Document:

stlt_ex1040.htm

EXHIBIT 10.40
 
EXCHANGE AGREEMENT
 
THIS EXCHANGE AGREEMENT (the “Agreement”) is dated as of December ----, 2016, by and between SPOTLIGHT INNOVATION INC., a Nevada corporation (the “Company”), and ----- (the “Holder”).
 
WHEREAS:
A. The Company has previously issued the Holder options (“Holder Options”) to purchase ------ shares of the Company’s Common Stock pursuant to the Spotlight Innovation 2015 Equity incentive Plan; 
 
B. The Company and the Holder desire to enter into this Agreement, pursuant to which the Company and the Holder shall exchange the Holder Options and the Company will issue the Holder -------- shares (the “Shares”) of the Company’s Common Stock, which Shares are being issued pursuant to the Company’s 2016 Equity Incentive Plan; 
 
C. The exchange of the Holder Options for the Shares is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”);
 
D. The Holder is a member of the Board of Directors of the Company. 
 
NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants hereinafter contained, the parties hereto agree as follows:
 
1. EXCHANGE.
 
1.1 Exchange. Subject to the satisfaction or waiver of the conditions with respect to the Closing set forth in Sections 5 and 6 below, at the Closing the Holder and the Company shall, pursuant to Section 3(a)(9) of the Securities Act, exchange the Shares for the Holder Options (the “Exchange”). 
 
a. Closing. The issuance of the Shares (the “Closing”) shall occur at the offices of Sichenzia Ross Ference Kesner LLP. The date and time of the Closing shall be 10:00 a.m., New York time, on the first (1st) Business Day on which the conditions to the Closing set forth in Sections 5 and 6 below are satisfied or waived (or such later date as is mutually agreed to by the Company and Holder).
 
b. Consideration. At the Closing, the Company shall issue the Holder the Shares in exchange for the Holder Options. 
 
c. Termination of Holder Options. As of the Closing, the Holder Options exchanged by such Holder pursuant to this Agreement shall be null and void, and any and all rights arising thereunder shall be extinguished and the Option Agreement between the Holder and the Company granted ---------- shall be void.
    	 
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2. COMPANY REPRESENTATIONS AND WARRANTIES.
 
2.1 Authorization and Binding Obligation. The Company has the requisite power and authority to enter into and perform its obligations under this Agreement and to issue the Shares in accordance with the terms hereof and thereof. The execution and delivery of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including, without limitation, the issuance of the Shares has been duly authorized by the Company's Board of Directors and no further consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement has been duly executed and delivered by the Company, and constitutes the legal, valid and binding obligations of the Company, enforceable against the Company in accordance with their respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities laws.
 
2.2 Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein, the offer and issuance by the Company of the issuance of the Shares is exempt from registration pursuant to the exemption provided by Section 3(a)(9) of the Securities Act and the exemption provided by Rule 506 of Regulation D promulgated under the Securities Act.
 
2.3 Issuance of Securities. The issuance of the Shares is duly authorized and upon issuance in accordance with the terms of this Agreement, shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances with respect to the issue thereof. 
 
3. HOLDER’S REPRESENTATIONS AND WARRANTIES.
 
As a material inducement to the Company to enter into this Agreement and consummate the exchange, Holder represents, warrants and covenants with and to the Company as follows:
 
3.1 Authorization and Binding Obligation. The Holder has the requisite legal capacity, power and authority to enter into, and perform under, this Agreement and to exchange such Holder’s Holder Options and receives the Shares in exchange thereof. The execution, delivery and performance of this Agreement and performance by such Holder and the consummation by such Holder of the transactions contemplated hereby have been duly authorized by all requisite corporate, partnership or similar action on the part of such Holder and no further consent or authorization is required. This Agreement has been duly executed and delivered by the Holder, and constitutes the legal, valid and binding obligations of the Holder, enforceable against the Holder in accordance with its respective terms, except as such enforceability may be limited by general principles of equity or applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or similar laws relating to, or affecting generally, the enforcement of applicable creditors' rights and remedies and except as rights to indemnification and to contribution may be limited by federal or state securities laws. Holder understands that by executing this Agreement, Holder is automatically, irrevocably and contemporaneously exchanging such Holder’s Holder Options and thereafter such Holder Options will be null and void. 
    	 
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3.2 Beneficial Owner. With respect to the Holder Options being exchanged by the Holder: (i) the Holder owns, beneficially and of record, good and marketable title to such Holder Options free and clear of any taxes or encumbrances; (ii) the Holder Options being exchanged by the Holder are not subject to any transfer restriction; (iii) the Holder has not entered into any agreement or understanding with any person or entity to dispose of the Holder Options; and (iv) at the Closing, the Holder will convey to the Company good and marketable title to the Holder Options, free and clear of any security interests, liens, adverse claims, encumbrances, taxes or encumbrances.
 
3.3 Purchase Entirely for Own Account. The Shares to be received by such Holder hereunder will be acquired for such Holder’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof in violation of the Securities Act, and such Holder has no present intention of selling, granting any participation in, or otherwise distributing the same in violation of the Securities Act without prejudice, however, to such Holder’s right at all times to sell or otherwise dispose of all or any part of such Shares in compliance with applicable federal and state securities laws. Nothing contained herein shall be deemed a representation or warranty by such Holder to hold the Shares for any period of time. 
 
3.4 Disclosure of Information. Holder has had the opportunity to review the current business prospects, financial condition and operating history of the Company as set forth in the filings that the Company has made with the Securities and Exchange Commission, including, but not limited to, the Company’s Report on form 10-K for the year ended December 31, 2015 and the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 as well as the other reports and filings the Company has made with the Securities Exchange Commission since December 31, 2015. The Holder has also had the opportunity to ask questions and receive answers from the Company regarding the terms and conditions pertaining to my execution of this Agreement and the Holder has received all the information Holder consider necessary or appropriate for deciding whether to exchange such Holder’s Holder Options.
 
3.5 Proceedings. No proceedings are pending or, to the knowledge of the Holder, threatened before any court, arbitrator or administrative or governmental body that would adversely affect the Holder’s right and ability to surrender and exchange the Holder’s Holder Options.
 
3.6 Tax Consequences. The Holder acknowledges that the purchase of the Shares may involve tax consequences to the Holder and that the contents of this Agreement do not contain tax advice. Holder acknowledges that it has not relied and will not rely upon the Company with respect to any tax consequences related to the exchange of such Holder’s Option. The Holder assumes full responsibility for all such consequences and for the preparation and filing of any tax returns and elections which may or must be filed in connection with such Holder Option. 
    	 
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3.7 Reliance on Exemptions. The Holder understands that the Shares are being offered and exchanged in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that the Company is relying in part upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the Shares. Holder acknowledges that that neither the Securities Exchange Commission nor any state securities commission has approved or disapproved of the transactions contemplated herein, passed up on the merits or fairness of the transaction; or passed upon the adequacy or accuracy of the disclosure in this document.
 
3.8 Legends. It is understood that the Shares will bear the following legend or another legend that is similar to the following:
 
	 
	THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THESE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT SECURED BY SUCH SECURITIES.
	 

  
and any legend required by the “blue sky” laws of any state to the extent such laws are applicable to the securities represented by the certificate so legended.
 
3.9 Accredited Investor. The Holder is an “accredited investor” within the meaning of Rule 501 under the Securities Act.
 
4. COVENANTS.
 
4.1 Reasonable Best Efforts. The Holder shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 5 of this Agreement. The Company shall use its reasonable best efforts to timely satisfy each of the conditions to be satisfied by it as provided in Section 6 of this Agreement. 
    	 
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4.2 No Trading. The Holder agrees not to directly or indirectly purchase, sell make any short sale of, loan grant any option for the purchase of, or otherwise transfer or dispose of the Company’s Common Stock (or other securities, warrants, or other forms of convertible securities outstanding or other rights to acquire such securities) until the Company has filed an 8-K with the Securities Exchange Commission announcing this Agreement and the transactions contemplated herein. 
 
4.3 Restricted Securities. The Holder understands that the Shares are characterized as “restricted securities” under the Securities Act. The Holder further acknowledges that if the Shares are issued to the Holder in accordance with the provisions of this Agreement, such Shares may not be resold without registration under the Securities Act or the existence of an exemption therefrom. The Holder represents that it is familiar with Rule 144 promulgated under the Securities Act, as presently in effect, and understands the resale limitations imposed thereby and by the Securities Act.
 
5. CONDITIONS TO COMPANY’S OBLIGATIONS HEREUNDER.
 
The obligations of the Company to the Holder hereunder are subject to the satisfaction of each of the following conditions (except to the extent such condition is expressly conditional to a specific closing, in which case such condition shall only apply to such specific closing), provided that these conditions are for the Company’s sole benefit and may be waived by the Company at any time in its sole discretion by providing the Holder with prior written notice thereof:
 
5.1 The Holder shall have duly executed this Agreement and delivered the same to the Company.
 
5.2 The representations and warranties of the Holder shall be true and correct in all material respects as of the date when made and as of the Closing as though made at that time (except for representations and warranties that speak as of a specific date which shall be true and correct as of such specified date), and the Holder shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Holder at or prior to the Closing.
 
5.3 No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement.
    	 
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6. CONDITIONS TO HOLDER’S OBLIGATIONS HEREUNDER.
 
The obligations of the Holder hereunder are subject to the satisfaction of each of the following conditions (except to the extent such condition is expressly conditional to a specific closing, in which case such condition shall only apply to such specific closing), provided that these conditions are for the Holder’s sole benefit and may be waived by the Holder at any time in its sole discretion by providing the Company with prior written notice thereof:
 
6.1 The Company shall have duly executed and delivered this Agreement.
 
6.2 Each and every representation and warranty of the Company shall be true and correct in all material respects as of the date when made and as of the Closing as though originally made at that time (except for representations and warranties that speak as of a specific date, which shall be true and correct as of such date) and the Company shall have performed, satisfied and complied in all material respects with the covenants, agreements and conditions required to be performed, satisfied or complied with by the Company at or prior to the Closing.
 
6.3 The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary for the transactions contemplated by this Agreement.
 
6.4 No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or endorsed by any court or governmental authority of competent jurisdiction that prohibits the consummation of any of the transactions contemplated by this Agreement.
 
7. MISCELLANEOUS.
 
7.1 Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Agreement shall be governed by the internal laws of the State of Nevada without giving effect to any choice of law or conflict of law provision or rule (whether of the State of Nevada or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of Nevada. 
 
7.2 Counterparts. This Agreement may be executed simultaneously in two or more counterparts, any one of which need not contain the signatures of more than one party, but all such counterparts taken together will constitute one and the same Agreement. This Agreement, to the extent delivered by means of a facsimile machine or electronic mail (any such delivery, an “Electronic Delivery”), shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any party hereto, each other party hereto shall re execute original forms hereof and deliver them in person to all other parties. No party hereto shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such party forever waives any such defense, except to the extent such defense related to lack of authenticity.
    	 
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7.3 Headings. The headings of this Agreement are for convenience of reference and shall not form part of, or affect the interpretation of, this Agreement.
 
7.4 Severability. If any provision of this Agreement is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Agreement so long as this Agreement as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
 
7.5 Entire Agreement; Amendments. This Agreement supersedes all other prior oral or written agreements between the Holder, the Company, their affiliates and persons acting on their behalf with respect to the matters discussed herein, and this Agreement, contains the entire understanding of the parties with respect to the matters covered herein and, except as specifically set forth herein, neither the Company nor Holder makes any representation, warranty, covenant or undertaking with respect to such matters. No provision of this Agreement may be amended other than by an instrument in writing signed by the Company and the Holder, and any amendment to this Agreement made in conformity with the provisions of this Section shall be binding upon the Holder. No provision hereof may be waived other than by an instrument in writing signed by the party against whom enforcement is sought. 
 
7.6 Notices. To be effective, any notice, consent, or communication required or permitted to be given in connection with this Agreement must be in writing and personally delivered or sent by messenger, fax, overnight courier, electronic mail, or certified mail and when to the Company, addressed to Spotlight Innovation Inc. 11147 Aurora Avenue Building 3, Urbandale, Iowa 50322, email: bill.pim@spotlightinnovation.com, Attention: John William Pim , or, in the case of an Holder, to the Holder’s address on record with the Company, or to such other address and/or email address and/or to the attention of such other person as the recipient party has specified by written notice given to each other party five (5) days prior to the effectiveness of such change. All notices, consents, and communications are deemed delivered and received by the receiving party (i) if personally delivered or delivered by messenger, on the date of delivery or on the date delivery was refused, (ii) if delivered by fax transmission or electronic mail, upon receipt of confirmation of the party transmitting such fax or electronic mail, or (iii) if delivered by overnight courier or certified mail, on the date of delivery as established by the return receipt, courier service confirmation, or similar documentation (or the date on which the courier or postal service, as the case may be, confirms that acceptance of delivery was refused or undeliverable).
 
7.7 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns. The Company shall not assign this Agreement or any rights or obligations hereunder without the prior written consent of the Holder. Holder may not assign some or all of its rights hereunder without the prior written consent of the Company.
 
7.8 Construction. The language used in this Agreement will be deemed to be the language chosen by the parties to express their mutual intent, and no rules of strict construction will be applied against any party. No specific representation or warranty shall limit the generality or applicability of a more general representation or warranty.
 
[signature page follows]
    	 
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IN WITNESS WHEREOF, the Holder and the Company have caused their respective signature pages to this Agreement to be duly executed as of the date first written above.
 
		COMPANY:	
				
	
	SPOTLIGHT INNOVATION INC.	
				
	
	By:		
	
	Name: 	John William Pim
	
	
	Title: 	CFO
	
				
				
	
	HOLDER:	
				
				
				

 
  
	 
	8stlt_ex1041.htm

EXHIBIT 10.41
 
SPOTLIGHT INNOVATION INC.
RESTRICTED STOCK GRANT AGREEMENT
 
This Restricted Stock Grant Agreement (the “Agreement”) is made and entered into as of December ---, 2016 (the “Effective Date) by and between Spotlight Innovation Inc., a Nevada corporation (the “Company”) and the person named below (the “Grantee”).
 
WHEREAS, the Company has adopted the 2016 Equity Incentive Plan (the "Plan") pursuant to which awards of restricted stock may be granted; and
 
WHEREAS, the Board of Directors (the “Board”) of the Company has determined that it is in the best interests of the Company and its shareholders to grant the award of Restricted Shares of common stock of the Company provided for herein in recognition of the efforts of the Grantee in leading the Company.
  
		Grantee:
	 
	 

	 
	 
	 
	 

		Social Security Number:
	 
	 

	 
	 
	 
	 

		Address:
	 
	 

	 
	 
	 
	 

	 
	Total Number of Shares to Be Granted:
	------- (the “Restricted Shares”)	 

  
1. Grant of Restricted Shares. In consideration for the performance of services by the Grantee for the Company, whether as a director, officer, employee or consultant, the Company hereby grants the Restricted Shares to the Grantee, subject to the conditions of this Agreement. As used in this Agreement, the term “Shares” shall mean shares of the Company’s common stock, par value $0.001 per share, which includes the Restricted Shares granted under this Agreement, and all securities received (i) in replacement of the Restricted Shares, (ii) as a result of stock dividends or stock splits with respect to the Restricted Shares and (iii) in replacement of the Restricted Shares in a merger, recapitalization, reorganization or similar corporate transaction. The Company intends to register the Restricted Shares by filing the Registration Statement on the Form S-8. 
    	 
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2.Vesting. The Restricted Shares shall vest as of the date of grant. 
 
2.1 Title to Shares. The exact spelling of the name(s) under which Grantee shall take title to the Shares is:
 
Grantee desires to take title to the Shares as follows: 
 
o Individual, as separate property
o Husband and wife, as community property 
o Joint Tenants
 
To assign the Shares to a trust, a stock transfer agreement in a form and substance acceptable to the Company must be completed and executed and such transfer must comply with applicable federal and state securities laws.
 
3. Representations and Warranties of Grantee. Grantee represents and warrants to the Company that:
 
3.1 Agrees to Terms of this Agreement. Grantee has received a copy of this Agreement, has read and understands the terms of this Agreement, and agrees to be bound by its terms and conditions. 
 
3.2 Acceptance of Shares for Own Account for Investment. Grantee is acquiring the Restricted Shares for Grantee's own account, for investment purposes only, and not with a view to, or for sale in connection with, a distribution of the Restricted Shares within the meaning of the Securities Act of 1933, as amended (the “Securities Act”). Grantee has no present intention of selling or otherwise disposing of all or any portion of the Restricted Shares.
 
3.3 Access to Information. Grantee has had access to all information regarding the Company and its present and prospective business, assets, liabilities and financial condition that Grantee reasonably considers important in making the decision to acquire the Restricted Shares, and Grantee has had ample opportunity to ask questions and receive answers from the Company's representatives concerning such matters and this investment.
 
3.4 Understanding of Risks. Grantee is fully aware of: (i) the highly speculative nature of the investment in the Restricted Shares; (ii) the financial hazards involved; (iii) the lack of liquidity of the Restricted Shares and the restrictions on transferability of the Restricted Shares (e.g., that Grantee may not be able to sell or dispose of the Restricted Shares or use them as collateral for loans); (iv) the qualifications and backgrounds of the management of the Company; and (v) the tax consequences of investment in the Restricted Shares. Grantee is capable of evaluating the merits and risks of this investment, has the ability to protect Grantee's own interests in this transaction and is financially capable of bearing a total loss of this investment.
    	 
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3.5 No General Solicitation. At no time was Grantee presented with or solicited by any publicly issued or circulated newspaper, mail, radio, television or other form of general advertising or solicitation in connection with the offer, sale and issue of the Restricted Shares.
 
4. Compliance with Securities Laws. Grantee understands and acknowledges that the Restricted Shares have not been registered with the Securities and Exchange Commission (the “SEC”) under the Securities Act and that, notwithstanding any other provision of this Agreement to the contrary, the issuance of any Restricted Shares is expressly conditioned upon compliance with the Securities Act and all applicable state securities laws. Grantee agrees to cooperate with the Company to ensure compliance with such laws.
 
5. Restricted Securities.
 
5.1 No Transfers Unless Registered or Exempt. Grantee understands that Grantee may not transfer any Restricted Shares unless such Restricted Shares are registered under the Securities Act and qualified under applicable state securities laws or unless, in the opinion of counsel to the Company, exemptions from such registration and qualification requirements are available. Grantee understands that only the Company may file a registration statement with the SEC and that the Company has agreed to file a registration statement with respect to the Restricted Shares as soon as practicable. Grantee has also been advised that exemptions from registration and qualification may not be available or may not permit Grantee to transfer all or any of the Restricted Shares in the amounts or at the times proposed by Grantee.
 
5.2 SEC Rule 144. In addition, Grantee has been advised that SEC Rule 144 promulgated under the Securities Act, which permits certain limited sales of unregistered securities, is not presently available with respect to the Restricted Shares and, in any event, requires that the Restricted Shares be held for a minimum of six (6) months, and in certain cases one (1) year, after they have been acquired, before they may be resold pursuant to Rule 144. Grantee understands that Rule 144 may indefinitely restrict transfer of the Restricted Shares so long as Grantee remains an “affiliate” of the Company or if “current public information” about the Company (as defined in Rule 144) is not publicly available.
 
6. Accredited Investor. The Grantee is an “accredited investor” within the meaning of Rule 501 under the Securities Act of 1933, as amended. 
 
7. RESERVED.
 
8. RESERVED. 
 
9. Rights as a Stockholder. Subject to the terms and conditions of this Agreement, Grantee shall have all of the rights of a stockholder of the Company with respect to the Restricted Shares after the Restricted Shares vest and are issuable until such time as Grantee disposes of the Restricted Shares, including, without limitation, the right to vote such shares and receive all dividends or other distributions paid with respect to such shares
    	 
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10. No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position, as a director, officer, employee or consultant of the Company. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee's continuous service at any time, with or without cause.
 
11. Restrictive Legends and Stop-Transfer Orders.
 
11.1 Legends. Grantee understands and agrees that the Company shall place the legends set forth below or similar legends on any stock certificate(s) evidencing the Restricted Shares, together with any other legends that may be required by state or federal securities laws, the Company's Articles of Incorporation, as amended, or Bylaws, any other agreement between Grantee and the Company, or any agreement between Grantee and any third party:
 
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR UNDER THE SECURITIES LAWS OF CERTAIN STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
 
11.2 Stop-Transfer Instructions. Grantee agrees that, to ensure compliance with the restrictions imposed by this Agreement, the Company may issue appropriate “stop-transfer” instructions to its transfer agent, if any, and if the Company transfers its own securities, it may make appropriate notations to the same effect in its own records.
 
11.3 Refusal to Transfer. The Company shall not be required (i) to transfer on its books any Restricted Shares that have been sold or otherwise transferred in violation of any of the provisions of this Agreement, or (ii) to treat as owner of such Restricted Shares, or to accord the right to vote or pay dividends, to any purchaser or other transferee to whom such Restricted Shares have been so transferred.
 
12. Tax Consequences. GRANTEE UNDERSTANDS THAT GRANTEE MAY SUFFER ADVERSE TAX CONSEQUENCES AS A RESULT OF GRANTEE'S ACQUISITION OR DISPOSITION OF THE RESTRICTED SHARES. GRANTEE REPRESENTS (i) THAT GRANTEE HAS CONSULTED WITH A TAX ADVISER THAT GRANTEE DEEMS ADVISABLE IN CONNECTION WITH THE ACQUISITION OR DISPOSITION OF THE RESTRICTED SHARES AND (ii) THAT GRANTEE IS NOT RELYING ON THE COMPANY FOR ANY TAX ADVICE. 
    	 
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13.Tax Liability and Withholding.
 
13.1 The Grantee shall be required to pay to the Company, and the Company shall have the right to deduct from any compensation paid to the Grantee pursuant to the Plan, the amount of any required withholding taxes in respect of the Restricted Shares and to take all such other action as the Committee deems necessary to satisfy all obligations for the payment of such withholding taxes. The Committee may permit the Grantee to satisfy any federal, state or local tax withholding obligation by any of the following means, or by a combination of such means:
 
(a) tendering a cash payment; or
 
(b) authorizing the Company to withhold shares of common stock from the shares of common stock otherwise issuable or deliverable to the Grantee as a result of the vesting of the Restricted Stock; provided, however, that no shares of common stock shall be withheld with a value exceeding the minimum amount of tax required to be withheld by law.
 
13.2 Notwithstanding any action the Company takes with respect to any or all income tax, social insurance, payroll tax, or other tax-related withholding ("Tax-Related Items"), the ultimate liability for all Tax-Related Items is and remains the Grantee's responsibility and the Company (a) makes no representation or undertakings regarding the treatment of any Tax-Related Items in connection with the grant or vesting of the Restricted Stock or the subsequent sale of any shares; and (b) does not commit to structure the Restricted Stock to reduce or eliminate the Grantee's liability for Tax-Related Items.
 
14. Compliance with Laws and Regulations. The issuance and transfer of the Restricted Shares shall be subject to and conditioned upon compliance by the Company and Grantee with all applicable state and federal laws and regulations and with all applicable requirements of any stock exchange or automated quotation system on which the Company's common stock may be listed or quoted at the time of such issuance or transfer.
 
15. Conflicts. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained herein and a term or provision of the Plan, the applicable terms and provisions of the Agreement will govern and prevail.
 
16. Discretionary Nature of Plan. The Plan is discretionary and may be amended, suspended or terminated by the Company at any time, in its discretion; provided, however, that any amendment, suspension or termination of the Plan, or change of or affecting any outstanding award shall not, without written consent of the Grantee, affect in any manner materially adverse to the Grantee, any rights or benefits of the Grantee or obligations of the Company under any award granted under the Plan prior to the effective date of such change. The grant of the Restricted Stock in this Agreement does not create any contractual right or other right to receive any Restricted Stock or other awards in the future. Future awards, if any, will be at the sole discretion of the Company. Any amendment, modification, or termination of the Plan shall not constitute a change or impairment of the terms and conditions of the Grantee's employment with the Company.
    	 
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17. Successors and Assigns. The Company may assign any of its rights under this Agreement.This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the Company. Subject to the restrictions on transfer herein set forth, this Agreement shall be binding upon Grantee and Grantee's heirs, executors, administrators, legal representatives, successors and assigns. The Grantee may not assign this Agreement without the consent of Company. 
 
18. Governing Law; Severability. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Nevada as such laws are applied to agreements betweenNevada residents entered into and to be performed entirely within Nevada, excluding that body of laws pertaining to conflict of laws. If any provision of this Agreement is determined by a court of law to be illegal or unenforceable, then such provision shall be enforced to the maximum extent possible and the other provisions shall remain fully effective and enforceable.
 
19. Notices. Any notice required to be given or delivered to the Company shall be in writing and addressed to the Corporate Secretary of the Company at its principal corporate offices. Any notice required to be given or delivered to Grantee shall be in writing and addressed to Grantee at the address indicated above or to such other address as Grantee may designate in writing from time to time to the Company. All notices shall be deemed effectively given upon personal delivery, (i) three (3) business days after deposit in the United States mail by certified or registered mail (return receipt requested), (ii) one (1) business day after its deposit with any return receipt express courier (prepaid), or (iii) one (1) business day after transmission by facsimile or email.
 
20. Further Instruments. The parties agree to execute such further instruments and to take such further action as may be reasonably necessary to carry out the purposes and intent of this Agreement.
 
21. Headings; Counterparts. The captions and headings of this Agreement are included for ease of reference only and shall be disregarded in interpreting or construing this Agreement. All references herein to Sections shall refer to Sections of this Agreement. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement.
 
22. Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to the subject matter of this Agreement, and supersedes all prior understandings and agreements, whether oral or written, between the parties hereto with respect to the specific subject matter of this Agreement.
 
23. Acceptance. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement. The Grantee has read and understands the terms and provisions thereof, and accepts the Restricted Stock subject to all of the terms and conditions of the Plan and this Agreement. The Grantee acknowledges that there may be adverse tax consequences upon the grant or vesting of the Restricted Stock or disposition of the underlying shares and that the Grantee has been advised to consult a tax advisor prior to such grant, vesting or disposition.
 
[SIGNATURE PAGE FOLLOWS]
    	 
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IN WITNESS WHEREOF, the parties hereto have duly caused this Restricted Stock Agreement to be executed and delivered on the date first above written.
 
	 	SPOTLIGHT INNOVATION INC.
	
	 	 	 	 
		By:		
	 
	Name:
	John William Pim	 
	 	Title:
	CFO	 
	 	 		 
	 
	 
	 
	 

	 
	GRANTEE
	 

	 
	 
	 
	 

	 
	 
	 
	 

 
	 
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Spouse Consent
 
The undersigned spouse of -------- (the “Grantee”) has read, understands, and hereby approves the Restricted Stock Grant Agreement between Spotlight Innovation Inc., a Nevada corporation (the “Company”) and Grantee (the “Agreement”). In consideration of the Company's granting my spouse the right to purchase the Restricted Shares as set forth in the Agreement, the undersigned hereby agrees to be irrevocably bound by the Agreement and further agrees that any community property interest shall similarly be bound by the Agreement. The undersigned hereby appoints Grantee as my attorney-in-fact with respect to any amendment or exercise of any rights under the Agreement.
 
	Date:___________________________________________
	 
	_______________________________________________
	
	 
	 
	Print Name of Grantee's Spouse
	
	 
	 
	 
	
	_______________________________________________
	  
	_______________________________________________
	 

	(Please print name)
	 
	Signature of Grantee's Spouse
	
	 
	 
	 
	
	_______________________________________________
	 
	Address:________________________________________
	
	 
	  
	_______________________________________________
	 

	 
	  
	_______________________________________________
	 

	 
	  
	_______________________________________________
	 

	 
	  
	 
	 

	 
	  
	 ̈ Check this box if you do not have a spouse.
	 

 
 
	 
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