Document:

DEFINITIVE
AGREEMENT

 

for

 

Walker
River Resources Corp. (“WRR”) Acquisition of All Interests of Nevada Canyon Gold Corp. (“NCG”) in and
to an Exploration Lease with Option to PurchaseAgreement, with Goodsprings Development LLC. (“GSD”), dated June 1,
2017 (the”Transaction”)

 

July
11, 2018

 

	1.
    Overview / Recitals:	 	Walker
        River Resources Corp., an Canadian public company (TSX.V:WRR)

                                                                                           

        Nevada
        Canyon Gold Corp. (NCG) is a Nevada Corporation publicly traded issuer on the OTC/QB markets, that holds all rights and
        interests in and to an Exploration Lease with Option to Purchase Agreement with Goodsprings Development LLC, (GSD) a private
        Nevada company, dated June 1, 2017 (the “Agreement”). GSD holds all rights, titles and 100% undivided interest
        in and to the Garfield Flats Property, consists of 156 unpatented mining claims (3120 acres) located in sections 27 and
        28 of T 7 N, R 32 E, Mineral County, Nevada which is the subject of the Agreement. See Schedule “A”.

	 	 	 
	2.
Terms of the Exploration Lease and Option Purchase Agreement: 
	 	Attached
    hereto as Schedule A and incorporated herein in its entirety by this reference.
	 	 	 
	3.
Approval of Transaction:
	 	Both
    the NCG and WRR boards have approved the Transaction. GSD has also granted its written consent to the assignment of the Exploration
    and Option to Purchase Agreement to WRR.
	 	 	 
	4.
    Consideration: 	 	Full
    consideration for all rights subject of the Transaction consists of a one-time cash payment of USD$55,000.00 by WRR to NGC.
    Due within 5 business days upon the execution of this Definitive Agreement and Closing.
	 	 	 
	5.
Principal Conditions to Closing:
	 	Conditions for Closing are as follows:

                                                                               

                                                                              (i)    Board approvals of the Transaction by NCG and WRR.

                                                                              (ii)   GSD’s written consent to the Transaction.

                                                                              (iii)  Receipt of all required regulatory approvals, if any.

                                                                              (iv)  No material adverse change to either the structure or operations of NCG or WRR prior to Closing.

 

    	 	-1-	 

     

    

 

	6.
    Closing:	 	This
    Transaction shall Close upon the full execution of this Definitive Agreement. The parties shall cooperate in the filing of
    appropriate notice of the Transaction, with the Option to be registered or recorded to WRR, in all necessary or desirable
    locations.
	 	 	 
	7.
    Expenses:	 	Each
    party shall pay its own expenses and attorneys’ fees incurred in connection with this Definitive Agreement and the Transaction,
    unless otherwise agreed in writing.

 

8.
Miscellaneous Provisions.

 

1.
No Violation. Each respective party represents and warrants, for itself only, that entering into this Definitive Agreement
and the consummation of the Transaction contemplated herein do not violate or cause a breach of any document, agreement or instrument
to which such party is a party or by which such party or any of their assets are or may be bound.

 

2.
Governing Law. This Definitive Agreement shall be governed by and construed and enforced in accordance with the internal
laws of the State of Nevada as such laws are applied to agreements entered into and to be performed entirely within such State
without giving effect to the conflicts of law provisions thereof.

 

4.
Duty of Care to Protect Confidential Information. Any information disclosed by one party (“Disclosing Party”)
to another party (“Recipient”) which is clearly marked and identified by the Disclosing Party as “Confidential
Information” may not be disclosed to any third party without the prior written consent of the Disclosing Party. Each Party
agrees that the other may disclose Confidential Information it receives to its subsidiaries or affiliates (or agents who have
a “need to know” and have agreed to a non-disclosure obligation at least as restrictive as the terms of this section
of this Definitive Agreement), all subject to the terms of this Definitive Agreement. The Recipient must provide at least the
same standard of care to the protection of the Confidential Information herein as it provides to protect its own confidential
information. The Recipient will not reproduce Confidential Information except to accomplish the purpose of this Definitive Agreement.
Neither party will be liable to the other for inadvertent or accidental disclosure of Confidential Information if the disclosure
occurs notwithstanding the party’s exercise of the same level of protection and care that such party customarily uses in
safeguarding its own proprietary and confidential information.

 

In
addition, each party warrants and represents that it has the right to disclose any and all Confidential Information that it discloses
to the Recipient pursuant to this Definitive Agreement and shall indemnify Recipient from any claims arising out any assertion
or claim with respect thereto. Furthermore, each party will indemnify and defend the other from all third-party claims
resulting from the negligent or wrongful disclosure by it of a third-party’s confidential information. Except as specifically
set forth herein, neither party makes any representation or warranty about the Confidential Information disclosed.

 

5.
Resolution of Disputes. Except as otherwise provided herein as to injunctive relief for an unauthorized disclosure, any
dispute arising under this Definitive Agreement, shall be first submitted in writing to the parties for mutual discussion and
resolution. In the event that a resolution has not been reached by the parties within ten (10) days of the date of written notice
of dispute, such dispute shall be submitted to, and settled by, final, binding, non-appealable arbitration. Such arbitration shall
be conducted by arbitrators selected as hereinafter provided and shall be conducted in accordance with the Commercial Arbitration
Rules, existing at the date thereof, of the American Arbitration Association in Reno, Nevada.

 

    	 	2	 

     

    

 

The
parties expressly acknowledge and agree that such arbitration shall be final, binding and non-appealable. The dispute shall be
submitted to three (3) arbitrators, one arbitrator being selected by Recipient, one arbitrator being selected by Disclosing Party,
and the third arbitrator being selected by the two (2) so selected by the parties, or, if they cannot agree on a third, by the
American Arbitration Association. In the event that either party, within twenty (20) days after any notification made to it of
the demand for arbitration by the other party, shall not have selected its arbitrator and given notice thereof by registered mail
to the other party, such arbitrator shall be selected by the American Arbitration Association.

 

The
validity, construction, performance or termination of any agreement by and between the parties submitted to arbitration shall
be determined on the basis of the contractual obligations of the parties and the law governing such obligations. The arbitrators
shall determine their jurisdiction over persons and subject matter if such jurisdiction is challenged by one of the parties. The
award or decision of the arbitrators shall be: (a) rendered in writing, not more than forty-five (45) days after the selection
of such arbitrators and shall state the grounds on which the arbitrators reached their decision; (b) dated and sent to the parties
by registered mail, return receipt requested; and (c) final, binding and not subject to appeal before any court, nor other jurisdiction
nor any authority. The party determined by the written arbitration decision to have been the prevailing party shall, in addition
to any arbitration award, be entitled to an award of all costs, expenses and attorneys’ fees incurred in the dispute, from
inception of such dispute. The non-prevailing party shall also pay any and all costs and expenses of arbitration.

 

6.
Independent Legal Advice. Each respective party acknowledges that it has obtained or had the opportunity to obtain independent
legal advice in respect of this Definitive Agreement.

 

7.
Notices. All demands, notices, requests, consents and other communications required or permitted under this Definitive
Agreement shall be in writing and shall be personally delivered or sent by facsimile machine (with a confirmation copy sent by
one of the other methods authorized in this Section 7), commercial (including FedEx) or U.S. Postal Service overnight delivery
service, or, deposited with the U.S. Postal Service mailed first class, registered or certified mail, postage prepaid, as set
forth below:

 

	If
    to NCG, addressed to:	 
	 	Nevada
    Canyon Gold Corp
	 	316
    California Ave, Suite 543
	 	Reno,
    Nevada 89509
	 	Attn:
    Mr. Jeffrey Cocks, President
	 	 
	If
    to TFV, addressed to:	 
	 	Walker
    River Resources Corp.
	 	1130
    West Pender, Suite 820
	 	Vancouver,
    BC V6E 4A4
	 	Attn:
    Mr. Michel David, President

 

Notices
shall be deemed given upon the earliest to occur of (i) receipt by the party to whom such notice is directed; (ii) if sent by
facsimile machine, on the day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is directed)
such notice is sent if sent (as evidenced by the facsimile confirmed receipt) prior to 5:00 p.m. Pacific Time and, if sent after
5:00 p.m. Pacific Time, on the day (other than a Saturday, Sunday or legal holiday in the jurisdiction to which such notice is
directed) after which such notice is sent; (iii) on the first business day (other than a Saturday, Sunday or legal holiday in
the jurisdiction to which such notice is directed) following the day the same is deposited with the commercial carrier if sent
by commercial overnight delivery service; or (iv) the fifth day (other than a Saturday, Sunday or legal holiday in the jurisdiction
to which such notice is directed) following deposit thereof with the U.S. Postal Service as aforesaid. Each party, by notice duly
given in accordance therewith may specify a different address for the giving of any notice hereunder.

 

    	 	3	 

     

    

 

8.
Finders and Brokers. Each party represents and warrants to the other that it has no agreement with respect to the payment
of a fee or other compensation to any broker or finder, nor is it aware that any broker or finder is entitled to a fee or other
compensation, in connection with this Definitive Agreement or the consummation of the Transaction contemplated hereby. Each party
shall indemnify the other from and against any claims for brokerage commissions or finder’s fees asserted by any broker,
finder or other purported agent claiming through such party in connection with the Definitive Agreement and/or the Transaction
contemplated hereby.

 

9.
General. This Definitive Agreement: (a) represents the parties’ entire understanding regarding this Definitive
Agreement and Confidential Information, and supersedes any prior agreements or discussions, written or oral, regarding any other
Definitive Agreement or Confidential Information; (b) may be modified only by written amendment signed by the parties’
officers or authorized designees; (c) is to be considered severable, and if any provision of this Definitive Agreement
is illegal or unenforceable, the unaffected provisions will remain in effect; (d) contains headings for reference only;
these headings have no effect on any provision’s meaning; and (e) does not extend to any third-party beneficiaries.

 

10.
Waiver. If either party fails to enforce any right or remedy under this Definitive Agreement, that failure is not a waiver
of the right or remedy for any other breach or failure by the other party.

 

SIGNATURES
TO FOLLOW

 

    	 	4	 

     

    

 

Accepted
and agreed this 11 th day of July, 2018

 

	Walker River Resources Corp.	 	Nevada Canyon Gold Corp.
	 	 	 	 	 
	By:	/s/
    Michel David	 	By:	/s/
    Jeffrey Cocks
	Name:
    	Michel
    David	 	Name:	Jeffrey
    Cocks
	Title:	President	 	Title:	President
	Date:	July
    11, 2018	 	Date:	July
    11, 2018

 

    	 	5	 

     

    

 

SCHEDULE
A

 

Exploration
Lease and Option To Purchase Agreement

Garfield Flat Project

 

This
Exploration Lease and Option to Purchase Agreement Garfield Flat Project (“Agreement”) is made and entered into by
and between Goodsprings Development LLC, a Nevada limited liability corporation (“Owner”), and Nevada Canyon Gold
Corp., a Nevada corporation (“NCG”).

 

Recitals

 

A.
Owner owns the Lazy and Orsa unpatented mining claims situated in Mineral County, Nevada, described in Exhibit A attached to and
by this reference incorporated in this Agreement (collectively the “Property”).

 

B.
Owner desires to lease and to grant to NCG the option to purchase the Property on the terms and conditions of this Agreement.

 

Now,
therefore, in consideration of their mutual promises, the parties agree as follows:

 

1.
Definitions. The following defined terms, wherever used in this Agreement, shall have the meanings described below:

 

1.1
“Area of Interest” means the geographic area within one (1) mile of the exterior boundaries of the Property existing
on the Effective Date.

 

1.2
“Deed” means the conveyance to be executed and delivered by Owner to NCG on NCG’s exercise and closing of
the Option.

 

1.3
“Effective Date” means June 7, 2017.

 

1.4
“Governmental Regulations” means all directives, laws, orders, ordinances, regulations and statutes of any federal,
state or local agency, court or office.

 

1.5
“Gross Returns” means the returns and revenues from the production of Minerals from the Property as calculated
and determined in accordance with Exhibit B attached to this Agreement.

 

1.6
“Lease Year” means each one (1) year period following the Effective Date and each anniversary of the Effective
Date.

 

1.7
“Minerals” means all minerals and mineral materials, including, without limitation, gold, silver, platinum and
platinum group metals, base metals (including, for example, antimony, chromium, cobalt, copper, lead, manganese, mercury, nickel,
molybdenum, titanium, tungsten, zinc), and other metals and mineral materials which are on, in or under the Property.

 

1.8
“Minimum Payments” means the minimum payments payable by NCG in accordance with Section 4.1.

 

    	 	6	 

     

    

 

1.9
“NCG” means Nevada Canyon Gold Corp., a Nevada corporation, and its successors and assigns.

 

1.10
“Option” means the option and right granted by Owner to NCG to purchase the Property in accordance with Section
5.

 

1.11
“Owner” means Goodsprings Development LLC, a Nevada limited liability company, and its successors and assigns.

 

1.12
“Property” means the unpatented mining claims situated in Mineral County, Nevada, more particularly described
in Exhibit A and unpatented mining claims located in the Area of Interest which become subject to this Agreement

 

1.13
“Royalty” means the production royalty payable by NCG to Owner in accordance with Section 4.2.

 

2.
Lease and Grant of Rights. Owner leases the Property exclusively to NCG and grants to NCG the rights and privileges described
in this Section.

 

2.1
Lease. Owner leases to NCG and grants to NCG the right to use the Property for the purposes of exploration for Minerals. NCG
must exercise the Option to purchase the Property before NCG commences the development of a mine or mine-related facilities or
commences mining on the Property.

 

2.2
Water Rights. Subject to the regulations of the State of Nevada concerning the appropriation and taking of water, NCG shall
have the right to appropriate and use water, to drill wells for the water on the Property and to lay and maintain all necessary
water lines as may be required by NCG in its operations on the Property.

 

3.
Term. The term of this Agreement shall commence on the Effective Date and shall continue for ten (10) years, subject to NCG’s
right to extend this Agreement for two (2) additional terms of ten (10) years each, and subject to NCG’s right to purchase
the Property in accordance with Section 5.

 

4.
Payments. NCG shall make the following payments to Owner:

 

4.1
Annual Minimum Payments. On the parties’ execution of this Agreement, NCG shall pay to Owner the sum of fifteen thousand
dollars ($15,000.00) following the Effective Date, NCG shall pay the following Minimum Payments to Owner:

 

	First anniversary of Effective Date	 	$	15,000	 
	Second anniversary of Effective Date	 	$	20,000	 
	Third anniversary of Effective Date	 	$	20,000	 
	Fourth anniversary of Effective Date	 	$	25,000	 
	Fifth anniversary of Effective Date	 	$	25,000	 
	Sixth and any succeeding anniversary of the Effective Date	 	$	40,000	 

 

    	 	7	 

     

    

 

The
initial payment and the Minimum Payments provided in this Section shall not be credited against the Purchase Price if NCG elects
to exercise the Option. NCG shall be obligated to pay the Minimum Payments after the exercise and closing of the Option and Minimum
Payments paid after closing of the Option shall be credited against the Royalty payable in accordance with the Deed.

 

4.2
Production Royalty. NCG shall pay to Owner a production royalty (the “Royalty”) based on the Gross Returns from
the production and sale of Minerals from the Property. The Royalty percentage rate shall be two percent (2%).

 

4.3
Method of Payment. NCG shall pay all payments under this Agreement by wire transfer or another acceptable payment method to
an account which Owner designates.

 

5.
Option to Purchase. Owner grants to NCG the exclusive option and right to acquire ownership of the Property (the “Option”).
The purchase price of the Property shall be Three Hundred Thousand Dollars ($300,000.00) (the “Purchase Price”). The
Minimum Payments paid by NCG to Owner shall not be applied or credited against the Purchase Price.

 

5.1
Notice of Election. If NCG elects to exercise the Option, NCG shall deliver written notice to Owner. NCG’s notice shall
specify which of the Purchase Option or the Royalty Option NCG elects to exercise. On Owner’s receipt of NCG’s notice
of exercise of the Option, the parties shall make diligent efforts to close the conveyance of the Property and shall do so within
thirty (30) days after NCG’s delivery of the notice.

 

5.2
Transfer of Fees and Taxes. If NCG exercises the Option, NCG shall pay the Bureau of Land Management mining claim transfer
fees, the real property transfer taxes, if any, and all recording costs incurred in closing of the Option.

 

5.3
Payment on Closing. On closing of the Option, NCG shall pay the Purchase Price to Owner.

 

5.4
Owner’s Deliveries on Closing. If NCG exercises and closes the Option, Owner shall execute and deliver to NCG a conveyance
of the Property, reserving the Royalty to Owner in the form of the Deed which is Exhibit C attached to this Agreement. Owner shall
execute and deliver to NCG a declaration of value to be submitted on recording of the Deed and an affidavit of non-foreign taxpayer
status in accordance with Internal Revenue Code Section 1445.

 

5.5
Effect of Closing. On closing of the Option, NCG shall own the Property, subject to the Royalty reserved by Owner and NCG’s
obligations under the Deed, including the obligation to pay the Minimum Payments.

 

    	 	8	 

     

    

 

6.
Compliance With The Law. NCG shall, at NCG’s sole cost, comply with all Governmental Regulations relating to the condition,
use or occupancy of the Property by NCG, including but not limited to all exploration and development work performed by NCG during
the term of this Agreement. NCG shall, at its sole cost, promptly comply with all applicable Governmental Regulations regarding
reclamation of the Property. Owner agrees to cooperate with NCG in NCG’s application for governmental licenses, permits
and approvals, the costs of which shall be borne by NCG.

 

7.
NCG’s Work Practices and Reporting.

 

7.1
Work Practices. NCG shall work the Property in a miner-like fashion.

 

7.2
Inspection of Data. During the term of this Agreement, Owner and Owner’s representatives shall have the right to examine
and make copies of the technical data regarding the Property in NCG’s possession during reasonable business hours and upon
prior notice, provided, however, that the rights of Owner to examine such data shall be exercised in a manner that does not interfere
with the operations of NCG.

 

7.3
Reports. On or before three (3) months after the end of each Lease Year, NCG shall deliver to Owner digital copies of the
factual data generated during the preceding Lease Year as a result of NCG’s activities conducted on the property, including
information about NCG’s geological, geochemical and geophysical mapping and surveying of the Property, exploration drilling
results and assaying of mineral samples taken from the Property and information about NCG’s production and sale of Minerals.

 

8.
Scope of Agreement. This Agreement shall extend to and include the unpatented mining claims described in Exhibit A of this
Agreement (and any amendments or relocations of the unpatented mining claims) and the portions of any unpatented mining claims
located by the parties which are within the Area of Interest, including any unpatented mining claims amended or located by the
parties to fill any fractions or gaps among the unpatented mining claims which constitute the Property or among the unpatented
mining claims and any fee lands adjacent to or near the unpatented mining claims which constitute the Property. NCG’s obligations
under this Section shall not apply to any unpatented mining claims acquired by NCG from an unaffiliated third party in an arm’s
length transaction. NCG agrees and covenants that this Section shall be binding on NCG and NCG’s affiliates and any assignee
of this Agreement and the affiliates of any such assignee. If NCG locates any unpatented mining claims in the Area of Interest
which become part of the Property, NCG shall locate such unpatented mining claims in Owner’s name, and the parties shall
execute and record an amendment of this Agreement which includes the unpatented mining claims in this Agreement.

 

9.
Liens. NCG agrees to pay all indebtedness and liabilities incurred by or for NCG arising from or relating to NCG’s activities
on the Property, except that NCG need not discharge or release any such lien, charge or encumbrance so long as NCG is contesting
the same in good faith, provided that if a judgment is entered which affirms or authorizes foreclosure on the lien, NCG promptly,
and before foreclosure of the lien, shall pay, post a bond to secure payment of the lien, or otherwise cause the discharge and
release of the lien. NCG must comply with the requirements of NRS 108.2403.

 

    	 	9	 

     

    

 

 

10.
Taxes.

 

10.1
Real Property Taxes. Owner shall pay any and all taxes assessed and due against the Property before the Effective Date. NCG
shall pay promptly before delinquency all taxes and assessments, general, special, ordinary and extraordinary, that may be levied
or assessed during the term of this Agreement upon the Property. All such taxes for the year in which this Agreement is executed
and for the year in which this Agreement terminates shall be prorated between Owner and NCG, except that neither Owner nor NCG
shall be responsible for the payment of any taxes which are based upon income, net proceeds, production or revenues from the Property
assessed solely to the other party.

 

10.2
Personal Property Taxes. Each party shall promptly when due pay all taxes assessed against such party’s personal property,
improvements or structures placed or used on the Property.

 

10.3
Income Taxes. No party shall not be liable for any taxes levied on or measured by the other party’s income, net proceeds
or payments under this Agreement or received from the production of minerals from the Property.

 

10.4
Delivery of Tax Notices. If Owner receives tax bills or claims which are NCG’s responsibility, Owner shall promptly
forward them to NCG for payment.

 

11.
Insurance and Indemnity. NCG shall provide, maintain and keep in force comprehensive all risk, public liability insurance
against claims for personal injury, including, without limitation, bodily injury, death or property damage occurring on, in or
about the Property, such insurance to afford immediate minimum protection to a limit of not less than Two Million Dollars ($2,000,000.00)
with respect to personal injury or death to any one or more persons or damage to property. NCG shall on Owner’s request
furnish to Owner a certificate of all policies of required insurance which shall identify Owner as a named or additional insured.
Each policy shall contain a provision that the policy will not be cancelled or materially amended, which terms shall include any
reduction in the scope or limits of coverage, without at least fifteen (15) days’ prior written notice to Owner. If NCG
fails to provide, maintain, keep in force or deliver and furnish to Owner the policies of insurance required under this Section,
Owner may, but is not obligated to, procure such insurance or single-interest insurance for such risks covering Owner’s
interest and NCG shall promptly reimburse Owner for all costs incurred by Owner to obtain the insurance. Owner shall not be liable
to NCG and NCG waives all claims against Owner for injury to or death of any person or damage to or destruction of any personal
property or equipment or theft of property occurring on or about the Property or arising from or relating to NCG’s business
conducted on the Property. NCG shall defend, indemnify and hold harmless Owner and its members, officers, directors, agents and
employees from and against any and all claims, judgments, damage, demands, losses, expenses, costs or liability arising in connection
with injury to person or property from any activity, work, or things done, permitted or suffered by NCG or NCG’s agents,
partners, servants, employees, invitees or contractors on or about the Property, or from any breach or default by NCG in the performance
of any obligation on the part of NCG to be performed under the terms of this Agreement, excluding, however, the negligence of
Owner.

 

    	 	10	 

     

    

 

12.
Property Maintenance and Work Commitment.

 

12.1
Annual Assessment Work. To the extent required by law, beginning with the annual assessment work period of September 1, 2017,
to September 1, 2018, and for each subsequent following annual assessment work year commencing during the term of this Agreement,
NCG shall perform for the benefit of the Property work of a type customarily deemed applicable as assessment work and of sufficient
value to satisfy the annual assessment work requirements of all applicable federal, state and local laws, regulations and ordinances,
if any, and shall prepare evidence of the same in form proper for recordation and filing, and shall timely record and/or file
such evidence in the appropriate federal, state and local office as required by applicable federal, state and local laws, regulations
and ordinances, provided that if NCG elects to terminate this Agreement more than two (2) months before the deadline for performance
of annual assessment work for the following annual assessment year, NCG shall have no obligation to perform annual assessment
work nor to prepare, record and/or file evidence of the same for the following annual assessment year.

 

12.2
Federal Mining Claim Maintenance Fees. If under applicable federal laws and regulations federal annual mining claim maintenance
fees are required to be paid for the unpatented mining claims which constitute all or part of the Property, beginning with the
annual assessment work period of September 1, 2017, to September 1, 2018, NCG shall pay the federal annual mining claim maintenance
fees no later than two (2) months before the applicable statutory and regulatory deadline, and shall execute and record or file,
as applicable, proof of payment of the federal annual mining claim maintenance fees and of Owner’s intention to hold the
unpatented mining claims which constitute the Property. If NCG elects to terminate this Agreement more than two (2) months before
the deadline for payment of the federal annual mining claim maintenance fees for the following annual assessment year, NCG shall
have no obligation to pay the federal annual mining claim maintenance fees for the Property for the following assessment year.
If NCG does not terminate this Agreement more than two (2) months before the deadline for payment of the federal annual mining
claim maintenance fees for the following annual assessment year, NCG shall pay the annual maintenance fees for the Property for
the following assessment year.

 

13.
Amendment of Mining Laws. The parties acknowledge that legislation for the amendment or repeal of the mining laws of the United
States applicable to the Property has been, and in the future may be, considered by the United States Congress. The parties desire
to insure that any and all interests of the parties in the lands subject to the unpatented mining claims which comprise all or
part of the Property, including any rights or interests acquired in such lands under the mining laws as amended, repealed or superseded,
shall be part of the Property and shall be subject to this Agreement. If the mining laws applicable to the unpatented mining claims
subject to this Agreement are amended, repealed or superseded, the conversion or termination of Owner’s interest in the
Property pursuant to such amendment, repeal or supersession of the mining laws shall not be considered a deficiency or defect
in Owner’s title in the Property, and NCG shall have no right or claim against Owner resulting from the conversion, diminution,
or loss of Owner’s interest in and to the Property, except as expressly provided in this Agreement. If pursuant to any amendment
or supersession of the mining laws Owner is granted the right to convert its interest in the unpatented mining claims comprising
the Property to a permit, license, lease, or other right or interest, all converted interests or rights shall be deemed to be
part of the Property subject to this Agreement. Upon the grant or issuance of such converted interests or rights, the parties
shall execute and deliver an addendum to this Agreement, in recordable form, by which such converted interests or rights are made
subject to this Agreement.

 

    	 	11	 

     

    

 

14.
Relationship of the Parties.

 

14.1
No Partnership. This Agreement shall not be deemed to constitute any party, in its capacity as such, the partner, agent or
legal representative of any other party, or to create any joint venture, partnership, mining partnership or other partnership
relationship between the parties.

 

14.2
Competition. Except as expressly provided in this Agreement, each party shall have the free and unrestricted right independently
to engage in and receive the full benefits of any and all business endeavors of any sort outside the Property or outside the scope
of this Agreement, whether or not competitive with the endeavors contemplated under this Agreement, without consultation with
or participation of the other party. In particular, without limiting the foregoing, neither party to this Agreement shall have
any obligation to the other as to any opportunity to acquire any interest, property or right offered to it outside the scope of
this Agreement.

 

14.3
Limitation. NCG’s performance of its duties and obligations under this Agreement shall not obligate NCG to perform any
additional services to Owner, nor, except as expressly provided in this Agreement, to conduct or to invest any funds of any nature
whatsoever in the exploration of, development or production of minerals on or under the Property. NCG may explore, conduct geological,
geochemical and geophysical investigations, drill, sample or otherwise explore for or develop Minerals in the manner and to the
extent that NCG, in its sole discretion, deems advisable. Only the express duties and obligations described in this Agreement
are binding on NCG and NCG shall have no duties or obligations, implied or otherwise, to explore for, develop or mine minerals.
Owner acknowledges that NCG’s express undertakings under this Agreement and the Minimum Payments are in lieu of any implied
duties or obligations.

 

15.
Inspection. Owner or Owner’s duly authorized representatives shall be permitted to enter on the Property and NCG’s
workings at reasonable times and on five (5) days’ advance notice to NCG for the purpose of inspection, but they shall enter
on the Property at their own risk and in such a manner which does not unreasonably hinder, delay or interfere with NCG’s
operations. If NCG is conducting exploration, development or mining during Owner’s inspection, Owner agrees that Owner will
comply with all of NCG’s safety rules and regulations, including the requirement that Owner and Owner’s representatives
be accompanied by NCG’s representatives during the inspection.

 

16.
Representations.

 

16.1
Title. Except as expressly provided in this Agreement, Owner represents to Owner’s knowledge and belief as follows:
(a) the unpatented mining claims which are part of the Property were properly located in accordance with applicable federal and
state laws and regulations; (b) the unpatented mining claims which are part of the Property are in good standing; and (c) subject
to the paramount title of the United States, the unpatented mining claims are free and clear of adverse claims, liens, encumbrances,
or royalties.

 

    	 	12	 

     

    

 

16.2
Lesser Interest. If Owner owns an interest in the Property which is less than the entire and undivided estate in the Property,
the Minimum Payments and the Purchase Price shall not be reduced, however, the Royalty payments shall be reduced proportionately
in accordance with the nature and extent of Owner’s interest such that the Royalty payments shall be paid to Owner only
in the proportion that Owner’s interest bears to the entire and undivided estate in the portion of the Property from which
Minerals are produced.

 

16.3
Escrow for Disputes. If at any time a third party asserts a claim of ownership in the Property or the Minerals which is adverse
to the interest of Owner or NCG, or if NCG is advised by legal counsel for NCG that it appears that a third party may have such
a claim, NCG may deposit any payments which would otherwise be due to Owner into escrow and give notice of such deposit to Owner.
In the event of a dispute as to ownership of the Property, the Minerals, the surface of the Property, or the Royalty, payment
of the Royalty payments may be deferred until twenty (20) days after NCG is furnished satisfactory evidence that such dispute
has been finally settled and all provisions as to keeping this Agreement in force shall relate to such extended time for payment.

 

17.
Covenants, Warranties and Representations. Each of the parties covenants, warrants and represents for itself as follows:

 

17.1
Compliance with Laws. That it has complied with all applicable laws and regulations of any governmental body, federal, state
or local, regarding the terms of and performance of its obligations under this Agreement. Each party shall maintain its standing
as a business entity in accordance with the laws of the jurisdiction of its organization.

 

17.2
No Pending Proceedings. That there are no lawsuits or proceedings pending or threatened which affect its ability to perform
the terms of this Agreement.

 

17.3
Costs. That it shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement
and in closing and carrying out the transactions contemplated by this Agreement.

 

17.4
Brokers. That it has had no dealings with any agent, broker or finder in connection with this Agreement, and shall indemnify,
defend and hold the other party harmless from and against any claims that may be asserted through such party that any agent’s
broker’s or finder’s fee is due in connection with this Agreement.

 

17.5
Patriot Act. That it is not on the Specially Designated National & Blocked Persons List of the Office of Foreign Assets
Control of the United States Treasury Department and is not otherwise blocked or banned by any foreign assets office rule or any
other law or regulation, including the USA Patriot Act or Executive Order 13224.

 

    	 	13	 

     

    

 

18.
Termination by Owner. Any failure by NCG to perform any of its covenants, liabilities, obligations or responsibilities under
this Agreement shall be a default. Owner may give NCG written notice of a default. If a payment default is not remedied within
five (5) days after receipt of the notice or any other default is not remedied within thirty (30) days after receipt of the notice,
provided the default can reasonably be cured within that time, or, if not, if NCG has not within that time commenced action to
cure the same or does not after such commencement diligently prosecute such action to completion, Owner may terminate this Agreement
by delivering notice to NCG of Owner’s termination of this Agreement, provided that if NCG contests Owner’s notice
of default or Owner’s assertion that NCG has not timely cured or commenced action to cure the alleged default, Owner may
not terminate this Agreement unless and until issues of the alleged default and failure to cure the alleged default had been determined
by a court of competent jurisdiction. In such case, NCG shall have such time as provided by the decree or order of the court having
jurisdiction of the dispute concerning the alleged default or failure to cure the alleged default. On termination of this Agreement
based on NCG’s default, within ten (10) days NCG shall execute and deliver to Owner a release and termination of this Agreement
in form acceptable for recording.

 

19.
Termination and Surrender of Mining Claims by NCG. NCG may at any time terminate this Agreement by giving written notice to
Owner. If NCG terminates this Agreement, NCG shall perform all obligations and pay all payments which accrue or become due before
the termination date. On NCG’s termination of this Agreement, within ten (10) days NCG shall execute and deliver to Owner
a release and termination of this Agreement in form acceptable for recording.

 

20.
Force Majeure. NCG’s obligations under this Agreement, except its obligations to pay the Minimum Payments and their
obligations under Sections 6, 7.3, 9, 10, 11, 12.2, 21, 22, and 23, shall be suspended during the time and to the extent that
NCG is prevented from compliance, in whole or in part, by war or war conditions (actual or potential), earthquake, fire, flood,
strike, labor stoppage, accident, riot, unavoidable casualty, act or restraint, present or future, or any lawful authority, statute,
act of God, act of public enemy, inability to obtain or delays in obtaining governmental approvals, consents, licenses or permits
(including any of the foregoing relating to the change of the use or points of diversion and use of water resources), labor or
transportation, or other delays or cause of the same or other character beyond the reasonable control of NCG. If NCG invokes force
majeure, it shall notify Owner in writing within ten (10) days of the force majeure event and shall diligently attempt to cure,
end or remediate the force majeure event. NCG shall notify Owner in writing within ten (10) days of termination of the force majeure
event.

 

21.
Surrender of Property. On expiration or termination of this Agreement, NCG shall surrender the Property promptly to Owner
and at NCG’s sole cost shall remove from the Property all of NCG’s buildings, equipment and structures. NCG shall
reclaim the Property in accordance with all applicable Governmental Regulations.

 

22.
Data. Promptly following the parties’ execution of this Agreement, Owner shall deliver to NCG copies of all of the technical
and title data Owner possesses regarding the Property and the Area of Interest. Within thirty (30) days following termination
of this Agreement, NCG shall deliver to Owner copies of the technical data regarding the Property in NCG’s possession at
the time of termination which before termination NCG has not furnished to Owner. At Owner’s election, NCG shall deliver
to Owner NCG’s core, cuttings, sample splits, and sample pulps from the Property.

 

    	 	14	 

     

    

 

23.
Confidentiality. The data and information, including the terms of this Agreement, coming into the parties’ possession
by virtue of this Agreement shall be deemed confidential and shall not be disclosed to outside third parties except as may be
required to publicly record or protect title to the Property or to publicly announce and disclose information under Governmental
Regulations or under the rules and regulations of any stock exchange on which the stock of a party, or the parent or affiliates
of a party, is listed. If a party negotiates for a transfer of all or any portion of such party’s interest in the Property
or under this Agreement or negotiates to procure financing or loans relating to the Property, in order to facilitate any such
negotiations such party shall have the right to furnish information to third parties, provided that each third party to whom the
information is disclosed agrees to maintain its confidentiality in the manner provided in this Section.

 

24.
Assignment.

 

24.1
NCG’s Assignment. NCG shall not assign, convey, encumber, sublease, grant any concession, or license or otherwise transfer
to a third party (each a “Transfer”) all or any part of its interest in this Agreement or the Property, without, in
each case, Owner’s prior written consent, which shall not be withheld unreasonably. Owner shall have the right to consider
the proposed transferee’s financial, legal, operating and technical expertise and history when determining the suitability
of the transferee as the lessee under this Agreement. Owner shall respond to NCG’s request for consent within ten (10) days
following Owner’s receipt of NCG’s request, and if Owner does not timely inform NCG that Owner does not consent to
the proposed Transfer, Owner shall be deemed to have approved the Transfer. Each transferee of any interest in this Agreement
shall execute and deliver an instrument by which the transferee agrees to assume and perform the obligations of the assignor under
this Agreement.

 

24.2
Owner’s Assignment. Owner shall have the right to assign or otherwise transfer all or any part of its interest in this
Agreement or the Property. No change in ownership of Owner’s interest in the Property shall affect NCG’s obligations
under this Agreement unless and until Owner delivers and NCG receives copies of the documents which demonstrate the change in
ownership of Owner’s interest. Until NCG receives Owner’s notice and the documents required to be delivered under
this Section, NCG may continue to make all payments under this Agreement as if the transfer of Owner’s Ownership interest
had not occurred. No division of Owner’s ownership as to all or any part of the Property shall enlarge NCG’s obligations
or diminish NCG’s rights, with all Sections remaining in full force under this Agreement.

 

25.
Memorandum Agreement. The parties shall execute and deliver a memorandum of this Agreement. The execution of the memorandum
shall not limit, increase or in any manner affect any of the terms of this Agreement or any rights, interests or obligations of
the parties.

 

26.
Notices. Any notices required or authorized to be given by this Agreement shall be in writing and shall be sent either by
commercial courier, facsimile, or by certified U.S. mail, postage prepaid and return receipt requested, addressed to the proper
party at the address stated below or such address as the party shall have designated to the other parties in accordance with this
Section. Such notice shall be effective on the date of receipt by the addressee party, except that any facsimiles received after
5:00 p.m. of the addressee’s local time shall be deemed delivered the next day.

 

    	 	15	 

     

    

 

	 	If
    to Owner:	Goodsprings
    Development LLC	 
	 	 	Attn:
    Doyle Kenneth Brook, Jr.	 
	 	 	2305
    Pleasure Drive	 
	 	 	Reno,
    NV 89509	 
	 	 	 	 
	 	If
    to NCG:	Nevada
    Canyon Gold Corp	 
	 	 	316
    California Avenue #543	 
	 	 	Reno,
    NV 89501	 

 

27.
Binding Effect of Obligations. This Agreement shall be binding upon and inure to the benefit of the respective parties and
their successors or assigns.

 

28.
Entire Agreement. The parties agree that the entire agreement between them is written in this Agreement and in a memorandum
of agreement of even date. There are no terms or conditions, express or implied, other than expressly stated in this Agreement.
This Agreement may be amended or modified only by a written instrument signed by the parties with the same formality as this Agreement.

 

29.
Governing Law and Forum Selection. This Agreement shall be construed and enforced in accordance with the laws of the State
of Nevada. The forum for any action regarding the construction or enforcement of this Agreement shall be the Second Judicial District
Court, Washoe County, Reno, Nevada.

 

30.
Multiple Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which shall constitute the same Agreement.

 

31.
Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal
or in conflict with any Governmental Regulations, the validity of the remaining portions or provisions shall not be affected,
and the rights and obligations of the parties shall be construed and enforced as if the Agreement did not contain the particular
part, term or provision held to be invalid. The parties have executed this Agreement effective as of the Effective Date.

 

	GOODSPRINGS DEVELOPMENTS, LLC	 
	 	 	 
	By:	/s/
    Doyle Kenneth Brook, Jr.                                   	 
	 	Doyle
    Kenneth Brook, Jr., Manager	 

 

	NEVADA CANYON GOLD CORP.	 
	 	 	 
	By:	/s/
    Jeffrey A. Cocks	 
	 	Jeffrey
    A. Cocks, President & CEO	 

 

    	 	16	 

     

    

 

Mining Lease Agreement  

Garfield Flat Project

 

Exhibit
A

 

Description
of Property

Mineral
County Nevada

 

	Claim
    Names	 	BLM
    NMC Nos.
	 	 	 
	Lazy
    4, 6, 7, 9, 10, 12	 	1126109
    to 1126114
	 	 	 
	Orsa
    104, 106, 108, 121, 123, 125	 	1126115
    to 1126120
	 	 	 
	Orsa
    1-69	 	1155127
    to 1155196
	 	 	 
	Lazy
    101-175	 	1155197
    to 1155270

 

    	 	17	 

     

    

 

Exhibit
B

 

Gross
Returns

Garfield
Flat Project

 

	Payor:	Nevada
    Canyon Gold Corp. 
	 	 
	Recipient:	Desert
    Ventures Inc.

 

1.
Definitions. The terms defined in the instrument to which this Exhibit is attached and made part of shall have the same meanings
in this Exhibit. The following definitions shall apply to this Exhibit.

 

1.1
“Gross Returns” means all income and revenues accrued, received, and realized by Payor from the production of
Minerals and products of Minerals from the Property.

 

1.2
“Property” means the real property described in the instrument to which these Gross Returns provisions are attached
and made a part.

 

2.
Payment Procedures.

 

2.1
Accrual of Obligation. Payor’s obligation to pay the royalty shall accrue and become due and payable upon the sale or
shipment from the Property of unrefined metals, dore metal, concentrates, ores or other Minerals or Minerals products or, if refined
metals are produced, upon the outturn of refined metals meeting the requirements of the specified published price to Payor’s
account.

 

2.2
Futures or Forward Sales, Etc. Gross Returns shall be determined irrespective of any actual arrangements for the sale or other
disposition of Minerals by Payor, specifically including but not limited to forward sales, futures trading or commodities options
trading, and any other price hedging, price protection, and speculative arrangements that may involve the possible delivery of
gold, silver or other metals produced from Minerals.

 

2.3
Quarterly Calculations and Payments. The Royalty shall be determined on a quarterly basis. Payor shall pay Recipient each
quarterly royalty payment on or before the last business day of the quarter immediately following the quarter in which the
royalty payment obligation accrued. Payor acknowledges that late payment by Payor to Recipient of royalty payments will cause
Recipient to incur costs, the exact amount of which will be difficult to ascertain. Accordingly, if any amount due and
payable by Payor is not received by Recipient within ten (10) days after such amount is due, then Payor shall pay to
Recipient a late charge equal to ten percent (10%) of such overdue amount. Recipient’s acceptance of such late charge
shall not constitute a waiver of Payor’ default with respect to such overdue amount, nor prevent Recipient from
exercising any of Recipient’s other rights and remedies. If any amount payable by Payor remains delinquent for a period
in excess of thirty (30) days, Payor shall pay to Recipient, in addition to the late payment, interest from and after the due
date at the statutory interest rate.

 

    	 	18	 

     

    

 

2.4
Statements. At the time of payment of the royalty, Payor shall accompany such payment with a statement which shows in detail
the quantities and grades of refined gold, silver or other metals or dore, concentrates or ores produced and sold or deemed sold
by Payor in the preceding quarter. Payor shall pay the Royalty by wire transfer to an account which Recipient designates.

 

2.5
Audit. Upon reasonable notice and at a reasonable time, the Recipient shall have the right to audit and examine the Payor’s
accounts and records relating to the calculation of the Gross Returns Royalty payments. If such audit determines that there has
been a deficiency or an excess in the payment made to Recipient, such deficiency or excess shall be resolved by adjusting the
next monthly royalty payment due Recipient. Recipient shall pay all costs of such audit unless a deficiency of three percent (3%)
or more of the royalty payment due for the calendar month in question is determined to exist. All books and records used by Payor
to calculate the Royalty payments shall be kept in accordance with generally accepted accounting principles applicable to the
mining industry.

 

2.6
Sampling and Commingling. Payor shall have the right to commingle Minerals and ores from the Property and materials from other
properties, provided, that Payor first informs Recipient, in writing, of Payor’s intention to commingle and delivers to
Recipient a detailed written description of Payor’s commingling plan. Recipient shall have ninety (90) days during which
to review, comment on and approve Payor’s proposed commingling plan. In any and all events, all Minerals and ores shall
be measured and sampled by Payor in accordance with sound mining and metallurgical practices for metal and mineral content before
commingling of any such Minerals or ores with materials from any other property. Representative samples of materials from the
Property intended to be commingled shall be retained by Payor, and assays of these samples shall be made before commingling to
determine the metal content of each ore. Detailed records shall be kept by Recipient showing measurements, assays of metal content
and gross metal content of the materials from the Property are commingled. Payor shall prepare and maintain records of the production
of Minerals from the Property, assays of samples taken from the Property and all other records reasonably necessary to accurately
account for the production of Minerals from the Property.

 

2.7
Royalty as Burden on the Property. The Royalty shall be a burden on, an interest in, and a covenant which runs with the Property.
The Royalty shall be prior and superior to any interest in the Property or the Agreement of which this Net Smelter Return provision
is a part which Payor grants to any third party. Payor agrees and covenants that at Recipient’s request, Payor, Recipient,
and Payor’s refiner or smelter shall enter into an agreement pursuant to which the Royalty shall be deposited or paid directly
to an account in Recipient’s name with the refiner or smelter.

 

    	 	19apyp_ex101.htm

Exhibit 10.1
  
 SECURITIES PURCHASE AGREEMENT
  
 This Securities Purchase Agreement (this “Agreement”) is dated as of June [__], 2018, between APPYEA, Inc., a South Dakota corporation (the “Company”), and the purchasers identified on the signature pages hereto (each, including its successors and permitted assigns, a “Purchaser”, or in the aggregate, the “Purchasers”). 
  
 WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and/or Rule 506 promulgated thereunder, the Company desires to issue and sell to the Purchasers, and the Purchasers desire to purchase from the Company, Securities (as defined herein) of the Company as more fully described in this Agreement.
  
 NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company and each Purchaser agree as follows: 
  
 ARTICLE I. 
 DEFINITIONS 
  
 1.1 Definitions. In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have the meanings given to such terms in the Transaction Documents (as defined herein), and (b) the following terms have the meanings set forth in this Section 1.1:
  
 “Acquiring Person” shall have the meaning ascribed to such term in Section 4.6.
  
 “Action” shall have the meaning ascribed to such term in Section 3.1(j).
  
 “Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act. 
  
 “BHCA” shall have the meaning ascribed to such term in Section 3.1(ii).
  
 “Board of Directors” means the board of directors of the Company.
  
 “Business Day” means any day except any Saturday, any Sunday, or any day on which the Federal Reserve Bank of New York is closed.
  
 “Closing(s)” means each of the First Closing and Second Closing of the purchase and sale of the Securities pursuant to Section 2.1.
  
  	 
	1
	 
 
	 

  
 “Closing Date(s)” means the Trading Day(s) of the First Closing and the Second Closing as applicable, on which the Transaction Documents have been executed and delivered by the applicable parties thereto in connection with such Closings, and all conditions precedent to (i) the Purchaser’s obligations to pay the Subscription Amount as to each such Closing and (ii) the Company’s obligations to deliver the Securities as to each such Closing, in each case, have been satisfied or waived.
  
 “Commission” means the United States Securities and Exchange Commission.
  
 “Common Stock” means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed. 
  
 “Common Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock. 
  
 “Conversion Price” shall have the meaning ascribed to such term in the Notes.
  
 “Conversion Shares” shall have the meaning ascribed to such term in the Notes.
  
 “Disclosure Schedules” shall have the meaning ascribed to such term in Section 3.1.
  
 “Evaluation Date” shall have the meaning ascribed to such term in Section 3.1(q).
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder. 
  
 “Exchange Transaction” shall have the meaning ascribed to such term in Section 4.11(b).
  
 “Exempt Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers, directors, advisors or independent contractors of the Company; provided, however, that such issuance is approved by a majority of the board of directors of the Company; and provided, further that such issuance shall not exceed in the aggregate 5% of the outstanding shares of Common Stock without the prior approval of the Purchaser, (b) shares of Common Stock, warrants or options to advisors or independent contractors of the Company for compensatory purposes, (c) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date hereof, provided that such securities have not been amended since the date hereof to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities, (d) securities issuable pursuant to any contractual anti-dilution obligations of the Company in effect as of the date hereof, provided that such obligations have not been materially amended since the date of hereof, and (e) securities issued pursuant to acquisitions or any other strategic transactions approved by a majority of the disinterested members of the Board of Directors, provided that any such issuance shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.
  
  	 
	2
	 
 
	 

  
 “Exercise Price” shall have the meaning ascribed to such term in the Warrants.
  
 “FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
  
 “Federal Reserve” shall have the meaning ascribed to such term in Section 3.1(ii).
  
 “GAAP” shall have the meaning ascribed to such term in Section 3.1(h).
  
 “Indebtedness” means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.
  
 “Intellectual Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).
  
 “Legend Removal Date” shall have the meaning ascribed to such term in Section 4.1(c).
  
 “Liabilities” means all direct or indirect liabilities, Indebtedness and obligations of any kind of Company to the Purchaser, howsoever created, arising or evidenced, whether now existing or hereafter arising (including those acquired by assignment), absolute or contingent, due or to become due, primary or secondary, joint or several, whether existing or arising through discount, overdraft, purchase, direct loan, participation, operation of law, or otherwise, including, but not limited to, pursuant to the Note, this Agreement and/or any of the other Transaction Documents, all accrued but unpaid interest on the Note, any letter of credit, any standby letter of credit, and/or outside attorneys’ and paralegals’ fees or charges relating to the preparation of the Transaction Documents and the enforcement of the Purchaser’s rights, remedies and powers under this Agreement, the Note and/or the other Transaction Documents.
  
 “Liens” means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.
  
 “Material Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).
  
 “Material Permits” shall have the meaning ascribed to such term in Section 3.1(m). 
  
 “Maximum Rate” shall have the meaning ascribed to such term in Section 5.17.
  
  	 
	3
	 
 
	 

  
 “Money Laundering Laws” shall have the meaning ascribed to such term in Section 3.1(nn).
  
 “Note” means the Company’s Senior Secured Convertible Promissory Note due, subject to the terms therein, twelve (12) months from the date of issuance, issued by the Company to the Purchaser hereunder, in the form of Exhibit A attached hereto.
  
 “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind. 
  
 “Pre-Notice” shall have the meaning ascribed to such term in Section 4.13(b). 
  
 “Principal Amount” means, as to the Purchaser, the principal amount of the Note set forth below the Purchaser’s signature block on the signature pages hereto next to the heading “Principal Amount”, in United States Dollars, which shall be 5% more than the Purchaser’s Subscription Amount after taking into account the 5% original issue discount on such Subscription Amount as set forth herein. 
  
 “Pro Rata Portion” shall have the meaning ascribed to such term in Section 4.13(d).
  
 “Proceeding” means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or threatened. 
  
 “Public Information Failure” shall have the meaning ascribed to such term in Section 4.3(b).
  
 “Public Information Failure Payments” shall have the meaning ascribed to such term in Section 4.3(b). 
  
 “Purchaser Party” shall have the meaning ascribed to such term in Section 4.9.
  
 “Required Approvals” shall have the meaning ascribed to such term in Section 3.1(e).
  
 “Required Minimum” means, as of any date, 150% of the maximum aggregate number of shares of Common Stock then issued or potentially issuable in the future pursuant to the Notes (including Conversion Shares issuable as payment of interest on the Notes), ignoring any conversion limits set forth therein, and assuming that the Conversion Price is at all times on and after the date of determination 100% of the then Conversion Price on the Trading Day immediately prior to the date of determination. 
  
 “Restricted Shares” means the restricted shares of Common Stock issued by the Company to the Purchaser pursuant to this Agreement.
  
  	 
	4
	 
 
	 

  
 “Rule 144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such rule.
  
 “Rule 424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such rule. 
  
 “SEC Reports” shall have the meaning ascribed to such term in Section 3.1(h).
  
 “Second Closing” shall have the meaning ascribed to such term in Section 2.1(b).
  
 “Securities” means the Notes, the Conversion Shares, the Warrants, the Warrant Shares and the Restricted Shares issued to the Purchaser pursuant to this Agreement. 
  
 “Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder. 
  
 “Security Agreement” means the Security Agreement dated on or about the date hereof by and among the Company, the Company’s Subsidiaries, and the Purchaser as hereinafter amended and/or supplemented altogether with all exhibits, schedules and annexes to such Security Agreement, pursuant to which all Liabilities of the Company to the Purchaser under the Transaction Documents are secured by the Collateral (as defined in the Security Agreement) which security interest in the Collateral shall be perfected by the Purchaser’s UCC-1, filed with the Secretary of State of the State of South Dakota, to the extent perfectable by the filing of a UCC-1 Financing Statement, or if applicable, a UCC-3 Financing Statement Amendment and such other documents and instruments related thereto, which Security Agreement is annexed hereto as Exhibit B.
  
 “Shell Company” means an entity that fits within the definition of “shell company” under Section 12b-2 of the Exchange Act and Rule 144.
  
 “Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act. 
  
 “Subscription Amount” means, as to the Purchaser, the aggregate amount to be paid for the Notes purchased hereunder as specified below the Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,” in United States dollars and in immediately available funds, which Subscription Amount shall include a 5% original issue discount on the Purchaser’s Principal Amount. 
  
 “Subsidiary” means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof. 
  
  	 
	5
	 
 
	 

  
 “Subsidiary Guarantee” means the Subsidiary Guarantee, dated as of the date hereof, pursuant to which the Subsidiaries have jointly and severally agreed to guarantee and act as surety for the Company’s obligation to repay the Notes, in the form attached hereto as Exhibit D.
  
 “Third Party Exchange Transfer” shall have the meaning ascribed to such term in Section 4.11(b).
  
 “Trading Day” means a day on which the principal Trading Market is open for trading. 
  
 “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American; the Nasdaq Capital Market; the Nasdaq Global Market; the Nasdaq Global Select Market; the New York Stock Exchange; OTC Markets or the OTC Bulletin Board (or any successors to any of the foregoing). 
  
 “Transaction Documents” means this Agreement, the Notes, the Warrant, the Security Agreement, the Subsidiary Guarantee, the Transfer Agent Instruction Letter, and all exhibits and schedules thereto and hereto and any other documents or agreements executed in connection with the transactions contemplated hereunder. 
  
 “Transfer Agent” means VStock Transfer LLC, and any successor transfer agent of the Company. 
  
 “Transfer Agent Instruction Letter” means the letter from the Company to the Transfer Agent which instructs the Transfer Agent to issue the Conversion Shares pursuant to the Transaction Documents, in the form of Exhibit C attached hereto.
  
 “Variable Rate Transaction” shall have the meaning ascribed to such term in Section 4.11(a).
  
 “Warrants” means, collectively, the Common Stock Purchase Warrants delivered to the Purchasers at the First Closing in accordance with Section 2.2(a) hereof, which warrants shall be exercisable in accordance with the terms thereof, in the form of Exhibit D attached hereto.
  
 “Warrant Shares” means the shares of Common Stock issuable upon exercise of the Warrants.
  
 ARTICLE II. 
 PURCHASE AND SALE 
  
 2.1 Purchase and Closings. 
  
 (a) First Closing. On June ___, 2018 (the “First Closing”), upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers agree to purchase, severally and not jointly, an aggregate of up to (i) Five Hundred Thousand Dollars ($500,000) in Subscription Amount of Notes, which Subscription Amount with respect to the Notes shall correspond to an aggregate of up to Five Hundred Twenty Six Thousand Three Hundred Sixteen Dollars ($526,316) in Principal Amount of Notes, (ii) a Warrant to purchase such number of Warrant Shares as set forth on the signature page hereto executed by such Purchaser, which shall be equal to such Purchaser’s Subscription Amount divided by the Exercise Price and (iii) the number of Restricted Shares as set forth on the signature page hereto executed by the Purchaser. On the First Closing, the Purchaser shall purchase an aggregate of $75,000 of such Notes (the “Initial Subscription Amount”), with the remaining balance to be paid by such Purchaser at the Second Closing as provided in Section 2.1(b) below (the “Second Subscription Amount”). At the First Closing, the Purchaser shall deliver to the Company, via wire transfer to an account designated by the Company, immediately available funds equal to the Initial Subscription Amount as set forth on the signature page hereto executed by the Purchaser, and the Company shall deliver to the Purchaser its Note, as set forth in Section 2.2(a), and the Company and the Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the First Closing.
  
  	 
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 (b) Second Closing. On the second Closing, which shall occur on such date as determined by the Purchaser in its sole discretion, upon the terms and subject to the conditions set forth herein, the Company agrees to sell, and each Purchaser agrees to purchase, the Second Subscription Amount of Notes (the “Second Closing”). At the Second Closing, the Purchaser shall deliver to the Company, via wire transfer to an account designated by the Company, immediately available funds equal to the Second Subscription Amount as set forth on the signature page hereto executed by the Purchaser, and the Company and the Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Second Closing. 
  
 (c) Closings. Upon satisfaction of the covenants and conditions set forth in Sections 2.2 and 2.3 for the Closings, such Closings shall occur at the offices of Robinson Brog Leinwand Greene Genovese & Gluck P.C. or such other location as the parties hereto shall mutually agree and may by agreement be undertaken remotely by electronic exchange of Closing documentation.
  
 2.2 Deliveries.
  
 (a) On or prior to each Closing (except as noted), the Company shall deliver or cause to be delivered to each Purchaser the following:
  
 (i) as to the First Closing, this Agreement duly executed by the Company;
  
 (ii) as to the First Closing, a Note with a Principal Amount equal to the amount set forth opposite such Purchaser’s name in column (2) on the Schedule of Purchasers, registered in the name of the Purchaser;
  
 (iii) as to the First Closing, the Warrant in the name of such Purchaser to purchase such number of Warrant Shares as set forth on the signature page hereto executed by such Purchaser;
  
 (iv) as to the First Closing, the Restricted Shares registered in the name of such Purchaser in the amount set forth on the signature page hereto executed by such Purchaser;
  
 (v) as to the First Closing, the Security Agreement, duly executed by the Company; 
  
  	 
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 (vii) as to the First Closing, the Subsidiary Guarantee, duly executed by the Company’s Subsidiaries and
  
 (vi) as to the First Closing, the Transfer Agent Instruction Letter, duly executed by the Company and the Transfer Agent.
  
 (b) On or prior to each Closing, the Purchaser shall deliver or cause to be delivered to the Company, as applicable, the following:
  
 (i) as to the First Closing, this Agreement, duly executed by the Purchaser; 
  
 (ii) as to the First Closing, the Purchaser’s Initial Subscription Amount by wire transfer to the account specified in writing by the Company;
  
 (iii) as to the First Closing, the Security Agreement, duly executed by the Purchaser;
  
 (iv) as to the Second Closing, the Purchaser’s Second Subscription Amount by wire transfer to the account specified in writing by the Company;
  
 2.3 Closing Conditions.
  
 (a) The obligations of the Company hereunder in connection with each of the Closings are subject to the following conditions being met:
  
 (i) the accuracy in all material respects as at each Closing Date of the representations and warranties of the Purchaser contained herein (unless as of a specific date therein in which case they shall be accurate as of such date);
  
 (ii) all obligations, covenants and agreements of the Purchaser required to be performed at or prior to each Closing Date shall have been performed; and
  
 (iii) the delivery by the Purchaser of the items set forth in Section 2.2(b) of this Agreement.
  
 (b) The respective obligations of each Purchaser hereunder in connection with each Closing are subject to the following conditions being met:
  
 (i) the accuracy in all material respects when made as to each Closing Date of the representations and warranties of the Company contained herein (unless as of a specific date therein);
  
 (ii) all obligations, covenants and agreements of the Company required to be performed at or prior to each Closing Date shall have been performed;
  
  	 
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 (iii) the delivery by the Company of the items set forth in Section 2.2(a) of this Agreement;
  
 (iv) there is no existing Event of Default (as defined in the Notes) and no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default;
  
 (v) there is no breach of an obligations, covenants and agreements under the Transaction Documents and no existing event which, with the passage of time or the giving of notice, would constitute a breach under the Transaction Documents;
  
 (vi) there shall have been no Material Adverse Effect with respect to the Company since the date hereof; 
  
 (vii) from the date hereof to each Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s principal Trading Market and, at any time prior to such Closing Date, trading in securities generally as reported by Bloomberg L.P. shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the reasonable judgment of the Purchaser, and without regard to any factors unique to the Purchaser, makes it impracticable or inadvisable to purchase the Securities at such Closing; 
  
 (viii) any other conditions contained herein or the other Transaction Documents, including, without limitation those set forth in Section 2.2 herein.
  
 ARTICLE III. 
 REPRESENTATIONS AND WARRANTIES 
  
 3.1 Representations and Warranties of the Company. Except as set forth in the Disclosure Schedules, which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company (which for purposes of this Section means the Company and all of its Subsidiaries) hereby makes the following representations and warranties to the Purchaser as of each Closing Date:
  
 (a) Subsidiaries. All of the direct and indirect subsidiaries of the Company are set forth on Schedule 3.1(a) hereto. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, other than as set forth in the SEC Reports, and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities. 
  
  	 
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 (b) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized and validly existing, and the Company and each of AppYea Holdings, Inc. and The Diagnostic Centers, Inc. is in good standing, under the respective laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. The Company and The Diagnostic Centers, Inc. is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document; (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole; or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.
  
 (c) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
  
 (d) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents; (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien (except Liens in favor of the Purchaser) upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected; or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.
  
  	 
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 (e) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filings required pursuant to Sections 4.3 and 4.14 of this Agreement; (ii) the notice and/or application(s) to each applicable Trading Market for the issuance and sale of the Securities and the listing of the Conversion Shares, Warrant Shares and Restricted Shares for trading thereon in the time and manner required thereby; and (iii) the filing of Form D with the Commission and such filings as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).
  
 (f) Issuance of the Securities. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Conversion Shares, Warrant Shares and Restricted Shares, when issued in accordance with the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other than restrictions on transfer provided for in the Transaction Documents. The Company has reserved from its duly authorized capital stock a number of shares of Common Stock for issuance of the Conversion Shares, Warrant Shares and Restricted Shares at least equal to the Required Minimum on the date hereof or as provided for in Section 4.10(a) herein.
  
 (g) Capitalization. The capitalization of the Company is as set forth on Schedule 3.1(g), which Schedule 3.1(g) shall also include the number of shares of Common Stock owned beneficially, and of record, by Affiliates of the Company as of the date hereof. The Company has not issued capital stock since its most recently filed periodic report under the Exchange Act except as set forth on Schedule 3.1(g), except pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of the most recently filed periodic report under the Exchange Act as set forth on Schedule 3.1(g). No Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents except as set forth on Schedule 3.1(g). There are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents except as set forth on Schedule 3.1(g). The issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Purchaser) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities except as set forth on Schedule 3.1(g). All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders’ agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.
  
  	 
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 (h) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the one (1) year preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively referred to herein as the “SEC Reports”). As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. 
  
 (i) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect; (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission; (iii) the Company has not altered its method of accounting; (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock; and (v) the Company has not issued any equity securities to any officer, director or Affiliate, 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, properties, operations, assets or financial condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one (1) Trading Day prior to the date that this representation is made. 
  
 (j) Litigation. There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties except as set forth in the SEC Reports, or against or affecting the Company’s current or former officers or directors in their capacity as such, before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect, and neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company that is likely to lead to action that can reasonably be expected to result in a Material Adverse Effect. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.
  
  	 
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 (k) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
  
 (l) Compliance. Neither the Company nor any Subsidiary, except as set forth in the SEC Reports: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived); (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority; or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.
  
 (m) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit.
  
 (n) Title to Assets. The Company and the Subsidiaries have good and marketable title in fee simple to all real property owned by them and good and marketable title in all personal property owned by them that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except as set forth in the SEC Reports and except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance.
  
  	 
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 (o) Intellectual Property. The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights as necessary or required for use in connection with their respective businesses as presently conducted and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.
  
 (p) Transactions with Affiliates and Employees. Except as set forth in the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered; (ii) reimbursement for expenses incurred on behalf of the Company; and (iii) other employee benefits. 
  
 (q) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.
  
  	 
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 (r) Certain Fees. Except as set forth on Schedule 3.1(r), no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. The Purchaser shall have no obligation with respect to any fees or with respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in connection with the transactions contemplated by the Transaction Documents. 
  
 (s) Private Placement. Assuming the accuracy of each Purchaser’s representations and warranties set forth in Section 3.2, no registration under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchaser as contemplated hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.
  
 (t) Investment Company. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject to registration under the Investment Company Act of 1940, as amended.
  
 (u) Registration Rights. No Person has any right to cause the Company to effect the registration under the Securities Act of any securities of the Company or any Subsidiaries.
  
 (v) Listing and Maintenance Requirements. The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. The Company has not, in the twelve (12) months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements.
  
 (w) Application of Takeover Protections. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company’s Articles of Incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable to the Purchaser as a result of the Purchaser and the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation as a result of the Company’s issuance of the Securities and the Purchaser’s ownership of the Securities.
  
  	 
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 (x) Disclosure. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company confirms that neither it nor any other Person acting on its behalf has provided the Purchaser or its agents or counsel with any information that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the Purchaser will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure furnished by or on behalf of the Company to the Purchaser regarding the Company and its Subsidiaries, their respective businesses and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.
  
 (y) No Integrated Offering. Assuming the accuracy of the Purchaser’s representations and warranties set forth in Section 3.2, 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 of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.
  
 (z) No General Solicitation. Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchaser and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.
  
 (aa) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity; (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds; (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law; or (iv) violated in any material respect any provision of FCPA.
  
  	 
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 (bb) Accountants. The Company’s accounting firm is MaloneBailey, LLP. To the knowledge and belief of the Company, such accounting firm is a registered public accounting firm as required by the Exchange Act.
  
 (cc) No Disagreements with Accountants and Lawyers. There are no disagreements of any kind presently existing, or reasonably anticipated by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability to perform any of its obligations under any of the Transaction Documents.
  
 (dd) Acknowledgment Regarding Purchaser’s Purchase of Securities. The Company acknowledges and agrees that the Purchaser is acting solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated thereby. The Company further acknowledges that the Purchaser is not acting as a financial advisor or fiduciary of the Company (or in any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given by the Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions contemplated thereby is merely incidental to the Purchaser’s purchase of the Securities. The Company further represents to the Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.
  
 (ee) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the 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, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s placement agent in connection with the placement of the Securities.
  
 (ff) Stock Option Plans. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their respective financial results or prospects.
  
 (gg) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.
  
  	 
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 (hh) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s request.
  
 (ii) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.
  
 (jj) Promotional Stock Activities. Neither the Company, its officers, its directors, nor any affiliates or agents of the Company have engaged in any stock promotional activity that could give rise to a complaint, inquiry, or trading suspension by the Securities and Exchange Commission alleging (i) a violation of the anti-fraud provisions of the federal securities laws, (ii) violations of the anti-touting provisions, (iii) improper “gun-jumping” or (iv) promotion without proper disclosure of compensation.
  
 (kk) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company (i) has made or filed all United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company know of no basis for any such claim.
  
 (ll) Seniority. As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Notes in right of payment, whether with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by purchase money security interests (which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property covered thereby).
  
 (mm) Intentionally omitted. 
  
 (nn) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.
  
  	 
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 (oo) Subsidiary Rights. he Company has the unrestricted right to vote, and (subject to limitations imposed by applicable law) to receive dividends and distributions on, all capital securities of its Subsidiaries as owned by the Company or any Subsidiary.
  
 (pp) Shell Company Status. The Company has never been, and is not presently, an issuer identified as a Shell Company.
  
 (qq) Full Disclosure. No representation or warranty by the Company in this Agreement and no statement contained in the Disclosure Schedules to this Agreement or any certificate or other document furnished or to be furnished to the Purchasers pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.
  
 3.2 Representations and Warranties of the Purchaser. Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein in which case they shall be accurate as of such date):
  
 (a) Organization; Authority. The Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and performance by the Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary corporate, partnership, limited liability company or similar action, as applicable, on the part of the Purchaser. Each Transaction Document to which it is a party has been duly executed by the Purchaser, and when delivered by the Purchaser in accordance with the terms hereof, will constitute the valid and legally binding obligation of the Purchaser, enforceable against it in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally; (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies; and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.
  
 (b) Own Account. The Purchaser understands that the Securities are “restricted securities” and have not been registered under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting the Purchaser’s right to sell the Securities in compliance with applicable federal and state securities laws). The Purchaser is acquiring the Securities hereunder in the ordinary course of its business.
  
  	 
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 (c) Purchaser Status. At the time the Purchaser was offered the Securities, it was, and as of the date hereof it is, and on each date on which it converts the Notes it will be an “accredited investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.
  
 (d) Experience of the Purchaser. The Purchaser, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Securities, and has so evaluated the merits and risks of such investment. The Purchaser is able to bear the economic risk of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.
  
 (e) General Solicitation. The Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or any other general solicitation or general advertisement.
  
 (f) Certain Transactions and Confidentiality. Other than consummating the transactions contemplated hereunder, the Purchaser has not directly or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with the Purchaser, executed any purchases or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that the Purchaser first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions of the Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio managers managing other portions of the Purchaser’s assets, the representation set forth above shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered by this Agreement. Other than to other Persons party to this Agreement, the Purchaser has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).
  
 The Company acknowledges and agrees that the representations contained in Section 3.2 shall not modify, amend or affect the Purchaser’s right to rely on the Company’s representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of the transaction contemplated hereby. 
  
  	 
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 ARTICLE IV. 
 OTHER AGREEMENTS OF THE PARTIES 
  
 4.1 Transfer Restrictions.
  
 (a) The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion of counsel selected by the transferor and reasonably acceptable to the Company, at the Company’s sole expense in the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this Agreement and shall have the rights and obligations of a Purchaser under this Agreement.
  
 (b) The Purchaser agrees to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:
  
 [NEITHER] THIS SECURITY [NOR THE SECURITIES INTO WHICH THIS SECURITY IS [CONVERTIBLE][EXERCISABLE]] HAS NOT [HAVE] BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY [AND THE SECURITIES ISSUABLE UPON [CONVERSION] [EXERCISE] OF THIS SECURITY]] MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES. 
  
 The Company acknowledges and agrees that the Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor” as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required under the terms of such arrangement, the Purchaser may transfer pledged or secured Securities to the pledgees or secured parties. Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee, secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the Company’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured party of Securities may reasonably request in connection with a pledge or transfer of the Securities. 
  
  	 
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 (c) Certificates evidencing the Conversion Shares, Warrant Shares or Restricted Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while a registration statement covering the resale of such security is effective under the Securities Act; (ii) following any sale of such Conversion Shares, Warrant Shares or Restricted Shares pursuant to Rule 144; (iii) if such Conversion Shares, Warrant Shares or Restricted Shares are eligible for sale under Rule 144; or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission). The Company shall upon request of a Purchaser and at the Company’s sole expense cause its counsel (or at the Purchaser’s option, counsel selected by the Purchaser) to issue a legal opinion to the Transfer Agent promptly after any of the events described in (i)-(iv) in the preceding sentence if required by the Transfer Agent to effect the removal of the legend hereunder (with a copy to the applicable Purchaser and its broker). If all or any portion of any Note or Warrant is converted or exercised, respectively, at a time when there is an effective registration statement to cover the resale of the Conversion Shares or Warrant Shares, or if such Conversion Shares or Warrant Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) then such Conversion Shares or Warrant Shares shall be issued free of all legends. The Company agrees that following such time as such legend is no longer required under this Section 4.1(c), it will, no later than 9:00 AM the next Trading Day following the delivery by a Purchaser to the Company or the Transfer Agent of a certificate representing Conversion Shares, Warrant Shares or Restricted Shares, issued with a restrictive legend (such Trading Day, the “Legend Removal Date”), instruct the Transfer Agent to deliver or cause to be delivered to the Purchaser a certificate representing such shares of Common Stock that is free from all restrictive and other legends. The Company may not make any notation on its records or give instructions to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for the Conversion Shares, Warrant Shares and Restricted Shares that are subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the Purchaser’s prime broker with the Depository Trust Company System as directed by the Purchaser.
  
 (d) In addition to the Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, $1,000 per Trading Day for each Trading Day after the Legend Removal Date until such certificate is delivered without a legend. Nothing herein shall limit the Purchaser’s right to pursue actual damages for the Company’s failure to deliver certificates representing any Securities as required by the Transaction Documents, and the Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
  
  	 
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 4.2 Acknowledgment of Dilution. The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations under the Transaction Documents, including, without limitation, its obligation to issue the Conversion Shares, Warrant Shares and Restricted Shares pursuant to the Transaction Documents, are unconditional and absolute and not subject to any right of set off, counterclaim, delay or reduction, regardless of the effect of any such dilution or any claim the Company may have against the Purchaser and regardless of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.
  
 4.3 Furnishing of Information; Public Information.
  
 (a) The Company covenants to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange Act.
  
 (b) At any time during the period commencing from the six (6)-month anniversary of the date hereof and ending at such time that all of the Securities have been sold or may be sold without the requirement for the Company to be in compliance with Rule 144(c)(1) and otherwise without restriction or limitation pursuant to Rule 144, if the Company shall fail for any reason to satisfy the current public information requirement under Rule 144(c) (a “Public Information Failure”) then, in addition to the Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages and not as a penalty, by reason of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to two percent (2.0%) of the aggregate Subscription Amount of the Purchaser’s Securities on the day of a Public Information Failure and on every thirtieth (30th) day (pro-rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information Failure is cured and (b) such time that such public information is no longer required for the Purchaser to transfer the Conversion Shares, Warrant Shares and Restricted Shares pursuant to Rule 144. The payments to which a Purchaser shall be entitled pursuant to this Section 4.3(b) are referred to herein as “Public Information Failure Payments”. Public Information Failure Payments shall be paid on the earlier of (i) the last day of the calendar month during which such Public Information Failure Payments are incurred and (ii) the third (3rd) Business Day after the event or failure giving rise to the Public Information Failure Payments is cured. In the event the Company fails to make Public Information Failure Payments in a timely manner, such Public Information Failure Payments shall bear interest at the rate of 1.5% per month (prorated for partial months) until paid in full. Nothing herein shall limit the Purchaser’s right to pursue actual damages for the Public Information Failure, and the Purchaser shall have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief. 
  
 4.4 Integration. The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction. 
  
  	 
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 4.5 Conversion Procedures. The form of Notice of Conversion included in any Note sets forth the totality of the procedures required of the Purchaser in order to convert such Note. Without limiting the preceding sentences, no ink-original Notice of Conversion shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form be required in order to convert the Notes. No additional legal opinion, other information or instructions shall be required of the Purchaser to convert such Note. The Company shall honor conversions of any Note, and shall deliver Conversion Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.
  
 4.6 Shareholder Rights Plan. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that the Purchaser is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that the Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the Transaction Documents or under any other agreement between the Company and the Purchaser.
  
 4.7 Material Non-Public Information. Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company covenants and agrees that neither it, nor any of its subsidiaries, nor any other Person acting on its behalf, will provide the Purchaser or its agents or counsel with any information that the Company believes constitutes material non-public information, unless prior thereto such information is disclosed to the public, or the Purchaser shall have entered into a written agreement with the Company regarding the confidentiality and use of such information. The Company understands and confirms that the Purchaser shall be relying on the foregoing covenant in effecting transactions in securities of the Company.
  
 4.8 Use of Proceeds. The Company shall use the net proceeds as set forth in Schedule 4.8.
  
 4.9 Indemnification of Purchaser. Subject to the provisions of this Section 4.9, the Company will indemnify and hold the Purchaser and its directors, officers, managers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls the Purchaser (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, managers, shareholders, agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser 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 the Purchaser 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 in the other Transaction Documents or (b) any action instituted against the Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not an Affiliate of the Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless such action is based upon a breach of the Purchaser Party’s representations, warranties or covenants under the Transaction Documents or any agreements or understandings the Purchaser Party may have with any such stockholder or any violations by such Purchaser Party of state or federal securities laws or any conduct by the Purchaser Party which constitutes fraud, gross negligence, willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may be sought pursuant to this Agreement, the Purchaser 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 Purchaser Party. Any Purchaser 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 the Purchaser 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 counsel or (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 the Purchaser 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 Purchaser Party under this Agreement (x) for any settlement by a Purchaser Party effected without the Company’s prior written consent, which shall not be unreasonably withheld or delayed; or (y) to the extent, but only to the extent that a loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties, covenants or agreements made by the Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification required by this Section 4.9 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 indemnification contained herein shall be in addition to any cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject to pursuant to law.
  
  	 
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 4.10 Reservation and Listing of Securities.
  
 (a) The Company shall maintain a reserve equal to the following formula, to be updated monthly; 1.5 x ( P / CP ), P is the outstanding balance on the Note and CP is the Applicable Conversion Price are convertible into shares of Common Stock from its duly authorized shares of Common Stock for issuance pursuant to the Transaction Documents in such amount as may then be required to fulfill its obligations in full under the Transaction Documents. Upon a reverse stock split or increase in the authorized Common Stock of the Company, the Company will immediately instruct the Transfer Agent to reserve at least two times (2x) the full number of Conversion Shares issuable pursuant to the Note at the Conversion Price. This reserve amount shall be updated monthly. 
  
 (b) If, on any date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock is less than 100% of the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend the Company’s articles of incorporation to increase the number of authorized but unissued shares of Common Stock to 100% of the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such date.
  
 (c) The Company shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on the date of such application; (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or quotation on such Trading Market as soon as possible thereafter; (iii) provide to the Purchaser evidence of such listing or quotation; and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date on such Trading Market or another Trading Market.
  
  	 
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 4.11 Subsequent Equity Sales.
  
 (a) For so long as any of the Notes remain outstanding, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. A “Variable Rate Transaction” means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price.
  
 (b) For as long as any of the Notes remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives, will, directly or indirectly: (a) solicit, initiate, encourage or accept any other inquiries, proposals or offers from any Person relating to any exchange (i) of any security of the Company or any of its Subsidiaries for any other security of the Company or any of its Subsidiaries, except to the extent (x) consummated pursuant to the terms of Common Stock Equivalents of the Company as in effect as of the date hereof and disclosed in filings with the Commission prior to the date hereof (without giving effect to any amendment, modification, change or waiver of any terms thereof occurring on or after the date hereof or not disclosed in a filing by the Company with the Commission prior to the date hereof) or (ii) of any indebtedness or other securities of, or claim against, the Company or any of its Subsidiaries pursuant to a registration statement files with the Commission or relying on any exemption under the Securities Act (including, without limitation, Section 3(a)(10) of the Securities Act (any such transaction described in clauses (i) or (ii), an “Exchange Transaction”); (b) enter into, effect, alter, amend, announce or recommend to its stockholders any Exchange Transaction with any Person; or (c) participate in any discussions, conversations, negotiations or other communications with any Person regarding any Exchange Transaction, or furnish to any Person any information with respect to any Exchange Transaction, or otherwise cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person to seek an Exchange Transaction involving the Company or any of its Subsidiaries. For as long as the Notes remain outstanding, neither the Company nor any of its affiliates or Subsidiaries, nor any of its or their respective officers, employees, directors, agents or other representatives, will, directly or indirectly, cooperate in any way, assist or participate in, facilitate or encourage any effort or attempt by any Person to effect any acquisition of securities or indebtedness of, or claim against, the Company by such Person from an existing holder of such securities, indebtedness or claim in connection with a proposed exchange of such securities or indebtedness of, or claim against, the Company (whether pursuant to Section 3(a)(9) or 3(a)(10) of the Securities Act or otherwise) (a “Third Party Exchange Transfer”). The Company, its affiliates and Subsidiaries, and each of its and their respective officers, employees, directors, agents or other representatives shall immediately cease and cause to be terminated all existing discussions, conversations, negotiations and other communications with any Persons with respect to any of the foregoing. For all purposes of this Agreement, violations of the restrictions set forth in this Section 4.11 by any Subsidiary or affiliate of the Company, or any officer, employee, director, agent or other representative of the Company or any of its Subsidiaries or affiliates shall be deemed a direct breach of this Section 4.11 by the Company.
  
  	 
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 (c) From the date hereof until sixty (60) calendar days after the Closing Date, neither the Company nor any Subsidiary shall, directly or indirectly, issue, offer, sell, grant any option or right to purchase, or otherwise dispose of (or announce any issuance, offer, sale, grant of any option or right to purchase or other disposition of) any equity security or any equity-linked or related security (including, without limitation, any “equity security” (as that term is defined under Rule 405 promulgated under the Securities Act), any shares of Common Stock or Common Stock Equivalents, any debt securities, any preferred stock or any purchase rights) or otherwise amend, modify, waiver or alter any terms of conditions of any Common Stock Equivalents outstanding as of the date hereof to decrease the exercise, conversion and/or exchange price, as applicable, thereunder or otherwise increase the aggregate number of shares of Common Stock issuable in connection therewith.
  
 (d) The Purchaser shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages. Notwithstanding the foregoing, this Section 4.11 shall not apply in respect of an Exempt Issuance, except that no Variable Rate Transaction shall be an Exempt Issuance.
  
 4.12 Certain Transactions. The Purchaser covenants and agrees that neither it, nor any Affiliate acting on its behalf or pursuant to any understanding with it will execute any Short Sales of the Common Stock or (ii) hedging transaction, which establishes a net short position with respect to the Company’s Common Stock) during the period commencing with the execution of this Agreement and ending on the earlier of the Maturity Date (as defined in the Notes) of the Notes or the full repayment or conversion of the Notes; provided that this provision shall not prohibit any sales made where a corresponding Notice of Conversion is tendered to the Company and the shares received upon such conversion are used to close out such sale; provided, further that this provision shall not operate to restrict a Purchaser’s trading under any prior securities purchase agreement containing contractual rights that explicitly protects such trading in respect of the previously issued securities. 
  
  	 
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 4.13 Right of First Refusal. 
  
 (a) For so long as any of the Notes remain outstanding, upon any issuance by the Company of Common Stock, Common Stock Equivalents or debt securities for cash consideration or a combination of units thereof (a “Subsequent Financing”), the Purchasers shall have the right to participate up to an amount of the Subsequent Financing equal to 100% of the Subsequent Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent Financing, which participation shall be pro rata to their respective subscription amounts. 
  
 (b) At least three (3) Trading Days prior (eight (8) hours in the event of a Subsequent Financing structured as a public offering) to the closing of the Subsequent Financing, the Company shall deliver to the Purchaser a written notice of its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask the Purchaser if it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”). Upon the request of the Purchaser, and only upon a request by the Purchaser, for a Subsequent Financing Notice, the Company shall promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to the Purchaser. The Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed to be effected and shall include a term sheet or similar document relating thereto as an attachment. 
  
 (c) If a Purchaser desires to participate in such Subsequent Financing, the Purchaser must provide written notice to the Company within one (1) Trading Day of receipt of the Subsequent Financing Notice (eight (8) hours in the event of a Subsequent Financing structured as a public offering) that the Purchaser is willing to participate in the Subsequent Financing, the amount of the Purchaser’s participation, and representing and warranting that the Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing Notice. 
  
 (d) Each Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum. “Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased pursuant to this Agreement by a Purchaser participating under this Section 4.13 and (y) the sum of the aggregate Subscription Amounts of Securities purchased pursuant to this Agreement by all Purchaser participating under this Section 4.13. If notifications by a Purchaser of their willingness to participate in the Subsequent Financing (or to cause their designees to participate) is, in the aggregate, less than the total amount of its Pro Rata Portion, then the Company may effect the remaining portion of such Subsequent Financing on the terms and with the other Purchasers set forth in the Subsequent Financing Notice for any remaining amount. 
  
  	 
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 (e) The Company must provide the Purchaser with a second Subsequent Financing Notice, and the Purchaser will again have the right of participation set forth above in this Section 4.13, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial Subsequent Financing Notice.
  
 (f) The Company and the Purchaser agree that if the Purchaser elects to participate in the Subsequent Financing, the transaction documents related to the Subsequent Financing shall not include any term or provision whereby the Purchaser shall be required to agree to any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of the Purchaser.
  
 (g) Notwithstanding anything to the contrary in this Section 4.13 and unless otherwise agreed to by the Purchaser, the Company shall either confirm in writing to the Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that the Purchaser will not be in possession of any material, non-public information, by the fifth (5h) Trading Day following delivery of the Subsequent Financing Notice. If by such fifth (5th) Trading Day, no public disclosure regarding a transaction with respect to the Subsequent Financing has been made, and no notice regarding the abandonment of such transaction has been received by the Purchaser, such transaction shall be deemed to have been abandoned and the Purchaser shall not be deemed to be in possession of any material, non-public information with respect to the Company or any of its Subsidiaries. 
  
 (h) Notwithstanding the foregoing, this Section 4.13 shall not apply in respect of an Exempt Issuance.
  
 4.14 Securities Laws Disclosure; Publicity. The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits thereto, with the Commission within the time required by the Exchange Act. From and after the issuance of such Current Report on Form 8-K, the Company represents to the Purchaser that it shall have publicly disclosed all material, non-public information delivered to any of the Purchaser by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated by the Transaction Documents. The Company and the Purchaser shall consult with each other in issuing any other public disclosure with respect to the transactions contemplated hereby, and neither the Company nor the Purchaser shall issue any such public disclosure nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of the Purchaser, or without the prior consent of the Purchaser, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding the foregoing, the Company shall not publicly disclose the name of the Purchaser, or include the name of the Purchaser in any filing with the Commission or any regulatory agency or Trading Market, without the prior written consent of the Purchaser, except: (a) as required by federal securities law in connection with any registration statement contemplated by this Agreement and (b) to the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchaser with prior notice of such disclosure permitted under this clause (b).
  
  	 
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 4.15 Form D; Blue Sky Filings. The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to provide a copy thereof, promptly upon request of the Purchaser. The Company shall take such action as the Company shall reasonably determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchaser at the Closings under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such actions promptly upon request of the Purchaser.
  
 ARTICLE V. 
 MISCELLANEOUS 
  
 5.1 Termination. This Agreement may be terminated by the Purchaser, as to the Purchaser’s obligations hereunder only and without any effect whatsoever on the obligations between the Company and the other Purchaser, by written notice to the other parties, if the First Closing has not been consummated on or before June [_], 2018; provided, however, that such termination will not affect the right of any party to sue for any breach by any other party (or parties).
  
 5.2 Fees and Expenses. The Company has agreed to bear all fees, disbursements, and expenses in connection with the transactions contemplated herein, including, without limitation, the Company’s legal and accounting fees and disbursements, the costs incident to the preparation, printing and distribution of any registration statement, filing fees, origination and diligence fees, and UCC fees. In addition, the Company will reimburse the Purchaser for its reasonable out-of-pocket expenses, including legal fees and disbursements of its counsel in connection with the purchase and sale of the Securities contemplated hereby; provided that such reimbursement obligation shall not exceed $10,000. Accordingly, in lieu of the foregoing payments, the aggregate amount that the Purchaser is to pay for the Securities at the Closing shall be reduced by $24,500 in lieu thereof. The Company shall deliver to each Purchaser, prior to the Closing, a completed and executed copy of the Closing Statement, attached hereto as Annex A. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company and any conversion notice delivered by a Purchaser), stamp taxes and other taxes and duties levied in connection with the delivery of any Securities or the Conversion Shares to the Purchasers.
  
 5.3 Entire Agreement. The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties hereto acknowledge have been merged into such documents, exhibits and schedules.
  
 5.4 Notices. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto at or prior to 12:00 p.m. (New York City time) on a Trading Day; (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 12:00 p.m. (New York City time) on any Trading Day; (iii) the second (2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service; or (iv) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.
  
  	 
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 5.5 Amendments; Waivers. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and Purchasers holding at least 50.1% in interest of the Notes then outstanding or, in the case of a waiver, by the party against whom enforcement of any such waived provision is sought, provided that if any amendment, modification or waiver disproportionately and adversely impacts a Purchaser (or group of Purchasers), the consent of such disproportionately impacted Purchaser (or group of Purchasers) shall also be required. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right. Any proposed amendment or waiver that disproportionately, materially and adversely affects the rights and obligations of any Purchaser relative to the comparable rights and obligations of the other Purchasers shall require the prior written consent of such adversely affected Purchaser. Any amendment effected in accordance with accordance with this Section 5.5 shall be binding upon each Purchaser and holder of Securities and the Company.
  
 5.6 Headings. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.
  
 5.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their successors and permitted assigns. The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Purchaser (other than by merger). The Purchaser may assign any or all of its rights under this Agreement to any Person to whom the Purchaser assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred Securities, by the provisions of the Transaction Documents that apply to the Purchaser.
  
 5.8 No Third-Party Beneficiaries. This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth in Section 4.9.
  
  	 
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 5.9 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Section 4.9, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
   
 5.10 Survival. The representations and warranties contained herein shall survive the Closings and the delivery of the Securities.
  
 5.11 Execution. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party hereto and delivered to each other party hereto, it being understood that the parties hereto need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.
  
 5.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.
  
 5.13 Rescission and Withdrawal Right. Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any of the other Transaction Documents, whenever the Purchaser exercises a right, election, demand or option under a Transaction Document and the Company does not timely perform its related obligations within the periods therein provided, then the Purchaser may rescind or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election in whole or in part without prejudice to its future actions and rights; provided, however, that in the case of a rescission of a conversion of any Note, the Purchaser shall be required to return any shares of Common Stock subject to any such rescinded conversion notice.
  
  	 
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 5.14 Replacement of Securities. If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.
  
 5.15 Remedies. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Purchaser and the Company will be entitled to specific performance under the Transaction Documents. The parties hereto agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.
  
 5.16 Payment Set Aside. To the extent that the Company makes a payment or payments to the Purchaser pursuant to any Transaction Document or a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.
  
 5.17 Usury. To the extent it may lawfully do so, the Company hereby agrees not to insist upon or plead or in any manner whatsoever claim, and will resist any and all efforts to be compelled to take the benefit or advantage of, usury laws wherever enacted, now or at any time hereafter in force, in connection with any claim, action or proceeding that may be brought by the Purchaser in order to enforce any right or remedy under any Transaction Document. Notwithstanding any provision to the contrary contained in any Transaction Document, it is expressly agreed and provided that the total liability of the Company under the Transaction Documents for payments in the nature of interest shall not exceed the maximum lawful rate authorized under applicable law (the “Maximum Rate”), and, without limiting the foregoing, in no event shall any rate of interest or default interest, or both of them, when aggregated with any other sums in the nature of interest that the Company may be obligated to pay under the Transaction Documents exceed such Maximum Rate. It is agreed that if the maximum contract rate of interest allowed by law and applicable to the Transaction Documents is increased or decreased by statute or any official governmental action subsequent to the date hereof, the new maximum contract rate of interest allowed by law will be the Maximum Rate applicable to the Transaction Documents from the effective date thereof forward, unless such application is precluded by applicable law. If under any circumstances whatsoever, interest in excess of the Maximum Rate is paid by the Company to the Purchaser with respect to indebtedness evidenced by the Transaction Documents, such excess shall be applied by the Purchaser to the unpaid principal balance of any such indebtedness or be refunded to the Company, the manner of handling such excess to be at the Purchaser’s election.
  
  	 
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 5.18 Liquidated Damages. The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts are due and payable shall have been canceled.
  
 5.19 Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
  
 5.20 Construction. The parties hereto agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.
  
 5.21 WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY HERETI AGAINST ANY OTHER PARTY HERETO, THE PARTIES HERETO EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.
  
 [Signature Pages Follow]
  
  	 
	34
	 
 
	 

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

	 By: 
	  
	  

	  
	 Name: Douglas O. McKinnon
 Title: CEO
	

  
 [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
 SIGNATURE PAGE FOR PURCHASER FOLLOWS] 
  
  	 
	35
	 
 
	 

  
 [PURCHASER SIGNATURE PAGES TO APPYEA, INC. SECURITIES PURCHASE AGREEMENT] 
  
 IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as of the date first indicated above. 
  
 Name of Purchaser: Bellridge Capital L.P.
  
 Signature of Authorized Signatory of Purchaser:  ____________________________________ 
  
 Name of Authorized Signatory: ____________________________________ 
 Title of Authorized Signatory:  ____________________________________ 
 Email Address of Authorized Signatory:  ____________________________________ 
 Facsimile Number of Authorized Signatory:  ____________________________________ 
  
 Address for Notice to Purchaser: 
  
 _________________________
 _________________________
 _________________________
  
  
 Principal Amount: $ 78,947
  
 Initial Subscription Amount: $$ 78,947
  
 Second Subscription Amount: $      
  
  	 
	36
	 
 
	 

  
 SCHEDULE OF PURCHASERS
  
 	 (1)
	  
	 (2)
	  
	 (3)

	 Purchaser
	  
	 Principal Amount of 
 Convertible Notes
	  
	 Subscription
 Amount

		  
		  
	  

	 Bellridge Capital, LP
	  
	 $526,316
	  
	 $500,000

		  
		  
	
		  
		  
	
		  
		  
	

  
  	 
	37
	 
 
	 

  
 EXHIBIT A
  
 Form of Senior Secured Convertible Promissory Note
  
  
 EXHIBIT B
  
 Form of Security Agreement
  
  
 EXHIBIT C
  
 Form of Transfer Agent Instruction Letter
  
  
 EXHIBIT D
  
 Form of Subsidiary Guarantee
  
  
 EXHIBIT C
  
 Form of Transfer Agent Instruction Letter
  
  
 EXHIBIT D
  
 Form of Warrant
  
  
  	 38

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