Document:

yume_ex101.htm

Exhibit 10.1

 

FIFTH AMENDMENT TO CREDIT AGREEMENT

 

THIS FIFTH AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is entered into effective as of October 14, 2014 (the “Effective Date”), among YUMA EXPLORATION AND PRODUCTION COMPANY, INC., a Delaware corporation (the “Borrower”), the undersigned lenders party to the Credit Agreement (the “Lenders”) and SOCIÉTÉ GÉNÉRALE, in its capacity as Administrative Agent and Issuing Bank (the “Administrative Agent”).

 

RECITALS

 

A. Borrower, the Lenders and Administrative Agent are parties to a Credit Agreement dated as of August 10, 2011, as amended by that certain First Amendment and Limited Waiver to Credit Agreement and Assignment, dated as of September 30, 2012, as further amended by that certain Second Amendment to Credit Agreement and Assignment, dated as of February 13, 2013, as further amended by that certain Third Amendment to Credit Agreement and Assignment, dated as of May 20, 2013, and as further amended by that certain Fourth Amendment to Credit Agreement, dated as of April 22, 2014 (as amended, restated, modified or supplemented from time to time until the date hereof, the “Credit Agreement”).

 

B. Borrower has requested certain amendments to the Credit Agreement as set forth herein and, subject to the conditions precedent set forth herein, the parties hereto have agreed to so amend the Credit Agreement.

 

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

 

1. Same Terms. All terms used herein which are defined in the Credit Agreement shall have the same meanings when used herein, unless the context hereof otherwise requires or provides.  In addition, (i) all references in the Loan Documents to the “Agreement” shall mean the Credit Agreement, as amended by this Amendment, and (ii) all references in the Loan Documents to the “Loan Documents” shall mean the Loan Documents, as amended by this Amendment, as the same shall hereafter be amended from time to time.

 

2. Amendments to Credit Agreement. Subject to the conditions precedent set forth in Section 4 hereof, the Credit Agreement is amended as follows:

 

A. Section 1.02.  The following new definition is added to Section 1.02 of the Credit Agreement in proper alphabetical order:

 

“Certificate of Determination” means the Certificate of Determination of Yuma Energy, Inc., a California corporation, that is filed with the Secretary of State of the State of California and creates the Series A Preferred Stock.

 

B. Section 1.02.  The following definitions in Section 1.02 of the Credit Agreement are amended and restated in their entirety as follows:

 

“Interest Expense” means, for any period, the sum (determined without duplication) of the gross interest expense of the Borrower for such period, including to the extent included in interest expense under GAAP:  (a) amortization of debt discount, (b) capitalized interest, (c) the portion of any payments or accruals under Capital Leases allocable to interest expense and (d) total interest and other fees and expenses incurred in connection with obligations of the Borrower and the Guarantors owing in respect of redeemable preferred stock or other preferred equity interest of the Borrower and the Guarantors, minus (i) the portion of any payments or accruals under Synthetic Leases allocable to interest expense, and (ii) and any imputed interest pursuant to asset retirement obligations whether or not the same constitutes interest expense under GAAP.

 

“Maturity Date” means May 20, 2017.

 

“Parent Guarantor” means The Yuma Companies, Inc., a Delaware corporation.

 

“Series A Preferred Stock” means the Series A Cumulative Redeemable Preferred Stock, no par value per share, of Yuma Energy, Inc., a California corporation.

 

C. Section 1.02.  The definitions of “Cote de Mer Distribution”, “Cote de Mer Prospect”, “La Posada Distribution”, “La Posada Prospect”, “Performance Payments Rights Distribution, “Series A Preferred Stock Agreement” and “Series B Preferred Stock Agreement” in Section 1.02 of the Credit Agreement is hereby deleted in its entirety.

 

  

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D. Section 9.04.  Section 9.04 of the Credit Agreement is hereby amended in its entirety to read as follows:

 

“Section 9.04. Dividends, Distributions and Redemptions.  The Borrower will not, and will not permit any of its Subsidiaries to, declare or make, or agree to pay or make, directly or indirectly, any Restricted Payment, return any capital to its stockholders, members or partners or make any distribution of its Property to its Equity Interest holders, provided that so long as no Default has occurred and is continuing or will result therefrom, no Borrowing Base Deficiency then exists or results therefrom and the Borrowing Base Utilization Percentage is 90% or less after giving effect thereto, then (i) the Borrower may declare and pay cash distributions to its direct and indirect Equity Interest holders to permit such holders to pay federal and state taxes due with respect to the income of the Borrower and Parent Guarantor, (ii) the Borrower may declare and pay dividends with respect to its Equity Interests payable solely in additional shares of its Equity Interests (other than Disqualified Capital Stock), (iii) Subsidiaries may declare and pay dividends ratably with respect to their Equity Interests, (iv) the Borrower may make Restricted Payments pursuant to and in accordance with stock option plans or other benefit plans for management or employees of the Borrower and its Subsidiaries, (v) once a month, the Borrower may make Restricted Payments, directly or indirectly, to Yuma Energy, Inc., to permit Yuma Energy, Inc. to pay dividends in connection with the Series A Preferred Stock pursuant to and accordance with the Certificate of Determination or other agreement governing the Series A Preferred Stock, that do not exceed amounts required under such Certificate of Determination, and (vi) the Borrower may make Restricted Payments to Parent Guarantor in an amount not to exceed $8,000,000 in any fiscal year (the “Total Costs Cap”) for the purposes of (A) paying General and Administrative Costs and (B) Transaction Costs; provided, however, that in the event the Transaction Costs cause the Total Costs to exceed the Total Costs Cap, such Total Costs Cap shall be increased by the lesser of (1) the amount by which the Transaction Costs cause the Total Costs to exceed $8,000,000 and (2) $1,000,000.”

 

E. Article IX.  Article IX of the Credit Agreement is hereby amended by inserting the following new Section 9.20 immediately after the existing Section 9.19:

 

“Section 9.20. No Prepayment.  Neither the Borrower nor any Guarantor shall, or shall permit any of its Subsidiaries to redeem, retire, purchase, defease or otherwise acquire any Series A Preferred Stock without the prior written consent of the Majority Lenders.”

 

3. Conditions Precedent. The obligations and agreements of the Lenders as set forth in this Amendment are subject to the satisfaction (in the opinion of Administrative Agent), unless waived in writing by Administrative Agent, of each of the following conditions (and upon such satisfaction, this Amendment shall be deemed to be effective as of the Effective Date):

 

A. Fifth Amendment to Credit Agreement.  The Administrative Agent shall have received multiple original counterparts, as requested by the Administrative Agent, of this Amendment duly and validly executed and delivered by duly authorized officers of the Borrower, the Guarantor, the Administrative Agent and each Lender.

 

B. Fees and Expenses. The Administrative Agent shall have received (a) payment of all out-of-pocket fees and expenses (including reasonable attorneys’ fees and expenses) incurred by the Administrative Agent in connection with the preparation, negotiation and execution of this Amendment and the other documents in connection herewith, and (b) all fees due and payable under the Credit Agreement and under any separate fee agreement entered into by the parties pursuant to the Credit Agreement.

 

C. Representations and Warranties; No Defaults.  The Borrower shall have confirmed and acknowledged to the Administrative Agent and the Lenders, and by its execution and delivery of this Amendment, the Borrower does hereby confirm and acknowledge to the Administrative Agent and the Lenders, that (i) all representations and warranties contained herein or in the other Loan Documents or otherwise made in writing in connection herewith or therewith shall be true and correct with the same force and effect as though such representations and warranties have been made on and as of the Effective Date and (ii) no Default or Event of Default exists under the Credit Agreement or any of the other Loan Documents.

 

4. Certain Representations.  Borrower represents and warrants that, as of the Effective Date:  (a) Borrower has full power and authority to execute this Amendment and the other documents executed in connection herewith and this Amendment and such other documents constitute the legal, valid and binding obligation of Borrower enforceable in accordance with their terms, except as enforceability may be limited by general principles of equity and applicable bankruptcy, insolvency, reorganization, moratorium, and other similar laws affecting the enforcement of creditors’ rights generally; and (b) no authorization, approval, consent or other action by, notice to, or filing with, any governmental authority or other person is required for the execution, delivery and performance by Borrower thereof.  In addition, Borrower represents that after giving effect to this Amendment all representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the Effective Date as if made on and as of such date except to the extent that any such representation or warranty expressly relates solely to an earlier date, in which case such representation or warranty is true and correct in all material respects as of such earlier date.

 

5. No Further Amendments.  Except as amended hereby, the Credit Agreement shall remain unchanged and all provisions shall remain fully effective between the parties.

 

6. Acknowledgments and Agreements.  Borrower acknowledges that on the date hereof all outstanding Indebtedness is payable in accordance with its terms, and Borrower waives any defense, offset, counterclaim or recoupment with respect thereto.  Borrower, Administrative Agent and each Lender do hereby adopt, ratify and confirm the Credit Agreement, as amended hereby, and acknowledge and agree that the Credit Agreement, as amended hereby, is and remains in full force and effect.  Borrower acknowledges and agrees that its liabilities and obligations under the Credit Agreement, as amended hereby, and under the Loan Documents, are not impaired in any respect by this Amendment.  Any breach of any representations, warranties and covenants under this Amendment shall be an Event of Default under the Credit Agreement.

 

  

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7. Limitation on Agreements.  The modifications set forth herein are limited precisely as written and shall not be deemed (a) to be a consent under or a waiver of or an amendment to any other term or condition in the Credit Agreement or any of the Loan Documents (other than the waiver of the Specified Default), or (b) to prejudice any right or rights which Administrative Agent now has or may have in the future under or in connection with the Credit Agreement and the Loan Documents, each as amended hereby, or any of the other documents referred to herein or therein. This Amendment shall constitute a Loan Document for all purposes.

 

8. Confirmation of Security.  Borrower hereby confirms and agrees that all of the Security Instruments, as may be amended in accordance herewith, which presently secure the Indebtedness shall continue to secure, in the same manner and to the same extent provided therein, the payment and performance of the Indebtedness as described in the Credit Agreement as modified by this Amendment.

 

9. Counterparts.  This Amendment may be executed in any number of counterparts, each of which when executed and delivered shall be deemed an original, but all of which constitute one instrument.  In making proof of this Amendment, it shall not be necessary to produce or account for more than one counterpart thereof signed by each of the parties hereto.

 

10. Incorporation of Certain Provisions by Reference.  The provisions of Section 12.09 of the Credit Agreement captioned “Governing Law; Jurisdiction; Consent to Service of Process” are incorporated herein by reference for all purposes.

 

11. Entirety, Etc.  This Amendment, the Expenses and Indemnity Letter and all of the other Loan Documents embody the entire agreement between the parties.  THIS AMENDMENT, THE EXPENSES AND INDEMNITY LETTER AND ALL OF THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT AMONG THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE ARE NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.

 

[The rest of this page is intentionally left blank; the signature pages follow.]

  

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IN WITNESS WHEREOF, the parties hereto have executed this Amendment to be effective as of the date and year first above written.

 

 

	 	
BORROWER

	 
	 	 	 
	 	 
YUMA EXPLORATION AND PRODUCTION COMPANY, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Kirk Sprunger	 
	 	 	Kirk Sprunger, Secretary and Treasurer	 
	 	 	 	 
	 	 	 	 

 

 

  

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ADMINISTRATIVE AGENT, ISSUING BANK

AND LENDER:

SOCIÉTÉ GÉNÉRALE

By: /s/ Graeme Bullen

Name:  Graeme Bullen

Title:    Managing Director

 

 

  

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LENDER:

ONEWEST BANK, FSB

By: /s/ Whitney Randolph

Name: Whitney Randolph

Title:    Senior Vice President

 

 

 

 

 

  

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LENDER:

VIEWPOINT BANK, N.A.

By: /s/ Christopher S. Parada

Name:  Christopher S. Parada

Title:    Senior Vice President

 

 

 

 

 

  

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THE GUARANTOR HEREBY CONSENTS TO THE EXECUTION, DELIVERY AND PERFORMANCE OF THE TERMS OF THIS AMENDMENT BY THE BORROWER.

	 
	 	 	 
	 	 
THE YUMA COMPANIES, INC.

	 
	 	 	 	 
	
 

	
By: 

	/s/ Kirk Sprunger	 
	 	 	Kirk Sprunger, Secretary and Treasurer	 
	 	 	 	 
	 	 	 	 

8Exhibit
10.1

 

private
placement Engagement Letter

 

October
9, 2014

 

Personal
and Confidential

 

MoPals.Com
Inc.

109
Atlantic Avenue

Toronto,
ON, M6K 1X4

Attn:
Mr. Alex Haditaghi, CEO

 

Dear
Alex:

 

This
letter agreement (this “Agreement”) confirms the understanding and agreement between MoPals.Com Inc. (the “Company”)
and Amarok Financial, LLC (“Amarok”) and Cabrillo Broker, LLC through which all securities are offered (“Cabrillo,”
and together with Amarok, collectively, “Advisor”) as follows:

 

1.Engagement;
Services; Term. The Company hereby retains Advisor as its exclusive placement agent in connection with the possible private
placement of equity, equity-linked or debt securities (including, without limitation, any convertible securities, preferred stock,
unsecured, non-senior or subordinated debt securities, and/or senior notes or bank debt) (any or all of which being “Securities”)
to provide financing to the Company and/or any of its subsidiaries or affiliates, or any entity formed by or at the direction
of the Company, in one or more transactions (each, a “Transaction”). On the terms and subject to the conditions contained
herein, Advisor will assist the Company in its efforts to effect a Transaction on terms approved by the Company in an amount not
less $15,000,000 with a minimum post-money valuation of $60,000,000. Notwithstanding same the Company shall have the right to
accept less than $15,000,000 and other terms in its sole discretion. The Company acknowledges that consummation of a Transaction
is subject, among other factors, to acceptable documentation, market conditions, and satisfaction of the conditions set forth
in one or more agreements to be entered into with any financier, lender, investor or other purchaser of Securities. It is expressly
understood that this engagement does not constitute any commitment, express or implied, on the part of Advisor to (a) acquire,
and does not ensure the successful placement of, any portion of the Securities, (b) secure any other financing on behalf of any
person or entity, or (c) ensure that any agreements are executed by any financier, lender, investor or other prospective purchaser
of Securities or guarantee the obligations of any such party. The Company further acknowledges and agrees that Advisor is not
acting as an underwriter of the Securities and shall have no responsibility or obligation to underwrite the Securities, and that
Advisor’s undertaking is subject to our continued satisfaction with the results of our ongoing review of the Company’s
business and affairs.

 

Advisor’s
services will consist of, if appropriate and if requested by the Company, (a) familiarizing ourselves with the Company’s
financial condition and business, (b) assisting the Company in soliciting, coordinating and evaluating indications of interest
and proposals regarding a Transaction, (c) assisting the Company in negotiating financial aspects of any Transaction, and
(d) providing such other financial advisory and investment banking services as may be agreed upon by Advisor and the Company.
In addition, Advisor shall assist the Company in the preparation of a Private Placement Memorandum (as
defined below) or similar document describing the Company (it being expressly understood that the Company will remain solely responsible
for such documents and all of the information contained therein). All services described herein shall be the sole responsibility
of Amarok, except for the services that require registration as a broker or dealer which shall be performed by Cabrillo.

 

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    	MoPals.Com Inc.

    

 

The
Company agrees that none of it, its controlling equity holders or other affiliates, or its management will initiate any discussions
regarding a Transaction during the term of this Agreement, except with prior consultation with Advisor. In the event the Company,
its controlling equity holders or other affiliates, or its management receives any inquiry regarding a Transaction from any party,
the Company shall promptly inform Advisor of such inquiry so that Advisor can assist the Company in evaluating such party and
its interest in a Transaction and in any resulting negotiations.

 

This
Agreement may be terminated at any time by any party upon thirty days’ prior written notice to the other party; provided,
however, that no expiration or termination of this Agreement shall affect (a) the indemnification, reimbursement,
contribution and other obligations and provisions set forth on Schedule A attached hereto, (b) the confidentiality provisions
set forth herein, (c) Sections 3-8 hereof, and (d) Advisor’s right to receive, and the Company’s obligation to
pay, any and all fees and expenses due, whether or not any Transaction shall be consummated prior to or subsequent to the effective
date of expiration or termination, all as more fully set forth in this Agreement.

 

2.Fees
and Expenses. Upon the first closing of any Transaction completed by the Company (and upon each subsequent closing, if
any), the Company shall pay Advisor a fee (“Transaction Fee”) equal to 7% of the aggregate amount of all equity and
equity-linked securities (including, without limitation, convertible securities and preferred stock) placed or committed. The
Transaction Fee(s) will be paid in the following manner: (i) 5% in cash and (ii) 2% in restricted stock to be valued at the Offering
Price sold to the Investors. The Cash Fee to be paid to Advisor will be withheld from the proceeds of each Transaction and the
Company will instruct the financier, lender, investor or other purchaser of Securities to wire transfer the Transaction Fee(s)
directly to Advisor and the Stock Fee will be paid within three (3) business days of the Closing. The fees set forth in this Agreement
shall be due regardless of whether the Transaction involves a change of control of the Company. The Transaction Fee(s) will be
payable in respect of any sale of securities whether such sale has been arranged by Advisor, by another agent or directly by the
Company (or such other issuer of the Securities in such Transaction) or any of its affiliates. Any non-cash consideration provided
to or received in connection with the Transaction (including but not limited to intellectual or intangible property, securities,
labor or services rendered, debt (or cancellation thereof) or tangible property) shall be valued for purposes of calculating the
Transaction Fee as equaling the number of Securities issued in exchange for such consideration multiplied by (in the case of debt
securities) the face value of each such Security or (in the case of equity securities) the price per Security paid in the then
current round of financing. The fees set forth herein shall be in addition to any other fees that the Company (or such other issuer
of the Securities in the Transaction) may be required to pay to any investor or other purchaser of Securities to secure its financing
commitment.

 

If
this Agreement expires or is terminated for any reason, and the Company (and/or any of its subsidiaries or affiliates) consummates,
or enters into an agreement in principle to engage in (and which subsequently closes at any time), any Transaction prior to the
date that is twelve (12) months after such expiration or termination date with any party which (i) Advisor identified, contacted
or with whom Advisor or the Company had discussions regarding a potential Transaction during the term of this Agreement, or (ii)
reviewed the Private Placement Memorandum or any other written materials prepared by Advisor or by the Company with the assistance
of Advisor concerning the Company and/or any proposed Transaction, Advisor shall be entitled to receive its Transaction Fee upon
the first closing of a Transaction (and upon each subsequent closing, if any) as if no such expiration or termination had
occurred.

 

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    	MoPals.Com Inc.

    

 

In
addition, and regardless of whether any Transaction is consummated, the Company shall, upon Advisor’s request, reimburse
Advisor for its reasonable out-of-pocket expenses incurred from time to time in connection with its services hereunder.

 

3.Information.
The Company will provide Advisor with access to management and other representatives of the Company and other participants
in the Transaction, as reasonably requested by Advisor. The Company will furnish Advisor with such information as Advisor may
reasonably request for the purpose of carrying out its engagement hereunder, all of which will be, to the Company’s best
knowledge, accurate and complete at the time furnished. The Company further represents and warrants that any financial projections
delivered to Advisor have been or will be reasonably prepared in good faith on bases reflecting the best currently available estimates
and judgments of the future financial results and condition of the Company. The Company will promptly notify Advisor in writing
of any material inaccuracy or misstatement in, or material omission from, any information previously delivered to, or discussed
with, Advisor, or any materials provided to any interested party. Advisor shall rely, without independent verification, on the
accuracy and completeness of all information that is publicly available and of all information furnished by or on behalf of the
Company or any other potential party to any Transaction or otherwise reviewed by, or discussed with, Advisor. The Company understands
and agrees that Advisor will not be responsible for the accuracy or completeness of such information, and shall not be liable
for any inaccuracies or omissions therein. The Company acknowledges that Advisor has no obligation to conduct any appraisal of
any assets or liabilities of the Company or any other party or to evaluate the solvency of any party under any applicable laws
relating to bankruptcy, insolvency or similar matters. Any advice (whether written or oral) rendered by Advisor pursuant to this
Agreement is intended solely for the use of the Board of Directors of the Company (solely in its capacity as such) in evaluating
a Transaction, and such advice may not be relied upon by any other person or entity or used for any other purpose. Any advice
rendered by, or other materials prepared by, or any communication from, Advisor may not be disclosed, in whole or in part, to
any third party, or summarized, quoted from, or otherwise referred to in any manner, without the prior written consent of Advisor.
In addition, neither Advisor nor the terms of this Agreement may otherwise be referred to without our prior written consent.

 

The
Company authorizes Advisor to provide a private placement memorandum (or similar document) (as such document may be amended or
supplemented and including any information incorporated therein by reference, the “Private Placement Memorandum”)
and other pertinent information furnished by or on behalf of the Company to prospective investors and other purchasers and agrees
not to transmit the Private Placement Memorandum to prospective investors or other purchasers without Advisor’s prior approval.
The Company will be solely responsible for the contents of the Private Placement Memorandum and any and all other written or oral
communications provided by or on behalf of the Company to any actual or prospective investor or other purchaser. The Company represents
and warrants that the Private Placement Memorandum and such other communications will 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, not misleading. If an event occurs as a result of which the Private Placement
Memorandum (as then supplemented or amended) would include any untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading,
the Company will promptly notify Advisor of such event and Advisor will suspend solicitations of prospective investors and other
purchasers until such time as the Company prepares (and the Company agrees that, if the solicitation of prospective investors
and other purchasers has been so suspended after the Company has accepted orders from prospective investors or other purchasers,
the Company will promptly prepare) a supplement or amendment to the Private Placement Memorandum which corrects such statement(s)
or omission(s). The Company will (i) make available to each bona fide offeree of the Securities such information (in addition
to that contained in the Private Placement Memorandum) concerning the offering of the Securities, the Company and any other
relevant matters, and (ii) will provide each bona fide offeree the opportunity to ask questions of, and receive answers from,
the officers and employees of the Company concerning the terms and conditions of the offering of the Securities.

 

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    	MoPals.Com Inc.

    

 

Advisor
acknowledges that, in connection with the services to be provided pursuant to this Agreement, certain confidential, non-public
and proprietary information concerning the Company and the Transaction (“Confidential Information”) has been or may
be disclosed by the Company to Advisor or its employees, affiliates, attorneys, subcontractors and advisors (collectively, “Representatives”).
Advisor agrees that, without the Company’s prior consent, no Confidential Information will be disclosed, in whole or in
part, to any other party (other than to any potential party to a Transaction under appropriate assurances of confidentiality,
to those Representatives who need access to any Confidential Information for purposes of performing the services to be provided
hereunder, or as may be required by law or regulatory authority). The term “Confidential Information” does not include
any information: (a) that was already in the possession of Advisor or any of its Representatives, or that was available to Advisor
or any of its Representatives on a non-confidential basis, prior to the time of disclosure to Advisor or such Representatives;
(b) obtained by Advisor or any of its Representatives from a third party which, insofar as is known to Advisor or such Representatives,
is not subject to any prohibition against disclosure; (c) which was or is independently developed by Advisor or any of its Representatives
without violating any confidentiality obligations under this paragraph; or (d) which was or becomes generally available to the
public through no fault of Advisor. If Advisor becomes required by legal process or requested by regulatory authority to disclose
any Confidential Information, prompt notice thereof (to the extent legally permissible) shall be given to the Company (provided
that no notification shall be required in respect of any disclosure to regulatory authorities having jurisdiction over Advisor),
and Advisor may disclose only that information which its counsel advises it is compelled to disclose. The obligations of Advisor
and its Representatives set forth in this paragraph shall remain in effect for a period of one year after the date of this Agreement. 

 

4.Indemnification. The
Company agrees to provide indemnification, contribution and reimbursement to Advisor and certain other parties in accordance
with, and the Company further agrees to be bound by the other provisions set forth in, Schedule A attached hereto, which
Schedule A is incorporated herein and made a part hereof.

 

5.Other
Services. To the extent Advisor is requested by the Company and agrees to perform any financial advisory or investment
banking services which are not within the scope of this engagement (such as rendering a fairness opinion), the Company shall pay
Advisor such fees as shall be mutually agreed upon by Advisor and the Company in writing, in advance, depending on the level and
type of services required, and shall be in addition to the fees and expenses described hereinabove. Except as set forth in the
preceding sentence, if Advisor is required to render services directly or indirectly relating to the subject matter of this Agreement
(including, but not limited to, producing documents, answering interrogatories, attending depositions, and testifying at trial,
and whether by subpoena, court process or order, or otherwise), the Company shall pay Advisor’s then current hourly rates
for the persons involved for the time expended in rendering such services, including, but not limited to, time for meetings, conferences,
preparation and travel, and all related out-of-pocket expenses (including, without limitation, the fees and expenses of Advisor’s
legal counsel incurred in connection therewith).

 

    	4

    	MoPals.Com Inc.

    

 

6.Credit.
After the announcement or consummation of any Transaction, Advisor may, at its own expense, place announcements on its corporate
website and in financial and other newspapers and periodicals (such as a customary “tombstone” advertisement, including
the Company’s logo or other identifying marks) describing its services in connection therewith. The content of any such
announcement shall be subject to the Company’s prior approval, which approval shall not be unreasonably withheld. Furthermore,
if requested by Advisor, the Company agrees that in any press release announcing any Transaction, the Company will include in
such press release a mutually acceptable reference to Advisor’s role as placement agent for the Company with respect to
such Transaction.

 

7.Additional
Covenants and Representations of the Company. In connection with all offers and sales of the Securities, the Company will
cause to be addressed and delivered to Advisor a written opinion of Company counsel acceptable to Advisor containing (i) an opinion
to the effect that the placement of Securities was exempt from registration under the Securities Act of 1933, as amended (the
“Act”), and (ii) any other opinions of counsel that have been provided to investors or other purchasers of the Securities
or which Advisor may reasonably request. The Company also will cause to be furnished to Advisor at or after each closing of a
sale of Securities copies (addressed to Advisor, if requested and as appropriate) of such agreements, opinions, certificates and
other documents (including, without limitation, accountant’s letters) as Advisor may reasonably request. The Company hereby
acknowledges and agrees that Advisor shall be entitled to rely upon the representations and warranties made (whether pursuant
to a subscription agreement or in any other format) to investors or other purchasers of Securities and the Company shall be deemed
to have made such representations and warranties to and for the benefit of Advisor.

 

It
is understood that the offer and sale of the Securities in a Transaction will be exempt from the registration requirements of
the Act, pursuant to Section 4(2) thereof. The Company has not taken, and will not take, any action, directly or indirectly, so
as to cause the transactions contemplated by this Agreement to fail to be entitled to exemption under Section 4(2) of the Act.
The Company will promptly from time to time take such reasonable action as necessary to qualify the Securities as a private placement
under the securities laws of such States and foreign jurisdictions as any prospective investor or other purchaser may reasonably
request and will comply with applicable laws. The Company represents and warrants that all Securities to be issued in connection
with this engagement will be duly authorized, validly issued, fully paid and nonassessable. The Company shall cause the issuer
of the Securities to offer and sell the Securities only to investors and other purchasers of the Securities that they reasonably
believe to be “accredited investors”, as defined in Rule 501 of Regulation D under the Act. The Company will cause
the issuer of the Securities to file in a timely manner with the Securities and Exchange Commission (the “SEC”) and/or
each other regulatory authority any notices or other filings with respect to the Securities required by Rule 503 of Regulation
D under the Act and/or other applicable law or regulation and will upon request furnish to Advisor a signed copy of each such
notice or filing promptly after its submission.

 

The
Company represents and warrants that it has filed all reports, schedules, forms, statements and other documents required to be
filed by it with the SEC pursuant to the reporting requirements of the Securities Exchange Act of 1934, as amended (“1934
Act”) (all of the foregoing filed prior to the date hereof and all exhibits included therein and financial statements, notes
and schedules thereto and documents incorporated by reference therein being hereinafter referred to as the “SEC Documents”).
As of their respective dates, all SEC Documents complied in all material respects with the requirements of the 1934 Act and the
rules and regulations of the SEC promulgated thereunder applicable to the SEC Documents, and none of the SEC Documents, at the
time they were filed with the SEC contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial statements of the Company included in the SEC Documents
complied as to form in all material respects with applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto.

 

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    	MoPals.Com Inc.

    

 

8.Miscellaneous.
This Agreement shall be binding upon the parties hereto and their respective successors, heirs and assigns and any successor,
heir or assign of any substantial portion of such parties’ respective businesses and/or assets. Nothing in this Agreement,
express or implied, is intended to confer or does confer on any person or entity, other than the parties hereto, the Indemnified
Parties (as defined in Schedule A attached hereto) and each of their respective successors, heirs and assigns, any rights or remedies
(directly or indirectly as a third party beneficiary or otherwise) under or by reason of this Agreement or as a result of the
services to be rendered by Advisor hereunder.

 

The
Company understands and acknowledges that Advisor engages in providing investment banking, securities trading, financing, and
financial advisory services and other commercial and investment banking products and services to a wide range of institutions
and individuals. In the ordinary course of business, Advisor and certain of its employees, as well as investment funds in which
they may have financial interests or with which they may co-invest, may acquire, hold or sell, long or short positions, or trade
or otherwise effect transactions, in debt, equity, and other securities and financial instruments (including bank loans and other
obligations) of, or investments in, the Company or any other party that may be involved in the matters contemplated by this Agreement
or have other relationships with such parties. With respect to any such securities, financial instruments and/or investments,
all rights in respect of such securities, financial instruments and investments, including any voting rights, will be exercised
by the holder of the rights, in its sole discretion. In addition, Advisor may in the past have had, and may currently or
in the future have, financial advisory or other investment banking relationships with parties involved in the matters contemplated
by this Agreement, including parties that may have interests with respect to the Company, a Transaction or other parties involved
in a Transaction, from which conflicting interests or duties may arise. Although Advisor in the course of such other activities
and relationships may acquire information about the Company, a Transaction or such other parties, or that otherwise may be of
interest to the Company, Advisor shall have no obligation to, and may not be contractually permitted to, disclose such information,
or the fact that Advisor is in possession of such information, to the Company or to use such information on the Company’s
behalf.

 

The
Company acknowledges that certain of Advisor’s affiliates (such affiliates collectively, the “Affiliate Purchaser”)
may be potential purchasers, lenders or investors in connection with the Transaction. The Company acknowledges that (a) Advisor
may discuss the potential Transaction with, and disclose confidential information concerning the Company and the Transaction to,
the Affiliate Purchaser, (b) the interests of the Affiliate Purchaser may differ from those of the Company with respect to the
timing, pricing and terms and conditions of the Transaction and otherwise, and the Company (on its own behalf and, to the extent
permitted by applicable law, on behalf of its security holders) knowingly and voluntarily waives any conflicts of interest which
may result from Advisor’s multiple roles as placement agent for the Company hereunder and as an affiliate of the Affiliate
Purchaser, (c) no advice or recommendation rendered by Advisor hereunder shall be deemed a representation that the Affiliate Purchaser
would agree to participate in a Transaction structured in accordance with such advice or recommendation, and (d) the Affiliate
Purchaser shall be entitled to act as it deems appropriate to protect its interests as a prospective purchaser, lender or investor
including, without limitation, by exercising any power, discretion, right or remedy, withholding any agreement, consent, waiver
or approval, or making any other decision or determination.

 

    	6

    	MoPals.Com Inc.

    

 

In
order to enable Advisor to bring relevant resources to bear on its engagement hereunder from among its global affiliates, the
Company agrees that Advisor may share information obtained from the Company and other parties hereunder with other members of
Advisor, and may perform the services contemplated hereby in conjunction with such other members.

 

The
parties understand that Advisor is being engaged hereunder as an independent contractor to provide the services described above
solely to the Company, and that Advisor is not acting as a fiduciary of the Company, the security holders or creditors of the
Company or any other person or entity in connection with this engagement, and the Company agrees that it shall not make, and hereby
waives, any claim based on an assertion of such a fiduciary relationship. Any duties arising by reason of this Agreement or as
a result of the services to be rendered by Advisor hereunder will be owed solely to the Company.

 

The
invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect pursuant to the terms hereof.

 

The
Company agrees that it will be solely responsible for ensuring that any Transaction complies with applicable law. The Company
understands that Advisor is not undertaking to provide any legal, regulatory, accounting, insurance, tax or other similar professional
advice.

 

This
Agreement is the complete and exclusive statement of the entire understanding of the parties regarding the subject matter hereof,
and supersedes all previous agreements or understandings regarding the same, whether written or oral.

 

This
Agreement may not be amended, and no portion hereof may be waived, except in a writing duly executed by the parties.

 

This
Agreement has been reviewed by the signatories hereto and their counsel. There shall be no construction of any provision against
Advisor because this Agreement was drafted by Advisor, and the parties waive any statute or rule of law to such effect.

 

The
Company has all requisite power and authority to enter into this Agreement. This Agreement has been duly and validly authorized
by all necessary action on the part of the Company and has been duly executed and delivered by the Company and constitutes a legal,
valid and binding agreement of the Company, enforceable in accordance with its terms.

 

To
help the United States government fight the funding of terrorism and money laundering activities, the federal law of the United
States requires all financial institutions to obtain, verify and record information that identifies each person with whom they
do business as a condition to doing business with that person. Accordingly, the Company will provide Advisor upon request certain
identifying information necessary to verify the Company's identity, such as a government-issued identification number (e.g., a
U.S. taxpayer identification number), certified articles of incorporation, a government-issued business license, partnership agreement
or trust instrument.

 

    	7

    	MoPals.Com Inc.

    

 

This
Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which will constitute
one and the same instrument. Such counterparts may be delivered by one party to the other by facsimile or other electronic transmission,
and such counterparts shall be valid for all purposes.

 

ALL
DISPUTES ARISING OUT OF OR RELATED TO This agreement (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) shall be governed by, AND
CONSTRUED IN ACCORDANCE WITH, the laws of the state of NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS. EACH OF ADVISOR
AND THE COMPANY (ON ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS EQUITY HOLDERS) IRREVOCABLY
WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED UPON CONTRACT, TORT OR OTHERWISE) RELATED
TO OR ARISING OUT OF THE ENGAGEMENT OF ADVISOR PURSUANT TO, OR THE PERFORMANCE BY ADVISOR OF THE SERVICES CONTEMPLATED BY, THIS
AGREEMENT.

 

Please
confirm that the foregoing terms are in accordance with your understanding by signing and returning a copy of this Agreement.

 

Sincerely,

 

	AMAROK
    FINANCIAL, LLC	 	CABRILLO
    BROKER, LLC
	 	 	 	 	 
	By:	 	 	By:	 
	 	Harry
                                         Kang

        Managing
        Director
	 	 	Wade
                                         Hansen

        Managing
        Director

 

Accepted
and agreed to as of the date

first
written above:

 

MOPALS.COM
INC.

  

	By:	/s/
    Alex Haditaghi	 
	 	Alex
    Haditaghi	 
	 	CEO	 

 

    	8

    	 

    

 

SCHEDULE
A

 

This
Schedule is attached to, and constitutes a material part of, that certain agreement (the “Agreement”) dated October
9, 2014, between MoPals.Com Inc. (the “Company”) and Advisor. Unless otherwise noted, all capitalized terms
used herein shall have the meanings set forth in the Agreement.

 

As
a material part of the consideration for the agreement of Advisor to furnish its services under the Agreement, the Company agrees
(i) to indemnify and hold harmless Advisor and its affiliates, and their respective past, present and future directors, officers,
shareholders, partners, members, employees, agents, representatives, advisors, subcontractors and controlling persons (collectively,
the “Indemnified Parties”), to the fullest extent lawful, from and against any and all losses, claims, damages or
liabilities (or actions in respect thereof), joint or several, (A) arising out of or based upon any untrue statement or alleged
untrue statement of any material fact contained in the materials or any other information (whether written or oral) supplied to
any third party by or on behalf of the Company or the omission or alleged omission to state therein a material fact required to
be stated therein or necessary in order to make the statements therein not misleading, or (B) otherwise arising out of or relating
to the Agreement, Advisor’s engagement under the Agreement, any Transaction or proposed Transaction, or any actions taken
or omitted to be taken by an Indemnified Party or the Company in connection with the Agreement, and (ii) to reimburse each Indemnified
Party for all expenses (including, without limitation, the fees and expenses of counsel) as they are incurred in connection with
investigating, preparing, pursuing, defending, settling, compromising or otherwise becoming involved in any action, suit, dispute,
inquiry, investigation or proceeding, pending or threatened, brought by or against any person or entity (including, without limitation,
any shareholder or derivative action), arising out of or relating to the Agreement, or such engagement, Transaction or actions.
However, the Company shall not be liable under clause (i)(B) of the foregoing indemnification provision for any loss, claim, damage
or liability which is finally judicially determined by a court of competent jurisdiction to have resulted primarily from the willful
misconduct or gross negligence of such Indemnified Party.

 

If for any reason the foregoing indemnification or reimbursement
is unavailable to any Indemnified Party or insufficient fully to indemnify any such party or to hold it harmless in respect of
any losses, claims, damages, liabilities or expenses referred to in such indemnification or reimbursement provisions, then the
Company shall contribute to the amount paid or payable by the Indemnified Party as a result of such losses, claims, damages, liabilities
or expenses in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and
Advisor, on the other hand, in connection with the matters contemplated by the Agreement. If, however, the allocation provided
by the immediately preceding sentence is not permitted by applicable law, then the Company shall contribute to such amount paid
or payable by any Indemnified Party in such proportion as is appropriate to reflect not only such relative benefits, but also
the relative fault of the Company, on the one hand, and such Indemnified Party, on the other hand, in connection therewith, as
well as any other relevant equitable considerations. Notwithstanding the foregoing, in no event shall the Indemnified Parties
be required to contribute an aggregate amount in excess of the amount of fees actually received by Advisor from the Company pursuant
to the Agreement. Relative benefits received by the Company, on the one hand, and Advisor, on the other hand, shall be deemed
to be in the same proportion as (i) the total value paid or received or contemplated to be paid or received by the Company, and
its security holders, creditors, and other affiliates, as the case may be, pursuant to the transaction(s) (whether or not consummated)
contemplated by the engagement hereunder, bears to (ii) the fees received by Advisor under the Agreement. The Company shall not
settle, compromise or consent to the entry of any judgment in or otherwise seek to terminate any pending or threatened action,
suit, dispute, inquiry, investigation or proceeding in respect of which indemnification or contribution may be sought hereunder
(whether or not an Indemnified Party is an actual or potential party thereto), unless such settlement, compromise, consent or
termination contains a release of the Indemnified Parties reasonably satisfactory in form and substance to Advisor.

 

    	9

    	 

    

 

The
Company further agrees that neither Advisor nor any other Indemnified Party shall have any liability (whether direct or indirect
and regardless of the legal theory advanced) to the Company or any person or entity asserting claims on behalf of or in right
of the Company related to or arising out of the Agreement, Advisor’s engagement under the Agreement, any Transaction or
proposed Transaction, or any actions taken or omitted to be taken by an Indemnified Party or the Company in connection with the
Agreement, except for losses, claims, damages or liabilities incurred by the Company which are finally judicially determined by
a court of competent jurisdiction to have resulted primarily from the willful misconduct or gross negligence of such Indemnified
Party. The indemnity, reimbursement, and other obligations and agreements of the Company set forth in the Agreement (i) shall
apply to any services provided by Advisor in connection with this engagement prior to the date hereof and to any modifications
of the Agreement, (ii) shall be in addition to any obligation or liability which the Company may otherwise have to any Indemnified
Party, (iii) shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Company
or any Indemnified Party or any person controlling any of them, and (iv) shall survive the completion of the services described
in, and any expiration or termination of the relationship established by, the Agreement.

 

 

10

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