Document:

EXHIBIT 10.4

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this "Agreement") is made and entered into as of _________, 2018, between UA Granite Corporation, a Nevada corporation (the "Company"), and each of the several purchasers signatory hereto (each such purchaser, a "Purchaser" and, collectively, the "Purchasers").

This Agreement is made pursuant to the Securities Purchase Agreement, dated as of the date hereof, between the Company and each Purchaser (the "Purchase Agreement").

The Company and each Purchaser hereby agrees as follows:

1. Definitions.

Capitalized terms used and not otherwise defined herein that are defined in the Purchase Agreement shall have the meanings given such terms in the Purchase Agreement.  As used in this Agreement, the following terms shall have the following meanings:

"Advice" shall have the meaning set forth in Section 6(c).

"Effectiveness Date" means, with respect to the Initial Registration Statement required to be filed hereunder, the 120th calendar day following the Filing Date (or, in the event of a "full review" by the SEC, the 150th calendar day following the Filing Date) and with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the 120th calendar day following the date on which an additional Registration Statement is required to be filed hereunder (or, in the event of a "full review" by the SEC, the 150th calendar day following the date such additional Registration Statement is required to be filed hereunder); provided , however , that in the event the Company is notified by the SEC that one or more of the above Registration Statements will not be reviewed or is no longer subject to further review and comments, the Effectiveness Date as to such Registration Statement shall be the fifth trading day following the date on which the Company is so notified if such date precedes the dates otherwise required above, provided, further, if such Effectiveness Date falls on a day that is not a trading day, then the Effectiveness Date shall be the next succeeding trading day.

"Effectiveness Period" shall have the meaning set forth in Section 2(a).

"Exchange Act" means the Securities Exchange Act of 1934.

"Filing Date" means, with respect to the Initial Registration Statement required hereunder, the 90th calendar day following the closing date of a contemplated reverse merger transaction between the Company and Vortex Network, LLC and, with respect to any additional Registration Statements which may be required pursuant to Section 2(c) or Section 3(c), the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

"Holder" or "Holders" means the holder or holders, as the case may be, from time to time of Registrable Securities.

"Indemnified Party" shall have the meaning set forth in Section 5(c).

"Indemnifying Party" shall have the meaning set forth in Section 5(c).

"Initial Registration Statement" means the initial Registration Statement filed pursuant to this Agreement.

"Losses" shall have the meaning set forth in Section 5(a).

 

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"Plan of Distribution" shall have the meaning set forth in Section 2(a).

"Prospectus" means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

"Registrable Securities" means, as of any date of determination, (a) all Shares, (b) all Warrant Shares then issued and issuable upon exercise of the Warrants (assuming on such date the Warrants are exercised in full without regard to any exercise limitations therein), (c) any additional shares of Common Stock issued and issuable in connection with any anti-dilution provisions in the Warrants (without giving effect to any limitations on exercise set forth in the Warrants) and (d) any securities issued or then issuable upon any stock split, dividend or other distribution, recapitalization or similar event with respect to the foregoing; provided, however , that any such Registrable Securities shall cease to be Registrable Securities (and the Company shall not be required to maintain the effectiveness of any, or file another, Registration Statement hereunder with respect thereto) for so long as (a) a Registration Statement with respect to the sale of such Registrable Securities is declared effective by the SEC under the Securities Act and such Registrable Securities have been disposed of by the Holder in accordance with such effective Registration Statement, (b) such Registrable Securities have been previously sold in accordance with Rule 144, or (c) such securities become eligible for resale without volume or manner-of-sale restrictions and without current public information pursuant to Rule 144 as set forth in a written opinion letter to such effect, addressed, delivered and acceptable to the Company's transfer agent and the affected Holders (assuming that such securities and any securities issuable upon exercise, conversion or exchange of which, or as a dividend upon which, such securities were issued or are issuable, were at no time held by any Affiliate of the Company, and all Warrants are exercised by "cashless exercise" as provided in Section 1(c) of each of the Warrants), as reasonably determined by the Company, upon the advice of counsel to the Company.

"Registration Statement" means any registration statement required to be filed hereunder pursuant to Section 2(a) and any additional registration statements contemplated by Section 2(c) or Section 3(c), including (in each case) the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

"Rule 415" means Rule 415 promulgated by the SEC 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 SEC having substantially the same purpose and effect as such Rule.

"Rule 424" means Rule 424 promulgated by the SEC 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 SEC having substantially the same purpose and effect as such Rule.

"Selling Stockholder Questionnaire" shall have the meaning set forth in Section 3(a).

"SEC Guidance" means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act.

"Securities Act" means the Securities Act of 1933, as amended.

"Warrant Shares" means the Warrant Shares issuable upon exercise of the Warrants.

2. Registration Statement Requirements.

(a) On or prior to each Filing Date, the Company shall prepare and file with the SEC a Registration Statement covering the resale of all of the Registrable Securities that are not then registered on an effective Registration Statement for an offering to be made on a continuous basis pursuant to Rule 415. Each Registration Statement filed hereunder shall be on Form S-3 (except if the Company is not then eligible to register for resale the Registrable Securities on Form S-3, in which case such registration shall be on Form S-1 or another appropriate form in accordance herewith, subject to the provisions of Section 2(d)) and shall contain (unless otherwise directed by at least 85% in interest of the Holders) substantially the "Plan of Distribution" attached hereto as Exhibit A ; provided , however , that no Holder shall be required to be named as an "underwriter" without such Holder's express prior written consent. Subject to the terms of this Agreement, the Company shall use its best efforts to cause a Registration Statement filed under this Agreement (including, without limitation, under Section 3(c)) to be declared effective under the Securities Act as promptly as possible after the filing thereof, but in any event no later than the applicable Effectiveness Date, and shall use its best efforts to keep such Registration Statement continuously effective under the Securities Act until the date that all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent and the affected Holders (the "Effectiveness Period"). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. eastern standard time on a trading day. The Company shall immediately notify the Holders via facsimile or by e-mail of the effectiveness of a Registration Statement on the same trading day that the Company telephonically confirms effectiveness with the SEC, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. eastern standard time on the trading day after the effective date of such Registration Statement, file a final Prospectus with the SEC as required by Rule 424. Failure to so notify the Holder within one (1) trading day of such notification of effectiveness or failure to file a final Prospectus as foresaid shall be deemed an Event under Section 2(d).

 

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(b) Notwithstanding the registration obligations set forth in Section 2(a), if the SEC informs the Company that all of the Registrable Securities cannot, as a result of the application of Rule 415, be registered for resale as a secondary offering on a single registration statement, the Company agrees to promptly inform each of the Holders thereof and use its commercially reasonable efforts to file amendments to the Initial Registration Statement as required by the SEC, covering the maximum number of Registrable Securities permitted to be registered by the SEC, on Form S-3 or such other form available to register for resale the Registrable Securities as a secondary offering, subject to the provisions of Section 2(d); with respect to filing on Form S-3 or other appropriate form; provided , however , that prior to filing such amendment, the Company shall be obligated to use diligent efforts to advocate with the SEC for the registration of all of the Registrable Securities in accordance with the SEC Guidance, including without limitation, Compliance and Disclosure Interpretation 612.09.

 

(c) Notwithstanding any other provision of this Agreement, if the SEC or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by a Holder as to its Registrable Securities, the number of Registrable Securities to be registered on such Registration Statement will be reduced as follows:

(i) First, the Company shall reduce or eliminate any securities to be included by any Person other than a Holder;

(ii) Second, the Company shall reduce Registrable Securities represented by Warrant Shares (applied, in the case that some Warrant Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Warrant Shares held by such Holders); and

(iii) Third, the Company shall reduce Registrable Securities represented by the Shares (applied, in the case that some Shares may be registered, to the Holders on a pro rata basis based on the total number of unregistered Shares held by such Holders).

In the event of a cutback hereunder, the Company shall give the Holder at least five (5) trading days prior written notice along with the calculations as to such Holder's allotment. In the event the Company amends the Initial Registration Statement in accordance with the foregoing, the Company will use its best efforts to file with the SEC, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Initial Registration Statement, as amended.

(d) If Form S-3 is not available for the registration of the resale of Registrable Securities hereunder, the Company shall (i) register the resale of the Registrable Securities on another appropriate form and (ii) undertake to register the Registrable Securities on Form S-3 as soon as such form is available, provided that the Company shall maintain the effectiveness of the Registration Statement then in effect until such time as a Registration Statement on Form S-3 covering the Registrable Securities has been declared effective by the SEC.

(e) Notwithstanding anything to the contrary contained herein, in no event shall the Company be permitted to name any Holder or affiliate of a Holder as any Underwriter without the prior written consent of such Holder.

3. Registration Procedures.

In connection with the Company's registration obligations hereunder, the Company shall:

(a) Not less than five (5) trading days prior to the filing of each Registration Statement and not less than one (1) trading day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to each Holder copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of such Holders, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to each Holder, to conduct a reasonable investigation within the meaning of the Securities Act. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Holders of a majority of the Registrable Securities shall reasonably object in good faith, provided that, the Company is notified of such objection in writing no later than five (5) trading days after the Holders have been so furnished copies of a Registration Statement or one (1) trading day after the Holders have been so furnished copies of any related Prospectus or amendments or supplements thereto. Each Holder agrees to furnish to the Company a completed questionnaire in the form attached to this Agreement as Exhibit B (a "Selling Stockholder Questionnaire") on a date that is not less than two (2) trading days prior to the Filing Date or by the end of the fourth (4th ) trading day following the date on which such Holder receives draft materials in accordance with this Section.

(b) (i) Prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably possible to the Holders true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided that, the Company shall excise any information contained therein which would constitute material non-public information regarding the Company), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Holders thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

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(c) If during the Effectiveness Period, the number of Registrable Securities at any time exceeds 100% of the number of shares of Common Stock then registered in a Registration Statement, then the Company shall file as soon as reasonably practicable, but in any case prior to the applicable Filing Date, an additional Registration Statement covering the resale by the Holders of not less than the number of such Registrable Securities.

(d) Notify the Holders of Registrable Securities to be sold (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) trading day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) trading day following the day (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the SEC notifies the Company whether there will be a "review" of such Registration Statement and whenever the SEC comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus, provided , however , in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company.

(e) Use its best efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

(f) Furnish to each Holder, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

(g) Subject to the terms of this Agreement, the Company hereby consents to the use of such Prospectus and each amendment or supplement thereto by each of the selling Holders in connection with the offering and sale of the Registrable Securities covered by such Prospectus and any amendment or supplement thereto, except after the giving of any notice pursuant to Section 3(d).

 

(h) Prior to any resale of Registrable Securities by a Holder, use its commercially reasonable efforts to register or qualify or cooperate with the selling Holders in connection with the registration or qualification (or exemption from the Registration or qualification) of such Registrable Securities for the resale by the Holder under the securities or Blue Sky laws of such jurisdictions within the United States as any Holder reasonably requests in writing, to keep each registration or qualification (or exemption therefrom) effective during the Effectiveness Period and to do any and all other acts or things reasonably necessary to enable the disposition in such jurisdictions of the Registrable Securities covered by each Registration Statement; provided, that, the Company shall not be required to qualify generally to do business in any jurisdiction where it is not then so qualified, subject the Company to any material tax in any such jurisdiction where it is not then so subject or file a general consent to service of process in any such jurisdiction.

(i) If requested by a Holder, cooperate with such Holder to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be delivered to a transferee pursuant to a Registration Statement, which certificates shall be free, to the extent permitted by the Purchase Agreement, of all restrictive legends, and to enable such Registrable Securities to be in such denominations and registered in such names as any such Holder may request.

(j) Upon the occurrence of any event contemplated by Section 3(d), as promptly as reasonably possible under the circumstances taking into account the Company's good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Holders in accordance with clauses (iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Holders shall suspend use of such Prospectus. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3(j) to suspend the availability of a Registration Statement and Prospectus, for a period not to exceed 60 calendar days (which need not be consecutive days) in any 12-month period.

(k) Otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the SEC under the Securities Act and the Exchange Act, including, without limitation, Rule 172 under the Securities Act, file any final Prospectus, including any supplement or amendment thereof, with the SEC pursuant to Rule 424 under the Securities Act, promptly inform the Holders in writing if, at any time during the Effectiveness Period, the Company does not satisfy the conditions specified in Rule 172 and, as a result thereof, the Holders are required to deliver a Prospectus in connection with any disposition of Registrable Securities and take such other actions as may be reasonably necessary to facilitate the registration of the Registrable Securities hereunder.

(l) If the Company is or becomes eligible for use of Form S-3 for the registration for the resale of the Registrable Securities, the Company shall use its best efforts to maintain eligibility for use of Form S-3 (or any successor form thereto) for the registration of the resale of Registrable Securities.

 

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(m) The Company may require each selling Holder to furnish to the Company a certified statement as to the number of shares of Common Stock beneficially owned by such Holder and, if required by the SEC, the natural persons thereof that have voting and dispositive control over the shares.

4. Registration Expenses.  All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company's counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, and (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities), (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of any Holder or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Holders.

5. Indemnification.

(a) Indemnification by the Company.  The Company shall, notwithstanding any termination of this Agreement, indemnify and hold harmless each Holder, the officers, directors, members, partners, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), investment advisors and 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 each of them, each Person who controls any such Holder (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, members, stockholders, partners, agents and 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 each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys' fees) and expenses (collectively, "Losses"), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding such Holder furnished in writing to the Company by such Holder expressly for use therein, or to the extent that such information relates to such Holder or such Holder's proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto (it being understood that the Holder has approved Exhibit A hereto for this purpose) or (ii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Holders promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by any of the Holders in accordance with Section 6(g).

(b) Indemnification by Holders.  Each Holder shall, severally and not jointly, indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by such Holder to the Company expressly for inclusion in such Registration Statement or such Prospectus or (ii) to the extent, but only to the extent, that such information relates to such Holder's information provided in the Selling Stockholder Questionnaire or the proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by such Holder expressly for use in a Registration Statement (it being understood that the Holder has approved Exhibit A hereto for this purpose), such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), to the extent, but only to the extent, related to the use by such Holder of an outdated, defective or otherwise unavailable Prospectus after the Company has notified such Holder in writing that the Prospectus is outdated, defective or otherwise unavailable for use by such Holder and prior to the receipt by such Holder of the Advice contemplated in Section 6(c), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of a selling Holder be greater in amount than the dollar amount of the proceeds received by such Holder upon the sale of the Registrable Securities included in the Registration Statement giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings.  If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an "Indemnified Party"), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the "Indemnifying Party") in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that, the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

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An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses, (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section) shall be paid to the Indemnified Party, as incurred, within ten trading days of written notice thereof to the Indemnifying Party; provided, that, the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

(d) Contribution.  If the indemnification under Section 5(a) or 5(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys' or other fees or expenses incurred by such party in connection with any Proceeding to the extent such party would have been indemnified for such fees or expenses if the indemnification provided for in this Section was available to such party in accordance with its terms.

The parties hereto agree that it would not be just and equitable if contribution pursuant to this Section 5(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. In no event shall the contribution obligation of a Holder of Registrable Securities be greater in amount than the dollar amount of the proceeds (net of all expenses paid by such Holder in connection with any claim relating to this Section 5 and the amount of any damages such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission) received by it upon the sale of the Registrable Securities giving rise to such contribution obligation.

The indemnity and contribution agreements contained in this Section are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

6. Miscellaneous.

(a) Remedies.  In the event of a breach by the Company or by a Holder of any of their respective obligations under this Agreement, each Holder or the Company, as the case may be, in addition to being entitled to exercise all rights granted by law and under this Agreement, including recovery of damages, shall be entitled to specific performance of its rights under this Agreement. Each of the Company and each Holder agrees that monetary damages would not provide adequate compensation for any losses incurred by reason of a breach by it of any of the provisions of this Agreement and hereby further agrees that, in the event of any action for specific performance in respect of such breach, it shall not assert or shall waive the defense that a remedy at law would be adequate.

(b) No Piggyback on Registrations; Prohibition on Filing Other Registration Statements.  Neither the Company nor any of its security holders (other than the Holders in such capacity pursuant hereto) may include securities of the Company in any Registration Statements other than the Registrable Securities. The Company shall not file any other registration statements until all Registrable Securities are registered pursuant to a Registration Statement that is declared effective by the SEC, provided that this Section 6(b) shall not prohibit the Company from filing amendments to registration statements filed prior to the date of this Agreement.

(c) Discontinued Disposition.  By its acquisition of Registrable Securities, each Holder agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3(d)(iii) through (vi), such Holder will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the "Advice") by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its best efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

(d) Piggy-Back Registrations.  If, at any time during the Effectiveness Period, there is not an effective Registration Statement covering all of the Registrable Securities and the Company shall determine to prepare and file with the SEC a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with the Company's stock option or other employee benefit plans, then the Company shall deliver to each Holder a written notice of such determination and, if within fifteen days after the date of the delivery of such notice, any such Holder shall so request in writing, the Company shall include in such registration statement all or any part of such Registrable Securities such Holder requests to be registered; provided , however , that the Company shall not be required to register any Registrable Securities pursuant to this Section 6(d) that are eligible for resale pursuant to Rule 144 (without volume restrictions or current public information requirements) promulgated by the SEC pursuant to the Securities Act or that are the subject of a then effective Registration Statement that is available for resales or other dispositions by such Holder.

 

6

(e) Amendments and Waivers.  The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given, unless the same shall be in writing and signed by the Company and the Holders of 51% or more of the then outstanding Registrable Securities (for purposes of clarification, this includes any Registrable Securities issuable upon exercise or conversion of any Security), provided that, if any amendment, modification or waiver disproportionately and adversely impacts a Holder (or group of Holders), the consent of such disproportionately impacted Holder (or group of Holders) shall be required. If a Registration Statement does not register all of the Registrable Securities pursuant to a waiver or amendment done in compliance with the previous sentence, then the number of Registrable Securities to be registered for each Holder shall be reduced pro rata among all Holders and each Holder shall have the right to designate which of its Registrable Securities shall be omitted from such Registration Statement. Notwithstanding the foregoing, a waiver or consent to depart from the provisions hereof with respect to a matter that relates exclusively to the rights of a Holder or some Holders and that does not directly or indirectly affect the rights of other Holders may be given only by such Holder or Holders of all of the Registrable Securities to which such waiver or consent relates; provided , however , that the provisions of this sentence may not be amended, modified, or supplemented except in accordance with the provisions of the first sentence of this Section 6(e). No consideration shall be offered or paid to any Person to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration also is offered to all of the parties to this Agreement.

(f) Notices.  Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be delivered as set forth in the Purchase Agreement.

(g) Successors and Assigns.  This Agreement shall inure to the benefit of and be binding upon the successors and permitted assigns of each of the parties and shall inure to the benefit of each Holder. The Company may not assign (except by merger) its rights or obligations hereunder without the prior written consent of all of the Holders of the then outstanding Registrable Securities.

(h) No Inconsistent Agreements.  The Company has not entered, as of the date hereof, nor shall the Company, on or after the date of this Agreement, enter into any agreement with respect to its securities, that would have the effect of impairing the rights granted to the Holders in this Agreement or otherwise conflicts with the provisions hereof. The Company has not previously entered into any agreement granting any registration rights with respect to any of its securities to any Person that have not been satisfied in full.

(i) Execution and Counterparts.  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 and delivered to the other party, it being understood that both parties 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.

(j)  Governing Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be determined in accordance with the provisions of the Purchase Agreement.

(k) Cumulative Remedies.  The remedies provided herein are cumulative and not exclusive of any other remedies provided by law.

(l) 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.

(m) Headings.  The headings in this Agreement are for convenience only, do not constitute a part of the Agreement and shall not be deemed to limit or affect any of the provisions hereof.

(n) Independent Nature of Holders' Obligations and Rights.  The obligations of each Holder hereunder are several and not joint with the obligations of any other Holder hereunder, and no Holder shall be responsible in any way for the performance of the obligations of any other Holder hereunder. Nothing contained herein or in any other agreement or document delivered at any closing, and no action taken by any Holder pursuant hereto or thereto, shall be deemed to constitute the Holders as a partnership, an association, a joint venture or any other kind of group or entity, or create a presumption that the Holders are in any way acting in concert or as a group or entity with respect to such obligations or the transactions contemplated by this Agreement or any other matters, and the Company acknowledges that the Holders are not acting in concert or as a group, and the Company shall not assert any such claim, with respect to such obligations or transactions. Each Holder shall be entitled to protect and enforce its rights, including without limitation the rights arising out of this Agreement, and it shall not be necessary for any other Holder to be joined as an additional party in any proceeding for such purpose. The use of a single agreement with respect to the obligations of the Company contained was solely in the control of the Company, not the action or decision of any Holder, and was done solely for the convenience of the Company and not because it was required or requested to do so by any Holder. It is expressly understood and agreed that each provision contained in this Agreement is between the Company and a Holder, solely, and not between the Company and the Holders collectively and not between and among Holders.

(Signature Pages Follow)

 

7

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

UA GRANITE CORPORATION

By: 

Name:  Angel Luis Reynoso Vasquez

Title:  President and CEO

 

 

(Signature Page of Holders Follows)

[SIGNATURE PAGE OF COMPANY TO REGISTRATION RIGHTS AGREEMENT]

 

8

 

IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.

Name of Holder: __________________________

Signature of Authorized Signatory of Holder : __________________________

Name of Authorized Signatory: _________________________

Title of Authorized Signatory: __________________________

(Signature Pages Continue)

 

[SIGNATURE PAGE OF HOLDERS TO REGISTRATION RIGHTS AGREEMENT]

 

9

 

Exhibit A

Plan of Distribution

Each Selling Stockholder (the "Selling Stockholders") of the securities and any of their pledgees, assignees and successors-in-interest may, from time to time, sell any or all of their securities covered hereby on any stock exchange, market or trading facility on which the securities are traded or in private transactions. These sales may be at fixed or negotiated prices. A Selling Stockholder may use any one or more of the following methods when selling securities:

	
·

	
Ordinary brokerage transactions and transactions in which the broker-dealer solicits purchasers;

	
·

	
Block trades in which the broker-dealer will attempt to sell the securities as agent but may position and resell a portion of the block as principal to facilitate the transaction;

	
·

	
Purchases by a broker-dealer as principal and resale by the broker-dealer for its account;

	
·

	
An exchange distribution in accordance with the rules of the applicable exchange;

	
·

	
Privately negotiated transactions;

	
·

	
Settlement of short sales;

	
·

	
In transactions through broker-dealers that agree with the Selling Stockholders to sell a specified number of such securities at a stipulated price per security;

	
·

	
Through the writing or settlement of options or other hedging transactions, whether through an options exchange or otherwise;

	
·

	
A combination of any such methods of sale; or

	
·

	
Any other method permitted pursuant to applicable law.

The Selling Stockholders may also sell securities under Rule 144 under the Securities Act of 1933, as amended (the "Securities Act"), if available, rather than under this prospectus.

Broker-dealers engaged by the Selling Stockholders may arrange for other brokers-dealers to participate in sales. Broker-dealers may receive commissions or discounts from the Selling Stockholders (or, if any broker-dealer acts as agent for the purchaser of securities, from the purchaser) in amounts to be negotiated, but, except as set forth in a supplement to this Prospectus, in the case of an agency transaction not in excess of a customary brokerage commission in compliance with FINRA Rule 2440; and in the case of a principal transaction a markup or markdown in compliance with FINRA IM-2440.

In connection with the sale of the securities or interests therein, the Selling Stockholders may enter into hedging transactions with broker-dealers or other financial institutions, which may in turn engage in short sales of the securities in the course of hedging the positions they assume. The Selling Stockholders may also sell securities short and deliver these securities to close out their short positions, or loan or pledge the securities to broker-dealers that in turn may sell these securities. The Selling Stockholders may also enter into option or other transactions with broker-dealers or other financial institutions or create one or more derivative securities which require the delivery to such broker-dealer or other financial institution of securities offered by this prospectus, which securities such broker-dealer or other financial institution may resell pursuant to this prospectus (as supplemented or amended to reflect such transaction).

The Selling Stockholders and any broker-dealers or agents that are involved in selling the securities may be deemed to be "underwriters" within the meaning of the Securities Act in connection with such sales. In such event, any commissions received by such broker-dealers or agents and any profit on the resale of the securities purchased by them may be deemed to be underwriting commissions or discounts under the Securities Act. Each Selling Stockholder has informed the Company that it does not have any written or oral agreement or understanding, directly or indirectly, with any person to distribute the securities.

The Company is required to pay certain fees and expenses incurred by the Company incident to the registration of the securities. The Company has agreed to indemnify the Selling Stockholders against certain losses, claims, damages and liabilities, including liabilities under the Securities Act.

We agreed to keep this prospectus effective until the earlier of (i) the date on which the securities may be resold by the Selling Stockholders without registration and without regard to any volume or manner-of-sale limitations by reason of Rule 144, without the requirement for the Company to be in compliance with the current public information under Rule 144 under the Securities Act or any other rule of similar effect or (ii) all of the securities have been sold pursuant to this prospectus or Rule 144 under the Securities Act or any other rule of similar effect. The resale securities will be sold only through registered or licensed brokers or dealers if required under applicable state securities laws. In addition, in certain states, the resale securities covered hereby may not be sold unless they have been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement is available and is complied with.

Under applicable rules and regulations under the Exchange Act, any person engaged in the distribution of the resale securities may not simultaneously engage in market making activities with respect to the common stock for the applicable restricted period, as defined in Regulation M, prior to the commencement of the distribution. In addition, the Selling Stockholders will be subject to applicable provisions of the Exchange Act and the rules and regulations thereunder, including Regulation M, which may limit the timing of purchases and sales of the common stock by the Selling Stockholders or any other person. We will make copies of this prospectus available to the Selling Stockholders and have informed them of the need to deliver a copy of this prospectus to each purchaser at or prior to the time of the sale (including by compliance with Rule 172 under the Securities Act).

 

10

Exhibit B

 

UA GRANITE CORPORATION

 

Selling Stockholder Notice and Questionnaire

 

The undersigned beneficial owner of common stock (the "Registrable Securities") of UA Granite Corporation, a Nevada corporation (the "Company"), understands that the Company has filed or intends to file with the Securities and Exchange Commission (the "Commission") a registration statement (the "Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Registrable Securities, in accordance with the terms of the Registration Rights Agreement (the "Registration Rights Agreement") to which this document is attached.  A copy of the Registration Rights Agreement is available from the Company upon request at the address set forth below.  All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Registration Rights Agreement.

Certain legal consequences arise from being named as a selling stockholder in the Registration Statement and the related prospectus.  Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling stockholder in the Registration Statement and the related prospectus.

NOTICE

The undersigned beneficial owner (the "Selling Stockholder") of Registrable Securities hereby elects to include the Registrable Securities owned by such Selling Stockholder in the Registration Statement.

The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate:

QUESTIONNAIRE

	
1.

	
Name.

	
(a)

	
Full Legal Name of Selling Stockholder:

	
(b)

	
Full Legal Name of Registered Holder (if not the same as (a) above) through which Registrable Securities

are held: 

	
(c)

	
Full Legal Name of Natural Control Person (which means a natural person who directly or indirectly,

alone or with others, has power to vote or dispose of the securities covered by this Questionnaire): 

  

	
2.

	
Address for Notices to Selling Stockholder:

Telephone: 

Fax: 

Contact Person:

 

11

	
3.

	
Broker-Dealer Status:

	
(a)

	
Are you a broker-dealer?

Yes [  ]           No [  ]

	
(b)

	
If "yes" to Section 3(a), did you receive your Registrable Securities as compensation for investment banking services to the Company?

Yes [  ]           No [  ]

Note:  If "no" to Section 3(b), the SEC Staff has indicated that you should be identified as an underwriter in the Registration Statement.

	
(c)

	
Are you an affiliate of a broker-dealer?

Yes [  ]           No [  ]

	
(d)

	
If you are an affiliate of a broker-dealer, do you certify that you purchased the Registrable Securities in the ordinary course of business, and at the time of the purchase of the Registrable Securities to be resold, you had no agreement or understandings, directly or indirectly, with any person to distribute the Registrable Securities?

Yes [  ]           No [  ]

Note:  If "no" to Section 3(d), the SEC Staff has indicated that you should be identified as an underwriter in the Registration Statement.

	
4.

	
Beneficial Ownership of Securities of the Company Owned by the Selling Stockholder.  Except as set forth below in this Item 4, the undersigned is not the beneficial or registered owner of any securities of the Company other than the securities issuable pursuant to the Purchase Agreement.

	
(a)

	
Type and Amount of other securities beneficially owned by the Selling Stockholder:

  

	
5.

	
Relationships with the Company.  Except as set forth below, neither the undersigned nor any of its affiliates, officers, directors or principal equity holders (owners of 5% or more of the equity securities of the undersigned) has held any position of office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.

State any exceptions here: 

 

The undersigned agrees to promptly notify the Company of any material inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Registration Statement remains effective; provided, that the undersigned shall not be required to notify the Company of any changes to the number of securities held or owned by the undersigned or its affiliates.

By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to Items 1 through 5 and the inclusion of such information in the Registration Statement and the related prospectus and any amendments or supplements thereto. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Registration Statement and the related prospectus and any amendments or supplements thereto.

(Signature Page Follows)

 

12

 

 

IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Beneficial Owner: 

By: 

Name: 

Title: 

Date: 

Beneficial Owner: 

By: 

Name: 

Title: 

Date: 

PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:

 

13Exhibit
No. 10.39

 

 

July
7, 2017

 

Mr.
David Phipps

Chairman
& CEO c/o Orbital Tracking Corp.

18851
NE 29th Avenue, Suite 700

Aventura,
FL 33180

 

Re:
Letter of Intent for Orbital Tracking Corp. Proposed Public Offering

 

Dear
Board of Directors,

 

The
undersigned, ViewTrade Securities Inc. (“ViewTrade”), has recently discussed with you a proposal pursuant to which
Orbital Tracking Corp., (the “Company”), wishes to effectuate a public offering of its securities.

 

In
the course of such discussions, the Company has either submitted to us or will submit to ViewTrade, among other things, recent
audited and unaudited financial statements which the Company represents as fairly reflecting the financial condition of the Company
and the results of its operations for the periods mentioned therein, and you have given us information and projections relating
to the capabilities of the Company.

 

Based
upon the foregoing, and the representations which you and the Company have made to us with regard to the present and proposed
business activities of the Company, as well as the Company’s operations and financial condition, and our appraisal of the
general conditions of the securities markets, this Letter of Intent is written to you to express the interest of the undersigned,
either acting as Underwriter or as the representative of several underwriters (“Representative”), to underwrite an
offering of the Company’s securities in accordance with the basic terms and conditions hereinafter set forth below. The
Representative’s obligation to underwrite such an offering is subject to: (i) satisfactory completion of our due diligence
examination of the Company; (ii) execution of a definitive underwriting agreement; (iii) mutual agreement on the valuation and
pricing of the securities to be offered; (iv) market conditions on the effective date of the offering and (v) approval of all
matters relating to the offering by our counsel.

 

The
following terms, as used in this Letter of Intent, shall have the meanings set forth below:

 

“Commission”
shall mean the Securities and Exchange Commission.

 

“Act”
shall mean the Securities Act of 1933, as amended.

 

    	 	 	1

     

    

 

“Common
Stock” shall mean the capital stock of the Company bearing that designation in its Articles of Incorporation, as amended
to date.

 

“Exchange
Act” shall mean the Securities Exchange Act of 1934, as amended

 

“Effective
Date” shall mean the initial date of effectiveness of the Company’s Registration Statement for the public offering
of securities contemplated hereby.

 

“Public
Offering Price” shall mean the price that when paid by an investor shall entitle such investor to receive a Share of Common
Stock. It is anticipated that the Offering contemplated herein will result in gross proceeds of approximately five million dollars
($5,000,000) to seven million dollars ($7,000,000) and that the Per Share Public Offering Price will be determined by mutual agreement
of the Company and the Representative.

 

“Registration
Statement” shall mean the registration statement relating to the public offering of the Company’s securities which
are the subject of this Letter of Intent.

 

“Representative
Warrants” shall mean those warrants to be sold by the Company to the Representative and/or persons related to the Representative
for nominal consideration of $.0001, each such warrant evidencing the right to purchase one share of the Securities Being Offered
at an exercise price equal to 110% of the Public Offering Price and which shall be exercisable for a period of five years. The
number of Representative Warrants shall be equal to 8% of the total number of Securities sold in the offering.

 

The
“Securities Being Offered” shall be mutually agreed upon prior to filing the Registration Statement and shall be exclusive
of the Representative’s over-allotment, equal to 15% of the Securities Being Offered.

 

	1)
    	The
    Company shall be a duly organized corporation under the laws of the state of Nevada and is authorized to issue 750,000,000
    shares of its common stock, par value $.001 per share and approximately 50,000,000 shares of Preferred Stock. Approximately
    70,977,104 of common shares and 26,396,541 preferred shares, consisting of the following Series: A,B,C,D,E,F,G,H, I, J and
    K, respectively shall be issued and outstanding on the Effective Date (unless the Representative agrees in writing), subject
    to adjustments, including any outstanding stock options and warrants, excluding options and warrant to be issued to outside
    directors and additional shares for the Company’s incentive stock option plan. On the Effective Date, there will be
    no other authorized, issued and/or outstanding securities of the Company, and there will be no commitments by the Company
    to issue any additional securities of the Company, except (i) such number of shares of Common Stock to be issued pursuant
    to Employee Stock Options shall be customary in the industry and approved by the Company’s Compensation Committee; and
    (ii) such securities as required to effectuate the proposed public offering. No holders of any of the securities of the Company
    shall have any preemptive rights of any nature. 

 

    	 	 	 

     

    

 

	2)
    	The
    Company will take all necessary and required corporate action to authorize the issuance and sale of the Securities Being Offered.
    
	 	 
	3)
    	The
    Company will promptly take all steps necessary to prepare and file the Registration Statement with respect to the Securities
    Being Offered and any other securities of the Company to be registered as set forth herein (the “Offering”). Such
    Registration Statement will include appropriate financial statements as required by the Commission. Such Registration Statement
    shall register: (a) the Securities Being Offered in the public offering (including, at the Representative’s discretion,
    an over-allotment equal to 15% of the Securities Being Offered); and (b) the number of shares underlying the Representative
    Warrants. 
	 	 
	4)
    	There
    is no “Finder” involved in this transaction.
	 	 
	5)
    	It
    is the intention of the Representative, pursuant to an agreement (the “Underwriting Agreement”), to act as the
    representative of a number of broker-dealers that will act as principal in purchasing the Securities Being Offered from the
    Company and to offer the Securities Being Offered in a public offering on a “Firm Commitment” basis. The Representative
    shall receive a gross discount equal to eight percent (8%) of the Public Offering Price on each Securities Being Offered sold
    in the Offering, with the exception of Securities Being Offered sold in the Offering, which are purchased by current shareholders
    of the Company, in which case the Representative shall receive a discount equal to three percent (3%) of the Public Offering
    Price. The Representative shall also have the right to re-offer all or any part of the Securities Being Offered to broker-
    dealers who are members of FINRA (“Selected Dealers”) and may allow a concession, to be determined by the Representative,
    to such Selected Dealers in accordance with the Conduct Rules of FINRA. 
	 	 
	6)
    	For
    the purpose of covering over-allotments, the Company shall grant to the Representative an option to purchase a number of Securities
    Being Offered equal to fifteen percent (15%) of Securities Being Offered at the Public Offering Price, in whole or in part,
    from time to time, only during a period of forty-five (45) days from the Effective Date. 
	 	 
	7)
    	The
    Company will reimburse the Placement Agent from the proceeds of the Offering, for accountable expenses, including but not
    limited to: (a) all fees, expenses and disbursements relating to background checks of our officers and directors in an amount
    not to exceed $1,000 per individual and $5,000 in the aggregate; (b) all filing fees incurred in clearing this offering with
    FINRA; (c) payment of up to $5,000 for ‘‘blue-sky’’ counsel; (d) all fees, expenses and disbursements
    relating to the registration, qualification or exemption of securities offered under the securities laws of foreign jurisdictions
    as reasonably designated by the underwriters; (e) the cost of commemorative mementos and lucite tombstones up to $2,500; (f)
    the fees and expenses of underwriters’ counsel not to exceed $100,000; (g) up to $25,000 of the representative’s
    actual accountable road show expenses for the offering. Any fee not listed here and over $500 shall be pre-approved by the
    Company. 

 

    	 	 	 

     

    

 

	8)
    	The
    Representative shall be entitled to an expense allowance equal to one and one percent (1%) of the aggregate gross proceeds
    of the offering (the “Expense Allowance”). Said Expense Allowance is intended to cover the internal expenses of
    the Representative incurred by it in connection with the offering contemplated by this Letter of Intent. The Representative
    shall not be required to make an accounting to the Company with respect to individual expenses included in said Expenses Allowance.
    The non-accountable expense allowance will be paid upon the consummation of this offering. 
	 	 
	9)
    	At
    the closing of the proposed offering, the Company shall sell to the Representative and/or its designees (the “Holders”),
    the Representative Warrants. The Representative’s Warrants shall be for that number of Securities Being Offered equal
    to eight percent (8%) of the total number of Securities Being Offered sold in the public offering and the Representative Warrants
    shall have a cashless exercise provision. 
	 	 
	10)
    	If
    during the period for two (2) years from the Effective Date, the Company shall register any of its securities for sale pursuant
    to a post-effective amendment, or a new Registration Statement under the Act or file a notification on Form S-11-A, or otherwise
    register securities under the Act (other than Registration Statements on Forms S-4 or S-8) and if the cashless provision of
    the Representative Warrants are unavailable to the Holders for any reason, the Company shall be required to offer all of the
    Holders of the Representative’s Warrants and/or underlying securities the opportunity to register the underlying securities
    without cost to the Holders thereof. In connection with these piggy back registration rights, the Company shall give all of
    the Holders of the Representative’s Warrants and/or underlying securities notice by certified or registered mail or
    overnight delivery (providing for proof of delivery in any such instance) at least thirty (30) business days prior to the
    filing of a post-effective amendment, a new Registration Statement under the Act, or a Regulation A filing or other filing
    with the Commission.

 

	 	(a)
    	During
    such time as the Representative’s Warrants are outstanding, the Company will agree not to merge, reorganize, or take
    any action which would terminate the Representative’s Warrants without first making adequate provisions for the Representative’s
    Warrants. Other terms regarding the rights of the holders of the Representative’s Warrants will be included in an agreement
    to be entered into by the Company and the Representative which will be filed as an exhibit to the Registration Statement.
    

 

	11)
    	Within
    three (3) days from the execution of this Letter of Intent, the Company shall pay to the Representative retainer in the sum
    of twenty five thousand dollars ($25,000) and an additional thirty thousand dollars upon receipt of first round of comments
    from the Commission which will be applied against accountable expenses that will be paid by us to the underwriters in connection
    with this offering in accordance with FINRA Rule 5110(f)(2)(C). The underwriting agreement, however, shall provide that in
    the event the offering is terminated, the $55,000 expense deposit paid to the representative will be returned to the extent
    such out-of-pocket accountable expenses are not actually incurred in accordance with FINRA Rule 5110(f)(2)(C). 

 

    	 	 	 

     

    

 

	 	(a)
    	If
    the proposed offering is not consummated as a result of the refusal by the Company to act in accordance with this Letter of
    Intent, the Company shall reimburse the Representative for any further reasonable accountable expenses incurred in connection
    with the proposed offering to the extent these expenses exceed the amounts paid pursuant to this paragraph. 
	 	 	 
	 	(b)
    	If
    the offering contemplated hereby is abandoned by the Representative and the deposits paid hereunder to the Representative
    exceed the actual costs incurred in connection herewith by the Representative, the Representative shall upon request promptly
    refund any such excess to the Company. The Representative shall not be responsible for any expenses of the Company to others
    or for any charges or claims relative to the proposed public offering if it is not consummated due to the Representative abandoning
    the Offering. 

 

	12)
    	Whether
    or not the proposed Public Offering is successfully completed, the Company will bear all other expenses directly and necessarily
    incurred in connection with the proposed offering, including, but not limited to, the following items: 

 

	 	(a)	Cost
    of preparing, printing and filing with the Commission the Registration Statement, amendments and supplements thereto, and
    post-effective amendments, as well as the filing with FINRA pursuant to FINRA Corporate Financing Rule 2710, and payment of
    all necessary fees in connection therewith and the printing of a sufficient quantity of preliminary and final prospectuses
    as the Representative may reasonably request; 
	 	 	 
	 	(b)	The
    cost of preparing and delivering to the Representative and its counsel, electronic and hardbound volumes containing copies
    of all documents and appropriate correspondence filed with or received from the Commission and FINRA and all closing documents;
	 	 	 
	 	(c)
    	The
    fees and disbursements of the transfer agent for the Company’s securities; 
	 	 	 
	 	(d)	All
    reasonable travel and lodging expenses incurred by the Representative and/or its counsel in connection with visits to, and
    examinations of, the Company’s premises;
	 	 	 
	 	(e)
    	The
    reasonable cost for road show meetings, including the cost of informational meetings at the offices of the Representative;
    

 

    	 	 	 

     

    

 

	13)
    	The
    Company’s auditors, are RBSM LLP are independent certified public accountants as that term is defined under the Act
    and the rules and regulations promulgated thereunder, and at the Effective Date and at each closing date of the Public Offering
    will give a cold comfort letter reasonably acceptable to the Representative. The Company’s securities law firm shall
    be Laxague Law Inc. the Company shall hire a financial printing firm, and financial relations firm for the proposed offering
    that are reasonably acceptable to the Representative. 
	 	 
	14)
    	The
    proposed public offering is dependent upon the Company receiving authorization to list the Securities Being Offered (i.e.,
    the Common Stock and warrants to purchase Common Stock) on a national exchange for example; NASDAQ Select, NASDAQ or the NYSE
    (the Exchanges). 
	 	 
	15)
    	The
    Registration Statement will include, in addition to audited and unaudited financial statements, such other information concerning
    the Company’s business, properties, prospects, capitalization, principal shareholders, management and history as may
    be required, all of which information will be true and correct in all material respects on the Effective Date. 
	 	 
	16)
    	The
    Company represents to the Representative that neither the Company nor its management knows of any facts which would materially
    and adversely affect the Company’s projections or the financial condition of the Company as a whole, or which would
    materially and adversely affect its earnings or prospects, which have not been fully disclosed to the Representative, are
    not contained in the Company’s financial statements, or will not be fully disclosed in the Registration Statement. Until
    the Effective Date or until the termination of this Letter of Intent, whichever first occurs, the Company will notify the
    Representative promptly of the occurrence of any event which might material affect the public offering or the status of the
    Company. 
	 	 
	17)
    	The
    offering will be subject to compliance with the Act and other applicable federal and state securities laws. All relevant terms,
    conditions and circumstances relating to the proposed offering will be reasonably satisfactory to the Representative and its
    counsel. The feasibility of the offering will depend upon the results of the Representative’s investigation of the Company,
    information about the Company that the Representative may receive, including, but not limited to, due diligence reports concerning
    the Company’s operations, management, and business plan, and the continuation of the operation of the Company, without
    material adverse change. 
	 	 
	18)
    	Prior
    to the Effective Date, the Company will have entered into employment contracts, in form and substance, reasonably satisfactory
    to the Representative, with such management of the company as agreed to between the Representative and the Company. 

 

    	 	 	 

     

    

 

	19)
    	On
    the Effective Date of the Registration Statement, the Company will own all right, title and interest in all copyrights, inventions,
    patents, processes, trade names, trademarks, licenses and other assets of every nature used in its operations, to the extent
    described in the Registration Statement. 
	 	 
	20)	In
    the event that the Securities Being Offered are sold by the Representative, the Company agrees that it will, for a period
    of one (1) year from the Closing Date of said Offering: 

 

	 	(a)
    	Provide
    to the Representative and distribute to the Company’s security holders an annual report and annual financial statements
    and 
	 	 	 
	 	(b)	Provide
    the Representative with copies of all filings with the Commission. 
	 	 	 
	 	(c)
    	Provide
    the Representative with security position and tracking reports as prepared by Depository Trust Company (“DTC”)
    for a period of one year after the offering. 

 

	21)
    	All
    officers, directors, and principal stockholders (defined as owners of five percent (5%) or more of the Company’s securities,
    provided that Representative may in its discretion request a lower percentage threshold) who or that own any of the Company’s
    securities (including warrants, options, convertible securities, and Common Stock of the Company) as of the Effective Date
    shall agree in writing, in a form satisfactory to the Representative, not to sell, transfer or otherwise dispose of any of
    such securities (or underlying securities) of the Company for a period of twelve (12) months from the Effective Date or any
    longer period required by FINRA, the Exchanges or any State, without the express written consent of the Representative, which
    consent may be given or withheld in the Representative’s sole discretion. 
	 	 
	22)
    	In
    view of the Company’s intention to file a Registration Statement, other than routine customary advertising of the Company’s
    products and services, and except as required by any applicable law or the directive of any relevant regulatory authority
    in any relevant jurisdiction, no news releases or other publicity about the Company will be permitted without approval by
    legal counsel of the Representative and the Company prior to the Effective Date. 
	 	 
	23)
    	All
    investor leads and indications of interest from individuals, corporations (or other similar entity strategic in nature or
    not), broker dealers and institutions resulting from the offering contemplated herein shall be referred to the Representative.
    
	 	 
	24)
    	For
    a period of three years from the Effective Date, upon notice from the Representatives to the Company, the Representatives
    shall have the right to send a representative (who need not be the same individual from meeting to meeting) to observe each
    meeting of the Board of Directors of the Company; provided that such representative shall sign a Regulation FD compliant confidentiality
    agreement which is reasonably acceptable to the Representatives and its counsel in connection with such representative’s
    attendance at meetings of the Board of Directors; and provided further that upon written notice to the Representatives, the
    Company may exclude the representative from meetings where, in the written opinion of counsel for the Company, the representative’s
    presence would destroy the attorney-client privilege. The Company agrees to give the Representatives written notice of each
    such meeting and to provide the Representatives with an agenda and minutes of the meeting no later than it gives such notice
    and provides such items to the other directors, and reimburse the representative of the Representatives for his reasonable
    out-of-pocket expenses incurred in connection with its attendance at the meeting, including but not limited to, food, lodging
    and transportation, as well as the same fees or compensation paid to non-employee directors of the Company. 

 

    	 	 	 

     

    

 

	25)
    	The
    Company hereby agrees that neither the Company nor its directors and affiliates will negotiate with any other broker-dealer
    or other person relating to a possible private and/or public offering of securities without the written consent of the Representative,
    provided that the Representative remains in good standing with FINRA and the exchange or stock quotation system upon which
    the Company lists or proposes to list its securities. In the event the Company does not complete the Offering and enters into
    discussions regarding a letter of intent, or similar agreement, and/or effectuates a private and /or a public offering of
    securities with another broker-dealer or any other person without the written permission of the Representative, after the
    execution of this Letter of Intent and prior to one (1) year after the effective date of this Letter of Intent, the Company
    shall be liable to the Representative for the accountable expenses of the Representative and $100,000 (“Break-up Fee”).
    

 

	 	(a)
    	The
    above notwithstanding the Break-up Fee shall be waived in the event the Company (a) enters into discussion, (b) ultimately
    enters into a business combination including a merger, capital stock exchange, asset acquisition, stock acquisition or other
    similar business combination of one or more businesses, by the Company or its subsidiaries (“Transaction”), during
    the this Agreement and (c) the Company agrees to engage ViewTrade as a financial advisor to the Transaction. 

 

i.
The Transaction Fees paid to ViewTrade shall be the greater of one hundred thousand dollars ($100,000) and two and one-half percent
(2.5%) of the aggregate consideration received or to be paid by the Company in connection with such Transaction. The Transaction
Fee will be payable in the same forms and proportions as the aggregate consideration disbursed or received by the Company.

 

	26)
    	This
    Letter of Intent shall be construed under the laws of the State of Florida, and shall inure to the benefit of, and be binding
    upon, the respective successors and assigns of the parties to this Letter of Intent. The parties agree that any action brought
    by any party against another party in connection with any rights or obligations arising out of this Letter of Intent shall
    be instituted properly in a federal or state court of competent jurisdiction with venue in the Seventeenth Judicial Circuit
    Court in and for Palm Beach County, Florida, or the United States District Court for the Southern District of Florida, Fort
    Lauderdale Division. A party to this Letter of Intent named in any action brought in connection with this Letter of Intent
    in any court outside of the above named designated county or district shall have the right to have the venue of said action
    changed to the above designated county or district or, if necessary, have the case dismissed, requiring the other party to
    re-file such action in an appropriate court in the above designated county or federal district. 
	 	 
	27)
    	This
    Letter of Intent may be signed in counterparts, but all such counterparts shall be considered as a single document. 
	 	 
	28)
    	Except
    for the Company’s obligations to the Representative as expressly set forth in Sections 7, 11, 12, 22, 23, 25 (a), 26
    (in its entirety), 27 and 28 of this Letter of Intent, which obligations are intended to be and are binding obligations, this
    letter is entered into as a letter of intent only, which evidences a brief outline and mutual intention at this time to effect
    the proposed transactions described herein as contemplated, but does not constitute a binding obligation to do so. Any further
    legal obligations between the parties thereto shall be undertaken only in an Underwriting Agreement, and related documents.
    
	 	 
	29)
    	If
    you are in accord with the terms of this letter of intent, please sign where indicated below and return a signed copy to the
    undersigned. 

 

THE
BALANCE OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK

 

    	 	 	 

     

    

 

Very
truly yours,

 

VIEWTRADE
SECURITIES INCORPORATED

 

	By:	/s/
    Douglas Aguililla	 	Date:
    7/7/2017
	 	Douglas
    Aguililla	 	 
	 	Director,
    Investment Banking	 	 

 

The
terms of this Letter of Intent have been accepted and agreed to as of the date first above written.

 

ORBITAL
TRACKING CORPORATION

 

	By:
    	/s/
    David     Phipps	 	Date:
    7/7/2017
	Name:
    	David
    Phipps	 	 
	Its:
    	Chairman
    and Chief Executive Officer

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