Hannover House Inc (HHSE)

[integral]

COUNT FIVE
SECURITIES FRAUD AS TO ALL DEFENDANTS - VIOLATION FOR FL. CH.
517.301
73. Plaintiff reasserts and re-alleges each and every allegation contained in Paragraphs 1-28 above.

74. In connection with the Loan Documents, and in particular Section 2.2(h) of the Credit Agreement, the Corporate Defendants were to pay to TCA an advisory fee of SI 00,000, in the form of Advisory Fee Shares consisting of the common stock of the Corporate Defendants.

75. In addition, the Corporate Defendants were to issue common shares to the Plaintiff, at the latter’s election, in the event of a default of the Obligations due under the Loan Documents (“Conversion Shares”).

76. In connection therewith, the Corporate Defendants made certain material representation, warranties, and covenants (collectively the “Statements”) to the Plaintiff, upon which the Plaintiff duly and justifiably relied in providing the Credit Facility and the loans to the Corporate Defendants, including;
a. The Corporate Defendants would become a reporting entity pursuant to the Exchange Act;
b. The Corporate Defendants would afford and perform all acts necessary to allow the Plaintiff the ability to avail itself of the Rule 144 Safe Harbor, at its election with respect to the Advisory Shares and the Conversion Shares;
c. The Corporate Defendants would timely file all financial statements in GAAP form reflecting the true financial condition of the entities;
d. The Corporate Defendants would be current in its reporting obligations to the SEC; and
e. The Corporate Defendants would maintain an adequate reserve of authorized common shares to satisfy all of the Conversion Share demands by the plaintiff.

77. The foregoing Representations were known to the Corporate Defendants and Individual Defendants to be false when made,

78. In making the Representations the Defendants acted willfully, intentionally and/or recklessly. Alternatively, the Defendants should have known that the Representations were false and misleading.

79. The Representations were made with the intention that the Plaintiff rely on same, and in fact, the Plaintiff did so rely.
80. The Representations were material in all respects.
81. The Defendants violated Fla. Stat. 517.301 and the Plaintiff has been damaged.

WHEREFORE, the Plaintiff pursuant to Count Five demands the recovery from the Defendants of:
a. the principal sum of $314,384.27 (a/o March 18, 2015);
b. default interest at the highest rate payable by law;
c. costs;
d. attorney fees; and
e. such other relief as this Court deems just and proper,

COUNT SIX
NEGLIGENT MISREPRESENTATION
82. Plaintiff reasserts and re-alleges each and every allegation contained in Paragraphs 1-28 above and Count Five,
83. Plaintiff was owed a duty of due care by the Defendants in connection with the Loan Documents and the underlying transaction.
84. The Defendants breached that duty of care.
85. The Plaintiff has been damaged.
WHEREFORE, the Plaintiff pursuant to Count Six demands the recovery by the Plaintiff from the Defendants of:
a. the principal sum of $314,384.27 (a/o March 18, 2015);
b. default interest at the highest rate payable by law;
c. costs; and