company believes that its and its
Subsidiaries' relations with their respective employees are good.
No executive officer (as defined in Rule 50l(f) promulgated under
the 1933 Act) or other key employee of the Company or any of its
Subsidiaries has notified the Company or any such Subsidiary that
such officer intends to leave the Company or any such Subsidiary or
otherwise terminate such officer's employment with the Company or
any such Subsidiary. To the knowledge of the Company, no executive
officer or other key employee of the Company or any of its
Subsidiaries is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality,
disclosure or proprietary information agreement, noncompetition
agreement, or any other contract or agreement or any restrictive
covenant, and the continued employment of each such executive
officer or other key employee (as the case may be) does not subject
the Company or any of its Subsidiaries to any liability with
respect to any of the foregoing matters.

 

ff.
Breach of Representations and Warranties by the Company. The
Company agrees that if the Company breaches any of the
representations or warranties set forth in this Section 3, and in
addition to any other remedies available to the Buyer pursuant to
this Agreement and it being considered an Event of Default under
Section 3.5 of the Note, the Company shall pay to the Buyer the
Standard Liquidated Damages Amount in cash or in shares of Common
Stock at the option of the Company, until such breach is cured. If
the Company elects to pay the Standard Liquidated Damages Amounts
in shares of Common Stock, such shares shall be issued at the
Conversion Price at the time of payment.

 

4.
COVENANTS.

 

a.
Best Efforts. The parties shall use their commercially reasonable
best efforts to satisfy timely each of the conditions described in
Section 7 and 8 of this Agreement.

 

b.
Blue Sky Laws. The Company shall, on or before the Closing Date,
take such action as the Company shall reasonably determine may be
necessary to qualify the Securities for sale to the Buyer at the
applicable closing pursuant to this Agreement under applicable
securities or "blue sky" laws of the states of the United States
(or to qualify for or obtain an exemption from such qualification
for sale), and shall provide evidence of any such action so taken
to the Buyer on or prior to the Closing Date.

 

c.
Use of Proceeds. The Company shall use the proceeds from the sale
of the Note for working capital and other general corporate
purposes and shall not, directly or indirectly, use such proceeds
for any loan to or investment in any other corporation,
partnership, enterprise or other person (except in connection with
its currently existing direct or indirect
Subsidiaries).

 

 

8

 

 

d.
Expenses. Except as otherwise expressly provided in Section 5, all
costs and expenses, including, without limitation, fees and
disbursements of counsel, financial advisors and accountants,
incurred in connection with this Agreement and the transactions
contemplated hereby shall be paid by the party incurring such costs
and expenses, whether or not the Closing shall have
occurred.

 

e.
Financial Information. The Company agrees to send or make available
the following reports to the Buyer until the Buyer transfers,
assigns, or sells all of the Securities:

(i)
within ten (10) days after the filing with the SEC, a copy of its
Annual Report on Form 10-K its Quarterly Reports on Form 10-Q and
any Current Reports on Form 8-K; (ii) within one (1) day after
release, copies of all press releases issued by the Company or any
of its Subsidiaries; and (iii) contemporaneously with the making
available or giving to the shareholders of the Company, copies of
any notices or other information the Company makes available or
gives to such shareholders. For the avoidance of doubt, filing the
documents required in (i) above via EDGAR or releasing any
documents set forth in (ii) above via a recognized wire service
shall satisfy the delivery requirements of this Section
4(f).

 

f.
Listing. The Company shall use commercially reasonable efforts to
secure the listing of the Conversion Shares upon each national
securities exchange or automated quotation system, if any, upon
which shares of Common Stock are then listed (subject to official
notice of issuance) and, so long as the Buyer owns any of the
Securities, shall use commercially reasonable efforts to maintain,
so long as any other shares of Common Stock shall be so listed,
such listing of all Conversion Shares from time to time issuable
upon conversion of the Note. So long as the Buyer owns any of the
Securities, The Company will use commercially reasonable efforts to
maintain the listing and trading of its Common Stock on the OTC
Pink, OTCQB or any equivalent replacement exchange, the Nasdaq
National Market ("Nasdaq"), the Nasdaq SmallCap Market ("Nasdaq
SmallCap"), the New York Stock Exchange ("NYSE"), or the NYSE MKT
and will use commercially reasonable efforts to comply in all
respects with the Company's reporting, filing and other obligations
under the bylaws or rules of the Financial Industry Regulatory
Authority ("FINRA") and such exchanges, as applicable. The Company
shall promptly provide to the Buyer copies of any material notices
it receives from the OTC Pink, OTCQB and any other exchanges or
quotation systems on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing
on such exchanges and quotation systems. The Company shall pay any
and all fees and expenses in connection with satisfying its
obligation under this Section 4(g).

 

g.
Corporate Existence. So long as the Buyer beneficially owns any
Note, the Company shall maintain its corporate existence and shall
not sell all or substantially all of the Company's assets, except
in the event of a merger or consolidation or sale of all or
substantially all of the Company's assets, where the surviving or
successor entity in such transaction (i) assumes the Company's
obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded
corporation whose Common Stock is listed for trading on the OTC
Pink, OTCQB, OTCQX, Nasdaq, NasdaqSmallCap, NYSE or
AMEX.

 

h.
No Integration. The Company shall not make any offers or sales of
any security (other than the Securities) under circumstances that
would require registration of the Securities being offered or sold
hereunder under the 1933 Act or cause the offering of the
Securities to be integrated with any other offering of securities
by the Company for the purpose of any stockholder approval
provision applicable to the Company or its securities.

 

i.
Failure to Comply with the 1934 Act. So long as the Buyer
beneficially owns the Note, the Company shall comply with the
reporting requirements of the 1934 Act; and the Company shall
continue to be subject to the reporting requirements of the 1934
Act.

 

j.
Trading Activities. Neither the Buyer nor its affiliates has an
open short position (or other hedging or similar transactions) in
the common stock of the Company and the Buyer agree that it shall
not, and that it will cause its affiliates not to, engage in any
short sales of or hedging transactions with respect to the common
stock of the Company.

 

k.
Restriction on Activities. Commencing as of the date first above
written, and until the sooner of the six month anniversary of the
date first written above or payment of the Note in full, or full
conversion of the Note, the Company shall not, directly or
indirectly, without the Buyer's prior written consent, which
consent shall not be unreasonably withheld: (a) change the nature
of its business; (b) sell, divest, acquire, change the structure of
any material assets other than in the ordinary course of business;
or (c) solicit any offers for, respond to any unsolicited offers
for, or conduct any negotiations with any other person or entity in
respect of any variable rate debt transactions (i.e., transactions
were the conversion or exercise price of the security issued by the
Company varies based on the market price of the Common Stock) above
$500,000, whether a transaction similar to the one contemplated
hereby or any other investment.

 

1.
Legal Counsel Opinions. Upon the request of the Buyer from to time
to time, the Company shall be responsible (at its cost) for
promptly supplying to the Company's transfer agent and the Buyer a
customary legal opinion letter of its counsel (the "Legal Counsel
Opinion") to the effect that the sale of Conversion Shares by the
Buyer or its affiliates, successors and assigns is exempt from the
registration requirements of the 1933 Act pursuant to Rule 144
(provided the requirements of Rule 144 are satisfied and provided
the Conversion Shares are not then registered under the 1933 Act
for resale pursuant to an effective registration statement). Should
the Company's legal counsel fail for any reason to issue the Legal
Counsel Opinion, the Buyer may (at the Company's cost) secure
another legal counsel to issue the Legal Counsel Opinion, and the
Company will instruct its transfer agent to accept such
opinion.

m.
Par Value. If the closing bid price at any time the Note is
outstanding falls below $0.001, the Company shall use all
commercially reasonable efforts to obtain shareholder consent, to
reduce the par value of its Common Stock to $0.0001 or less and
shall effect such action promptly upon obtaining such
approval.

 

 

9

 

 

n.
Breach of Covenants. The Company agrees that if the Company
breaches any of the covenants set forth in this Section 4, and in
addition to any other remedies available to the Buyer pursuant to
this Agreement, it will be considered an Event of Default under
Section 3.4 of the Note, the Company shall pay to the Buyer the
Standard Liquidated Damages Amount in cash or in shares of Common
Stock at the option of the Buyer, until such breach is cured, or
with respect to Section 4( d) above, the Company shall pay to the
Buyer the Standard Liquidated Damages Amount in cash or shares of
Common Stock, at the option of the Buyer, upon each violation of
such provision. If the Company elects to pay the Standard
Liquidated Damages Amounts in shares of Common Stock, such shares
shall be issued at the Conversion Price at the time of
payment.

 

1.

Transaction Expense Amount. Upon Closing, the
Company shall pay an amount equal to Five Thousand and
00/100
United States Dollars (US$5,000.00),
to Auctus Fund Management, LLC ("Auctus Management") to cover the
Holder's due diligence, monitoring, and other transaction costs
incurred for services rendered in connection
herewith.

2.

Transfer
Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent to issue certificates,
registered in the name of the Buyer or its nominee, for the
Conversion Shares in such amounts as specified from time to time by
the Buyer to the Company upon conversion of the Note in accordance
with the terms thereof (the "Irrevocable Transfer Agent
Instructions"). In the event that the Borrower proposes to replace
its transfer agent, the Borrower shall provide, prior to the
effective date of such replacement, a fully executed Irrevocable
Transfer Agent Instructions in a form as initially delivered
pursuant to the Purchase Agreement (including but not limited to
the provision to irrevocably reserve shares of Common Stock in the
Reserved Amount) signed by the successor transfer agent to Borrower
and the Borrower. Prior to registration of the Conversion Shares
under the 1933 Act or the date on which the Conversion Shares may
be sold pursuant to Rule 144 without any restriction as to the
number of Securities as of a particular date that can then be
immediately sold, all such certificates shall bear the restrictive
legend specified in Section 2(g) of this Agreement. The Company
warrants that: (i) no instruction other than the Irrevocable
Transfer Agent Instructions referred to in this Section, and stop
transfer instructions to give effect to Section 2(f) hereof (in the
case of the Conversion Shares, prior to registration of the
Conversion Shares under the 1933 Act or the date on which the
Conversion Shares may be sold pursuant to Rule 144 without any
restriction as to the number of Securities as of a particular date
that can then be immediately sold), will be given by the Company to
its transfer agent and that the Securities shall otherwise be
freely transferable on the books and records of the Company as and
to the extent provided in this Agreement and the Note; (ii) it will
not direct its transfer agent not to transfer or delay, impair,
and/or hinder its transfer agent in transferring (or issuing)(
electronically or in certificated form) any certificate for
Conversion Shares to be issued to the Buyer upon conversion of or
otherwise pursuant to the Note as and when required by the Note and
this Agreement; and (iii) it will not fail to remove (or directs
its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to
withdraw any stop transfer instructions in respect thereof) on any
certificate for any Conversion Shares issued to the Buyer upon
conversion of or otherwise pursuant to the Note as and when
required by the Note and this Agreement. Nothing in this Section
shall affect in any way the Buyer's obligations and agreement set
forth in Section 2(g) hereof to comply with all applicable
prospectus delivery requirements, if any, upon re-sa1e of the
Securities. If the Buyer provides the Company with (i) an opinion
of counsel of Buyer reasonably satisfactory to the Company's
transfer agent in form, substance and scope customary for opinions
in comparable transactions, to the effect that a public sale or
transfer of such Securities may be made without registration under
the 1933 Act and such sale or transfer is effected or (ii) the
Buyer provides reasonable assurances that the Securities can be
sold pursuant to Rule 144, the Company shall permit the transfer,
and, in the case of the Conversion Shares, promptly instruct its
transfer agent to issue one or more certificates, free from
restrictive legend, in such name and in such denominations as
specified by the Buyer. The Company acknowledges that a breach by
it of its obligations hereunder will cause irreparable harm to the
Buyer, by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations under this Section
may be inadequate and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Section,
that the Buyer shall be entitled, in addition to all other
available remedies, to an injunction restraining any breach and
requiring immediate transfer, without the necessity of showing
economic loss and without any bond or other security being
required.

 

7.
CONDITIONS PRECEDENT TO THE COMPANY'S OBLIGATIONS TO SELL. The
obligation of the Company hereunder to issue and sell the Note to
the Buyer at the Closing is subject to the satisfaction, at or
before the Closing Date of each of the following conditions
thereto, provided that these conditions are for the Company's sole
benefit and may be waived by the Company at any time in its sole
discretion:

 

a.
The Buyer shall have executed this Agreement and delivered the same
to the Company.

 

b.
The Buyer shall have delivered the Purchase Price in accordance
with Section l(b) above.

 

c.
The representations and warranties of the Buyer shall be true and
correct in all material respects as of the date when made and as of
the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date),
and the Buyer shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Buyer at or prior to the Closing Date.

 

d.
No litigation, statue, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.

 

 

10

 

 

8.
CONDITIONS PRECEDENT TO THE BUYER'S OBLIGATION TO PURCHASE. The
obligation of the Buyer hereunder to purchase the Note 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 Buyer's sole benefit and may be waived by
the Buyer at any time in its sole discretion:

 

a.
The Company shall have executed this Agreement and delivered the
same to the Buyer.

 

b.
The Company shall have delivered to the Buyer the duly executed
Note (in such denominations as the Buyer shall request) and in
accordance with Section l(b) above.

 

c.
The Irrevocable Transfer Agent Instructions, in form and substance
satisfactory to a majority-in-interest of the Buyer, shall have
been delivered to and acknowledged in writing by the Company's
Transfer Agent.

 

d.
The representations and warranties of the Company shall be true and
correct in all material respects as of the date when made and as of
the Closing Date as though made at such time (except for
representations and warranties that speak as of a specific date)
and the Company shall have performed, satisfied and complied in all
material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied
with by the Company at or prior to the Closing Date. The Buyer
shall have received a certificate or certificates, executed by the
chief executive officer of the Company, dated as of the Closing
Date, to the foregoing effect and as to such other matters as may
be reasonably requested by the Buyer including, but not limited to
certificates with respect to the Company's Certificate of
Incorporation, By-laws and Board of Directors' resolutions relating
to the transactions contemplated hereby.

 

e.
No litigation, statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated
or endorsed by or in any court or governmental authority of
competent jurisdiction or any self-regulatory organization having
authority over the matters contemplated hereby which prohibits the
consummation of any of the transactions contemplated by this
Agreement.

f.
No event shall have occurred which could reasonably be expected to
have a Material Adverse Effect on the Company including but not
limited to a change in the 1934 Act reporting status of the Company
or the failure of the Company to be timely in its 1934 Act
reporting obligations.

 

g.
The Conversion Shares shall have been authorized for quotation on
the OTC Pink, OTCQB or any similar quotation system and trading in
the Common Stock on the OTC Pink, OTCQB or any similar quotation
system shall not have been suspended by the SEC or the OTC Pink,
OTCQB or any similar quotation system.

 

h.
The Buyer shall have received an officer's certificate described in
Section 3(c) above, dated as of the Closing Date.

 

9.
GOVERNING LAW; MISCELLANEOUS.

 

a. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of Nevada
without regard to principles of conflicts of laws. Any action
brought by either party against the other concerning the
transactions contemplated by this Agreement, the Note or any other
agreement, certificate, instrument or document contemplated hereby
shall be brought only in the state courts of Massachusetts or in
the federal courts located in the state of Massachusetts. The
parties to this Agreement hereby irrevocably waive any objection to
jurisdiction and venue of any action instituted hereunder and shall
not assert any defense based on lack of jurisdiction or venue or
based upon forum non conveniens.
EACH PARTY HEREBY IRREVOCABLY WAIVES
ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR UNDER ANY OTHER
TRANSACTION DOCUMENT OR IN CONNECTION WITH OR ARISING OUT OF THIS
AGREEMENT, ANY OTHER TRANSACTION DOCUMENT OR ANY TRANSACTION
CONTEMPLATED HEREBY OR THEREBY. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's
fees and costs. In the event that any provision of this Agreement
or any other agreement delivered in connection herewith is invalid
or unenforceable under any applicable statute or rule of law, then
such provision shall be deemed inoperative to the extent that it
may conflict therewith and shall be deemed modified to conform with
such statute or rule of law. Any such provision which may prove
invalid or unenforceable under any law shall not affect the
validity or enforceability of any other provision of any agreement.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any suit, action or
proceeding in connection with this Agreement or any other
Transaction Document by mailing a copy thereof via registered or
certified mail or overnight delivery (with evidence of delivery) to
such party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.

 

 

11

 

 

b.
Counterparts; Signatures by Facsimile. This Agreement may be
executed in one or more counterparts, each of which shall be deemed
an original but all of which shall constitute one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. This
Agreement, once executed by a party, may be delivered to the other
party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this
Agreement.

 

c.
Construction; Headings. This Agreement shall be deemed to be
jointly drafted by the Company and the Buyer and shall not be
construed against any person as the drafter hereof. The headings of
this Agreement are for convenience of reference only and shall not
form part of, or affect the interpretation of, this
Agreement.

 

d.
Severability. In the event that any provision of this Agreement is
invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent
that it may conflict therewith and shall be deemed modified to
conform with such statute or rule of law. Any provision hereof
which may prove invalid or unenforceable under any law shall not
affect the validity or enforceability of any other provision
hereof.

 

e.
Entire Agreement; Amendments. This Agreement, the Note and the
instruments referenced herein contain the entire understanding of
the parties with respect to the matters covered herein and therein
and, except as specifically set forth herein or therein, neither
the Company nor the Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision
of this Agreement may be waived or amended other than by an
instrument in writing signed by the majority in interest of the
Buyer.

 

f.
Notices. All notices, demands, requests, consents, approvals, and
other communications required or permitted hereunder shall be in
writing and, unless otherwise specified herein, shall be (i)
personally served, (ii) deposited in the mail, registered or
certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or
(iv) transmitted by hand delivery, telegram, email, or facsimile,
addressed as set forth below or to such other address as such party
shall have specified most recently by written notice. Any notice or
other communication required or permitted to be given hereunder
shall be deemed effective (a) upon hand delivery or delivery by
email or facsimile, with accurate confirmation generated by the
transmitting facsimile machine, at the address or number designated
below (if delivered on a business day during normal business hours
where such notice is to be received), or the first business day
following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by
express courier service, fully prepaid, addressed to such address,
or upon actual receipt of such mailing, whichever shall first
occur. The addresses for such communications shall be:

 

If
to the Company, to:

 

Guided
Therapeutics, Inc.

 

5835
Peachtree Comers East, Suite B

 

Norcross,
GA 30092

 

Attn:
Gene Cartwright

 

E-mail:
info@guidedinc.com

 

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

 

Jones
Day

1420
Peachtreet St.

Norcross,
GA 30092

E-mail:
hdrodman@jonesday.com

 

 

12

 

 

lfto
the Buyer:

Auctus
Fund, LLC

545
Boylston Street, 2nd Floor

Boston,
MA 02116

Attn:
Lou Posner

Facsimile:
(617) 532-6420

 

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

 

Chad
Friend, Esq., LL.M.

Anthony
L.G., PLLC

625
N. Flagler Drive, Suite 600

West
Palm Beach, FL 33401

e-mail:
CFriend@AnthonyPLLC.com

 

Each
party shall provide notice to the other party of any change in
address.

 

g.
Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and
assigns. Neither the Company nor the Buyer shall assign this
Agreement or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the foregoing,
subject to Section 2(f), the Buyer may assign its rights hereunder
to any person that purchases Securities in a private transaction
from the Buyer or to any of its "affiliates," as that term is
defined under the 1934 Act, without the consent of the
Company.

 

h.
Third Party Beneficiaries. 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.

 

i.
Survival. The representations and warranties of the Company and the
agreements and covenants set forth in this Agreement shall survive
the closing hereunder not withstanding any due diligence
investigation conducted by or on behalf of the Buyer. The Company
agrees to indemnify and hold harmless the Buyer and all their
officers, directors, employees and agents for loss or damage
arising as a result of or related to any breach or alleged breach
by the Company of any of its representations, warranties and
covenants set forth in this Agreement or any of its covenants and
obligations under this Agreement, including advancement of expenses
as they are incurred.

 

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

 

k.
No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their
mutual intent, and no rules of strict construction will be applied
against any party.

 

l.
Remedies. The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated
hereby. Accordingly, the Company acknowledges that the remedy at
law for a breach of its obligations under this Agreement will be
inadequate and agrees, in the event of a breach or threatened
breach by the Company of the provisions of this Agreement, that the
Buyer shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining,
preventing or curing any breach of this Agreement and to enforce
specifically the terms and provisions hereof, without the necessity
of showing economic loss and without any bond or other security
being required.

 

 

13

 

 

m.
Publicity. The Company, and the Buyer shall have the right to
review a reasonable period of time before issuance of any press
releases, SEC, OTCQB or FINRA filings, or any other public
statements with respect to the transactions contemplated hereby;
provided, however, that the Company shall be entitled, without the
prior approval of the Buyer, to make any press release or SEC,
OTCQB (or other applicable trading market) or FINRA filings with
respect to such transactions as is required by applicable law and
regulations (although the Buyer shall be consulted by the Company
in connection with any such press release prior to its release and
shall be provided with a copy thereof and be given an opportunity
to comment thereon). Notwithstanding the foregoing, the Company
shall not be required to submit for review any such disclosure
contained in filings with the SEC if it shall have previously
provided substantially the same disclosure for review in connection
with a previous filing.

 

n.
Indemnification. Subject to the provisions of this Section 9(n),
the Company will indemnify and hold Buyer and its directors,
officers, shareholders, members, partners, employees and agents
(each, a "Buyer Party") harmless from any and all losses,
liabilities, obligations, claims, contingencies, damages, costs and
expenses, including all judgments, amounts paid in settlements,
court costs and reasonable attorneys' fees and costs of
investigation that any such Buyer Party may suffer or incur as a
result of or relating to (a) any breach of any of the
representations, warranties, covenants or agreements made by the
Company in this Agreement or the Note, or any other agreement,
certificate, instrument, or document contemplated hereby or
thereby, (b) any action instituted against the Buyer Parties in any
capacity, or any of them or their respective affiliates, by any
stockholder of the Company who is not an affiliate of such Buyer
Party, with respect to any of the transactions contemplated by this
Agreement (unless such action is based upon a breach of such Buyer
Party's representations, warranties or covenants under this
Agreement or any agreements or understandings such Buyer Party may
have with any such stockholder or any violations by such Buyer
Party of state or federal securities laws or any conduct by such
Buyer Party that constitutes fraud, gross negligence, willful
misconduct or malfeasance) or (c) any untrue or alleged untrue
statement of a material fact contained in any registration
statement, any prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus,
or arising out of or relating to any omission or alleged omission
of a material fact required to be stated therein or necessary to
make the statements therein (in the case of any prospectus or
supplement thereto, in light of the circumstances under which they
were made) not misleading. If any action shall be brought against
any Buyer Party in respect of which indemnity may be sought
pursuant to this Agreement, such Buyer Party shall promptly notify
the Company in writing, and the Company shall have the right to
assume the defense thereof with counsel of its own choosing
reasonably acceptable to the Buyer Party. Any Buyer Party shall
have the right to employ separate counsel in any such action and
participate in the defense thereof, but the fees and expenses of
such counsel shall be at the expense of such Buyer Party except to
the extent that (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed
after a reasonable period of time to assume such defense and to
employ counselor (iii) in such action there is, in the reasonable
opinion of counsel, a material conflict on any material issue
between the position of the Company and the position of such Buyer
Party, in which case the Company shall be responsible for the
reasonable fees and expenses of no more than one such separate
counsel. The Company will not be liable to any Buyer Party under
this Agreement (y) for any settlement by a Buyer Party effected
without the Company's prior written consent, which shall not be
uureasonab1y withheld, conditioned, or delayed; or (z) to the
extent, but only to the extent that a loss, claim, damage or
liability is attributable to any Buyer Party's breach of any of the
representations, warranties, covenants or agreements made by such
Buyer Party in this Agreement. The indemnification required by this
Section 9.n. shall be made by periodic payments of the amount
thereof during the course of the investigation or defense, as and
when bills are received or are incurred. The indemnity agreements
contained herein shall be in addition to any cause of action or
similar right of any Buyer Party against the Company or others and
any liabilities the Company may be subject to pursuant to
law.

 

[signature
page follows]

 

 

 

14

 

 

 

IN
WITNESS THEREOF, the undersigned Buyer and the Company have caused
this agreement to be duly executed as of date first above
written.

 

 

 

 

 

GUIDED THERAPEUTICS, INC.

/s/
Gene S. Cartwright

Gene
S. Cartwright

Chef
Executive Officer

 

 

 

AUCTUS FUND, LLC

/s/
Lou Posner

Lou
Posner

Managing
Director

 

15

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00307-of-00352.parquet"}]]