Document:

SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE
AGREEMENT (the
“Agreement”), dated
as of
November 25,
2013, by and
between CO-SIGNER,
INC.,
a Nevada corporation,
with headquarters
located at
6250 Mountain
Vista Street
- Suite C-1,
Henderson, NV
89014 (the
“Company”), and
ASHER ENTERPRISES, INC., a Delaware
corporation, with its address
at 1 Linden Place,
Suite 207, Great Neck,
NY 11021 (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
an 8%
convertible note
of the
Company, in
the form
attached hereto
as Exhibit
A, in
the aggregate
principal amount
of $42,500.00 (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:

 

1.                      
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.

 

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 6
and Section
7 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 November 27, 2013, 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.                      
Buyer’s 
Representations  and
 Warranties.
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(f)
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; 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.

 

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 remain
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
remain 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, at the cost
of the Buyer, an opinion of counsel 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 to sell
or otherwise transfer
the Securities
only in accordance
with this Section
2(f) 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, at
the cost of the Buyer, an
opinion of counsel 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 THIS CERTIFICATE 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 RULE
144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING,
THE SECURITIES
MAY BE PLEDGED
IN CONNECTION
WITH A BONA
FIDE MARGIN
ACCOUNT OR OTHER LOAN
OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES.”

 

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, 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. In
the event that the Company does
not accept the opinion of counsel
provided by the Buyer
with respect
to the transfer
of Securities pursuant
to an
exemption from registration, such
as Rule 144 or Regulation S, at the Deadline,
it will be considered
an Event of
Default pursuant to Section 3.2 of the
Note.

 

    	2

    	 

    

h.                      
Authorization;
Enforcement.
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 resident
of the
jurisdiction set
forth immediately
below the Buyer’s
name on the
signature pages hereto.

 

3.                      
Representations
and
Warranties
of the
Company.
The  Company represents
and warrants to
the Buyer that:

 

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
carry on its business
as and where
now owned, leased, used,
operated and conducted.
Schedule 3(a) sets
forth a list of all of the Subsidiaries
of the Company and the jurisdiction in which
each is incorporated.
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. “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.
“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.

 

c.                       
Capitalization.
As of
the date
hereof, the
authorized capital
stock of
the Company consists
of: (i)
440,000,000 shares
of Common
Stock, $0.001
par value
per share,
of which
136,111,1202 shares
are issued
and outstanding;
and (ii)
10,000,000 shares
of Preferred Stock,
$0.001 par
value per
share, of which
1,173,041 shares are
issued and
outstanding; no
shares are
reserved for
issuance pursuant to
the Company’s
stock option
plans, no shares are
reserved for issuance pursuant
to securities (other than
the Note) exercisable for,
or convertible into or exchangeable for
shares of Common Stock and
6,500,000 shares 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 furnished
to the Buyer 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.

    	3

    	 

    

 

d.                      
Issuance
of Shares.
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.                       
Acknowledgment 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,
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.
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 Over-the-
Counter Bulletin Board
(the “OTCBB”) and
does not reasonably anticipate that the
Common Stock will be delisted
by the OTCBB
in the foreseeable future. The Company
and its Subsidiaries
are unaware of any facts
or circumstances which might
give rise to any
of the foregoing.

 

g.                       
SEC
Documents;
Financial
Statements.
The Company
has timely 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”).
Upon written request
the Company will deliver 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
have been prepared
in accordance with
United States
generally accepted accounting principles,
consistently applied, during the
periods involved 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
or otherwise,
other than
(i) liabilities
incurred in
the ordinary course of business
subsequent to August
31, 2013, and
(ii) obligations under
contracts and
commitments incurred in
the ordinary course of business
and not required
under generally
accepted accounting
principles 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.

 

    	4

    	 

    

h.                      
Absence
of Certain
Changes.
Since August
31, 2013, there
has been
no material
adverse change
and no
material adverse
development in
the assets,
liabilities, business,
properties, operations,
financial condition,
results of
operations, prospects
or 1934 Act
reporting status of
the Company or any of its Subsidiaries.

 

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. 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,
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.

 

l.                        
Tax
Status.
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 disclosed
on 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
(assuming for this purpose that
the Company’s reports filed
under the 1934
Act are being
incorporated into
an effective
registration statement
filed by
the Company under the 1933 Act).

 

    	5

    	 

    

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.
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.
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
August 31, 2013, 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.

 

s.                       
Environmental Matters.

 

(i)                           
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.

    	6

    	 

    

 

(iii)                        
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 except
such as are described
in Schedule 3(t) 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.                      
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 all
policies relating to
directors’ and
officers’ liability coverage,
errors and
omissions coverage, and commercial
general liability coverage.

 

v.                      
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.

 

w.                     
Foreign
Corrupt
Practices.
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.

 

x.                      
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.

 

y.                      
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.

 

z.                      
Breach
of Representations
and Warranties
by the
Company.
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, it will be considered
an Event of
default under Section 3.4 of the
Note.

 

    	7

    	 

    

4.                      
COVENANTS.

 

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

 

b.                      
Form
D;
Blue
Sky
Laws.
The
Company agrees
to file
a Form
D with
respect to
the Securities
as required
under Regulation
D and
to provide a
copy thereof
to the Buyer
promptly after
such filing.
The Company shall,
on or before
the Closing Date, take such action
as the Company shall reasonably determine
is 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 obtain
an exemption from
such qualification),
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
for general
working capital purposes.

 

d.                      
Right
of First
Refusal.
Unless it
shall have
first delivered
to the Buyer,
at least
seventy two (72)
hours prior
to the closing
of such
Future Offering
(as defined
herein), written
notice describing
the proposed Future
Offering, including
the terms and
conditions thereof
and proposed definitive
documentation to be entered into in connection
therewith, and providing
the Buyer an option during
the seventy two (72) hour period following
delivery of such notice to purchase
the securities being offered in the Future
Offering on the same terms
as contemplated by
such Future Offering (the
limitations referred to in this sentence
and the preceding sentence are collectively
referred to as the “Right
of First Refusal”) (and subject
to the exceptions described below),
the Company will not conduct
any equity financing (including
debt with an
equity component) (“Future Offerings”)
during the period beginning on the
Closing Date
and ending
twelve (12)
months following
the Closing Date.
In the event
the terms and conditions
of a proposed Future Offering
are amended in any respect
after delivery of the notice
to the Buyer
concerning the
proposed Future
Offering, the
Company shall
deliver a new notice
to the Buyer describing
the amended terms and
conditions of the proposed Future
Offering and
the Buyer thereafter shall
have an
option during the seventy two
(72) hour period following
delivery of such new notice to purchase
its pro rata share of the securities
being offered on the same terms as
contemplated by such proposed Future
Offering, as amended.
The foregoing sentence shall
apply to successive amendments to the
terms and conditions of any
proposed Future Offering.
The Right of First
Refusal shall not apply to any
transaction involving (i) issuances of
securities in a firm commitment
underwritten public offering (excluding
a continuous
offering pursuant to
Rule 415 under
the 1933 Act) or (ii) issuances
of securities as
consideration for a merger, consolidation
or purchase of assets, or in connection
with any strategic partnership or joint
venture (the primary purpose of
which is not to raise equity capital),
or in connection with the disposition
or acquisition of a business, product
or license by the Company. The
Right of First Refusal
also shall not apply to the issuance
of securities upon
exercise or conversion
of the Company’s options,
warrants or other
convertible securities outstanding
as of the date
hereof or to the grant
of additional options
or warrants, or the
issuance of additional
securities, under
any Company
stock option or
restricted stock
plan approved by the
shareholders of the Company.

 

e.                      
Expenses.
At the
Closing, the
Company shall
reimburse Buyer
for expenses
incurred by
them in connection
with the
negotiation, preparation,
execution, delivery
and performance
of this Agreement
and the
other agreements
to be executed
in connection herewith (“Documents”),
including, without limitation,
reasonable attorneys’ and
consultants’ fees and
expenses, transfer agent fees,
fees for stock quotation
services, fees relating
to any amendments or modifications
of the Documents or any consents
or waivers of provisions
in the Documents, fees
for the preparation of opinions
of counsel, escrow fees,
and costs of restructuring
the transactions contemplated by the Documents.
When possible, the Company must pay these
fees directly,
otherwise the Company must make
immediate payment
for reimbursement to the Buyer
for all fees and
expenses immediately upon written notice
by the Buyer or the submission of an
invoice by the Buyer. The
Company’s obligation with
respect to this transaction is to reimburse
Buyer’ expenses shall be
$2,500.

 

f.                       
Financial
Information.
Upon
written
request
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.

 

g.                       
[INTENTIONALLY
DELETED]

    	8

    	 

    

 

h.                      
Listing. The
Company shall
promptly 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
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. The Company will
obtain and, so long as
the Buyer owns
any of the Securities, maintain
the listing and trading of
its Common Stock on the OTCBB or any
equivalent replacement exchange, the
Nasdaq National Market
(“Nasdaq”), the Nasdaq SmallCap
Market (“Nasdaq
SmallCap”), the
New York
Stock Exchange
(“NYSE”), or
the American Stock Exchange
(“AMEX”) and will
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 notices
it receives
from the
OTCBB 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.

 

i.                        
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 OTCBB,
Nasdaq, Nasdaq
SmallCap, NYSE or AMEX.

j.                        
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.

 

k.                      
Breach of Covenants.
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.

 

l.                        
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.

 

m.                    
Trading
Activities.
Neither
the Buyer
nor its affiliates
has an
open short
position 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.

 

5.                      
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 5, 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-sale
of the Securities. If the Buyer provides
the Company, at the cost
of the Buyer, with (i)
an opinion of counsel 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 5 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.

    	9

    	 

    

 

6.                      
Conditions to
the Company’s
Obligation 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 same to
the Company.

 

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

 

b.                     The
Buyer shall
have delivered
the Purchase
Price in accordance
with Section 1(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, 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.

 

7.                      
Conditions 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: the same to
the Buyer.

 

a.                   
The
Company shall
have executed
this Agreement
and delivered

 

b.                    The
Company shall
have delivered
to the Buyer
the duly executed
Note (in such denominations as
the Buyer shall request) in accordance
with Section 1(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
OTCBB and
trading in the
Common Stock
on the OTCBB
shall not have
been suspended
by the
SEC or the OTCBB.

 

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

    	10

    	 

    

 

8.                      
Governing Law;
Miscellaneous.

 

a.                      
Governing Law.
This Agreement
shall be
governed by
and construed
in accordance
with the
laws of
the State of
New York
without regard
to principles
of conflicts
of laws. Any action
brought by either
party against the other
concerning the transactions contemplated
by this
Agreement shall
be brought
only in the state
courts of New York
or in the federal courts located in the
state and county of Nassau. The
parties to this Agreement hereby irrevocably
waive any objection
to jurisdiction
and venue of any
action instituted hereunder
and shall
not assert
any defense based
on lack of jurisdiction or venue
or based upon forum non conveniens.
The Company and Buyer
waive trial by
jury. The prevailing party shall
be entitled to recover from
the other party its reasonable attorney's
fees and costs.
In the event that
any provision
of this Agreement
or any other
agreement delivered in
connection herewith is invalid
or unenforceable under any applicable
statute or rule of law,
then such provision
shall be deemed inoperative
to the extent
that it
may conflict
therewith and
shall be
deemed modified
to conform with
such statute
or rule
of law.
Any such provision
which may
prove invalid
or unenforceable
under any law shall
not affect
the validity or enforceability
of any other provision
of any agreement.
Each party hereby irrevocably waives personal
service of process
and consents
to process
being served in any suit,
action or proceeding in connection
with this Agreement or any
other Transaction 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.

 

b.                      
Counterparts.
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.

 

 

c.                      
Headings.
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
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, 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
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: CO-SIGNER,
INC.

6250 Mountain
Vista Street - Suite
C-1 Henderson, NV
89014

Attn:
DARREN M. MAGOT, Chief
Executive Officer 

facsimile:
[enter fax number]

 

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

Kyleen
Cane Cane•Clark
LLP

3273
E. Warm Springs
Rd. Las Vegas,
NV 89120

 

If
to the Buyer:

ASHER
ENTERPRISES, INC.

1
Linden Pl., Suite 207
Great Neck, NY. 11021

Attn:
Curt Kramer, President

facsimile:
516-498-9894

 

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

Naidich Wurman Birnbaum &
Maday LLP

80 Cuttermill
Road, Suite 410
Great Neck, NY
11021

Attn:
Bernard S. Feldman, Esq.

facsimile:
516-466-3555

 

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

    	11

    	 

    

 

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
notwithstanding 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.                        
Publicity. The
Company, and
the Buyer
shall have
the right
to review
a reasonable
period of time
before issuance
of any
press releases,
SEC, OTCBB
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, OTCBB
(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).

 

k.                      
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.

 

l.                        
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.

 

m.                    
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.

 

    	12

    	 

    

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

 

 

	CO-SIGNER, INC.
	 
	By: /s/ Darren M. Magot
	DARREN
M. MAGOT
	Chief
    Executive Officer
	 
	ASHER ENTERPRISES, INC.
	 
	By: /s/ Curt Kramer
	Name:
    Curt Kramer
	Title:   President
	1
    Linden Pl., Suite 207
    Great Neck, NY. 11021

 

	AGGREGATE SUBSCRIPTION AMOUNT:	 
	Aggregate Principal Amount of Note:	$42,500.00
	Aggregate Purchase Price:	$42,500.00
	
         3773(2)
11-25-13

        patrick.gaynes@gmail.com
        

        darrenmagot@earthlink.net
	 

 

    	13NEITHER THIS NOTE NOR THE SECURITIES
INTO WHICH THIS NOTE IS CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”)
OR ANY STATE SECURITIES LAWS AND NEITHER THIS NOTE NOR ANY INTEREST THEREIN NOR THE SECURITIES INTO WHICH THIS NOTE IS CONVERTIBLE
MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.

 

Co-Signer, Inc.

 

Promissory Note January 3, 2013

 

$15,000.00

 

FOR VALUE RECEIVED,
the undersigned, Co-Signer, Inc. (Maker), promises to pay to the order of Darren M. Magot (Note Holder) or the successors
and assigns, the principal sum of Fifteen Thousand and no/100 Dollars ($15,000.00) (Principal) subject to the terms and conditions
set forth herein.

Principal payment shall
be made to: Darren Magot

9061 Niguel Circle Huntington
Beach, CA 92646

 

Or as Note Holder may designate
in writing at any time in the future.

 

The consideration for
this loan shall be a fee of $750.00 per week for any outstanding principal balance until all principal and fees are paid in full.

 

The principal shall be
due and payable in full in one payment, without offset or deduction, in lawful money of the United States, by Fourteen (14) days
from final funding of loan (maturity date). This Note is a bridge loan in conjunction with the funding of the Company from a convertible
loan from Asher Enterprises, which is estimated to be consummated and funded between January 2 and January 14, 2014. This Note
will be paid in full as a designated payment to Asher Enterprises, Inc. as directed by the Company per Addendum A, Co-Signer,
Inc. Distribution Authorization to Asher Enterprises.

 

Maker will reimburse
legal expenses to Note Holder for any costs and expenses incurred in enforcing this Note to the extent allowable by applicable
law. Those expenses include, but are not limited to, reasonable attorney’s fees.

 

Co-Signer, Inc. and any
other entity that has obligations under this Note waive the rights of Presentment and Notice of Dishonor. "Presentment"
means the right to require the Note Holder to demand payment of amounts due. "Notice of Dishonor" means the right to
require the Note Holder to give notice to other persons that amounts due have not been paid.

The Maker represents and
warrants to Holder:

 

Organization and
Qualification. The Maker 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 carry on its business as and where now owned, leased, used, operated
and conducted. The Maker 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.
“Material Adverse Effect” means any material adverse effect on the business, operations, assets, financial condition
or prospects of the Maker 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. “Subsidiaries” means any corporation or other
organization, whether incorporated or unincorporated, in which the Maker owns, directly or indirectly, any equity or other ownership
interest. 

Authorization; Enforcement.
(i) The Maker has all requisite corporate power and authority to enter into and perform this Note and to consummate the transactions
contemplated hereby and thereby and to agree to all fees charged, in accordance with the terms hereof, (ii) the execution and
delivery of this Note by the Maker and the consummation by it of the transactions contemplated hereby and thereby have been duly
authorized by the Maker’s Board of Directors and no further consent or authorization of the Maker, its Board of Directors,
or its shareholders is required, (iii) this Note has been duly executed and delivered by the Maker by its authorized representative,
and such authorized representative is the true and official representative with authority to sign this Note and the other documents
executed in connection herewith and bind the Maker accordingly, and (iv) this Note constitutes, a legal, valid and binding obligation
of the Maker enforceable against the Maker in accordance with its terms.

    	 

    	 

    

 

No Conflicts. The
execution, delivery and performance the Note by the Maker and the consummation by the Maker of the transactions contemplated hereby
will not (i) conflict with or result in a violation of any provision of the Articles of Incorporation or By-laws of the Maker,
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 Maker 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 Maker or its securities are
subject) applicable to the Maker or any of its Subsidiaries or by which any property or asset of the Maker 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).

 

No Integrated Offering.
Neither the Maker, 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 this note or the Conversion Stock to the Holder.

 

No Investment Company.
The Company is not an “investment company” required to be registered under the Investment Company Act of 1940 (an
“Investment Company”). The Maker is not controlled by an Investment Company.

 

This Note is a uniform instrument
with limited variations in some jurisdictions.

 

Notices. Any notice
herein required or permitted to be given shall be in writing and may be personally served or delivered by courier or sent by United
States mail and shall be deemed to have been given upon receipt if personally served (which shall include telephone line facsimile
transmission) or sent by courier or three (3) days after being deposited in the United States mail, certified, with postage pre-paid
and properly addressed, if sent by mail. For the purposes hereof, the address of the Note Holder shall be 9061 Niguel Circle,
Huntington Beach, CA 92646 and the address of the Maker shall be 8275 S. Eastern Avenue, Suite 200-661, Las Vegas, NV 89123-2545.
Both the Holder or its assigns and the Maker may change the address for service by delivery of written notice to the other as
herein provided.

 

Amendment.  This
Note and any provision hereof may be amended only by an instrument in writing signed by the Maker and the Note Holder.

 

Assignability.
This Note shall be binding upon the Maker and its successors and assigns and shall inure to be the benefit of the Holder and its
successors and assigns; provided, however, that so long as no Event of Default has occurred, this Note shall only be transferable
in whole subject to the restrictions contained in the restrictive legend on the first page of this Note.

 

Governing Law.
 This Note shall be governed by the internal laws of the State of California, without regard to conflicts of laws principles.

 

Replacement of Note.
The Maker covenants that upon receipt by the Maker of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Note, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which
shall not include the posting of any bond), and upon surrender and cancellation of such Note, if mutilated, the Maker will make
and deliver a new Note of like tenor.

 

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

 

Headings. The
headings of the sections of this Note are inserted for convenience only and do not affect the meaning of such section.

 

Counterparts. This Note
may be executed in multiple counterparts, each of which shall be an original, but all of which shall be deemed to constitute on
instrument.

 

    	2

    	 

    

IN WITNESS WHEREOF ,
with the intent to be legally bound hereby, the Maker as executed this Note as of the date first written above.

 

	MAKER:
	 
	/s/
    Kurt Kramerenko
	Kurt
    Kramerenko, Chief Executive Officer
	Co-Signer,
    Inc.
	Date:
    1/3/14
	 
	NOTE
    HOLDER:
	 
	/s/
    Darren Magot
	Darren
    Mago
	Individual
    Investor/Lender
	Date:
    1/3/14

Chief Executive Officer

    	3

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