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Exhibit 10.2
 
 
REVOLVING CREDIT and WARRANT PURCHASE AGREEMENT
 

THIS REVOLVING CREDIT AND WARRANT PURCHASE AGREEMENT (this “Agreement”) is made
as of February 14th , 2011 by and between MANHATTAN RESOURCES LIMITED, a
Singapore corporation (“Lender”) and ECOBLU PRODUCTS, INC., a Colorado
corporation (the “Borrower”) and is effective on the date (the “Effective Date”)
determined in accordance with Section 5.6.
 
NOW, THEREFORE, in consideration of the mutual agreements herein contained, the
parties hereto agree as follows:
 
SECTION 1.       DEFINITIONS.
 
1.1           Defined Terms.  In addition to terms defined elsewhere in this
Agreement, when used herein the following terms shall have the following
meanings:
 
“Affiliate” means any Person: (a) who beneficially owns or Controls 5% or more
of the issued and outstanding voting shares of the Borrower; or (b) of which an
Affiliate is an officer or director, or both; or (c) in which an Affiliate owns
or Controls 5% or more of the issued and outstanding voting shares or other
equity interests; or (d) which directly or indirectly Controls or is Controlled
by or is under common Control with, the Borrower; or (e) who is related by
blood, adoption or marriage to any Affiliate..
 
“Board” shall mean the Board of Directors of the Borrower as constituted at any
time while this Agreement is in effect.
 
“Business Day” shall mean any day (other than a Saturday or Sunday) on which
Lender is open for business in Singapore and on which banks are open for
business in Vista , California.
 
“Documents” shall mean this Agreement, the Note (as hereafter defined), the
Warrant (as hereafter defined) and any and all other instruments or documents
required or contemplated hereunder or thereunder or delivered in connection
herewith or therewith or pursuant hereto or thereto, or evidencing any
Liabilities, whether now existing or at any time hereafter arising.
 
“Equity Stock” shall mean, with respect to any Person, shares of capital stock
of (or other ownership or profit interests in) such Person, warrants, options or
other rights for the purchase or other acquisition from such Person of shares of
capital stock of (or other ownership or profit interests in) such Person,
securities convertible into or exchangeable for shares of capital stock of (or
other ownership or profit interests in) such Person or warrants, rights or
options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
 
“Equipment” shall mean all machinery and equipment owned by Borrower, wherever
located, whether now owned or hereafter existing or acquired by Borrower, any
additions thereon, accessions thereto or replacements of parts thereof.
 
“GAAP” shall mean generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants
 
 
 
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and statements and pronouncements of the Financial Accounting Standards Board,
which are applicable to the circumstances as of the date of determination,
applied in a manner consistent with those principles used in preparation of the
audited financial statements of Borrower.
 
“Law” means any federal, state, local, foreign or other law, rule or regulation,
and the rules, regulations, interpretations and orders promulgated thereunder.
 
“Liabilities” shall mean all liabilities, indebtedness and obligations of any
one or more of Borrower to Lender, howsoever created, arising or evidenced,
whether now existing or hereafter arising, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due,
primary or secondary, joint or several, whether existing or arising through
discount, overdraft, purchase, direct loan, participation, operation of law, or
otherwise, including, but not limited to, all liabilities, indebtedness and
obligations of any one or more of Borrower to Lender pursuant to any of the
Documents, any letter of credit or any application or reimbursement agreement
for any letter of credit.
 
“Lien” shall mean, with respect to any asset:  (a) any mortgage, pledge, lien,
charge, security interest or encumbrance of any kind; and (b) the interest of a
vendor or lessor under any conditional sale agreement, financing lease or other
title retention agreement relating to such asset..
 
“Permitted Liens shall mean:
 
(a)           Liens for taxes, assessments, or governmental charges, and Liens
incident to construction, which are either not delinquent or are being contested
in good faith by appropriate proceedings which will prevent foreclosure of such
Liens, and against which adequate reserves have been provided;
 
(b)           Easements, restrictions, minor title irregularities and similar
matters which have no adverse effect as a practical matter upon the ownership
and use of the affected property;
 
(c)           Liens or deposits in connection with workmen’s compensation or
other insurance or to secure customs duties, public or statutory obligations in
lieu of surety, stay or appeal bonds, or to secure performance of contracts or
bids, other than contracts for the payment of money borrowed, or deposits
required by Law as a condition to the transaction of business or other Liens or
deposits of a like nature made in the ordinary course of business; and
 
(d)           Mortgages, pledges, encumbrances, security interests, assignments
or liens in favor of the Lender.
 
“Organizational Documents” shall mean the articles of incorporation, the bylaws,
any certificate of designations or instrument relating to the rights of
shareholders of Borrower, any shareholder rights agreement, and all applicable
resolutions of the board of directors (or any committee thereof) of Borrower.
 
 “Person” shall mean any individual, sole proprietorship, partnership, joint
venture, trust, unincorporated organization, association, corporation (including
a business trust), limited liability company, institution, entity, party or
government (whether national, federal, state, county, city, municipal or
otherwise, including, without limitation, any instrumentality, division, agency,
body or department thereof).
 
“Subsidiary” of any Person shall mean any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding Equity Stock having ordinary voting
power to elect a majority of the board of directors of such corporation
(irrespective of whether at the time Equity Stock of any other class or classes
of such Person shall or might have voting power upon the
 
 
 
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occurrence of any contingency), (b) the interest in the capital or profits of
such Person or (c) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person, by such Person
and one or more of its other Subsidiaries or by one or more of such Person’s
other Subsidiaries.
 
“Unmatured Default” shall mean any Event of Default (as such term is defined in
Section 6.1) and any other event that, if it continues uncured, will, with lapse
of time or notice or both, constitute an Event of Default.
 
1.2           Other Terms.  Accounting terms used in this Agreement which are
not specifically defined shall have the meanings customarily given them in
accordance with GAAP in effect from time to time.
 
SECTION 2.       LOANS AND WARRANT
 
2.1           Loan Amounts, Etc.  On and subject to the terms and conditions of
this Agreement, Lender shall make loans on a revolving basis (collectively,
“Loans”) from time to time until three years from the Effective Date (the
“Expiration Date”) in such aggregate amounts as Borrower may request with the
prior approval of the Board; provided that the aggregate outstanding principal
amount of all Loans shall not at any time exceed US$5,000,000, less the
aggregate investment, if any, made by Lender pursuant to the Warrant (as defined
in Section 2.7).  (For the avoidance of doubt, it is intended that the maximum
amount available to Borrower under this Agreement, the Warrant and the
US$5,000,000 investment made under the Investment Agreement dated the date
hereof among Lender, Borrower and  Dato Low Tuck Kwong will not exceed
$10,000,000.)  Each Loan shall be in an integral multiple of $500,000.  Each
Loan shall mature and be due and payable, together with accrued interest, three
months from the date it is advanced, but not later than the Expiration Date.  So
long as no Event of Default or Unmatured Event of Default has occurred, any Loan
may be rolled over with another Loan, subject to prior receipt of a Borrowing
Notice as provided in this Agreement.  The maturity of any Loan which would be
payable on a day which is not a Business Day,  shall be extended to the next
succeeding Business Day.
 
2.2           Use of Loan Proceeds.  The proceeds of all Loans shall be used
solely for (a) paying all unpaid principal aggregating $1,287,000 with respect
to notes dated March 26, 2010, Series A through G (the “3/10 Notes”) originally
issued to Iroquois Capital, LP and certain other Noteholders, plus accrued
interest on the 3/10 Notes; and (c) working capital for Borrower, including the
purchase of lumber or chemicals or for investment in fixed assets, including the
establishment of coating or storage facilities.  The 3/10 Notes and accrued
interest thereon shall be paid automatically and without further notice from the
Company by means of a Loan advanced on the Effective Date, which Loan shall
thereafter be subject to the terms of this Agreement.  Upon the Effective Date,
the Lender shall mark the 3/10 Notes “paid” and return them to the Company.
 
2.3           Evidence of Loans.  The Loans shall be evidenced by a revolving
promissory note substantially in the form of Exhibit A, with appropriate
insertions, payable by Borrower to the order of Lender (as amended, modified,
supplemented or restated from time to time, the “Note”).  The date and principal
amount of each Loan and of each repayment of principal received by the Lender
shall be recorded by the Lender on the Note and in its records, and the
aggregate unpaid principal amount shown on such records shall be rebuttable,
presumptive evidence of the principal owing and unpaid of all Loans.  The
failure to record any such amount on the Note or on such
 
 
 
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records shall not, however, limit or otherwise affect the obligations of the
Borrower hereunder to repay the principal amount of the Loans together with all
interest accruing thereon.  The unpaid principal amount from time to time
outstanding on the Loans shall bear interest and be payable as set forth herein.
 
2.4           Requests for Loans.  For each Loan requested hereunder, Borrower
shall deliver to Lender a Borrowing Notice in the form of Exhibit B (a
“Borrowing Notice”) not later than two (2) Business Days prior to the proposed
date of such Loan, which shall be a Business Day.  Each such Borrowing Notice
shall be effective upon receipt by Lender, shall be irrevocable, and shall
specify the date and amount of the Loan.  Each Borrowing Notice, shall be signed
by the President or Chief Financial Officer of the Borrower.
 
2.5           Voluntary Prepayments.  The Borrower may prepay without premium or
penalty and in whole or in part the Loans at any time, such payment to be made
by the payment of the principal amount to be prepaid and accrued interest
thereon to the date fixed for prepayment, provided that Borrower shall give
Lender notice thereof not later than one Business Day before the date of such
prepayment (which shall be a Business Day).  All partial prepayments of the
principal of the Loans shall be in an integral multiple of $100,000.
 
2.6           Interest.  Borrower agrees to pay interest on the unpaid principal
amount of each Loan for the period commencing on the date of such Loan until
such Loan is paid in full at a rate per annum of 6% (the “Applicable
Rate”).     Accrued interest on each Loan shall be payable in arrears upon the
maturity of each Loan.  After maturity, and at any time an Event of Default
exists, accrued interest on all Loans shall be payable on demand.  Interest
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days.  All payments of principal or interest on the Loans and other
Liabilities, and of all fees, shall be made by Borrower to Lender in immediately
available funds to the following account: Standard Chartered Bank, SWIFT Code:
SCBLSGSG, Account No: 01-7-021308-0 or as Lender may otherwise direct.  Any
payment not credited to the payment account by 2:00 p.m. (New York time) on any
relevant day shall be deemed to have been received by Lender on the following
Business Day.
 
2.7           Issue of Warrant.  In consideration of the credit facility
provided under this Agreement, Borrower hereby agrees to issue to  Lender a
warrant to acquire fifty million (50,000,000) newly issued shares of the
Borrower’s common stock (the “Warrant”) at U.S$0.10 per share, exercisable for
five years from the date of issuance.  The form of the Warrant is attached to
this Agreement as Exhibit C.   Lender represents and warrants that it is
acquiring  the Warrant for investment and not with a view to or for the sale in
connection with any distribution thereof.    As provided in Section 2.1, the
aggregate amount of Loans available will be reduced by the amount invested in
the stock of the Borrower pursuant to the Warrant, so that the total of Loans,
common stock investment made by Lender under the Warrant and under the
Investment Agreement dated the date of this Agreement will not exceed
$10,000,000
 
SECTION 3.       REPRESENTATIONS AND WARRANTIES.
 
Borrower represents and warrants that, as of the date of the execution of this
Agreement and as of the date of each Loan, and continuing so long as any
Liabilities remain outstanding, and  so long as this Agreement remains in effect
as follows:
 
3.1           Organization and Qualification.  Borrower is a corporation duly
and validly organized and existing under the law of the State of
Colorado.  Borrower has the corporate power and all necessary licenses, permits
and franchises to own its assets and properties and to carry on its business as
now conducted and as contemplated to be conducted following consummation of the
transactions described in the Purchase Agreement.  Borrower is duly licensed or
qualified in all other jurisdictions in which failure to do so would have a
material adverse effect on its business or financial condition.
 
 
 
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3.2           Authorization; Enforceability.  Borrower’s making, execution,
delivery and performance of the Documents, and compliance with their respective
terms, have been duly authorized by all necessary corporate action.  This
Agreement is and the valid and binding obligation of Borrower, enforceable
against Borrower in accordance with its terms, except as enforcement may be
limited by bankruptcy, insolvency, or similar Laws affecting the enforcement of
creditors’ rights in general, moratorium Laws or by general principles of
equity.  All Documents, agreements and instruments to be executed, issued or
delivered pursuant to this Agreement, when executed, issued and delivered by the
Borrower, will be the valid and binding obligations of Borrower, enforceable
against Borrower in accordance with their terms, except as enforcement may be
limited by bankruptcy, insolvency, or similar Laws affecting the enforcement of
creditors’ rights in general, moratorium Laws or by general principles of
equity.
 
3.3           Absence of Conflicting Obligations.  Borrower’s making, execution,
delivery and performance of this Agreement, the Purchase Agreement and all of
the documents, agreements and instruments executed or delivered pursuant to this
Agreement, and compliance with their respective terms, do not violate the
Certificate of Incorporation or bylaws of Borrower, any agreement to which the
Borrower is a party or by which it is bound, or any current provision of Law.
 
3.4           Accuracy of Information.  All information, certificates or
statements by Borrower given in, or pursuant to, this Agreement will be
accurate, true and complete when given.
 
3.5           Subsidiaries.  Borrower has no Subsidiaries.
 
3.6           Litigation.  Except for the matters listed on Schedule 3.6 to this
Agreement, there is no litigation or governmental investigation pending, or to
the knowledge of Borrower, threatened with respect to which Borrower is a
defendant or target.
 
3.7           Disclosure.  No statement of fact made or to be made by Borrower
in or pursuant to this Agreement and the other Documents contains or will
contain any untrue statement of a material fact or omits or will omit to state a
material fact necessary in order to make the statements herein, in light of the
circumstances under which they were made, not misleading as of the date to which
it speaks.
 
SECTION 4.       COVENANTS
 
4.1           Affirmative Covenants.  Until all Liabilities are paid in full and
this Agreement is terminated, Borrower covenants and agrees that (except to the
extent compliance in any case is waived in writing by Lender) Borrower shall:
 
4.2           (a)           Financial Statements and Certificates.  Furnish to
Lender:  (i) promptly when available and in any event within 90 days after the
close of each Fiscal Year: (A) a copy of the annual audit report (each, a
“Fiscal Audit”) of borrower for such Fiscal Year, including therein combined
balance sheets and statements of earnings and cash flows of Borrower as at the
end of such Fiscal Year; and (B) a balance sheet of Borrower as of the end of
such Fiscal Year and combining statement of earnings and cash flows for Borrower
for such Fiscal Year certified by Borrower’s chief financial officer; and (ii)
promptly when available and in any event within 40 days after the end of each
calendar quarter, a balance sheet of Borrower as of the end of such calendar
quarter, together with statements of earnings and cash flows for such calendar
quarter and for the period beginning with the first day of such Fiscal Year and
ending on the last day of such calendar quarter certified by Borrower’ chief
financial officer, provided that the Company’s obligation to provide such
information on such time schedule is subject to any disclosure restrictions
binding on the Company as a publicly traded company and (iii) Monthly management
accounts within fifteen (15) days after the end of each calendar month.
 
(b)           Books and Records.  Maintain complete and accurate books and
records in accordance with GAAP; permit reasonable access by the Lender to its
books and records; and permit the Lender, upon reasonable notice, to visit and
inspect any of its locations, assets or books and records, to
 
 
 
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examine and make copies of its books and records, and to discuss its affairs,
finances, and accounts with, and to be advised as to the same by, its officers
and employees.
 
(c)           Notices.  Furnish the Lender, promptly upon becoming aware of any
of the following, written notice describing the same and the steps being taken
by Borrower affected thereby with respect thereto:  (i) the occurrence of an
Event of Default or a Unmatured Default; and (ii) any material litigation,
arbitration or governmental investigation or proceeding not previously disclosed
by Borrower to Lender which has been instituted or, to the knowledge of
Borrower, is threatened against Borrower or to which any of its properties is
subject.
 
(d)           Maintenance of Existence, Etc.  Maintain and preserve (i) its
existence and good standing in the jurisdiction of its organization or
incorporation and (ii) its qualification to do business and good standing in
each jurisdiction where the nature of its business makes such qualification
necessary.
 
4.3           Negative Covenants.  Until all Liabilities are paid in full and
this Agreement is terminated, Borrower covenants and agrees that, (except to the
extent compliance in any case is waived in writing by Lender) Borrower shall
not:
 
(a)           Liens.  Incur, create, assume or permit to be created or allow to
exist any Lien upon or in any of its assets or properties, except Permitted
Liens or Liens approved in advance by its Board of Directors and MRL or an
MRL-designated Board member.
 
(b)           Mergers, Consolidations and Sales.  Be a party to any merger or
consolidation with, or purchase or otherwise acquire all or substantially all of
the assets or any Equity Stock of any class of, or any partnership or joint
venture interest in, any other Person, or sell, transfer, convey or lease all or
any substantial part of its assets, or sell or assign, with or without recourse,
any accounts receivable, except  for joint ventures formed for the purpose of
performing specific contracts in the ordinary course of business.
 
(c)           Self-Dealing.  Purchase, acquire or lease any property from, or
sell, transfer or lease any property to, or otherwise enter into, or cause,
suffer or permit to exist any transaction, arrangement or contract with (i) any
Affiliate, (ii) any officer, director or shareholder of it or any Affiliate, or
(iii) any member of the immediate family of any of the foregoing, except in the
ordinary course of business, in good faith, on terms comparable to the terms
which would prevail in an arms-length transaction between unaffiliated third
parties and to the extent the same would not cause the occurrence of an Event of
Default.
 
(d)           Maintenance of Business.  Enter into the ownership, active
management or operation of any business other than the business conducted by the
Borrower on the Effective Date.
 
(e)           Margin Stock.  Use or permit the proceeds of any Loans to be used
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of “purchasing or carrying” any “margin stock,” as such terms are
defined and used in Regulation U of the Board of Governors of the Federal
Reserve System or any successor thereof, as amended from time to time.
 
(f)           Dispositions.  Sell, transfer, convey or lease all or any material
part of its assets except for sales of inventory in the ordinary course of
business and used, worn-out or surplus equipment, in each case in the ordinary
course of business.
 
 
 
 
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SECTION 5.       CONDITIONS PRECEDENT.
 
Lender’s obligation to make any Loan is subject to the fulfillment of each and
every one of the following conditions:
 
5.1           Delivery of Documents. Lender shall have received each of the
following, in form and substance satisfactory to the Lender, and where
applicable, duly executed and recorded:  (i) certificates of the Secretaries of
each of Borrower certifying as to (a) all corporate actions taken and consents
made by each of them to authorize the transactions provided for or contemplated
under this Agreement and the execution, delivery and performance of the
Documents; and (b) the names of the officers or employees of each of them
authorized to sign the Documents, together with a sample of the true signature
of each such Person; (ii) certificate of good standing for Borrower, in the
jurisdiction of its incorporation; and (iii) such other instruments or documents
as the Lender may reasonably request.
 
5.2           Borrowing Notice.  Lender shall have received by 2:00 p.m.
(Singapore time) two (2) Business Days before such Loan a Borrowing Notice, duly
executed by Borrower and duly completed.
 
5.3           No Unmatured Default or Event of Default.  There shall not have
occurred any Unmatured Default or Event of Default which is then continuing, nor
shall any Unmatured Default or Event of Default occur after giving effect to any
Loan.
 
5.4           Representations and Warranties True and Correct.  The
representations and warranties contained in this Agreement shall be true and
correct in all material respects on and as of the date of each Loan, and after
giving effect thereto, as though made on and as of such date (except to the
extent such representations and warranties expressly refer to an earlier date,
in which case they shall be true and correct in all material respects as of such
earlier date).
 
5.5           Deemed representation and warranty.  Each request by Borrower for
a Loan shall be deemed to be a representation and warranty that the conditions
set forth in Sections 5.3and 5.4 have been satisfied on and as of the date of
such Loan and after giving effect thereto.
 
5.6           Approvals.   Lender shall have received approval of its
shareholders and relevant Singaporean authorities (the “Approvals”).  Upon
receipt of the Approvals, Lender shall promptly advise Borrower thereof and this
Agreement shall automatically become effective on the date on which such
approvals were obtained.  Lender agrees to use its best efforts to obtain the
Approvals and shall inform Borrower in writing at least every two weeks
regarding  its progress in doing so.
 
SECTION 6.       EVENTS OF DEFAULT
 
6.1           Events of Default.  Each of the following acts, occurrences or
omissions shall constitute an event of default under this Agreement (herein
referred to as an “Event of Default”), whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any governmental or nongovernmental body or tribunal:
 
(a)           Borrower fails to pay (i) any of the principal of the Liabilities
when such Liabilities are due or are declared due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) within five
(5) Business Days of the date such Liabilities are due or declared due (whether
by scheduled maturity, required prepayment, acceleration, demand or otherwise);
or
 
 
 
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(b)           Borrower breaches or otherwise fails or neglects to perform, keep
or observe any of its covenants, conditions or agreements contained in any of
the other Documents within any applicable grace period provided thereby or
Borrower fails or neglects to perform, keep or observe any of its covenants,
conditions or agreements contained in this Agreement, except that no Event of
Default shall occur as a result of a breach thereof  unless such breach shall
continue for 45 days after the receipt by Borrower of notice of such breach; or
 
(c)           any warranty or representation now or hereafter made by Borrower
is untrue or incorrect in any material respect when made or any schedule,
certificate, written statement, report, financial data, written notice, or
writing furnished at any time by Borrower is untrue or incorrect in any material
respect on the date as of which the facts set forth therein are stated or
certified or any of the foregoing omits to state a fact necessary to make the
statements therein contained not misleading in any material respect; or
 
(d)           Borrower becomes insolvent or fails generally, or admits in
writing its inability, to pay its debts as they become due; or a proceeding
under any bankruptcy, reorganization, arrangement of debt, insolvency,
readjustment of debt or receivership law or statute is filed (i) against
Borrower and an adjudication or appointment is made or order for relief is
entered, or such proceeding remains undismissed for a period in excess of 45
days, or (ii) Borrower makes an assignment for the benefit of creditors or
Borrower takes any corporate, limited liability company or partnership action to
authorize any of the foregoing; or
 
(e)           Borrower shall be dissolved, whether voluntarily or involuntarily
and such Person has not taken all actions required to become reinstated; or
 
If an Event of Default shall have occurred and be continuing, Lender may, upon
notice to Borrower, do any one or more of the following: (x) terminate any
obligations of Lender to make Loans pursuant to this Agreement, or (y) declare
all of the Liabilities to be immediately due and payable, whereupon all of the
Liabilities shall become immediately due and payable, provided, however, that if
an Event of Default described in Section 6.1(d) hereof shall exist or occur, all
of the Liabilities shall automatically, without notice of any kind, be
immediately due and payable, and Lender shall have no further obligations under
this Agreement.
 
SECTION 7.       RESERVED
 
SECTION 8.       MISCELLANEOUS
 
8.1           No Waiver; Modifications in Writing.    Any suspension or waiver
by Lender of an Event of Default or Unmatured Default under this Agreement or
any of the other Documents shall not suspend, waive or affect any other Event of
Default or Unmatured Default under this Agreement or any of the other Documents,
whether the same is prior or subsequent thereto and whether of the same or of a
different kind or character.  None of the undertakings, agreements, warranties,
covenants and representations of Borrower contained in this Agreement or any of
the other Documents and no Event of Default or Unmatured Default under this
Agreement or any of the other Documents shall be deemed to have been suspended
or waived by Lender unless such suspension or waiver is in writing signed by an
officer of Lender, and directed to Borrower specifying such suspension or
waiver.
 
8.2           Notices, Etc.  Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
(a) when sent after receipt of confirmation or answerback if sent by facsimile
transmission, (b) three (3) Business Days after deposited with a reputable
international courier
 
 
 
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with all charges prepaid, (c) when delivered, if hand-delivered by messenger, or
when received, if sent by email, all of which shall be properly addressed to the
party to be notified and sent to the address or number indicated as follows:
 

 
If to  Borrower:
EcoBlu Products, Inc.
Attention:  Chief Executive Officer
909 West Vista Way
Vista, CA 92083
Facsimile:  (760) 732-5845
Email: sconboy@ecob.net
 
             
If to Lender:
Manhattan Resources Limited
Attention:  Chief Executive Officer
133 New Bridge Road
#18-08 Chinatown Point
Singapore 059413
Facsimile:  +656342 0777
Email: scho@manhattan.sg

 
or to such other address or number as each party designates to the other in the
manner herein prescribed.
 
8.3           Costs, Expenses and Taxes.  Borrower jointly and severally agree
to pay or reimburse the Lender on demand for all its out-of-pocket costs and
expenses and reasonable attorneys’ fees and expenses incurred after the date
hereof in connection with  the exercise, enforcement or preservation of any
rights or remedies of Lender under any Document or applicable law, including any
action to, after the occurrence and during the continuance of an Event of
Default or Unmatured Default, commence, defend, or intervene in any litigation
or to file a petition, complaint, answer, motion or other pleadings, or take any
other action in or with respect to any suit or proceeding (bankruptcy or
otherwise), or enforce or attempt to enforce any rights of Lender, including
Lender’s rights to collect any of the Liabilities, together with interest
following demand for payment thereof at the Applicable Rate.   In addition,
Borrower shall pay any and all stamp, transfer and other Taxes (as used herein,
the term “Taxes” means any and all present and future taxes, duties, levies,
imposts, deductions, assessments, charges or withholdings, and any and all
liabilities (including interest and penalties and other additions to taxes) with
respect to the foregoing) payable or determined to be payable in connection with
the execution and delivery of the Documents and agrees to hold the Lender
harmless from and against any and all liabilities with respect to or resulting
from any delay in paying or omission to pay such taxes.  Without limiting the
generality of the foregoing, to the extent permitted by applicable law, all
payments hereunder or under the Documents (including any payment of principal,
interest, or fees) to, or for the benefit of, any Person shall be made by
Borrower free and clear of and without deduction or withholding for, or account
of, any Taxes now or hereinafter imposed by any taxing authority.  If Borrower
makes any payment hereunder or under any Document in respect of which it is
required by applicable law to deduct or withhold any Taxes, Borrower shall
increase the payment hereunder or under any such Document such that after the
reduction for the amount of Taxes withheld (and any Taxes withheld or imposed
with respect to the additional payments required under this Section 8.3), the
amount paid to Lender equals the amount that was payable hereunder or under any
such Document without regard to this Section 8.3.  To the extent Borrower
withholds any Taxes on
 
 
 
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payments hereunder or under any Document, Borrower jointly and severally agree
to pay the full amount deducted to the relevant taxing authority within the time
allowed for payment under applicable law and shall deliver to Lender within 30
days after it has made payment to such authority a receipt issued by such
authority (or other evidence satisfactory to Lender) evidencing the payment of
all amounts so required to be deducted or withheld from such payment.
 
8.4           Counterparts.  This Agreement may be executed and accepted in any
number of counterparts, each of which shall be an original with the same effect
as if the signatures were on the same instrument.  The delivery of an executed
counterpart of  this Agreement or a signature page by facsimile or email shall
be effective as delivery of a manually executed counterpart of this Agreement.
 
8.5           Binding Effect; Assignment.  This Agreement shall be binding upon,
and inure to the benefit of, Lender, Borrower and their respective successors
and assigns.  Notwithstanding anything herein to the contrary, Borrower shall
not assign any of its rights nor delegate any of its obligations under Documents
without the prior written consent of Lender.  Whenever in this Agreement there
is reference made to any of the parties hereto, such reference shall be deemed
to include, wherever applicable, a reference to the successors and assigns of
Borrower and the successor and assigns of the Lender, and the provisions of this
Agreement shall be binding upon and shall inure to the benefit of said
successors and assigns.
 
8.6           Entire Agreement.  This Agreement, together with the Documents,
contains the entire agreement between the parties hereto with respect to the
transactions contemplated herein and supersede all prior representations,
agreements, covenants and understandings, whether oral or written, related to
the subject matter of the Agreement.
 
8.7           GOVERNING LAW AND JURISDICTION.  THIS AGREEMENT AND THE OTHER
DOCUMENTS AND AGREEMENTS ISSUED PURSUANT TO THIS AGREEMENT WILL BE GOVERNED BY
THE LAWS OF THE STATE OF CALIFORNIA.  ANY ACTION SEEKING TO ENFORCE ANY
PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH, THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT MAY BE BROUGHT ONLY
IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA OR
IN ANY CALIFORNIA STATE COURT HAVING APPROPRIATE JURISDICTION LOCATED IN SAN
DIEGO COUNTY, CALIFORNIA, AND EACH OF THE PARTIES HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE COURTS)
IN ANY SUCH ACTION AND WAIVES ANY OBJECTION TO VENUE LAID THEREIN.  SERVICE OF
PROCESS SHALL BE IN ACCORDANCE WITH THE FEDERAL RULES OF CIVIL PROCEDURE OR THE
LOCAL RULES OF THE APPROPRIATE CALIFORNIA STATE COURT,WHICHEVER IS APPROPRIATE
IN  SUCH ACTION, AND MAY BE SERVED UNDER SUCH APPROPRIATE RULES ANYWHERE IN THE
WORLD, WHETHER WITHIN OR WITHOUT THE STATE OF CALIFORNIA.  BOTH PARTIES WAIVE
ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN.
 
8.8           Severability of Provisions.  Any provision of this Agreement which
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective only to the extent of such prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of such provision in any other
jurisdiction.
 
8.9           Continuing Effect; Survival.  All covenants, agreements,
representations and warranties made by Borrower in the Documents and in the
certificates or other instru­ments delivered in connection with or pursuant to
this Agreement or any other Document shall be considered to have been relied
upon by the other parties hereto and, and shall continue in full force and
effect as long as any Liabilities remain payable under this Agreement and so
 
 
 
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long as Lender shall have any obligations under this Agreement.  In addition,
notwithstanding anything herein or under applicable law to the contrary, the
provisions of this Agreement and the other Documents relating to indemnification
or payment of costs and expenses, shall survive the payment in full of all
Liabilities and any termination of this Agreement or any of the other Documents.
 
 
[Remainder of this page intentionally blank.]
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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8.10          IN WITNESS WHEREOF, the parties hereto have caused this Revolving
Credit and Warrant Purchase Agreement to be duly executed and delivered as of
the date first above written.
 

 
ECOBLU PRODUCTS, INC.
 
 
 
 
 
By:________________________________________
     
MANHATTAN RESOURCES LIMITED
 
 
 
 
 
By:________________________________________

 
 
 
 
 
 
 
 
 
 

 
 
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Schedule 3.6

Litigation

EcoBlu Products Inc. v. BluWood USA and other defendants.     This action was
commenced by EcoBlu as plaintiff in the San Diego County court.  EcoBlu has
asserted multiple causes of action involving, inter alia, collusion and
misrepresentations by defendants negatively affecting the supply relationship
between EcoBlu and BluWood USA.  An arbitration between EcoBlu and Blu Wood on
the supply agreement is presently pending, but subject to a motion to stay filed
in the pending litigation between the parties.

Express Employment v. N8 Concepts. The Company is the defendant in a collection
proceeding in Colorado brought by Express Employment against N8 Concepts, Inc.
(the predecessor to EcoBlu Products, Inc.). This is related to alleged temporary
labor provided to N8/EcoBlu that was not paid for. A default judgment against
EcoBlu has not yet been entered, but is estimated at approximately
$40,000.           
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

 
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Exhibit A

[FORM OF REVOLVING NOTE]

ECOBLU PRODUCTS, INC.
 
 
REVOLVING NOTE DUE  _______________, 2014
 
 
___________________, 2011
$5,000,000

FOR VALUE RECEIVED, the undersigned, ECOBLU PRODUCTS, INC., a corporation
organized and existing under the laws of the State of Colorado (herein called
the “Borrower”), hereby promises to pay in lawful money of the United States of
America to MANHATTAN RESOURCES LIMITED, a Singapore corporation. (herein called
the “Lender”),  the principal sum of FIVE MILLION DOLLARS ($5,000,000), or such
lesser amount as may be outstanding hereunder, on ______________, 2014, together
with all accrued and unpaid interest thereon.  Interest shall accrue hereunder
at the Applicable Rate and shall be due and payable on the maturity of each Loan
advanced under the Agreement described below (or on demand in the case of
Default) until the principal hereof shall have been fully paid.  This Revolving
Note is subject to prepayment, in whole or from time to time in part, on the
terms specified in the Agreement.
 
This Revolving Note is issued pursuant to a Credit and Warrant Purchase
Agreement, dated as of  ____________, 2011 (as amended, restated supplemented or
otherwise modified from time to time, the “Agreement”), between the Borrower and
any other Credit Party from time to time and the Lender, and is entitled to the
benefits thereof.  Capitalized terms used herein which are defined in the
Agreement and not otherwise defined herein shall have the meanings as defined in
the Agreement.
 
Upon the occurrence of an Event of Default, all amounts outstanding under this
Revolving Note may be declared or otherwise become due and payable in the manner
and with the effect provided in the Agreement.
 
This Revolving Note may not be transferred or assigned without the prior written
consent of the Borrower.
 
This Revolving Note shall be constructed and enforced in accordance with the
law  of the State of California.
 

  ECOBLU PRODUCTS, INC.                          
 
By:
      Title:             

 
 
 
 
          

 
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Schedule to ecoblu products, inc. Revolving Note Dated  __________, 2011

Date of Loan
or Payment
Amount of
Loan or
Payment
Outstanding
Principal
Balance (after such
Loan or
Payment)
Accrued and
Unpaid Interest on
the Outstanding
Principal Balance
of Loans
Notation Made By
                                                                               
                                                                               
         

 
 
 
 
 
 
 
 
 

 
 

--------------------------------------------------------------------------------

 

 
Exhibit B
 
FORM OF BORROWING NOTICE
 
To:

Attention: __________________
Facsimile:
Email:

Reference is hereby made to the Revolving Credit and Warrant Purchase Agreement,
dated as of _______________, 2011 (as amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), between
_______________________ (“Lender”) and ECOBLU PRODUCTS, INC., a Colorado
corporation (“Borrower”).  Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement.
 
The Borrower hereby certifies and represents that both immediately prior to the
making of the proposed borrowings hereunder and also after giving pro forma
effect thereto and to the intended use thereof:
 
(i)           no Unmatured Default or Event of Default has occurred or is
continuing;
 
(ii)          the representations and warranties made by the Borrower in the
Documents, are true and correct in all respects all and as of the date of the
proposed borrowing hereunder with the same force and effect as if made on and as
of such date (or, if any such representation or warranty is expressly stated to
have been made as of a specific date, as of such specific date);
 
(iii)         each of the other conditions set forth in Section 5 of the Credit
Agreement with respect to the proposed borrowing has been met; and
 
(iv)         the Loan requested hereby has been approved by the Borrower’s
Board.
 
The Borrower hereby requests a borrowing of the following Loan on the date
indicated:
 
On (a Business Day):
 
In the amount of:
$

 
IN WITNESS WHEREOF, Borrower has caused this Borrowing Notice to be executed by
the _________________________ of Borrower this __ day of ____________, 20__.
 

 
ECOBLU PRODUCTS, INC.
         
 
By:
      Name:       Its:    

 
 
 
 

 
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Exhibit C

FORM OF WARRANT

ECOBLU PRODUCTS INC.

Warrant Certificate
 
 
 
 
 
 
 
 
 

 
3

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THIS WARRANT AND THE UNDERLYING SECURITIES REPRESENTED BY THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”) OR ANY APPLICABLE STATE OR OTHER SECURITIES LAWS.  THIS WARRANT AND THE
UNDERLYING SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED UNLESS (1) THERE IS AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT COVERING SUCH SECURITIES, OR (2)
THE SALE IS MADE IN ACCORDANCE WITH RULE 144 OR ANOTHER APPLICABLE EXEMPTION
UNDER THE SECURITIES ACT.

THE UNITS OF LIMITED LIABILITY COMPANY INTERESTS ISSUABLE HEREUNDER ARE SUBJECT
TO CERTAIN TRANSFER PROVISIONS AS SET FORTH IN AN OPERATING AGREEMENT OF THE
COMPANY, A COPY OF WHICH IS ON FILE AT THE COMPANY’S PRINCIPAL PLACE OF BUSINESS
AND ITS REGISTERED OFFICE.

Warrant No. _____
 
Date of Issuance:   _________, 2011
Warrant to Purchase 50,000,000 shares
(subject to adjustment)

WARRANT TO PURCHASE COMMON STOCK
 
ECOBLU PRODUCTS, INC.
 
ECOBLU PRODUCTS, INC. (the “Issuer”), a Colorado corporation, for value
received, hereby certifies that MANHATTAN RESOURCES LIMITED or its registered
assign (the “Holder”), is entitled, subject to the terms and conditions set
forth below, to purchase from the Issuer fifty million (50,000,000) shares of
the Issuer’s fully paid and nonassessable shares of common stock (subject to
adjustment as provided below, the “Stock”), at the purchase price per share of
$0.10 (subject to adjustment as provided below, the “Stock Purchase Price”) at
any time or from time to time prior to the earlier of (i) 12:01 a.m., California
time, on _______, 2016 (the “Termination Date”).   This Warrant shall terminate
on the Termination Date unless exercised prior thereto.
 
This Warrant was issued on ____________,2011 pursuant to that certain Revolving
Credit and Warrant Purchase Agreement, dated as of ___________2011, by and among
the Issuer and Manhattan Resources Limited (the “Purchase Agreement”) and is
subject to the terms and conditions thereof.  This Warrant is referred to as the
“Warrant” in the Purchase Agreement and shall include any warrants delivered in
substitution or exchange therefor.

1.      Exercise of Warrant.
 
1.1           The purchase rights represented by the Warrant are exercisable by
the Holder hereof, in whole or in part, at any time and from time to time, on
any Business Day, prior to the Termination Date by (i) the surrender of this
Warrant together with delivery of the Warrant Exercise Notice annexed hereto
duly completed and executed on behalf of the Holder (the “Warrant Exercise
Notice”) at the office of the Issuer (or such other office or agency of the
Issuer as it may designate by notice to the Holder at the address of the Holder
appearing on the books of the Issuer) and (iii) payment of an amount equal to
the product of (a) the number of shares of Stock for which the Warrant is being
exercised multiplied by (b) the Stock Purchase Price.  Payment of the Stock
Purchase Price shall be made by wire transfer to such account as the Issuer
shall have designated theretofore in writing or by certified or official bank
 
 
 
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--------------------------------------------------------------------------------

 
 
 
check payable to the order of the Issuer.  Any amount invested in the Stock
pursuant to this warrant shall reduce by like amount the amount of the Loans
which may be outstanding under Section 2.1 of the Purchase Agreement so that the
amount invested pursuant to this Warrant and the amount of outstanding and/or
available Loans may at no time exceed $5,000,000.
 
1.2           This Warrant shall be deemed to have been exercised immediately
prior to the close of business on the date of its surrender for exercise as
provided in Section 1 (the “Exercise Date”), and the person entitled to receive
the shares of Stock issuable upon such exercise shall be treated for all
purposes as the holder of record of such shares of Stock as of the close of
business on such date.  As promptly as practicable on or after the Exercise Date
and in any event within ten (10) days thereafter, the Issuer at its expense
shall issue and deliver to the person or persons entitled to receive the same a
certificate or certificates for the number of shares of Stock issuable upon such
exercise and any cash payable to the Holder in accordance with Section 1.3.  In
the event that this Warrant is exercised in part, the Issuer at its expense will
execute and deliver as promptly as practicable but in any event within ten (10)
days after the Exercise Date a new Warrant of like tenor exercisable for the
number of shares of Stock for which this Warrant may then be exercised.
 
1.3           No Fractional Units or Scrip.  No fractional shares or scrip
representing fractional shares shall be issued upon the exercise of this
Warrant.  In lieu of any fractional unit to which Holder would otherwise be
entitled, the Issuer shall make a cash payment equal to the Stock Purchase Price
multiplied by such fraction.
 
2.      Adjustments.  The Stock Purchase Price and the number of shares of Stock
issuable hereunder are subject to adjustment from time to time as follows:
 
2.1           Reclassification, etc. If the Issuer, at any time while this
Warrant, or any portion hereof, remains outstanding and unexpired by
reclassification of securities or otherwise, shall change the Stock into the
same or a different number of securities of any other class or classes, this
Warrant shall thereafter represent the right to acquire such number and kind of
securities as would have been issuable as the result of such change with respect
to the Stock under this Warrant immediately prior to such reclassification or
other change and the Stock Purchase Price therefor shall be appropriately
adjusted.
 
2.2           Split, Subdivision or Combination of Stock.  If the Issuer at any
time while this Warrant, or any portion hereof, remains outstanding and
unexpired shall split, subdivide or combine the securities as to which purchase
rights under this Warrant exist, into a different number of securities of the
same class, the Stock Purchase Price for such securities shall be
proportionately decreased in the case of a split or subdivision or
proportionately increased in the case of a combination.
 
2.3            Dividends and Distributions.  In case the Issuer at any time or
from time to time after the date hereof shall declare, order, pay or make a
dividend or other distribution (including, without limitation, any distribution
of other or additional interests or other securities or property or options by
way of dividend or spin-off, reclassification, recapitalization or similar
corporate rearrangement) on the Stock, then provision shall be made so that the
Holder shall receive upon exercise hereof in addition to the number of shares of
Stock receivable thereupon, the kind and amount of securities, cash or other
property which the Holder would have been entitled to receive had the Holder
exercised this Warrant for such number of shares of Stock on the date of such
dividend record date and had the Holder thereafter, during the period from the
date of such dividend to and including the date of exercise, retained such
securities, cash or other property receivable by the Holder during such period,
giving application to all adjustments called for during such period under this
Warrant.
 
3.      Certificate as to Adjustments.  Upon the occurrence of each adjustment
or readjustment pursuant to Section 2, the Issuer at its expense shall promptly
compute such adjustment or readjustment in accordance with the terms hereof and
furnish to the Holder of this Warrant a certificate setting forth such
adjustment or readjustment and showing in detail the facts upon which such
adjustment or readjustment is based. The Issuer shall, upon the written
 
 
 
5

--------------------------------------------------------------------------------

 
 
 
request, at any time, of the Holder, furnish or cause to be furnished to the
Holder a like certificate setting forth: (i) such adjustments and readjustments;
(ii) the Stock Purchase Price at the time in effect; and (iii) the number of
shares of Stock and the amount, if any, of other property that at the time would
be received upon the exercise of this Warrant.
 
4.       No Impairment.  The Issuer will not, by any voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by the Issuer, but will at all times in good faith assist
in carrying out the provisions of this Section 4 and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of the
Holder of this Warrant against impairment.
 
5.      Issuance of Stock upon Exercise.  The Issuer covenants and agrees that
all Stock that may be issued upon the exercise of the rights represented by this
Warrant will, upon issuance, be validly issued and outstanding.
 
6.      Securities Are Not Registered.  By accepting delivery of this Warrant,
the Holder hereof represents and warrants to the Issuer the following:
 
6.1           The Holder understands that this Warrant and the shares of Stock
or other securities issuable upon the exercise hereof have not been registered
under the Securities Act of 1933, as amended (the “Act”), on the basis that no
distribution or public offering of the interests of the Issuer is to be
effected.  The Holder realizes that the basis for the exemption may not be
present if, notwithstanding its representations, the Holder has a present
intention of acquiring the securities for a fixed or determinable period in the
future, selling (in connection with a distribution or otherwise), granting any
participation in, or otherwise distributing the securities.
 
6.2           The Holder recognizes that this Warrant and the shares of Stock or
other securities issuable upon the exercise hereof must be held indefinitely
unless they are subsequently registered under the Act or an exemption from such
registration is available. In this connection, the Holder is familiar with SEC
Rule 144, as presently in effect, and understands the resale limitations imposed
thereby and by the Act.
 
6.3           The Holder is either (i) an “accredited investor” within the
meaning of Rule 501(a) promulgated by the SEC under the Act or (ii) a “Qualified
Institutional Buyer” as defined in Rule 144A under the Act.
 
6.4           The Holder believes that it has received all the information such
Holder consider necessary or appropriate in deciding whether to purchase this
Warrant and the shares of Stock or other securities issuable upon the exercise
hereof.
 
6.5           The Holder is experienced in evaluating and investing in private
placement transactions of securities of companies in a similar stage of
development and acknowledges that such Holder is able to fend for itself, can
bear the economic risk of such Holder’s investment, and has such knowledge and
experience in financial or business matters that such Holder is capable of
evaluating the merits and risks of the investment in this Warrant and the shares
of Stock or other securities issuable upon exercise hereof.
 
6.6           At the Holder’s request, the Issuer will enter into a registration
rights agreement with the Holder on reasonable commercial terms under which
Issuer will use commercially reasonable efforts to register shares of Stock
acquired by Holder pursuant to this Warrant.
 
 
 
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--------------------------------------------------------------------------------

 
 
 
7.      Disposition of Warrant and Stock Issued Upon Its Exercise.
 
7.1           By accepting delivery of this Warrant, the Holder further agrees
not to make any disposition of all or any part of the Warrant or shares of Stock
issuable upon the exercise hereof in any event unless and until:
 
(a)           The Issuer shall have received a letter secured by the Holder from
the Securities and Exchange Commission stating that no action will be
recommended to the Commission with respect to the proposed disposition;
 
(b)           There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with said registration statement; or
 
(c)           The Holder shall have notified the Issuer of the proposed
disposition and shall have furnished the Issuer with a detailed statement of the
circumstances surrounding the proposed disposition, and if requested by the
Issuer, the Holder shall have furnished the Issuer with an opinion of counsel,
reasonably satisfactory to the Issuer, that such disposition will not require
registration under the Act or any applicable state securities laws.
 
7.2           Legend.  The Holder understands and agrees that all certificates
evidencing the shares of Stock or other securities to be issued to the Holder
upon the exercise hereof may bear the following legend:
 
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE “ACT”) OR ANY STATE OR OTHER SECURITIES LAWS.  THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER THE ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
 
8.      Lost or Stolen Warrant.  On receipt of evidence reasonably satisfactory
to the Issuer of the loss, theft, destruction or mutilation of this Warrant, and
in the case of loss, theft or destruction, on delivery of an indemnity agreement
reasonably satisfactory in form and substance to the Issuer or, in the case of
mutilation, on surrender and cancellation of this Warrant, the Issuer at its
expense shall execute and deliver, in lieu of this Warrant a new Warrant of like
tenor and amount.
 
9.      Warrant Agent and Warrant Register.  The Issuer shall serve as warrant
agent (the “Warrant Agent”) under this Warrant.  The Warrant Agent hereunder
shall at all times maintain a register (the “Warrant Register”) of the Holder of
this Warrant.  The Warrant Register shall contain the names and addresses of the
Holder. Any Holder of this Warrant or any portion thereof may change his or her
address as shown on the Warrant Register by written notice to the Warrant Agent
requesting such change.  Any notice or written communication required or
permitted to be given to the Holder may be delivered or given by mail to such
Holder as shown on the Warrant Register and at the address shown on the Warrant
Register.  Until this Warrant is transferred on the Warrant Register, the Issuer
may treat the Holder as shown on the Warrant Register as the absolute owner of
this Warrant for all purposes,
 
 
 
7

--------------------------------------------------------------------------------

 
 
 
notwithstanding any notice to the contrary.  Upon 30 days’ notice to the
registered Holder hereof, the Issuer may appoint a new Warrant Agent.  Upon such
appointment, the new Warrant Agent shall be vested with the same powers, rights,
duties and responsibilities as if it had been originally named herein as the
Warrant Agent, without any further assurance, conveyance, act or deed; but if
for any reason it shall be reasonably necessary or expedient to execute and
deliver any further assurance, conveyance, act or deed, the same shall be done
at the expense of the Issuer and shall be legally and validly executed and
delivered by the Issuer.
 
10.             Remedies.  The Issuer stipulates that the remedies at law of the
Holder of this Warrant in the event of any default or threatened default by the
Issuer in the performance of or compliance with any of the terms of this Warrant
are not and will not be adequate and that, to the fullest extent permitted by
law, such terms may be specifically enforced by a decree for the specific
performance of any agreement contained herein or by an injunction against a
violation of any of the terms hereof or otherwise.
 
11.           No Rights or Liabilities as a Member.  Nothing contained in this
Warrant shall be construed as conferring upon the Holder hereof any rights as a
shareholder of the Issuer with respect to the Stock prior to its issue or as
imposing any obligation on such Holder to purchase any securities or as imposing
any liabilities on such Holder as a shareholder of the Issuer, whether such
obligation or liabilities are asserted by the Issuer or by creditors of the
Issuer.
 
11.1          Notices.    Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in writing, and shall be deemed to have been validly served, given or delivered
(a) when sent after receipt of confirmation or answerback if sent by facsimile
transmission, (b) three (3) Business Days after deposited with a reputable
international courier with all charges prepaid, (c) when delivered, if
hand-delivered by messenger, or when received, if sent by email, all of which
shall be properly addressed to the party to be notified and sent to the address
or number indicated as follows:
 

 
If to the Issuer:
EcoBlu Products, Inc.
Attention:
909 West Vista Way
Vista, CA 92083
Fax:  (760) 732-5845
E-Mail: sconboy@ecob.net
             
If to the Holder:
At the Holder’s last address as shown on the Warrant Register described in
Section 9.

 
or to such other address or number as the Issuer or Holder designates to the
other in the manner herein prescribed.
 
12.           Amendments.  This Warrant and any term hereof may be changed,
waived, discharged or terminated only by an instrument in writing signed by the
party against which enforcement of such change, waiver, discharge or termination
is sought.
 
13.           Headings.  The headings in this Warrant are for reference purposes
only and shall not limit or otherwise affect the meaning hereof.
 
 
 
8

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14.           GOVERNING LAW.  THIS WARRANT SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL BE GOVERNED BY, THE LAW OF
THE STATE OF COLORADO.
 
15.           No Transfer or Assignment.  This Warrant may not be transferred or
assigned without the prior written consent of the Issuer, in its sole
discretion.
 
16.        Judicial Proceedings; Waiver of Jury.  ANY ACTION SEEKING TO ENFORCE
ANY PROVISION OF, OR BASED ON ANY MATTER ARISING OUT OF OR IN CONNECTION WITH,
THIS WARRANT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT MAY BE BROUGHT
ONLY IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF CALIFORNIA
OR IN ANY CALIFORNIA STATE COURT HAVING APPROPRIATE JURISDICTION LOCATED IN SAN
DIEGO COUNTY, CALIFORNIA, AND EACH OF THE PARTIES HERETO HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION OF SUCH COURTS (AND OF THE APPROPRIATE APPELLATE COURTS)
IN ANY SUCH ACTION AND WAIVES ANY OBJECTION TO VENUE LAID THEREIN.  SERVICE OF
PROCESS SHALL BE IN ACCORDANCE WITH THE FEDERAL RULES OF CIVIL PROCEDURE OR THE
LOCAL RULES OF THE APPROPRIATE CALIFORNIA STATE COURT,WHICHEVER IS APPROPRIATE
IN  SUCH ACTION, AND MAY BE SERVED UNDER SUCH APPROPRIATE RULES ANYWHERE IN THE
WORLD, WHETHER WITHIN OR WITHOUT THE STATE OF CALIFORNIA.  BOTH PARTIES WAIVE
ANY OBJECTION BASED ON VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION
INSTITUTED THEREIN.

 
This Warrant Certificate shall not be valid unless signed by the Issuer.

IN WITNESS WHEREOF, EcoBlu Products, Inc. has caused this Warrant Certificate to
be signed by its duly authorized officer.

Dated:  __________2011
ECOBLU PRODUCTS, INC.
 
 
 
 
 
By:_____________________
       Name: Steve Conboy
       Title: CEO - President

 
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