Exhibit 10.6

 

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

AMONG

 

GAULA VENTURES LLC,

AS SELLER,

 

GENAREX FD LLC,

 

AND

 

ATTIS INDUSTRIES INC.,

AS BUYER

 

 

 

MAY 25, 2018

 

 

 

 

MEMBERSHIP INTEREST PURCHASE AGREEMENT

 

This MEMBERSHIP INTEREST PURCHASE AGREEMENT (this “Agreement”), dated as of MAY
27, 2018 and effective as of MAY 25, 2018 (“Effective Date”), is entered into by
and among ATTIS INDUSTRIES INC., a New York corporation (“Buyer”), ATTIS
INNOVATIONS, LLC, a Georgia limited liability company (“Attis”), FLUX CARBON
LLC, a Delaware limited liability company (“JVCo”), and GAULA VENTURES LLC, a
Delaware limited liability company (“Seller”).

 

WHEREAS, the Parties hereto are executing and delivering this Agreement in
reliance upon an exemption from securities registration pursuant to Section
4(2), Rule 506 of Regulation D (“Regulation D”), as promulgated by the U.S.
Securities and Exchange Commission (the “SEC”) under the Securities Act of 1933,
as amended (the “Securities Act”);

 

WHEREAS, Seller is the beneficial owner of 1,225 units (the “GFD Units”) of
GENAREX FD LLC, a Delaware limited liability company (“GFD”), representing
12.25% of the issued and outstanding equity of GFD, with a deemed value of
$544.2177 per unit, or $666,667.00 in total (“GFD Purchase Price”);

 

WHEREAS, effective November 29, 2017, Seller’s beneficial owner (the
“Principal”) and certain other Related Persons of GFD entered into that certain
Membership Interest Purchase Agreement (“ALB MIPA”) and related transaction
documents (together with the ALB MIPA, the “ALB Documents”) pertaining to the
purchase of 100% of the issued and outstanding equity of ADVANCED LIGNIN
BIOCOMPOSITES LLC (“ALB”) by Buyer for the benefit of Attis;

 

WHEREAS, the ALB Documents, inter alia, stated Buyer’s agreement to issue to
Principal 400,000 shares of Buyer’s Common Stock (“Buyer Common Stock”) at a
deemed value of $4.00 per share, or $1,600,000.00 (“ALB Purchase Price”), in
exchange for the assignment by Principal of 100% of any direct or indirect
right, title and interest he had or may have had in, to and under the issued and
outstanding equity of ALB (the “ALB Units” and, together with the GFD Units, the
“Seller Units”);

 

WHEREAS, Attis and Principal separately entered into an employment agreement as
part of the ALB Documents (“First Employment Agreement”), which, inter alia,
requires Attis to pay Principal an amount equal to 8.00% of Attis’ Consolidated
EBITDA (“Earn-Out Payment”);

 

WHEREAS, Buyer owns 100% of the issued and outstanding equity of Attis, the
beneficial owner of 80% of the issued and outstanding equity of JVCo, which
entity owns 36.75% of the issued and outstanding equity of GFD; and,

 

WHEREAS, Buyer, Attis, JVCo, Principal, and Seller desire, as applicable, to
state or amend their agreements upon the terms and subject to the conditions
contained herein: to cause their respective now and hereinafter-existing direct
and indirect equity interests in ALB to held by GFD; to cause their respective
now and hereinafter-existing direct and indirect equity interests in GFD to be
held by JVCo; to consolidate the GFD Purchase Price and ALB Purchase Price
(collectively, the “Purchase Price”), and replace the Buyer Common Stock with
the Buyer Securities issuable hereunder; and,

 

WHEREAS, as the beneficial owner of Seller, Principal will be materially
benefitted from Buyer’s performance of its obligations under this Agreement and
the Transaction Documents and as such has agreed to be bound by certain
provisions of this Agreement.

 

NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties hereby
agree to amended and restate the ALB MIPA as between themselves as follows:

 

1. Certain Matters

 

1.1 Certain Definitions. Except as otherwise expressly provided herein or unless
the context otherwise requires, initially capitalized terms used in this
Agreement have the meanings set forth in Schedule 1.0.

 

1.2 Effectiveness. THE PARTIES EACH HEREBY AGREE THAT, EXCEPT AS OTHERWISE
STATED HEREIN, THIS AGREEMENT AND APPLICABLE TRANSACTION DOCUMENTS SHALL AMEND,
RESTATE, REPLACE, SUPPLANT AND IN ALL RESPECTS SUPERSEDE THE ALB MIPA AND ALL
TRANSACTION DOCUMENTS EXECUTED IN CONNECTION THEREWITH.

 

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2. Purchase and Sale

 

2.1 Acquisition. On and subject to the terms and conditions of this Agreement
and applicable Transaction Documents, at the Closing, Principal and Seller shall
sell, assign, transfer and deliver 100% of their respective right, title and
interest in, to and under the Seller Units to Buyer in accordance with the terms
set forth in Schedule 2.0, free and clear of all Liens other than Permitted
Encumbrances. As used herein, the term “Acquisition” shall mean and refer to the
purchase of the Seller Units by Buyer.

 

2.2 The Closing. Upon the terms and subject to the conditions hereinbefore and
hereinafter set forth, the consummation of this Agreement and the Seller
Acquisition contemplated herein (the "Closing") shall take place on MAY 25,
2018, or, if all of the conditions to the Closing are not satisfied on that
date, on the first date thereafter on which all of such conditions are
satisfied. As used herein, the term “Closing Date” shall mean and refer to the
purchase of the Seller Units by Buyer. The Closing may take place by delivery
and exchange of documents by facsimile or electronic mail with originals to
follow by overnight courier.

 

2.3 Deliveries and Actions of Seller at Closing. At or prior to Closing, Seller
shall deliver (or cause to be delivered) to Buyer documents, instruments,
agreements and other materials itemized in Schedule 2.3.

 

2.4 Deliveries and Actions of Buyer at Closing. At or prior to Closing, Buyer
shall deliver (or cause to be delivered) to Seller documents, instruments,
agreements and other materials itemized in Schedule 2.4.

 

2.5 Taking of Necessary Action; Further Action. The Buyer, Seller and GFD will
take all reasonable and lawful action as may be necessary or appropriate in
order to effectuate the Seller Acquisition in accordance with this Agreement on
the Closing Date.

 

3. Warranties and Representations Relating to Seller, ALB and GFD

 

Seller represents and warrants to Buyer that the statements contained in this
Section 3 are true, correct and complete as of the Effective Date and as of the
Closing Date, subject to and except as set forth in the Seller Disclosure
Schedule delivered by Seller to Buyer on the date hereof. Nothing in the Seller
Disclosure Schedule shall be deemed adequate to disclose an exception to a
representation or warranty made herein unless the Seller Disclosure Schedule
identifies the exception with reasonable particularity and describes the
relevant facts in reasonable detail. Without limiting the generality of the
foregoing, the mere listing (or inclusion of a copy) of a document or other item
shall not be deemed adequate to disclose an exception to a representation or
warranty made herein (unless the representation or warranty has to do with the
existence of the document or other item itself). The Seller Disclosure Schedule
will be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Section 3.

 

3.1 Due Organization, Authorization and Good Standing.

 

3.1.1 Seller. Seller is duly organized, validly existing and in good standing
under the laws of Georgia. Seller is qualified to do business and is in good
standing as a foreign Person, as the case may be, in each jurisdiction in which
the ownership of its properties and the nature and extent of the activities
transacted by it makes such qualification necessary. Seller has full corporate
power and corporate authority to carry on its business, to own and use the
properties owned and used by it and to perform its obligations under this
Agreement.

 

3.1.2 GFD. GFD is duly organized, validly existing and in good standing under
the laws of Delaware. GFD is qualified to do business and is in good standing as
a foreign Person, as the case may be, in each jurisdiction in which the
ownership of its properties and the nature and extent of the activities
transacted by it makes such qualification necessary. GFD has full corporate
power and corporate authority to carry on its business, to own and use the
properties owned and used by it and to perform its obligations under this
Agreement.

 

3.1.3 ALB. Seller’s representations and warranties included in Section 3 of the
ALB MIPA, a copy of which is attached hereto in Exhibit 3.1.3, in connection
with ALB and the transfer of Seller’s interests in ALB to and for the benefit of
Buyer shall be incorporated herein by reference and deemed to be in full force
and effect notwithstanding the intention and agreement of the Parties for this
Agreement to amend and restate the ALB MIPA in its entirety; provided, however,
that in the event that any such terms conflict with the terms of this Agreement
and the Transaction Documents executed in connection herewith, the applicable
terms of this Agreement and the Transaction Documents shall govern.

 

3.2 Capitalization. Principal and Seller are the sole holders of the Seller
Units. There are no warrants, rights, options, conversion privileges, stock
purchase plans or other contractual obligations which obligate Seller to offer,
issue, purchase or redeem any equity or other interest of GFD or other ownership
interest or debt or other securities convertible into or exchangeable for
membership interests or units or such other ownership interest (now, in the
future or upon the occurrence of any contingency) or which provides for any
equity appreciation or similar right.

 

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3.3 Authorization. Seller has the requisite power and authority to enter into,
execute, deliver and perform this Agreement, and/or to consummate all
transactions contemplated thereby. The execution and delivery of this Agreement
by Seller and the consummation by Seller of the transactions contemplated hereby
have been duly and validly authorized by all necessary corporate action, and no
other corporate or partnership proceedings on the part of Seller are necessary
to authorize this Agreement or to consummate the transactions so contemplated.
This Agreement is the valid and legally binding obligation of Seller,
enforceable against each of them in accordance with the terms, subject to
bankruptcy, insolvency, moratorium, reorganization and similar laws of general
applicability affecting the rights and remedies of creditors and to general
principles of equity, regardless of whether enforcement is sought in proceedings
in equity or at law.

 

3.4 No Violation or Approval.

 

3.4.1 Subject to and except as set forth on Section 3.4 of the Seller Disclosure
Schedule, neither the execution and delivery of this Agreement by Seller, nor
the consummation or performance of any of the Contemplated Transactions will,
directly or indirectly (with or without notice or lapse of time): (i) Breach or
otherwise conflict with any provision of the Organizational Documents of Seller
or GFD, or contravene any resolution adopted by the officers, managers, or
members of either Seller or GFD; (ii) Breach or otherwise conflict with any
Legal Requirement or Order to which Seller or GFD may be subject or give any
Governmental Body or other Person the right to challenge the Contemplated
Transactions or to exercise any remedy or obtain any relief under any Legal
Requirement or any Order to which Seller or GFD may be subject; (iii) Breach or
otherwise conflict with or result in a violation or Breach of any of the terms
or requirements of, or give any Governmental Body the right to revoke, withdraw,
suspend, cancel, terminate or modify, any Governmental Authorization that is
held or being applied for by or on behalf of GFD, or that otherwise relates to
GFD, or the GFD business; (iv) cause Buyer (or any Related Person thereof) to
become subject to, or to become liable for the payment of, any Tax; (v) Breach
or otherwise conflict with any provision of, or give any Person the right to
declare a default or exercise any remedy under, or to accelerate the maturity or
performance of, or payment under, or to cancel, terminate or modify, any
contract or agreement to which GFD is a party or by which GFD is bound; or (vi),
result in the imposition or creation of any Lien on GFD, or the GFD business.

 

3.4.2 Subject to and except as set forth on Section 3.4 of the Seller Disclosure
Schedule, neither Seller nor GFD are required to give any notice to, or obtain
any Consent from, any Person in connection with the execution and delivery of
this Agreement or the consummation of any of the Contemplated Transactions,
including any Consent required in order to preserve and maintain all
Governmental Authorizations required for the ownership and continued operation
of the GFD business, either before or after Closing, and the consummation of the
Contemplated Transactions. Any registration, declaration, or filing with, or
Consent, or Governmental Authorization or Order by, any Governmental Body with
respect to GFD that is required in connection with the consummation of the
Contemplated Transactions has been completed, made, or obtained on or before the
Closing Date.

 

3.5 Litigation. Except as set forth in Section 3.5 of the Seller Disclosure
Schedule (which lists pending or threatened Proceedings, all of which are
referred to as “Current Litigation Matters”), (i) there is no pending or, to
Seller’s Knowledge, threatened Proceeding by or against Seller or GFD that
relates to or may affect GFD, or GFD’s Business, that challenges, or that may
have the effect of preventing, delaying, making illegal or otherwise interfering
with, any of the Contemplated Transactions; (ii) no event has occurred or
circumstance exists that is reasonably likely to give rise to or serve as a
Basis for the commencement of any such Proceeding; (iii) there is no Order to
which Seller or GFD, or GFD’s Business are subject or that in any way relates to
or could reasonably be expected to affect GFD, or GFD’s Business; (iv) no
officer, director, member, manager, agent or employee of the GFD is subject to
any Order that prohibits such officer, director member, manager, agent or
employee from engaging in or continuing any conduct, activity or practice
relating to the GFD business; (v) each of Seller and GFD are, and at all times
have been, in compliance with all of the terms and requirements of any Order;
(vi) no event has occurred or circumstance exists that is reasonably likely to
constitute or result in (with or without notice or lapse of time) a violation of
or failure to comply with any term or requirement of any such Order; and (vi),
neither Seller nor GFD has received any notice or other communication (whether
written or oral) from any Governmental Body or any other Person regarding any
actual, alleged, possible or potential violation of, or failure to comply with,
any term or requirement of any such Order.

 

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3.6 GFD Financial Matters. An internal draft of GFD’s unaudited balance sheet
and statement of income (collectively, the “GFD Financial Statements”) as of and
for the fiscal year ended December 31, 2017, shall be provided on or before June
30, 2018. The GFD Financial Statements (including the notes thereto) have been
prepared in good faith by Seller’s staff in accordance with GAAP applied on a
consistent basis throughout the periods covered thereby, present fairly the
financial condition of the GFD as of such dates and the results of operations of
GFD for such periods, are correct and complete, and are consistent with the
books and records of GFD (which books and records are correct and complete);
provided, however, that the GFD Financial Statements are subject to normal
adjustments (which will not be material individually or in the aggregate) and
lack footnotes and other presentation items. Subject to and except as disclosed
in Section 3.6 of the Seller Disclosure Schedule, (i) GFD has not incurred any
Liability, and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
GFD giving rise to any Liability; (ii) all Accounts Receivable that are
reflected in the GFD Financial Statements and/or in the business records of GFD
represent valid obligations arising from sales actually made or services
actually performed by GFD in the Ordinary Course of Business; (iii) there is no
contest, defense or right of set-off currently being claimed or, to the
Knowledge of Seller, expected to be claimed, by any account debtor with respect
to any Account Receivable, or any part thereof; (iv) except to the extent paid
prior to the Closing Date, such Accounts Receivable are or will be as of the
Closing Date current and collectible net of the respective reserves shown on the
GFD Financial Statements and/or in the business records of GFD (which reserves
are adequate and calculated consistent with past practice); (v) subject to such
reserves, each of such Accounts Receivable either has been or will be collected
in full, without any setoff, within ninety (90) days after the day on which it
first becomes due and payable; and (vi), Seller has provided Buyer with a
complete and accurate list of GFD’s current Accounts Receivable current to
within five (5) days of the Closing Date, which list sets forth the aging of
each such Account Receivable.

 

3.7 Taxes. Except as set forth in Section 3.7 of the Seller Disclosure Schedule,
GFD has duly filed, on a timely basis all Tax Returns which they are required to
file, and all material liabilities for Tax (including interest and penalties)
have been paid. GFD has paid all required withholding taxes with respect to
employees and independent contractors. Except as set forth in the Seller
Disclosure Schedule, there are in effect no waivers or extensions of the
applicable statutes of limitations for tax liabilities for any period, and no
taxing authority has asserted either orally or in writing any adjustment that
could result in an additional Tax for which GFD is or may be liable and there is
no pending audit, examination, investigation, dispute, proceeding or claim for
which GFD has received notice relating to any Tax for which any one of them is
or may be liable. Except as set forth in the Seller Disclosure Schedule, there
are no agreements in writing with any taxing authority by GFD. Except as set
forth in the Seller Disclosure Schedule, GFD has not been nor is it included in
any consolidated, affiliated, combined, unitary or other similar Tax Returns and
there are no tax sharing agreements to which GFD has now or ever has been a
party. Except as set forth in the Seller Disclosure Schedule, GFD is not a party
to any agreement, contract, arrangement or plan that would result in the payment
of any “excess parachute payments” within the meaning of Code Section 280G (or
any comparable provision of state, local or foreign law).

 

3.8 Title to Seller Units. Except for permitted encumbrances as defined and
itemized in Section 3.8 of the Seller Disclosure Schedule (“Permitted
Encumbrances”), Seller has good and valid title to the Seller Units, in each
case free and clear of all claim, charge, lease, covenant, easement,
encumbrance, security interest, lien, option, pledge, rights of others, or
restriction (whether on voting, sale, transfer, disposition or otherwise),
whether imposed by agreement, understanding, law, equity or otherwise, of any
kind or character (collectively, “Liens”). Seller shall transfer the Seller
Units to Buyer free and clear of all Liens other than Permitted Encumbrances.

 

3.9 Title to Assets. GFD has good and marketable title to all of the assets
reflected in the GFD Financial Statements as owned by them (other than assets
disposed of since the date of the last GFD Financial Statements in the Ordinary
Course of Business or as contemplated by this Agreement), or acquired since the
date of the last GFD Financial Statements, or as set forth in Section 3.9 of the
Seller Disclosure Schedule (“GFD Assets”), free and clear of any and all Liens,
except as set forth in the Seller Disclosure Schedule.

 

3.9.1 Real Property; Tangible Personal Property. GFD does not own, lease or
sublease real property. Except as disclosed in the Seller Disclosure Schedule,
(i) each item of Tangible Personal Property of GFD (including any and all
Tangible Personal Property set forth on Section 3.9.1 of the Seller Disclosure
Schedule) is in good repair and good operating condition, ordinary wear and tear
excepted, is suitable for immediate use in the Ordinary Course of Business, is
free from latent and patent defects and is being operated and maintained in all
material respects in accordance with industry standards and prescribed operating
instructions (if any) necessary to ensure the effectiveness of equipment
warranties and/or service plans; and (ii), no item of Tangible Personal Property
is in need of repair or replacement other than as part of routine maintenance in
the Ordinary Course of Business. If applicable, Tangible Personal Property owned
or leased by GFD is and will be as of Closing in GFD’s possession.

 

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3.9.2 Intangible Personal Property; Intellectual Property Assets. Section 3.9.2
of the Seller Disclosure Schedule contains a complete and accurate list and
summary of all Intellectual Property owned or possessed by GFD, or which GFD has
the right to use pursuant to a valid and enforceable, written license,
sublicense, agreement, or permission (collectively and together with the
Intangible Personal Property, the “Intellectual Property Assets”). Such
Intellectual Property Assets constitute all of the Intellectual Property
necessary for the operation of the businesses of GFD as presently conducted. The
Intellectual Property Assets do not infringe on the intellectual property rights
of any Person. GFD is the owner or licensee of all right, title and interest in
and to each of the Intellectual Property Assets, free and clear of all Liens
except for Permitted Encumbrances. GFD has the right to use all of the
Intellectual Property Assets without payment to any third party except as
disclosed in the applicable agreements disclosed in then Seller Disclosure
Schedule. GFD owns or has the right to use pursuant to ownership, license,
sublicense, agreement, permission, or free and unrestricted availability to
general public, all of the Intellectual Property Assets used by GFD, subject to
the terms of applicable agreements itemized in the Seller Disclosure Schedule.
GFD has not interfered with, infringed upon, misappropriated, or otherwise come
into conflict with any Intellectual Property rights of third parties, and
neither Seller nor GFD, or their respective members, managers, directors and
officers and employees has ever received any charge, complaint, claim, demand,
or notice alleging any such interference, infringement, misappropriation, or
violation (including any claim that GFD must license or refrain from using any
intellectual property rights of any third party). Except as disclosed in the
Seller Disclosure Schedule, to the Knowledge of Seller, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any proprietary intellectual property rights of GFD.

 

3.10 Operations in Conformity with Law, Etc. Except as set forth in Section 3.10
of the Seller Disclosure Schedule: (i) GFD is, and at all times has been, in
full compliance with each Legal Requirement that is or was applicable to it or
to the conduct or operation of GFD, GFD’s assets, and the GFD business; (ii) no
event has occurred or circumstance exists that (with or without notice or lapse
of time) (a) may constitute or result in a violation by GFD of, or a failure on
the part of GFD to comply with, any Legal Requirement, or (b) may give rise to
any obligation on the part of GFD to undertake, or to bear all or any portion of
the cost of, any Remedial Action of any nature; and (iii), neither the Seller
nor GFD have received any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding (a) any
actual, alleged, possible or potential violation of, or failure to comply with,
any Legal Requirement, or (b) any actual, alleged, possible or potential
obligation on the part of GFD to undertake, or to bear all or any portion of the
cost of, any Remedial Action of any nature.

 

3.11 Labor Relations. GFD has complied in all respects at all times with all
Legal Requirements, including all Occupational Safety and Health Laws, relating
to employment practices, terms and conditions of employment, equal employment
opportunity, nondiscrimination, immigration, wages, hours, benefits, payment of
social security and similar Taxes, collective bargaining and other requirements
under applicable Legal Requirements. To Seller’s Knowledge, GFD is not liable
for the payment of any Taxes, including any social security and similar Taxes,
fines, penalties, interest, back wages, front pay, liquidated or compensatory
damages, exemplary damages or other amounts, however designated, for failure to
comply with any of the foregoing Legal Requirements. GFD has not been, and are
not now, a party to any collective bargaining agreement or other labor Contract.
There has not been, there is not presently pending or existing, and to Seller’s
Knowledge, there is not threatened, any strike, slowdown, picketing, work
stoppage or employee grievance process involving GFD. No event has occurred or
circumstance exists that could provide the Basis for any work stoppage or other
labor dispute. There has not been, there is not presently pending or existing,
and, to the Knowledge of Seller, there is not overtly threatened any Proceeding,
charge, grievance proceeding or other claim against or affecting GFD (or any
director, officer, manager, member or employee thereof) relating to the actual
or alleged violation of any Legal Requirement pertaining to labor relations or
employment matters, including any charge or complaint filed by an employee or
union with the National Labor Relations Board, the Equal Employment Opportunity
Commission or any comparable Governmental Body, and there is no organizational
activity or other labor dispute against or affecting GFD or its business. There
is no organizational activity or other labor dispute against or affecting GFD
and no application or petition for an election of or for certification of a
collective bargaining agent is pending. No grievance or arbitration Proceeding
exists that might have a Material Adverse Effect upon GFD or the conduct of its
business. Neither GFD nor Seller have been served notice of, and GFD and Seller
do not otherwise have Knowledge of, any grievance or arbitration Proceeding by
any employee of GFD that might have an adverse effect upon GFD, or the conduct
of GFD’s business. There has been no charge of discrimination filed against or,
to Seller’s Knowledge, threatened against GFD with the Equal Employment
Opportunity Commission or similar Governmental Body. There is no lockout by GFD
of any employees of GFD, and no such action is contemplated by Seller or GFD.

 

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3.12 No Adverse Change. Since the formation of GFD, there has not been any
Material Adverse Change in the GFD business, operations, prospects, GFD Assets,
results of operations or condition (financial or other) of the GFD, and, to the
Knowledge of Seller, no event has occurred or circumstance exists that may
result in such a Material Adverse Change. Neither Seller nor GFD have received
any notice or other communication (written or oral) from any Governmental Body
or any other Person regarding the ability of GFD to own or operate or the
intention of any Governmental Body to challenge or oppose the Buyer’s ownership
or operation of same. No action has been taken by the Seller or GFD, or any
other officer, director, manager, or member of either Seller or GFD, that would
have a Material Adverse Effect on GFD or the Contemplated Transactions. GFD has
conducted its businesses only in the Ordinary Course of Business. Except as set
forth in the Seller Disclosure Schedule, without limiting the generality of the
foregoing, since the Closing Date: (i) GFD has not entered into any agreement,
Contract, lease, or license (or series of related agreements, contracts, leases,
and licenses) outside the Ordinary Course of Business; (ii) no party (including
GFD) has accelerated, terminated, modified, given rise to a notice of default,
or cancelled any agreement, Contract, lease, Permit, Governmental Authorization,
or license (or series of related agreements, contracts, leases, and licenses) to
which GFD is a party, or by which it is bound, or which affects GFD’s assets;
(iii) GFD has not granted any Liens upon any of GFD’s assets, tangible or
intangible; (iv) GFD has made no capital expenditure (or series of related
capital expenditures) outside the Ordinary Course of Business; (v) GFD has made
no capital investment in, any loan to, or any acquisition of the securities or
assets of, any other Person (or series of related capital investments, loans,
and acquisitions); (vi) GFD has not issued any note, bond, or other debt
security, or created, incurred, assumed, or guaranteed any indebtedness for
borrowed money or capitalized lease obligation; (vii) GFD has not transferred,
assigned, or granted any license or sublicense of any rights under or with
respect to any GFD Assets; (viii) GFD has not caused any change to be made or
authorized in the Organizational Documents of GFD; (ix) GFD has not issued,
sold, pledged or otherwise disposed of any of its equity interests, or granted
any options, warrants, or other rights to purchase or obtain (including upon
conversion, exchange, or exercise) any of equity interests or securities; (x)
GFD has not declared, set aside, or paid any dividend or made any distribution
with respect to its equity interests (whether in cash or in kind) or redeemed,
purchased, or otherwise acquired any of its equity interests; (xi) GFD has not
experienced any damage, destruction, or loss (whether or not covered by
insurance) to its property and GFD Assets, including any Property or any
Business; (xii) GFD has not made any loan to, or entered into any other
transaction with, any of its members, managers, officers, directors, or
employees; (xiii) GFD has not entered into any employment Contract, severance or
other benefit agreement, consulting agreement or collective bargaining
agreement, written or oral, or modified the terms of any existing such Contract
or agreement; (xiv) GFD has not granted any increase in the base compensation of
any of its officers, directors, members, managers or employees outside the
Ordinary Course of Business; (xv) GFD has not adopted, amended, modified, or
terminated any bonus, profit sharing, incentive, severance, or other plan,
contract, or commitment for the benefit of any of its members, managers,
officers, directors and employees (or taken any such action with respect to any
other Employee Benefit Plan); (xvi) GFD has not made any other change in
employment terms for any of its directors, officers, members, managers and
employees outside the Ordinary Course of Business; (xvii) GFD has not made or
pledged to make any charitable or other capital contribution; (xviii) GFD has
not discharged, in whole or in part, a material Liability or Lien outside the
Ordinary Course of Business; (xix) GFD has not disclosed any Confidential
Information; (xx) there has not been any other material occurrence, event,
incident, action, failure to act, or transaction outside the Ordinary Course of
Business involving GFD; (xxi) there has been no indication by any customer or
supplier of GFD of an intention to discontinue or change the terms of its
relationship with the GFD; (xxii) there has been no change in the accounting
methods, principles or practices for financial accounting with respect to GFD
(except for those changes required by GFD’s independent auditors to comply with
GAAP) or for IRS reporting purposes; and (xxiii), neither the Seller nor GFD has
committed to do any of the foregoing.

 

3.13 Permits. Section 3.13 of the Seller Disclosure Schedule contains a complete
and accurate list of all permits, licenses, Consents, Governmental
Authorizations and Approvals (collectively, the “Permits”): (i) owned by GFD
that are necessary or required to own, construct, operate and develop the
businesses of GFD, GFD’s assets, and the Properties; and (ii), for which GFD has
made application with respect to the ownership, operation, construction, and
development of its business and the Properties where such application is still
pending as of the date hereof and at Closing. GFD has not received any notice
(written or oral) from any Governmental Body of rejection of any such
application or any notice (written or oral) that any such application is being
considered for rejection. Each Permit is valid and in full force and effect, as
applicable. The Permits listed or required to be listed in Section 3.13 of the
Seller Disclosure Schedule collectively constitute all of the Permits necessary
or required to permit the GFD to lawfully conduct and operate its business in
accordance with all Legal Requirements. GFD is, and at all times has been, in
full compliance with all of the terms and requirements of each Permit listed or
required to be listed in Section 3.13 of the Seller Disclosure Schedule. Seller
has delivered, or has caused to be delivered, to Buyer (or its Representatives)
copies of all Permits and Approvals and applications therefor referred to above
in this Section 3.15, and all other correspondence between Seller or GFD (or
their respective Representatives) and the applicable Governmental Bodies in
connection with such Permits and applications therefor. No event has occurred or
circumstance exists that may (with or without notice or lapse of time)
constitute or result directly or indirectly in a violation of or a failure to
comply with any term or requirement of any Permit, or result directly or
indirectly in the revocation, withdrawal, suspension, cancellation or
termination of, or any modification to, any Permit or Approval. Neither Seller
nor GFD have received any notice or other communication (whether oral or
written) from any Governmental Body or any other Person regarding any actual,
alleged, possible or potential violation of or failure to comply with any term
or requirement of any Permit, or any actual, proposed, possible or potential
revocation, withdrawal, suspension, cancellation, termination of or modification
to any Permit. All applications required to have been filed for the renewal of
the Governmental Authorizations listed or required to be listed in Section 3.13
of the Seller Disclosure Schedule have been duly filed on a timely basis with
the appropriate Governmental Bodies, and all other filings required to have been
made with respect to such Permits have been duly made on a timely basis with the
appropriate Governmental Bodies.

 

 7

 

 

3.14 Environmental Matters. GFD has not treated, stored, disposed of, arranged
for or permitted the disposal of, transported, handled, manufactured,
distributed, or released any substance, including without limitation any
Hazardous Material, or owned or operated any property or facility (and no such
property or facility is contaminated by any such substance) so as to give rise
to any current or future Liabilities, including any Liability for fines,
penalties, response costs, corrective action costs, personal injury, property
damage, natural resources damages or attorney’s fees, pursuant to the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended (“CERCLA”), the Solid Waste Disposal Act, as amended (“SWDA”) or any
other Environmental Laws. The Properties do not now contain nor have the
Properties contained any underground storage tanks or Hazardous Material.
Neither this Agreement nor the consummation of the Contemplated Transactions
will result in any obligations for site investigation or cleanup, or
notification to or consent of government agencies or third parties, pursuant to
any of the so-called “transaction-triggered” or “responsible property transfer”
Environmental Laws. GFD has not assumed, or has otherwise become subject to, any
Liability, including without limitation any obligation for corrective or
Remedial Action, of any other Person relating to Environmental Laws. GFD has
complied in all respects, and is presently in compliance in all respects, with
all applicable Environmental Laws pertaining to the ownership and operation of
GFD’s assets, the Properties and the GFD business. Neither Seller nor GFD have
received any communication alleging that they are not in compliance with any
Environmental Law. GFD has not taken any action that could reasonably result in
any Liability (other than minor Liabilities of nominal or no financial or other
consequence) relating to (i) the environmental conditions on, under, or about
the Properties or any real property that is presently owned, leased or otherwise
used by GFD, or upon which GFD locates any Tangible Personal Property; or (ii),
the present use, management, handling, transport, treatment, generation,
storage, disposal or release of any Hazardous Material. There are no pending or
threatened Proceedings of any nature resulting from any Environmental, Health
and Safety Liabilities or arising under or pursuant to any Environmental Law
with respect to or affecting GFD, GFD’s assets, the Properties, or the GFD
business. No Property contains wetlands, vegetation, animal species or
significant historic/archaeological sites which are subject to special
regulations or limitations under any Legal Requirement. No unacceptable material
has deposited or buried on or under the Properties in violation of any Permit,
Governmental Authorization or Legal Requirement; no toxic wastes or Hazardous
Materials have been deposited, disposed of, stored, generated or released on or
from the Properties, and there are no cemeteries, grave sites or other burial
sites located on the Properties.

 

3.15 Contractual Obligations. The only Contracts to which GFD is a party are
described in Section 3.15 of the Seller Disclosure Schedule (“Contracts”), and
correct and complete copies of all such Contracts have been provided to Buyer.
Except as set forth in applicable Contracts, Seller does not have and may not
acquire any rights under any Contract. Subject to and except as set forth in
Section 3.15 of the Seller Disclosure Schedule: (i) the Contracts are legal,
valid, binding, enforceable, and in full force and effect (except as enforcement
thereof may be limited by applicable Insolvency Laws), and will continue to be
legal, valid, binding, enforceable, and in full force and effect on identical
terms following the consummation of the Contemplated Transactions; (ii) none of
the Contracts will upon completion or performance thereof have a Material
Adverse Effect on the GFD business, or the GFD business; (iii) GFD is, and at
all times has been, in compliance with all applicable terms and requirements of
the Contracts; (iv) no event has occurred or circumstance exists that (with or
without notice or lapse of time) may contravene, conflict with or result in a
Breach of, or give GFD or any other Person the right to declare a default or
exercise any remedy under, or to accelerate the maturity or performance of, or
payment under, or to cancel, terminate or modify, the Contracts; (v) no party to
the Contracts has threatened to terminate its business relationship with GFD for
any reason; (vi) neither Seller nor GFD has given to or received from any other
Person any notice or other communication (whether oral or written) regarding the
actual, alleged, possible or potential Breach of any Contract; and (vii), no
event has occurred or circumstance exists under or by virtue of any Contract
that (with or without notice or lapse of time) would cause the creation of any
Lien affecting any of GFD’s assets. There are no renegotiations of, attempts to
renegotiate or outstanding rights to renegotiate any material amounts paid or
payable under the Contracts with any Person having the contractual or statutory
right to demand or require such renegotiation and no such Person has made
written demand for such renegotiation. Each Contract relating to the sale or
provision of services has been entered into in the Ordinary Course of Business
and has been entered into without the commission of any act alone or in concert
with any other Person, or any consideration having been paid or promised, that
is or would be in violation of any Legal Requirement. Seller has provided to
Buyer a complete list of the recurring customers of the GFD business, whether or
not such recurring customers are bound by a written contract or agreement with
GFD.

 

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3.16 Bank Accounts. Section 3.16 of the Seller Disclosure Schedule lists all
bank, money market, savings and similar accounts and safe deposit boxes of GFD,
specifying the account numbers and the authorized signatories or persons having
access to them.

 

3.17 Insurance. The Seller Disclosure Schedule accurately sets forth a list of
all current policies of insurance held by GFD. All such policies of insurance
are in full force and effect, and no notice of cancellation has been received
with respect thereto, and all premiums owed to date have been paid in full.

 

3.18 Affiliated Transactions. Except as set forth in Section 3.18 of the Seller
Disclosure Schedule, no member, employee, or any members of their immediate
families owns, directly or indirectly (whether as undisclosed principal or
otherwise), individually or collectively, any interest in any corporation,
partnership, firm or other entity which has any agreement, arrangement or other
contractual relationship with GFD.

 

3.19 Charter, Bylaws, Minutes, Operating Agreement and Permits. Seller has
heretofore delivered or caused to be delivered (or will hereinafter deliver or
cause to be delivered prior to the Closing Date) to Buyer or its counsel
accurate and complete copies of the GFD Operating Agreement, written consents
and membership books. Nothing contained in any of the foregoing prevents or
adversely affects the consummation of the transactions contemplated by this
Agreement. A true and correct copy of the GFD Operating Agreement, as amended,
of GFD is attached hereto and made a part hereof as Exhibit 7.1, which agreement
is in full force and effect and have not been amended or modified in any way.

 

3.20 Restrictive Covenants. GFD is not party to or bound or affected by any
commitment, agreement or document which limits the freedom of GFD to compete in
any line of business, transfer or move any of or GFD’s operations, or which does
or could materially and adversely affect the GFD business after the Closing.

 

3.21 Worker’s Compensation. There are no notices of assessment or any other
communications which GFD has received from any workplace safety and insurance
board or similar authorities and there are no assessments which have not been
paid or accrued on the date hereof, and there are no facts or circumstances
which may result in a material increase in liability to any of GFD from any
applicable workers' compensation legislation or applicable employee health and
safety, training or similar legislation, regulations or rules after the Closing
Date.

 

3.22 Investment Purpose. Seller is acquiring the Seller Preferred Stock for its
own account for investment only and not with a view towards, or for resale in
connection with, the public sale or distribution thereof.

 

3.23 Accredited Seller Status. Seller is an “accredited investor” as that term
is defined in Rule 501 of Regulation D, as promulgated under the Seller
Preferred Stock Act of 1933.

 

3.24 Reliance on Exemptions. Seller understands that the Seller Preferred Stock
are being offered and sold to it in reliance on specific exemptions from the
registration requirements of United States federal and state securities laws and
that Buyer is relying in part upon the truth and accuracy of, and Seller’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of Seller set forth herein in order to determine the
availability of such exemptions and the eligibility of Seller to acquire the
Seller Preferred Stock.

 

3.25 Information. Seller and its advisors, if any, have been furnished with all
materials they have requested relating to the business, finances and operations
of Buyer and information Seller deemed material to making an informed investment
decision regarding its purchase of the Seller Preferred Stock. Seller and its
advisors, if any, have been afforded the opportunity to ask questions of Buyer
and its management. Neither such inquiries, nor any materials provided to
Seller, nor any other due diligence investigations conducted by Seller or its
advisors, if any, or its representatives, shall modify, amend or affect Seller’s
right to fully rely on Buyer’s representations and warranties contained in
Article VI below. Seller understands that its investment in the Seller Preferred
Stock involves a high degree of risk. Seller is in a position regarding Buyer,
which, based upon economic bargaining power, enabled and enables Seller to
obtain information from Buyer in order to evaluate the merits and risks of this
investment. Seller has sought such accounting, legal and tax advice as it has
considered necessary to make an informed investment decision with respect to its
acquisition of the Seller Preferred Stock.

 

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3.26 No Governmental Review. Seller understands that no United States federal or
state Governmental Authority has passed on or made any recommendation or
endorsement of the Seller Preferred Stock, or the fairness or suitability of the
investment in the Seller Preferred Stock, nor have such Governmental Authorities
passed upon or endorsed the merits of the offering of the Seller Preferred
Stock.

 

3.27 Authorization, Enforcement. This Agreement has been duly and validly
authorized, executed and delivered on behalf of Seller and is a valid and
binding agreement of Seller, enforceable in accordance with its terms, except as
such enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies.

 

3.28 Corrupt Practices. Except in compliance with all Legal Requirements,
neither the Seller nor GFD, nor any of their Related Persons, or each of their
respective officers, directors, employees or agents, have, directly or
indirectly, ever made, offered or agreed to offer anything of value to (i) any
employees, Representatives or agents of any customers of Seller or GFD for the
purpose of attracting business to Seller or GFD, or (ii) any domestic
governmental official, political party or candidate for government office or any
of their employees, Representatives or agents.

 

3.29 Brokers, Finders, Etc. No broker, finder or investment banker or other
party is entitled to any brokerage, finder’s or similar fee or commission in
connection with the transactions contemplated by this Agreement based upon
arrangements made by or on behalf of GFD or Seller.

 

3.30 The GFD Pre-Closing Operating Agreement. Attached hereto as Exhibit 3.30 is
a true and correct copy of the Operating Agreement of GFD (the “GFD Pre-Closing
Operating Agreement”). The GFD Pre-Closing Operating Agreement is in full force
and effect and has not been amended or modified in any way

 

3.31 The Seller Operating Agreement. Attached hereto as Exhibit 3.31 is a true
and correct copy of the Operating Agreement of Seller (the “Seller Operating
Agreement”). The Seller Operating Agreement is in full force and effect and has
not been amended or modified in any way.

 

3.32 Jurisdictions. Section 3.33 of the Seller Disclosure Schedule sets forth a
complete list of each State in which Seller, GFD and ALB conduct their
Businesses.

 

3.33 No Omissions. No other information provided by or on behalf of Seller or
GFD to Buyer, including, without limitation, information referred to in this
Agreement, contains any untrue statement of a material fact or omits to state
any material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.

 

4. Warranties and Representations Relating to the Buyer

 

Buyer represents and warrants to Seller that the statements contained in this
Section 4 are true and correct as of the Closing Date, except as set forth in
the Buyer Disclosure Schedule.

 

4.1 Due Organization, Authorization and Good Standing of Buyer. Buyer is duly
organized, validly existing and in good standing under the laws of New York.
Buyer is qualified to do business and is in good standing as a foreign Person,
as the case may be, in each jurisdiction in which the ownership of its
properties and the nature and extent of the activities transacted by it makes
such qualification necessary. Buyer has full corporate power and corporate
authority to carry on its business, to own and use the properties owned and used
by it and to perform its obligations under this Agreement.

 

4.2 Authority Relative to this Agreement. Buyer has the requisite corporate
power and corporate authority to execute, deliver and perform this Agreement,
and consummate all transactions contemplated hereby. The execution and delivery
of this Agreement by Buyer and the consummation by the Buyer of the transactions
contemplated hereby have been duly and validly authorized by all necessary
corporate action, and no other corporate proceedings on the part of Buyer are
necessary to authorize this Agreement or to consummate the transactions so
contemplated, including the filing of registration statements and issuance of
shares of Buyer’s common stock upon conversion of the Seller Preferred Stock.
This Agreement is the valid and legally binding obligation of Buyer, enforceable
against them in accordance with its terms, subject to bankruptcy, insolvency,
moratorium, reorganization and similar laws of general applicability affecting
the rights and remedies of creditors and to general principles of equity,
regardless of whether enforcement is sought in proceedings in equity or at law.

 

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4.3 No Violation or Approval. Except as set forth in Schedule 4.3, the
execution, delivery and performance of this Agreement and the consummation of
the transactions contemplated hereby will not result in the breach or violation
of, or a default under the Charter or Bylaws of Buyer, or any statute applicable
to Buyer or any material agreement to which Buyer is a party or by which any of
its properties are bound, any fiduciary duty or any order, judgment, decree,
rule or regulation of any court or any Government Authority or body having
jurisdiction over Buyer or its properties, except where such failure would
result in any change in or effect on the business of Buyer, which has a material
adverse effect on the ability of Buyer to consummate the transactions
contemplated by this Agreement. No consent, approval, order or authorization of,
or negotiation, declaration or filing with, any Governmental Authority or entity
or other party is required of, and has not been obtained or made by Buyer in
connection with the execution and delivery of this Agreement or the consummation
of any of the transactions contemplated hereby.

 

4.4 Capitalization; Voting Rights; Valid Issuance of the Shares. Section 4.4 of
the Buyer Disclosure Schedule contains an accurate itemization of Buyer’s
authorized and outstanding shares of common stock (“Common Stock”), and
preferred stock (“Preferred Stock” and, together with the Common Stock, the
“Buyer Stock”). All of such outstanding shares have been validly issued and are
fully paid and nonassessable. Except as disclosed in the Buyer Disclosure
Schedule, no shares of Buyer Stock are subject to preemptive rights or any other
similar rights or any liens or encumbrances suffered or permitted by Buyer.
Section 4.4 of the Buyer Disclosure Schedule contains an accurate itemization
of: (i) all issued, outstanding, and authorized shares of Buyer’s capital stock,
stating all holders in excess of 4.9% of Buyer’s partially-diluted and
fully-diluted capital stock; (ii) all outstanding options, warrants, scrip,
rights to subscribe to, calls or commitments of any character whatsoever
relating either to or rights convertible into any shares of capital stock of
Buyer or any of its subsidiaries, or contracts, commitments, understandings or
arrangements by which Buyer or any of its subsidiaries is or may become bound to
issue additional shares of capital stock of Buyer or any of its subsidiaries or
options, warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible into, any
shares of capital stock of Buyer or any of its subsidiaries; (iii) agreements or
arrangements under which Buyer or any of its subsidiaries is obligated to
register the sale of any of their securities under the Securities Act (except
pursuant to an S-8 Registration Statement); (iv) outstanding registration
statements (except for an S-8 Registration Statement) and comment letters from
the SEC or any other regulatory agency; and (v), securities or instruments
containing anti-dilution or similar provisions that will be triggered by the
issuance of the Buyer Stock described in this Agreement. Buyer has furnished to
Seller true and correct copies of Buyer’s Articles of Incorporation, as amended
and as in effect on the date hereof, and Buyer’s By-laws, as in effect on the
date hereof, and the terms of all securities convertible into or exercisable for
Common Stock and the material rights of the holders thereof in respect thereto
other than stock options issued to employees and consultants. The Seller
Preferred Stock, Seller Conversion Shares, and Seller Preferred Stock are duly
authorized and, upon issuance in accordance with the terms hereof, shall be duly
issued, fully paid and nonassessable, free from all taxes, liens and charges
with respect to the issue thereof. The shares of Common Stock issuable upon
conversion of the Seller Preferred Stock (“Seller Conversion Shares”) have been
duly authorized and reserved for issuance. The Seller Conversion Shares and
Seller Preferred Stock will be duly issued, fully paid and nonassessable upon
conversion or exercise in accordance with this Agreement and any applicable
Transaction Document.

 

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4.5 Buyer Financial Statements. Buyer has delivered to Seller its unaudited
financial statements (balance sheet, statement of operations, and statement of
cash flows) for the fiscal year ended December 31, 2016, and its unaudited
financial statements (balance sheet, statement of operations, and statement of
cash flows) as at, and for the nine-month period ended September 30, 2017
(collectively, the “Buyer Financial Statements”). The Buyer Financial
Statements: (i) are true, accurate and complete in all respects; (ii) are
consistent with the books and records of Buyer; (iii) present fairly and
accurately, in all material respects, the results of operations and financial
condition of the business of Buyer for the respective periods covered or as of
their respective dates; and (iv), have been prepared in accordance with U.S.
GAAP, applied on a consistent basis throughout the periods covered. Buyer has
delivered to Seller or their representatives, or made available through the
SEC’s website at http://www.sec.gov, true and complete copies of the SEC
Documents. As of their respective dates, the Buyer Financial Statements
disclosed in the SEC Documents complied as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto. As of the date of this Agreement, all indebtedness
of the Buyer is set forth in Section 4.5 of the Buyer Disclosure Schedule
(“Buyer Indebtedness”), and shall mean and include the principal, accreted
value, accrued and unpaid interest, prepayment and redemption premiums or
penalties (including breakage costs, penalties and fees), if any, unpaid fees or
expenses and other monetary obligations as of such time in respect of: (a) all
indebtedness of the Buyer for borrowed money or for the deferred or unpaid
purchase price of property or services; (b) any other indebtedness of the Buyer
which is evidenced by a note, bond, debenture or similar instrument or
commercial paper (including a purchase money obligation); (c) all deferred
obligations of the Buyer to reimburse any bank or other person in respect of
amounts paid or advanced under a letter of credit, surety bond, performance bond
or other instrument; (d) all indebtedness of others guaranteed, directly or
indirectly, by the Buyer or as to which the Buyer has an obligation (contingent
or otherwise) that is substantially the economic equivalent of a guarantee; (e)
all obligations of the Buyer under financing or capital leases; (f) all
indebtedness of others secured by (or for which the holder of such obligation
has an existing right, contingent or otherwise, to be secured by) any Lien other
than Permitted Encumbrances on any property or assets of the Buyer (whether or
not such obligation is assumed by the Buyer); (g) the aggregate net liability
pursuant to any derivative instruments, including any interest rate or currency
swaps, caps, collars, options, futures or purchase or repurchase obligations, or
other similar derivative instruments. Buyer does not have any liabilities of any
nature, including without limitation expenses, whether accrued, absolute,
contingent or otherwise, and whether due or to become due or whether or not
required to be included on the Buyer Financial Statements pursuant to the U.S.
GAAP, probable of assertion or not, except liabilities that are reflected or
disclosed in the notes of the most recent Buyer Financial Statements, or were
incurred in the Ordinary Course of Business and in the aggregate do not exceed
$50,000. No other information provided by or on behalf of Buyer to Seller which
is not included in the SEC Documents, including, without limitation, information
referred to in this Agreement, contains any untrue statement of a material fact
or omits to state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.

 

4.6 Taxes. Except as set forth in the Buyer Disclosure Schedule, Buyer has duly
filed, on a timely basis all Tax Returns which it is required to file, and all
material liabilities for Tax (including interest and penalties) have been paid.
Buyer has paid all required withholding taxes with respect to employees and
independent contractors. Except as set forth in the Buyer Disclosure Schedule,
there are in effect no waivers or extensions of the applicable statutes of
limitations for tax liabilities for any period, and no taxing authority has
asserted either orally or in writing any adjustment that could result in an
additional Tax for which Buyer is or may be liable and there is no pending
audit, examination, investigation, dispute, proceeding or claim for which Buyer
has received notice relating to any Tax for which any one of them is or may be
liable. Except as set forth in the Buyer Disclosure Schedule, there are no
agreements in writing with any taxing authority by Buyer. Except as set forth in
the Buyer Disclosure Schedule, Buyer has not been nor is it included in any
consolidated, affiliated, combined, unitary or other similar Tax Returns and
there are no tax sharing agreements to which Buyer has now or ever has been a
party. Except as set forth in the Buyer Disclosure Schedule, Buyer is not a
party to any agreement, contract, arrangement or plan that would result in the
payment of any “excess parachute payments” within the meaning of Code Section
280G (or any comparable provision of state, local or foreign law).

 

4.7 No Material Adverse Breaches, etc. Except as set forth in the SEC Documents,
neither Buyer nor any of its subsidiaries is subject to any charter, corporate
or other legal restriction, or any judgment, decree, order, rule or regulation
which in the judgment of Buyer’s officers has or is expected in the future to
have a material adverse effect on the business, properties, operations,
financial condition, results of operations or prospects of Buyer or its
subsidiaries. Except as set forth in the SEC Documents, neither Buyer nor any of
its subsidiaries is in breach of any contract or agreement which breach, in the
judgment of Buyer’s officers, has or is expected to have a material adverse
effect on the business, properties, operations, financial condition, results of
operations or prospects of Buyer or its subsidiaries.

 

4.8 Litigation. There is no action pending against, affecting or, to the
knowledge of Buyer, threatened against it or any of its properties before any
court or arbitrator or any governmental body, agent or official which in any
manner challenges or seeks to prevent, enjoin, alter or materially delay any of
the transactions contemplated by this Agreement or would materially adversely
affect Buyer’s ability to consummate the transactions contemplated hereby.

 

5. Covenants Relating to Seller and GFD

 

5.1 Best Efforts. Seller shall use its best efforts timely to satisfy each of
the conditions to be satisfied by it hereunder.

 

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5.2 Restrictions on Transfer, Proxies and Noninterference. Seller and GFD shall
not, directly or indirectly, except pursuant to the terms of this Agreement (i)
offer for sale, sell, transfer, tender, pledge, encumber, assign or otherwise
dispose of, or enter into any contract, option or other arrangement or
understanding with respect to or consent to the offer for sale, transfer,
tender, pledge, encumbrance, assignment or other disposition of, any or all
Seller Units; (ii) grant any proxies or powers of attorney, deposit any such
Seller Units into a voting trust or enter into a voting agreement with respect
to any such Seller Units; or (iii), take any action that would make any
representation or warranty contained in Section 3 (Warranties and
Representations Relating to Seller and GFD) untrue or incorrect or have the
effect of preventing or disabling any Entity from performing its obligations
under this Agreement.

 

5.3 Conduct of Business by GFD Pending the Closing. From the date hereof and on
and prior to the Closing, except as otherwise disclosed, permitted or required
by this Agreement, GFD will conduct business only in the Ordinary Course of
Business and substantially as presently operated and use reasonable efforts to
maintain the value of the GFD business as a going concern. From the date hereof
and prior to the Closing, GFD will not, without the prior written consent of the
Seller: enter into any transactions otherwise than on an arms’ length basis with
any Affiliate of GFD (other than as contemplated by this Agreement and the
transactions in the Ordinary Course of Business of GFD); pay any compensation
other than in the Ordinary Course of Business or increase any compensation of
any officer or employee; enter into any new contracts or agreements to incur any
Liabilities (including without limitation, any capital lease); amend the
operating agreement of GFD; sell, lease or otherwise dispose of any material
assets (except for sales and other dispositions in the Ordinary Course of
Business and as may otherwise be permitted by the terms of this Agreement);
propose or adopt any changes to the accounting principles used by GFD material
to its financial condition or business except as permitted by Generally Accepted
Accounting Principles; make any capital expenditures in any month with respect
to the GFD business or enter into any contract or commitment therefor other than
in the Ordinary Course of Business; pay any dividends; or, commit to do any of
the foregoing.

 

5.4 Registration and Exemption. Seller agrees and acknowledges that the Seller
Preferred Stock may not be sold or transferred unless: (i) such shares are sold
pursuant to an effective registration statement under the Securities Act; or
(ii), the Buyer or its transfer agent shall have been furnished with an opinion
of  counsel (which opinion shall be in form, substance and scope customary for
opinions of counsel in comparable transactions) to the effect that the shares to
be sold or transferred may be sold or transferred pursuant to an exemption from
such registration; or (iii), such shares are sold or transferred pursuant to
Rule 144 under the Securities Act (or a successor rule) (“Rule 144”); or (iv),
such shares are transferred to an “affiliate” (as defined in Rule 144) of the
Sellers who is an Accredited Investor (as defined in the Securities Act), and
who agrees to sell or otherwise transfer the shares only in accordance with this
Section 5.4.  Until such time as the Seller Preferred Stock have been registered
under the Securities Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can
then be immediately sold, each certificate for shares of the Common Stock that
has not been so included in an effective registration statement, or that has not
been sold pursuant to an effective registration statement or an exemption that
permits removal of the legend, shall bear a legend substantially in the
following form, as appropriate:

 

“NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE
SECURITIES LAWS.  THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED
OR ASSIGNED (I) IN THE ABSENCE OF (a) AN EFFECTIVE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (b) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.  NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.”

 

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5.5 Further Assurances; Cooperation. Seller shall use its best efforts to
cooperate with Buyer and to diligently perform under the Transaction Documents.
At and after the Closing, Seller shall execute and deliver such further
instruments of conveyance and transfer as Buyer (and/or Buyer’s designee) may
reasonably request to convey and transfer effectively the Seller Units.

 

5.6 Non-Competition and Non-Solicitation. Through and including MAY 30, 2023
(the “Restrictive Period”), upon and subject to the terms and conditions of the
Transaction Documents, and for so long as no Event of Default has occurred under
the Transaction Documents, Principal and Seller (collectively, the
“Transferors”), each on their own behalf, hereby agree that they shall not,
directly or indirectly, for itself or on behalf of, or in conjunction with, any
other person, company, firm, partnership, association, corporation or business
or organization, entity or enterprise,

 

5.6.1 within the United States or Canada be engaged or employed in any capacity
by, or own, operate, manage or control a business which is competitive with the
business of Attis or JVCo (except for passive, minority equity investments in,
or providing senior or mezzanine debt financing to, a business that is
competitive with Buyer’s Business, which shall be allowed);

 

5.6.2 solicit or attempt to solicit business from any third party which was a
customer or prospective customer of Attis or JVCo within two (2) years prior to
the date of this Agreement with a view to sell or provide any products or
services competitive with any products or services of Attis or JVCo; or

 

5.6.3 for any reason whatsoever, employ or attempt to employ or assist anyone
else in employing any employee of Buyer, JVCo or Attis (whether or not such
employment is full-time or is pursuant to a written contract).

 

In the event the enforceability of this Section 5.6 shall be challenged in a
court of competent jurisdiction and any applicable Transferor is not enjoined
from breaching any term of this Agreement, then, if such court finds that the
challenged term is enforceable, the applicable time periods set forth herein
shall be deemed tolled upon the filing of the lawsuit challenging the
enforceability of the applicable provision until the dispute is finally resolved
and all periods of appeal have expired. In the event any Party is required to
engage the services of an attorney at law to enforce any provision of this
Agreement, said Party may recover from the breaching Party, in addition to any
other damages to which it may be entitled, including, without limitation, its
reasonable attorneys’ fees and expenses of litigation. Transferors each hereby
acknowledge that breach of any of the provisions contained in this Section 5.6
could result in irreparable damage and injury to Buyer, which injury could not
be adequately compensated by money damages or other legal remedies. Accordingly,
in the event of such a breach of any of the provisions of this Section 5.6, in
addition to, and not in limitation of, any remedies which may be available to
Buyer under the Transaction Documents, Buyer may seek equitable relief against
the breaching Party for such breaches, including, without limitation, an
injunction or an order for a specific performance. If Buyer seeks to enjoin any
such breaching Party from breaching any such provision of this paragraph, the
breaching Party hereby waives the defense that Buyer has or will then have an
adequate remedy at law. Nothing in this paragraph shall be deemed to limit
Buyer’s remedies at law or equity for any breach by any Transferor of any
provision of the Transaction Documents which may be pursued or availed by Buyer.

 

6. Covenants Relating to Buyer

 

6.1 Best Efforts. Buyer shall use its best efforts timely to satisfy each of the
conditions to be satisfied by it hereunder.

 

6.2 Corporate Existence. So long as any of the Seller Preferred Stock remain
outstanding, Buyer shall not directly or indirectly consummate any merger,
reorganization, restructuring, reverse stock split, consolidation, sale of all
or substantially all of Buyer’s assets or any similar transaction or related
transactions (each such transaction, an “Organizational Change”) unless, prior
to the consummation an Organizational Change, Buyer obtains the written consent
of Seller. In any such case, Buyer shall make appropriate provision with respect
to Seller’s rights and interests to insure that the provisions of the
Transaction Documents will thereafter be applicable to Seller Preferred Stock
after any such Organizational Change.

 

6.3 Buyer’s SEC Filings. Buyer shall file all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC under of
the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (all of the
foregoing filed prior to the date hereof or amended after the date hereof and
all exhibits included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter referred to as
the “SEC Documents”). Until the earlier of (i) the date as of which the Seller
may sell all of the Seller Conversion Shares without restriction pursuant to
Rule 144(k) promulgated under the Securities Act (or successor thereto), or (ii)
the date on which (a) the Seller shall have sold all the Seller Conversion
Shares and (b) none of the Seller Preferred Stock are outstanding (the
“Registration Period”), Buyer shall file in a timely manner all reports required
to be filed with the SEC pursuant to the Exchange Act and the regulations of the
SEC thereunder, Buyer shall not terminate its status as an issuer required to
file reports under the Exchange Act even if the Exchange Act or the rules and
regulations thereunder would otherwise permit such termination.

 

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6.4 Listings or Quotation. Buyer shall maintain the Common Stock’s authorization
for quotation on the NASDAQ, NYSE, or OTCQX public trading markets or stock
exchanges.

 

6.5 Registration Rights. Buyer and Seller shall enter into a registration rights
agreement in substantially the same form as the form attached in Exhibit 6.5
hereto (“Registration Rights Agreement”), pursuant to which Buyer shall use its
best efforts to register the Seller Preferred Stock, Seller Conversion Shares,
and Seller Preferred Stock on a TIME IS OF THE ESSENCE basis, but in no event
later than May 31, 2018.

 

6.6 Reservation of Shares. Notwithstanding the foregoing, Buyer shall take all
action reasonably necessary, commercially reasonable action to at all times have
authorized, and reserved for the purpose of issuance, such number of shares of
Common Stock issuable hereunder, and otherwise as shall be necessary to effect
the issuance of all of the Seller Conversion Shares due upon conversion of the
Seller Preferred Stock.

 

6.7 Transfer Agent Instructions. Buyer shall issue instructions to its transfer
agent in the form(s) attached hereto as Exhibit 6.7 for the purpose of having
certificates issued, registered in the name of the Seller or its respective
designee(s) or nominee(s), for the Seller Preferred Stock and Seller Conversion
Shares representing such amounts of Seller Preferred Stock as specified from
time to time to Buyer upon conversion of the Seller Preferred Stock (“Transfer
Agent Instructions”). Buyer warrants that no instruction other than the Transfer
Agent Instructions will be given by Buyer to its transfer agent and that the
Seller Preferred Stock and Seller Conversion Shares shall otherwise be freely
transferable on the books and records of Buyer as and to the extent provided in
this Agreement. Nothing in this Section 6.7 shall effect in any way any
obligations and agreements to comply with all applicable securities laws upon
resale of any shares of Buyer Stock. If a holder of the Seller Preferred Stock
provides Buyer with an opinion of counsel, in form, scope and substance
customary for opinions of counsel in comparable transactions to the effect that
registration of a resale of any of the Seller Conversion Shares is not required
under applicable laws, Buyer shall within two (2) business days instruct its
transfer agent to issue one or more certificates in such name and in such
denominations as specified by Seller, subject only to the restrictions stated in
the Series G Certificate of Designations, and otherwise herein. Buyer
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to Seller by vitiating the intent and purpose of the
transactions contemplated hereby. Accordingly, Buyer acknowledges that the
remedy at law for a breach of its obligations under this Section 6.7 will be
inadequate, and hereby agrees, in the event of a breach or threatened breach by
Buyer of the provisions of this Section 6.7, that the Seller shall be entitled,
in addition to all other available remedies, to an injunction restraining any
breach and requiring immediate issuance and transfer, without the necessity of
showing economic loss and without any bond or other security being required.

 

6.8 Further Assurances; Cooperation. Buyer shall use its best efforts to
cooperate with Seller and to diligently perform under the Transaction Documents.
At and after the Closing, Buyer shall execute and deliver such further
instruments of conveyance and transfer as Seller (and/or Seller’s designee) may
reasonably request to convey and transfer effectively the Seller Preferred
Stock, Seller Conversion Shares, and any and all amounts and shares due and
payable thereunder, or which may otherwise be due and payable under any other
Transaction Document.

 

7. Corporate Matters

 

7.1 Allocation of Purchase Price. Within one hundred twenty (120) days after the
Closing (unless required sooner to meet the reasonable IRS filing requirements
of one of the parties) the parties agree to complete duplicate IRS Form 8594
("Seller Acquisition Statement") as required by the Internal Revenue Code. The
parties further agree to make no change or alteration of the Form 8594 and to
file no Supplement Statement Form 8594 without at least fifteen (15) days prior
written notice to the other party of the nature and extent of the changes, which
notice shall include the revised or Supplemental Statement Form 8594.

 

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7.2 Confidentiality. The term “Confidential Information” shall mean that
information of a Party (“Disclosing Party”) which is disclosed to another Party
(“Receiving Party”) pursuant to this Agreement, and shall include, but not be
limited to, trade secrets, know-how, inventions, techniques, processes,
algorithms, software programs, schematics, designs, contracts, customer lists,
financial information, sales and marketing plans and business information. The
Parties agree that the term “Confidential Information” shall also be construed
to include the existence and identity of specific third parties named in the
Seller Disclosure Schedule that were, are, or which may become party to one or
more agreements, transactions, disputes, or litigation involving GFD, and the
existence and nature of any of the foregoing (collectively, “Proprietary
Matters”). The Parties hereby agree and acknowledge that any disclosure of
Confidential Information involving Proprietary Matters could materially
adversely effect the relationship or rights of GFD in connection with such
matters, and that, notwithstanding anything stated herein to the contrary, no
disclosure of Confidential Information involving Proprietary Matters shall be
made by any Party without the express written consent of the other Parties
hereto unless as may be required by law, and, even then, on a need-to-disclose
basis after exhausting all available confidential treatment and such other
options to prevent general public disclosure. Each Party acknowledges that in
the course of the performance of this Agreement, it may obtain the Confidential
Information of the other Party. The Receiving Party shall, at all times, both
during the term of this Agreement and thereafter, keep in confidence and trust
all of the Disclosing Party’s Confidential Information received by it. The
Receiving Party shall not use the Confidential Information of the Disclosing
Party other than as expressly permitted under the terms of this Agreement or by
a separate written agreement. The Receiving Party shall take all reasonable
steps to prevent unauthorized disclosure or use of the Disclosing Party’s
Confidential Information and to prevent it from falling into the public domain
or into the possession of unauthorized persons. The Receiving Party shall not
disclose Confidential Information of the Disclosing Party to any person or
entity other than its officers, employees, consultants and permitted
sublicensees who need access to such Confidential Information in order to effect
the intent of this Agreement and who have entered into confidentiality
agreements with such person’s employer which protects the Confidential
Information of the Disclosing Party. The Receiving Party shall promptly give
notice to the Disclosing Party of any unauthorized use or disclosure of
Disclosing Party’s Confidential Information. The Receiving Party agrees to
assist the Disclosing Party to remedy such unauthorized use or disclosure of its
Confidential Information, which remedies shall include injunctive relief without
the necessity of posting a bond or proving damages. These obligations shall not
apply to the extent that Confidential Information includes information which: is
already known to the Receiving Party at the time of disclosure, which knowledge
the Receiving Party shall have the burden of proving; is, or, through no act or
failure to act of the Receiving Party, becomes publicly known; is received by
the Receiving Party from a third party without restriction on disclosure; is
independently developed by the Receiving Party without reference to the
Confidential Information of the Disclosing Party, which independent development
the Receiving Party will have the burden of proving; is approved for release by
written authorization of the Disclosing Party; is required to be disclosed by a
government agency to further the objectives of this Agreement, by a proper order
of a court of competent jurisdiction, or is required to be disclosed by law or
pursuant to the requirements of a recognized stock exchange; provided, however
that the Receiving Party will use its best efforts to minimize such disclosure
and will consult with and assist the Disclosing Party in obtaining a protective
order prior to such disclosure. For avoidance of doubt, no public disclosure
shall be made by any Party hereto at any time in the absence of the prior
written consent of each of the other Parties hereto, including pursuant to any
applicable requirement to file a current report on Form 8K, or other regulatory
disclosure in connection with the execution hereof.

 

7.3 Indemnification.

 

7.3.1 Survival. Subject to the provisions of this Section 7, all
representations, warranties, covenants and obligations of the Parties contained
in this Agreement and in the agreements, instruments and other documents
delivered pursuant to this Agreement will survive the Closing and the
consummation of the Contemplated Transactions.

 

7.3.2 Indemnification by Buyer. Buyer hereby covenants and agrees that, to the
fullest extent permitted by Legal Requirement, it will defend, indemnify and
hold harmless Seller and its Related Persons and Representatives, and their
respective officers, directors, members, managers, employees, agents, and
Representatives, and all successors and assigns of the foregoing (collectively,
the “Seller Indemnified Persons”), for, from and against any Adverse
Consequences, arising from or in connection with: (i) any Breach of any
representation, warranty, covenant, obligation or agreement made by Buyer in the
Transaction Documents, the Schedules and Exhibits hereto, the certificates
delivered hereunder, any transfer instrument, or any other certificate,
document, writing or instrument delivered by Buyer pursuant to or otherwise in
connection with the Transaction Documents; (ii) any Liability of Buyer, Attis,
or either of their Related Persons; or (iii), any claim by any Person for any
brokerage or finder’s fee, commission or similar payment based upon any
agreement or understanding made, or alleged to have been made, by any Person
with Buyer in connection with this Agreement or any of the Contemplated
Transactions.

 

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7.3.3 Indemnification by Seller. Seller hereby covenants and agree that, to the
fullest extent permitted by Legal Requirement, they will defend, indemnify and
hold harmless Buyer, and its Related Persons and Representatives, and their
respective officers, directors, members, managers, employees, agents, and
Representatives, and all successors and assigns of the foregoing (collectively,
the “Buyer Indemnified Persons”), for, from and against any Adverse Consequences
arising from or in connection with: (i) any Breach of any representation,
warranty, covenant, obligation or agreement made by Seller in the Transaction
Documents, the Schedules and Exhibits hereto, the certificates delivered
hereunder, any transfer instrument, or any other certificate, document, writing
or instrument delivered by Seller pursuant to or otherwise in connection with
the Transaction Documents; (ii) any Liability of GFD based on facts, events or
circumstances occurring before the Closing Date, or arising out of or in
connection with the ownership and operation of GFD, GFD’s assets, and the GFD
business prior to the Closing Date, or facts and circumstances relating
specifically to GFD, GFD’s assets, and the GFD business existing at or prior to
the Closing, respectively, whether or not such Liabilities or claims were known
or unknown, absolute, accrued or contingent, on such date; (iii) any Liability
of GFD to Seller or any Related Person of Seller (except in connection with
Permitted Encumbrances prior to the date on which Buyer has fully performed
under the Transaction Documents); (iv), the EXO Loan Documents; or (v) any claim
by any Person for any brokerage or finder’s fee, commission or similar payment
based upon any agreement or understanding alleged to have been made by such
Person with any Seller in connection with this Agreement or any of the
Contemplated Transactions.

 

7.3.3.1 In addition to its indemnification obligations under Section 7.3.3,
Seller hereby covenant and agree that, to the fullest extent permitted by Legal
Requirement, they will defend, indemnify and hold harmless the Buyer Indemnified
Persons for, from and against any Adverse Consequences (including costs of
cleanup, containment or other Remedial Action) arising out of acts or neglect
occurring or conditions existing at or before Closing from or in connection
with: (i) any Environmental, Health and Safety Liabilities arising out of or
relating to (a) the conduct of any activity by Seller, GFD, or their Related
Persons, or any employee, contractor, agent or Representative thereof, relating
to GFD’s assets or Business, (b) the ownership or operation by any Person at any
time on or prior to the Closing Date of any of GFD’s assets or Business, or (c),
any Hazardous Materials or other contaminants that were present on GFD’s assets
at any time on or prior to the Closing Date; or (ii), any bodily injury
(including illness, disability or death, regardless of when such bodily injury
occurred, was incurred or manifested itself), personal injury, property damage
(including trespass, nuisance, wrongful eviction and deprivation of the use of
real property) or other damage of or to any Person or any of GFD’s assets, in
any way arising from or allegedly arising from (a) any Hazardous Activity
conducted by Seller, GFD, their Related Persons or any employee, contractor,
agent or Representative thereof, with respect to GFD’s assets or Business, or
(b), from any Hazardous Material that was present or suspected to be present on
or before the Closing Date on or at the Properties (or present or suspected to
be present on any other property, if such Hazardous Material emanated or
allegedly emanated from any Property and was present or suspected to be present
on any Property, on or prior to the Closing Date), or Released or allegedly
Released by Seller, GFD, their Related Persons, or any Person, on or at any of
the Properties or GFD Assets at any time on or prior to the Closing Date. Buyer,
either directly or through GFD, will be entitled to control any Remedial Action,
any Proceeding relating to a claim that any Environmental Law has been violated
and any other Proceeding with respect to which indemnity may be sought under
this Section 7.3.

 

7.3.4 Time Limitations.

 

7.3.4.1 For purposes of this Agreement, a Buyer Indemnified Person may only
assert a claim for indemnification under Section 7.3.3 during the applicable
period of time (the “Buyer Claims Period”) commencing on the date of this
Agreement and continuing until the date that is TWO (2) YEARS after the Closing
Date; provided, however, that with respect to any such indemnification claim
regarding the Breach by Seller of any obligation hereunder, the Transaction
Documents or under any related agreement that is intended to survive and
continue after the Closing, the Buyer Claims Period will continue for as long as
such obligation is outstanding.

 

7.3.4.2 For purposes of this Agreement, a Seller Indemnified Person may only
assert a claim for indemnification under Section 7.3.2 during the applicable
period of time (the “Seller Claims Period”) commencing on the date of this
Agreement and continuing until the date that is TWO (2) YEARS after the Closing
Date; provided, however, that with respect to any such indemnification claim
regarding the Breach by Buyer of any obligation hereunder or under any related
agreement that is intended to survive and continue after the Closing, the Seller
Claims Period will continue for as long as such obligation is outstanding.

 

7.3.4.3 Notwithstanding anything to the contrary in this Section 7, if before
5:00 p.m. (eastern time) on the last day of the applicable Buyer Claims Period
or Seller Claims Period, any Party against which an indemnification claim has
been made hereunder has been properly notified in writing of such claim for
indemnity hereunder and the basis thereof, including with reasonable supporting
details for such claim (to the extent then known), and such claim has not been
finally resolved or disposed of as of such date, then such claim will continue
to survive and will remain a basis for indemnity hereunder until such claim is
finally resolved or disposed of in accordance with the terms of this Agreement.

 

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7.3.5 Payment of Claims. A claim for indemnification may be asserted by written
notice to the Party from whom indemnification is sought and will be paid
promptly after such notice, together with satisfactory proof of Adverse
Consequences or other documents evidencing the basis of the Adverse Consequences
sought, are received.

 

7.3.6 Third-Party Claims. No later than ten (10) Business Days after receipt by
a Person entitled to indemnity under Section 7 hereof (an “Indemnified Person”)
of notice of the assertion of a Third-Party Claim against it, such Indemnified
Person shall give notice to the Person obligated to indemnify under such section
(an “Indemnifying Person”) of the assertion of such Third-Party Claim and a copy
of any writing by which, such Third-Party assertion is made. The failure to
notify the Indemnifying Person will relieve the Indemnifying Person of any
liability that it may have to any Indemnified Person to the extent that the
Indemnifying Person demonstrates that the defense of such Third-Party Claim is
materially prejudiced by the Indemnified Person’s failure to give such notice.
If an Indemnified Person gives notice to the Indemnifying Person hereunder of
the assertion of a Third-Party Claim, the Indemnifying Person shall be entitled
to participate in the defense of such Third-Party Claim and, to the extent that
it wishes (unless (i) the Indemnifying Person is also a Person against whom the
Third-Party Claim is made and the Indemnified Person determines in good faith
that joint representation would be inappropriate, or (ii), the Indemnifying
Person fails to provide reasonable assurance to the Indemnified Person of its
financial capacity to defend such Third-Party Claim and provide indemnification
with respect to such Third-Party Claim), to assume the defense of such
Third-Party Claim with counsel reasonably satisfactory to the Indemnified Person
(provided, such counsel has appropriate experience in the subject matter
relating to the claim). After notice from the Indemnifying Person to the
Indemnified Person of its election to assume the defense of such Third-Party
Claim, the Indemnifying Person shall not, so long as it diligently conducts such
defense, be liable to the Indemnified Person hereunder for any fees of other
counsel or any other expenses with respect to the defense of such Third-Party
Claim, in each case subsequently incurred by the Indemnified Person in
connection with the defense of such Third-Party Claim, other than reasonable
costs of investigation. If the Indemnifying Person assumes the defense of a
Third-Party Claim, such assumption will conclusively establish for purposes of
this Agreement that the claims made in that Third-Party Claim are within the
scope of and subject to indemnification, and no compromise or settlement of such
Third-Party Claims may be effected by the Indemnifying Person without the
Indemnified Person’s Consent unless there is no finding or admission of any
violation of Legal Requirement or any violation of the rights of any Person, the
sole relief provided is monetary damages that are paid in full by the
Indemnifying Person; and, the Indemnified Person shall have no liability with
respect to any compromise or settlement of such Third-Party Claims effected
without its Consent, which shall not be unreasonably withheld. If notice is
given to an Indemnifying Person of the assertion of any Third-Party Claim and
the Indemnifying Person does not, within ten (10) days after the Indemnified
Person’s notice is given, give notice to the Indemnified Person of its election
to assume the defense of such Third-Party Claim, the Indemnifying Person will be
bound by any determination made in such Third-Party Claim or any compromise or
settlement effected by the Indemnified Person.

 

7.3.6.1 Notwithstanding the foregoing, if an Indemnified Person determines in
good faith that there is a reasonable probability that a Third-Party Claim may
adversely affect it or its Related Persons other than as a result of monetary
damages for which it would be entitled to indemnification under this Agreement,
the Indemnified Person may, by notice to the Indemnifying Person, assume the
exclusive right to defend, compromise or settle such Third-Party Claim, but the
Indemnifying Person will not be bound by any determination of any Third-Party
Claim so defended for the purposes of this Agreement or any compromise or
settlement effected without its Consent (which may not be unreasonably
withheld).

 

7.3.6.2 Seller hereby consents to the nonexclusive jurisdiction of any court in
which a Proceeding in respect of a Third-Party Claim is brought against any
Buyer Indemnified Person for purposes of any claim that a Buyer Indemnified
Person may have under this Agreement with respect to such Proceeding or the
matters alleged therein and agree that process may be served on Seller with
respect to such a claim anywhere in the world.

 

7.3.6.3 With respect to any Third-Party Claim subject to indemnification under
this Section 7, both the Indemnified Person and the Indemnifying Person, as the
case may be, shall keep the other Person fully informed of the status of such
Third-Party Claim and any related Proceedings at all stages thereof where such
Person is not represented by its own counsel; and the parties agree (each at its
own expense) to render to each other such assistance as they may reasonably
require of each other and to cooperate in good faith with each other in order to
ensure the proper and adequate defense of any Third-Party Claim.

 

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7.3.6.4 With respect to any Third-Party Claim subject to indemnification under
this Section 7, the parties agree to cooperate in such a manner as to preserve
in full (to the extent possible) the confidentiality of all Confidential
Information and the attorney-client and work-product privileges. In connection
therewith, each party agrees that: it will use its best efforts, in respect of
any Third-Party Claim in which it has assumed or participated in the defense, to
avoid production of Confidential Information (consistent with applicable law and
rules of procedure); and all communications between any party hereto and counsel
responsible for or participating in the defense of any Third-Party Claim shall,
to the extent possible, be made so as to preserve any applicable attorney-client
or work-product privilege.

 

7.3.7 Other Remedies. The foregoing right of any setoff provisions, holdback
provisions and indemnification provisions are in addition to, and not in
derogation of, any statutory, equitable, or common law remedy any Party may have
in connection with this Agreement and the Contemplated Transactions.

 

8. Additional Actions and Transactions

 

8.1 Access to Information; Confidentiality. Upon reasonable notice, Seller and
GFD shall afford to the officers, employees, accountants, counsel and other
representatives of Buyer, reasonable access, during the period prior to the
Closing Date, to all properties, books, contracts, commitments and records; and,
during such period, Seller and GFD shall furnish promptly to Buyer, as the case
may be, all information concerning GFD’s business, properties and personnel as
such parties may reasonably request, and Seller and GFD shall make available to
Buyer and its representatives the appropriate individuals, including attorneys,
accountants and other professionals for discussion of its business, properties
and personnel as such parties may reasonably request.

 

8.2 Continued Disclosure. From time to time, on and prior to the Closing Date,
Buyer, Seller and GFD shall each promptly notify the other parties upon becoming
aware of any fact, occurrence or event that would cause any of their respective
representations and warranties contained to be inaccurate or incomplete in any
material respect.

 

8.3 Supplemental Schedules. Buyer, Seller and GFD may (but will not be required
to) from time to time prior to the Closing Date, by notice in accordance with
the Agreement, supplement or amend their respective disclosure schedules hereto,
including without limitation one or more supplements or amendments to correct
any matter which would otherwise constitute a breach of any representation,
warranty or covenant herein contained.

 

9. Conditions to the Seller Acquisition

 

9.1 Conditions to the Obligations of Buyer. The obligations of Buyer, to
consummate the Closing are subject to the satisfaction, or written waiver by
Buyer (“Seller Exception Notice”), of the following conditions:

 

9.1.1 Representations and Warranties. The representations and warranties of
Seller contained herein, and in any certificate or other writing delivered by
Seller pursuant hereto, shall be true and correct in all material respects at
and as of the Closing Date as if made at and as of such time, except for (i)
changes contemplated by this Agreement, and (ii) those representations and
warranties which address matters only as of a particular date (which shall have
been true and correct as of such date), with the same force and effect as if
made at and as of the Closing Date.

 

9.1.2 Agreements and Covenants; Seller Closing Deliverables. The Seller and GFD
shall have performed or complied in all material respects with all agreements
and covenants required by this Agreement to be performed or complied with by
them at or prior to the Closing Date. Seller and GFD shall have delivered or
caused to be delivered to Buyer all of the items specified in Schedule 2.3. All
material written consents, assignments, waivers or authorizations that are
required as a result of the transactions contemplated by this Agreement shall
have been obtained.

 

9.1.3 Material Adverse Effect. No proceeding challenging this Agreement or the
transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any person before any
court, arbitrator or governmental authority nor shall any such proceeding be
pending. There shall have not occurred any events or developments, individually
or in the aggregate, resulting in a Material Adverse Effect with respect to GFD.

 

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9.1.4 Consummation of Contemplated Transactions. All Contemplated Transactions
involving Buyer, Seller, GFD and their respective Related Persons shall have
been consummated as of the Closing Date, as such term is defined in applicable
Transaction Documents.

 

9.2 Conditions to the Obligations of Seller. The obligations of Seller, to
consummate the Closing are subject to the satisfaction, or written waiver by
Seller (“Buyer Exception Notice”), of the following conditions:

 

9.2.1 Representations and Warranties. The representations and warranties of
Buyer contained in this Agreement, and in any certificate or other writing
delivered by Buyer pursuant hereto, shall be true and correct in all material
respects at and as of the Closing Date as if made at and as of such time, except
for (i) changes contemplated by this Agreement, and (ii) those representations
and warranties which address matters only as of a particular date (which shall
have been true and correct as of such date), with the same force and effect as
if made on and as of the Closing Date.

 

9.2.2 Agreements and Covenants; Buyer Closing Deliverables. Buyer shall have
performed or complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by them at or prior
to the Closing Date. Buyer shall have delivered or caused to be delivered to
Seller all of the items specified in Schedule 2.4. All material written
consents, assignments, waivers or authorizations that are required as a result
of the transactions contemplated by this Agreement shall have been obtained.

 

9.2.3 Material Adverse Effect. No proceeding challenging this Agreement or the
transactions contemplated hereby or seeking to prohibit, alter, prevent or
materially delay the Closing shall have been instituted by any person before any
court, arbitrator or governmental authority nor shall any such proceeding be
pending. There shall have not occurred any events or developments, individually
or in the aggregate, resulting in a Material Adverse Effect with respect to
Buyer.

 

9.2.4 Consummation of Contemplated Transactions. All Contemplated Transactions
involving Buyer, Seller, GFD and their respective Related Persons shall have
been consummated as of the Closing Date, as such term is defined in applicable
Transaction Documents.

 

10. Termination

 

10.1 Termination. This Agreement may be terminated at any time prior to the
Closing Date by mutual written consent of the Buyer and the Seller. In the event
of a termination of this Agreement pursuant to this Section, this Agreement
shall forthwith become void and there shall be no liability on the part of any
party hereto or any of its affiliates, directors, officers, stockholders or
members except that nothing herein shall relieve any party from liability for
any breach hereof occurring prior to termination. All fees and expenses incurred
in connection with this Agreement and the transactions contemplated hereby shall
be paid by the party incurring such expenses, whether or not the Seller
Acquisition is consummated.

 

10.2 Events of Default. For purposes of this Agreement, an “Event of Default”
shall be additionally construed to mean the occurrence of one or more of the
following events of Breach by any Party after the date hereof that remains
uncured SIXTY (60) days following written notice of default (each, a “Default
Notice”) to the breaching Party(ies) (“Breaching Party” or “Breaching Parties”)
from any one or more non-breaching Party(ies) (“Non-Breaching Party” or
“Non-Breaching Parties”):

 

10.2.1 Payment Default. If any Breaching Party shall, for any reason, fail to
comply with any payment obligations as and when due;

 

10.2.2 Representations. If any representation or warranty made by or on behalf
of any Breaching Party, whether contained in this Agreement, or in any other
Transaction Document with one or more of the Non-Breaching Parties, and which
the Non-Breaching Party(ies) asserting Breach has (or have) proven to have been
false or incorrect in any material respect when made;

 

10.2.3 Voluntary Insolvency Proceedings. If Buyer shall (i) apply for or consent
to or acquiesce in the appointment of or the taking of possession by a receiver,
liquidator, custodian or trustee of itself or of all or any part of its
property, (ii) admit in writing its inability, or be generally unable, to pay
its debts as such debts become due, (iii) make a general assignment for the
benefit of its creditors, (iv) commence a voluntary case under the bankruptcy
laws of the United States of America (as now or hereafter in effect) or any
similar foreign law, (v) file a petition seeking to take advantage of any other
law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, or (vi) take any action for the purpose of
effecting any of the foregoing;

 

 20

 

 

10.2.4 Involuntary Insolvency Proceedings. A proceeding or case shall be
commenced, without the application or consent of Buyer in any court of competent
jurisdiction, seeking (i) liquidation, reorganization, dissolution, winding-up
or composition or adjustment of debts of Buyer, (ii) the appointment of a
trustee, receiver, liquidator, custodian or the like of Buyer, or of all or any
part of any of their assets, (iii) similar relief under any law relating to
bankruptcy, insolvency, reorganization, winding-up or composition or adjustment
of debts, and such proceeding or case shall continue undismissed, for a period
of forty five (45) days; or (iv) any order for relief against Buyer or Seller,
shall be entered in an involuntary case under bankruptcy laws of the United
States of America, or any similar foreign law, and shall continue undismissed
for a period of forty five (45) days;

 

10.2.5 Judgments and Tax Liens. If one or more judgments, attachments, or tax
liens exceeding $100,000 in the aggregate are entered against Buyer, or against
Buyer’s property, and remain unpaid, unstayed on appeal, undischarged, unbonded
or undismissed for a period of thirty (30) days, or enforcement proceedings are
commenced with respect to any judgment, attachment, or tax lien against Buyer;

 

10.2.6 Divestiture of Assets. If any order, judgment, or decree shall be entered
in any proceeding requiring Buyer to divest itself of any material part of its
assets, and if, within forty-five (45) days after entry thereof (unless or until
enforcement is sooner commenced), such order, judgment or decree shall not have
been discharged or execution thereof stayed pending appeal, or if, within ten
(10) days after the expiration of any such stay (unless or until enforcement is
sooner commenced), such judgment, order or decree shall not have been
discharged; or,

 

10.2.7 Cross Default. The occurrence of any default or Event of Default by
Buyer, Seller and/or Principal under any Transaction Document.

 

11. General

 

11.1 Modifications. Any Transaction Documents involving Seller may be modified
only in writing that specifically refers to the proposed modification and
applicable Transaction Document(s), and which is signed by an authorized
representative of each Party.

 

11.2 Governing Law; Consent to Jurisdiction. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of Georgia, without
regard to the principles of conflict of laws. Any dispute arising under,
relating to or in connection with this Agreement or related to any matter which
is the subject of or incidental to this Agreement or Transaction Documents shall
be subject to the exclusive jurisdiction and venue of the Superior Court of
Fulton County, Georgia. The parties submit to the exclusive jurisdiction of
these courts for the purpose of any such action or proceeding, and this
submission cannot be revoked. The parties understand that they are surrendering
the right to bring litigation against one another outside the state of Georgia.

 

11.3 Assignment. This Agreement shall not be assigned by operation of law or
otherwise in the absence of the prior written consent of each the Parties
hereto.

 

11.4 Notices. All notices and other communications hereunder shall be in writing
and shall be deemed given if delivered personally or by commercial overnight
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via facsimile (with confirmation of receipt) to the parties
at the below address (or at such other address for a party as shall be specified
by like notice). Notice shall be deemed effective upon the earlier of (a) actual
receipt, (b) one business day following transmission by facsimile or commercial
overnight delivery services, or (c) three business days following registered or
certified mail.

 

  if to Buyer, to: Attis Industries Inc.     12540 Broadwell Road, Suite 2104  
  Milton, Georgia 30004     Attention: Jeff Cosman     E-mail:
jcosman@attisind.com           with a copy to (which copies shall not constitute
notice):           Richard J. Dreger, Attorney at Law, P.C.     11660 Alpharetta
Highway, Building 700, Suite 730     Roswell, Georgia 30076     Attention:
Richard J. Dreger, Esq.     Email: Rick@rdregerlaw.com           if to Seller,
to: Gaula Ventures LLC     Address     Address     Attention: David Winsness    
E-mail:  

 

 21

 

 

11.5 Severability. In the event that any provision of this Agreement is held to
be unenforceable by any rule of law, or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties so closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled to the fullest extent possible.

 

11.6 Entire Agreement. This Agreement, the Transaction Documents, and the
documents and instruments and other agreements specifically referred to herein
or delivered pursuant hereto, including the Exhibits, the Seller Disclosure
Schedule, the Buyer Disclosure Schedule, and the other Schedules constitute the
entire agreement among the parties with respect to the subject matter hereof and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof, and are not intended to
confer upon any other person any rights or remedies hereunder.

 

11.7 Amendment and Waiver. This Agreement may be amended only by a written
agreement executed by the parties hereto. No provision of this Agreement may be
waived except by a written document executed by the party entitled to the
benefits of the provision. No waiver of a provision will be deemed to be or will
constitute a waiver of any other provision of this Agreement. A waiver will be
effective only in the specific instance and for the purpose for which it was
given, and will not constitute a continuing waiver.

 

11.8 Parties in Interest. This Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this Agreement, express or
implied, is intended to or shall confer upon any other Person any right, benefit
or remedy of any nature whatsoever under or by reasons of this Agreement.

 

11.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or delay
on the part of any party hereto in the exercise of any right hereunder shall
impair such right to be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any single
or partial exercise of any such right preclude any other or further exercise
thereof or of any other right. Except as otherwise set forth herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy. The Parties hereto shall be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof, this being in addition to any
other remedy to which they are entitled at law or in equity, and the Parties
hereto hereby waive the requirement of any posting of a bond in connection with
the remedies described herein

 

11.10 Counterparts. This Agreement may be executed in any number of
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original, but all of which
together shall constitute one and the same agreement.

 

11.11 Waiver of Jury Trial. AS A MATERIAL INDUCEMENT TO ENTER INTO THIS
AGREEMENT, EACH PARTY HERETO IRREVOCABLY, VOLUNTARILY, AND KNOWINGLY HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING RELATED IN ANY WAY TO THIS AGREEMENT
AND/OR ANY AND ALL OTHER DOCUMENTS RELATED TO THIS TRANSACTION.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

- SIGNATURE PAGE FOLLOWS]

 

 22

 

 

IN WITNESS WHEREOF the parties have duly executed, or caused their duly
authorized representative, to execute this Membership Interest Purchase
Agreement.

 

ATTIS INDUSTRIES INC.       By: /s/ Jeffrey S. Cosman    Name: Jeffrey S. Cosman
  Title: Chief Executive Officer       ATTIS INNOVATIONS, LLC       By: /s/
Jeffrey S. Cosman    Name: Jeffrey S. Cosman   Title: Manager       FLUX CARBON
LLC       By: /s/ Jeffrey S. Cosman    Name: Jeffrey S. Cosman   Title: Manager
      GAULA VENTURES LLC       By: /s/ David Winsness    Name: David Winsness  
Title: Manager       PRINCIPAL       By: /s/ David Winsness      David Winsness
    Individually  

 

[SIGNATURE PAGE TO MEMBERSHIP INTEREST PURCHASE AGREEMENT]

 

  23

 

 

INDEX OF SCHEDULES AND EXHIBITS

 

Schedules           Schedule 1.0 Certain Definitions     Schedule 2.0 The
Acquisition     Schedule 2.3 Seller Closing Deliveries     Schedule 2.4 Buyer
Closing Deliveries     Schedule 3.0 Seller Disclosure Schedule   Section 3.4
Approval   Section 3.5 Current Litigation Matters   Section 3.6 Liabilities  
Section 3.7 Taxes   Section 3.8 Permitted Encumbrances   Section 3.9 GFD Assets
  Section 3.9.1 Tangible Personal Property   Section 3.9.2 Intellectual Property
Assets   Section 3.10 Compliance   Section 3.13 Permits   Section 3.15 Contracts
  Section 3.16 Bank Accounts   Section 3.17 Insurance   Section 3.18 Affiliated
Transactions       Schedule 4.0 Buyer Disclosure Schedule   Section 4.3
Violations   Section 4.4 Capital Structure   Section 4.5 Buyer Indebtedness  
Section 4.6 Taxes

 

Exhibits       Exhibit 2.1(a) Assignment Agreement, Seller Units     Exhibit
2.1(b) Assignment Agreement, Seller Interest     Exhibit 2.1(c) Assignment
Agreement, Buyer to JVCo     Exhibit 2.1(d) Principal Indemnity Agreement    
Exhibit 2.2.3 Certificate of Designations, Buyer’s Series G Preferred Stock    
Exhibit 3.1.3 ALB MIPA     Exhibit 3.4(a) Written Consent of Seller     Exhibit
3.4(b) Written Consent of GFD     Exhibit 3.5 Written Consent of Principal    
Exhibit 3.30 GFD Pre-Closing Operating Agreement     Exhibit 3.31 Seller
Operating Agreement     Exhibit 3.33 Jurisdictions     Exhibit 4.2(a) Written
Consent of Buyer     Exhibit 4.2(b) Written Consent of Attis     Exhibit 4.2(c)
Written Consent of JVCo     Exhibit 6.5 Registration Rights Agreement    
Exhibit 6.7 Transfer Agent Instructions     Exhibit 7.1 GFD Operating Agreement

 

Schedules to Membership Interest Purchase Agreement1

 

 

SCHEDULE 1.0

 

Certain Definitions

 

Accounts Receivable means (i) all trade and other accounts receivable and other
rights to payment from past or present customers of GFD, and the full benefit of
all security for such accounts or rights to payment, including all trade and
other accounts receivable representing amounts receivable in respect of services
rendered to customers of the Business, and (ii) any claim, remedy or other right
related to any of the foregoing

 

Action shall mean any claim, action, cause of action or suit (in contract, tort
or otherwise), inquiry, proceeding or investigation by or before any
governmental authority.

 

Adverse Consequences shall mean all actions, suits, Proceedings, hearings,
investigations, charges, complaints, claims, demands, diminutions in value,
injunctions, judgments, orders, decrees, rulings, damages, dues, penalties,
fines, costs, amounts paid in settlement or claims, obligations, Taxes, Liens,
losses, interest, expenses (including costs of investigation and defense), any
other Liability and fees, including court costs and reasonable attorneys’ fees
and expenses, whether or not involving a Third-Party Claim.

 

Affiliate shall mean, any Person directly or indirectly controlling, controlled
by or under common control with the specified Party or Person. For purposes of
this definition, the term control including the terms controlling, controlled by
and under common control with) means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through ownership of voting securities or otherwise.

 

Affiliated Group means any affiliated group within the meaning of Code Section
1504(a) or any similar group defined under a similar provision of state, local
or foreign law.

 

Agreement has the meaning set forth in the preface.

 

Approval means those certain Governmental Authorizations, if any, to be obtained
by Seller on or before the Closing in the name of the applicable Company from
any Governmental Body having jurisdiction over the Properties, or the
Businesses, in order for the Permits to be issued to Buyer.

 

Attis has the meaning set forth in the preface.

 

Basis shall mean any past or present fact, situation, circumstance, status,
condition, activity, practice, plan, occurrence, event, incident, action,
failure to act, or transaction that forms or could form the basis for any
specified consequence.

 

Breach shall mean any breach of, or any inaccuracy in, any representation or
warranty or any breach of, or failure to perform or comply with, any covenant,
obligation or agreement, in or of this Agreement or any other Contract,
agreement or instrument (whether or not related to this Agreement), or in or of
any corporate, Company or partnership organizational document or agreement, any
Governmental Authorization, Order or Legal Requirement, or any other breach of
any written instrument, or any event which with the passing of time or the
giving of notice, or both, would constitute such a breach, inaccuracy or failure

 

Business Day means any day other than a Saturday or Sunday or any other day on
which banks in Tennessee are permitted or required by Legal Requirement to be
closed.

 

Business shall mean the operating and other activities currently conducted in
the ordinary course of the applicable entity’s business.

 

Buyer Disclosure Schedule shall the disclosure schedule set forth in Schedule
4.0.

 

Buyer has the meaning set forth in the preface.

 

Buyer Indemnity means the indemnity provided by Buyer in Section 7.4.2 hereof.

 

Buyer Obligations shall mean all obligations of Buyer under this Agreement and
the Transaction Documents, including, without limitation, the payment of the
Purchase Price and the performance of all actions and transactions in connection
therewith on and after the Closing Date.

 

Buyer Securities shall have that meaning set forth in Schedule 2.0 hereto.

 

Bylaws shall mean, each the bylaws or operating agreement of the applicable
entity.

 

Schedules to Membership Interest Purchase Agreement2

 

 

COBRA means the requirements of Part 6 of Subtitle B of Title I of ERISA and
Code Section 4980B and of any similar state law.

 

Code means the Internal Revenue Code of 1986, as amended.

 

Confidential Information has the meaning set forth in Section 7.3.

 

Consent shall mean any approval, consent, ratification, waiver or other
authorization.

 

Consolidated EBITDA has the meaning set forth in Schedule 2.0.

 

Contemplated Transactions shall mean all of the transactions contemplated by
this Agreement and Transaction Documents.

 

Contract means any agreement, contract, license, lease, consensual obligation,
promise or undertaking (whether written or oral and whether express or implied),
whether or not legally binding.

 

EBITDA has the meaning set forth in Schedule 2.0.

 

Effective Date has the meaning set forth in the preface.

 

Employee Benefit Plan means all employee benefit plans as defined by Section
3(3) of the Employee Retirement Income Security Act of 1974 (ERISA), all
specified fringe benefit plans as defined in Section 6039D of the Code, and all
other bonus, incentive-compensation, deferred-compensation, profit-sharing,
stock-option, stock-appreciation-right, stock-bonus, stock-purchase,
employee-stock-ownership, savings, severance, change-in-control,
supplemental-unemployment, layoff, salary-continuation, retirement, pension,
health, life-insurance, disability, accident, group-insurance, vacation,
holiday, sick-leave, fringe-benefit or welfare plan, and any other employee
compensation or benefit plan, agreement, policy, practice, commitment, contract
or understanding (whether qualified or nonqualified, currently effective or
terminated, written or unwritten) and any trust, escrow or other agreement
related thereto that (i) is maintained or contributed to by GFD or any other
corporation or trade or business controlled by, controlling or under common
control with Sellers (within the meaning of Section 414 of the Code or Section
4001(a)(14) or 4001(b) of ERISA) (ERISA Affiliate) or has been maintained or
contributed to in the last six (6) years by GFD or any ERISA Affiliate, or with
respect to which any Company or any ERISA Affiliate has or may have any
liability, and (ii) provides benefits, or describes policies or procedures
applicable to any current or former director, officer, employee or service
provider of any Company or any ERISA Affiliate, or the dependents of any
thereof, regardless of how (or whether) liabilities for the provision of
benefits are accrued or assets are acquired or dedicated with respect to the
funding thereof.

 

Employee Welfare Benefit Plan has the meaning set forth in ERISA Section 3(1).

 

Environment means soil, land surface or subsurface strata, surface waters,
groundwaters, drinking water supply, stream sediments, ambient air (including
indoor air), plant and animal life and any other environmental medium or natural
resource.

 

Environmental Law means any Legal Requirement that requires or relates to (i)
advising appropriate Governmental Bodies, employees or the public of any
intended Release, actual Release or Threat of Release of pollutants or Hazardous
Materials, violations of discharge limits or other prohibitions and the
commencement of activities, such as resource extraction or construction, that
could have significant impact on the Environment; (ii) preventing or reducing to
acceptable levels the Release of pollutants or Hazardous Materials into the
Environment; (iii) reducing the quantities, preventing the Release or minimizing
the hazardous characteristics of wastes that are generated; (iv) assuring that
products are designed, formulated, packaged and used so that they do not present
unreasonable risks to human health or the Environment when used or disposed of;
(v) protecting resources, species or ecological amenities; (vi) reducing to
acceptable levels the risks inherent in the transportation of pollutants,
Hazardous Materials or other potentially harmful substances; (vii) cleaning up
pollutants that have been Released, preventing the Threat of Release or paying
the costs of such clean up or prevention; (viii) making responsible Persons pay
private parties, or groups of them, for damages done to their health or the
Environment or permitting self-appointed representatives of the public interest
to recover for injuries done to public assets; or (ix), governing or regulating
any Hazardous Activities.

 

Schedules to Membership Interest Purchase Agreement3

 

 

Environmental, Health and Safety Liabilities means any and all costs, damages,
Adverse Consequences, expenses, Liabilities and/or other responsibility arising
from or under any Environmental Law or Occupational Safety and Health Law,
including those consisting of or relating to: (i) any environmental, health or
safety matter or condition (including on-site or off-site contamination, and/or
occupational safety and health regulation of any chemical substance or product);
(ii) any fine, penalty, judgment, award, settlement, Proceeding, damages,
Adverse Consequence, loss, claim, demand or response, remedial or inspection
cost or expense arising under any Environmental Law or Occupational Safety and
Health Law; (iii) financial responsibility under any Environmental Law or
Occupational Safety and Health Law for cleanup costs or corrective action,
including any cleanup, removal, containment or other remediation or response
actions (Cleanup) required by any Environmental Law or Occupational Safety and
Health Law (whether or not such Cleanup has been required or requested by any
Governmental Body or any other Person) and for any natural resource damages;
and/or (iv), any other compliance, corrective or remedial measure required under
any Environmental Law or Occupational Safety and Health Law. For purposes of
this definition, the terms removal, remedial and response action include the
types of activities covered by the United States Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA).

 

Event of Default means

 

GAAP or Generally Accepted Accounting Principles means generally accepted
accounting principles as in effect in the United States of America, as
determined by the Financial Accounting Standards Board from time to time,
applied on a consistent basis as of the date of any application thereof.

 

GFD means GENAREX FD LLC, a Delaware limited liability company.

 

Governmental Authorization means any zoning approvals, permits (including the
Permits), franchise rights, rights-of-way, Consent, license, permission,
registration, permit or other right or approval issued, granted, given or
otherwise made available by or under the authority of any Governmental Body or
pursuant to any Legal Requirement and all pending applications therefor or
renewals thereof.

 

Governmental Body means any (i) nation, state, county, city, town, borough,
village, district or other jurisdiction; (ii) federal, state, county, local,
municipal, foreign or other government; (iii) governmental or quasi-governmental
authority of any nature (including any agency, branch, department, board,
commission, court, tribunal or other entity exercising governmental or
quasi-governmental powers); (iv) body exercising, or entitled or purporting to
exercise, any administrative, executive, judicial, legislative, police,
regulatory or taxing authority or power; (v) Indian tribal authority; (vi)
multinational organization or body, or (vii) official of any of the foregoing.

 

Hazardous Activity means, with respect to any Person (including any Party or
their Related Persons), the distribution, generation, handling, importing,
management, manufacturing, processing, production, refinement, Release, storage,
transfer, transportation, treatment or use (including any withdrawal or other
use of groundwater) of Hazardous Material in, on, under, about or from any
Property or other facility or real property owned, leased, operated or otherwise
used by such Person or any of its contractors in connection with the conduct of
the business of such Person, or from any other asset of such Person, into the
Environment and any other act, business, operation or thing that increases the
danger, or risk of danger, or poses an unreasonable risk of harm, to persons or
property, whether on or off the aforementioned Properties, facilities or other
real property, beyond what is authorized by any Environmental Law relating to
the business of such Person.

 

Hazardous Material means any substance, material or waste which is or will
foreseeably be regulated by any Governmental Body, including any material,
substance or waste which is defined as a hazardous waste, hazardous material,
hazardous substance, extremely hazardous waste, restricted hazardous waste,
contaminant, pollutant, toxic waste or toxic substance under any provision of
Environmental Law, and including petroleum, petroleum products, asbestos,
presumed asbestos-containing material or asbestos-containing material, urea
formaldehyde and polychlorinated biphenyls.

 

Improvements means all buildings, structures, fixtures, building systems and
equipment, and all components thereof, including the roof, foundation,
load-bearing walls, and other structural elements thereof, heating, ventilation,
air conditioning, mechanical, electrical, plumbing and other building systems,
environmental control, remediation and abatement systems, sewer, storm, and
waste water systems, irrigation and other water distribution systems, parking
facilities, fire protection, security and surveillance systems, and
telecommunications, computer, wiring, and cable installations, all of which are
included in the Properties.

 

Schedules to Membership Interest Purchase Agreement4

 

 

Indebtedness or Debt means: (a) any indebtedness (including all accrued
interest) for borrowed money or issued in substitution for or exchange of
indebtedness for borrowed money; (b) any indebtedness evidenced by any note,
bond, debenture or other debt security; (c) any indebtedness for the deferred
purchase price of property or services with respect to Seller or GFD is liable,
contingently or otherwise, as obligor or otherwise; (d) any commitment by which
Seller or GFD assures a creditor against loss (including, without limitation,
contingent reimbursement obligations with respect to letters of credit); (e) any
indebtedness guaranteed in any manner by Seller or GFD (including, without
limitation, guarantees in the form of an agreement to repurchase or reimburse);
(f) any obligations under capitalized leases with respect to which Seller or GFD
is liable, contingently or otherwise, as obligor, guarantor or otherwise, or
with respect to which obligations Seller or GFD assures a creditor against loss;
(g) any TRAC or synthetic leases; (h) any indebtedness secured by a Lien on the
Seller Units; (i) any unsatisfied obligation for withdrawal liability to a
Multiemployer Plan as such terms are defined under ERISA; (j) the deficit or
negative balance, if any, in GFD’s checking account; and (k), any credit card
debt.

 

Indemnified Person has the meaning set forth in Section 7.4.

 

Indemnifying Person has the meaning set forth in Section 7.4.

 

Insolvency Laws means any bankruptcy, insolvency, reorganization, moratorium or
other similar Legal Requirement affecting the enforcement of creditors rights
generally, and general principles of equity (regardless of whether enforcement
is considered in a proceeding in law or equity).

 

Insolvent means being unable to pay debts as they mature, or as obligations
become due and payable.

 

Intangible Personal Property means all intangible property used or held for use
by GFD, of whatever type or description, including (a) the business as a going
concern; (b) goodwill of GFD; (c) all files, records and correspondence; (d)
telephone numbers, telecopy numbers; (e) all rights in Internet web sites and
Internet domain names presently used by GFD, and links; (f) all registered and
unregistered copyrights in both published works and unpublished works; (g) all
names or trade names of or used by GFD, assumed fictional business names, trade
names, registered and unregistered trademarks, service marks and applications;
(h) all know-how, trade secrets, confidential or proprietary information,
customer lists, software, technical information, data, process technology,
plans, drawings and blue prints; and (i), all right, title and interest in and
to all Company Documents, Company Contracts, and all Permits, Governmental
Authorizations, Approvals, Consents, licenses and other permits and approvals of
GFD.

 

Intellectual Property Assets shall mean all Intellectual Property owned or
possessed by GFD as itemized in Section 3.9 of Schedule 3.0, or which GFD has
the right to use pursuant to a valid and enforceable, written license,
sublicense, agreement, or permission, and the Intangible Personal Property
itemized in Section 3.9 of Schedule 3.0.

 

IRS means the United States Internal Revenue Services and, to the extent
relevant, the United States Department of the Treasury.

 

JVCo has the meaning set forth in the preface.

 

JVCo Operating Agreement shall mean the amended and restated JVCo management and
operating agreement by and among Buyer or its designee and JVCo, executed and
delivered on or before the Closing in substantially the same form as the form of
operating agreement attached in Exhibit 7.1 hereto.

 

Knowledge means, when used to qualify a representation, warranty or other
statement of a Party to this Agreement, (i) the knowledge that management of the
Party actually has with respect to the particular fact or matter that is the
subject of such representation, warranty or other statement, and (ii) the
knowledge that management of the Party could reasonably be expected to have as
prudent and responsible owners and operators of the assets and the businesses of
such Party, or in the case of Seller, the ownership and operation of GFD, after
having conducted a reasonably comprehensive inquiry or investigation with
respect to the fact or matter that is the subject of such representation,
warranty or other statement. A Person (other than an individual) will be deemed
to have Knowledge of a particular fact or other matter if any individual who is
serving, or who has at any time served, as a director, officer, partner, member,
manager, executor or trustee of that Person (or in any similar capacity) has, or
at any time had, Knowledge of that fact or other matter (as set forth in (a) and
(b) above), and any such individual (and any individual party to this Agreement)
will be deemed to have conducted a reasonably comprehensive investigation
regarding the accuracy of the representations and warranties made herein by that
Person or individual.

 

Legal Requirement means any federal, state, local, municipal, foreign,
international, multinational or other constitution, law, ordinance, principle of
common law, code, regulation, statute or treaty.

 

Liability means with respect to any Person (including any Party), any
Indebtedness, liability, penalty, damage, loss, cost or expense, obligation,
claim, deficiency, or guaranty of such Person of any kind, character or
description, whether known or unknown, absolute or contingent, accrued or
unaccrued, disputed or undisputed, liquidated or unliquidated, secured or
unsecured, joint or several, due or to become due, vested or unvested,
executory, determined, determinable or otherwise, and whether or not the same is
required to be accrued on the financial statements of such Person, including any
liability for Taxes.

 

Schedules to Membership Interest Purchase Agreement5

 

 

Lien means with respect to any Person, any mortgage, right of way, easement,
encroachment, any restriction on use, servitude, pledge, lien, charge,
hypothecation, security interest, encumbrance, adverse right, interest or claim,
community or other marital property interest, condition, equitable interest,
encumbrance, license, covenant, title defect, option, or right of first refusal
or offer or similar restriction, voting right, transfer, receipt of income or
exercise of any other attribute of ownership, except for any liens for taxes not
yet due or delinquent or being contested in good faith by appropriate
proceedings for which adequate reserves have been established and accrued on the
financial statements of such Person in accordance with GAAP.

 

Material Adverse Effect or Material Adverse Change means any effect or change
that would be materially adverse to the business, assets, condition (financial
or otherwise), operating results, operations, or business prospects of the
applicable Party, taken as a whole, including the ability for such Party to own,
construct, operate and develop its business, the transfer or issuance, if
applicable, of any Permit, Consent, Governmental Authorization, license or other
permit or approval contemplated by this Agreement or reasonably necessary to the
continued operation of the applicable Party’s business, or on the ability of
either Party to timely consummate the Contemplated Transactions, except for any
adverse change or event arising from or relating to (a) general economic
conditions or conditions which generally affect the business of the applicable
Party and the industry in which it competes, and (b) public or industry
knowledge of the Contemplated Transactions.

 

MRPA Net Proceeds shall mean the cash proceeds received by Buyer and/or Attis,
after payment of any secured creditors holding any applicable lien rights,
commissions and all other costs of the sale, including attorneys' fees, upon the
(i) sale by Attis of any revenue generating asset having a fair market value
greater than or equal to $20,000 (“Material Revenue Producing Asset”), (ii) the
sale by Attis of all or substantially all of its assets, or (iii) the sale by
Buyer of any portion of its membership interests in Attis.

 

Multiemployer Plan has the meaning set forth in ERISA Section 3(37).

 

Occupational Safety and Health Law means any Legal Requirement designed to
provide safe and healthful working conditions and to reduce occupational safety
and health hazards, including the Occupational Safety and Health Act, and any
program, whether governmental or private (such as those promulgated or sponsored
by industry associations and insurance companies), designed to provide safe and
healthful working conditions.

 

Order means any order, injunction, judgment, decree, ruling, assessment or
arbitration award of any Governmental Body or arbitrator.

 

Ordinary Course of Business means an action taken by a Person will be deemed to
have been taken in the ordinary course of business only if that action (i) is
consistent in nature, scope and magnitude with the past practices of such Person
and is taken in the ordinary course of the normal, day-to-day operations of such
Person; (ii) does not require authorization by the board of directors, owners,
shareholders, interest holders, members or managers of such Person (or by any
Person or group of Persons exercising similar authority) and does not require
any other separate or special authorization of any nature; and (iii), is similar
in nature, scope and magnitude to actions customarily taken, without any
separate or special authorization, in the ordinary course of the normal,
day-to-day operations of other Persons that are in the same line of business as
such Person).

 

Organizational Documents means: (i) with respect to a corporation, the
certificate or articles of incorporation and bylaws; (ii) with respect to any
other Person any charter or similar document adopted or filed in connection with
the creation, formation or organization of a Person; (iii) any operating
agreement, partnership agreement, shareholder agreement or similar agreement;
and (iv), any amendment to any of the foregoing.

 

Party and Parties shall mean and refer to one or more of the undersigned, as
applicable.

 

Permits has the meaning set forth in Section 3.13.

 

Permitted Designee shall mean, as applicable, the designee or assignee of a
Party hereto.

 

Permitted Encumbrances has the meaning set forth in Section 3.8 of Schedule 3.0.

 

Person means an individual, a partnership, a corporation, a limited liability
company, an association, a joint stock holding company, a trust, a joint
venture, an unincorporated organization, any other business entity, joint
venture or other entity Governmental Body (or any department, agency, or
political subdivision thereof).

 

Schedules to Membership Interest Purchase Agreement6

 

 

Principal has the meaning set forth in the Preamble to this Agreement.

 

Principal Indemnity means the indemnity provided by Principal in the Principal
Indemnity Agreement.

 

Principal Market has the meaning set forth in Schedule 2.0.

 

Principal’s Interest means 100% of Principal’s direct and indirect ownership
interest in, to and under the equity of Seller and CleanTech.

 

Proceeding means any action, arbitration, audit, hearing, investigation,
litigation or suit (whether civil, criminal, administrative, judicial or
investigative, whether formal or informal, whether public or private) commenced,
brought, conducted or heard by or before, or otherwise involving, any
Governmental Body, court, or arbitrator.

 

Property or Properties has the meaning set forth in the background facts
described in the Seller Disclosure Schedule, including, without limitation, the
Tangible Personal Property, Intellectual Property Assets, Intellectual Property,
and Intangible Personal Property (including air, oil, gas, mineral, and water
rights together with all Permits).

 

Purchase Price has that meaning set forth in Section 2.2 of Schedule 2.0 hereto.

 

Purchased Equity has the meaning set forth in Section 2.1 of Schedule 2.0
hereto.

 

Real Property Lease means (i) any long-term lease of land in which most of the
rights and benefits comprising ownership of the land and the Improvements
thereon or to be constructed thereon, if any, are transferred to the tenant for
the term thereof or (ii) any lease or rental agreement pertaining to the
occupancy of any improved space on any real property.

 

Related Person means: (i) with respect to a particular individual: (a) each
other member of such individual’s Family; (b) any Person that is directly or
indirectly controlled by any one or more members of such individual’s Family;
(c) any Person in which members of such individual’s Family hold (individually
or in the aggregate) a Material Interest; and (d), any Person with respect to
which one or more members of such individual’s Family serves as a director,
officer, partner, executor or trustee (or in a similar capacity); and, (ii) with
respect to a specified Person other than an individual: (a) any Person that
directly or indirectly controls, is directly or indirectly controlled by or is
directly or indirectly under common control with such specified Person; (b) any
Person that holds a Material Interest in such specified Person; (c) each Person
that serves as a director, officer, partner, executor or trustee of such
specified Person (or in a similar capacity); (d) any Person in which such
specified Person holds a Material Interest; and (e), any Person with respect to
which such specified Person serves as a general partner or a trustee (or in a
similar capacity). For purposes of this definition, (a) control (including
controlling, controlled by, and under common control with) means the possession,
direct or indirect, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise, and shall be construed as such term is
used in the rules promulgated under the Securities Act; (b) the Family of an
individual includes (i) the individual; (ii) the individual’s spouse; (iii) any
other natural person who is related to the individual or the individual’s spouse
within the second degree; and (iv), any other natural person who resides with
such individual; and (c), Material Interest means direct or indirect beneficial
ownership (as defined in Rule 13d-3 under the Exchange Act of 1934) of voting
securities or other voting interests representing at least ten percent (10%) of
the outstanding voting power of a Person or equity securities or other equity
interests representing at least ten percent (10%) of the outstanding equity
securities or equity interests in a Person.

 

Release means any release, spill, emission, leaking, pumping, pouring, dumping,
emptying, injection, deposit, disposal, discharge, dispersal, leaching or
migration on or into the Environment or into or out of any property.

 

Remedial Action means all actions, including any capital expenditures, required
or voluntarily undertaken: (i) to clean up, remove, treat or in any other way
address any Hazardous Material or other substance; (ii) to prevent the Release
or Threat of Release or to minimize the further Release of any Hazardous
Material or other substance so it does not migrate or endanger or threaten to
endanger public health or welfare or the Environment; (iii) to perform
pre-remedial studies and investigations or post-remedial monitoring and care; or
(iv), to bring the Properties and the operations conducted (or to be conducted)
thereon into compliance with Environmental Laws and environmental Governmental
Authorizations.

 

Representative means with respect to a particular Person, any director, officer,
manager, employee, agent, consultant, advisor, accountant, financial advisor,
legal counsel or other representative of that Person.

 

SEC Documents has the meaning set forth in Section 6.3.

 

Schedules to Membership Interest Purchase Agreement7

 

 

SEC has the meaning set forth in the preface.

 

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

 

Seller has the meaning set forth in the preface.

 

Seller Disclosure Schedule shall mean the disclosure schedule set forth in
Schedule 3.0.

 

Seller Indemnity means the indemnity provided by Seller in Section 7.4.3 hereof.

 

Series G Conversion Shares shall mean all shares of Buyer Common Stock issuable
upon conversion of the Series G Stock issuable hereunder.

 

Series G Stock shall mean Buyer’s Series G Preferred Stock, issued in accordance
with the terms, conditions, rights and privileges set forth in the Series G
Certificate of Designations.

 

Tangible Personal Property means the tangible personal property itemized on in
Section 3.9.1 of the Seller Disclosure Schedule, and all other tangible personal
property used or useful in the Business, including all machinery, equipment,
scales, compactors, containers, bailers, tools, spare parts, furniture, office
equipment, computer hardware, supplies, materials, vehicles, trade fixtures and
other items of tangible personal property of every kind owned or leased by GFD
(wherever located and whether or not carried on the books of GFD or Seller),
together with any express or implied warranty by the manufacturers or lessors of
any item or component part thereof and all maintenance records and other
documents relating thereto.

 

Tax or Taxes means any income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, property, environmental, windfall
profit, customs, vehicle, airplane, boat, vessel or other title or registration,
capital stock, franchise, employees’ income withholding, foreign or domestic
withholding, social security, unemployment, disability, real property, personal
property, sales, use, transfer, value added, alternative, add-on minimum and
other tax, fee, assessment, levy, tariff, charge or duty of any kind whatsoever
and any interest, penalty, addition or additional amount thereon imposed,
assessed or collected by or under the authority of any Governmental Body or
payable under any tax-sharing agreement or any other Contract, whether disputed
or not and including any obligations to indemnify or otherwise assume or succeed
to the Tax liability of any other Person.

 

Tax Return means any return (including any information return), report,
statement, schedule, notice, form, declaration, claim for refund or other
document or information filed with or submitted to, or required to be filed with
or submitted to, any Governmental Body in connection with the determination,
assessment, collection or payment of any Tax or in connection with the
administration, implementation or enforcement of or compliance with any Legal
Requirement relating to any Tax.

 

Third Party Claim means any claim, issuance of any Order or the commencement of
any Proceeding by any Person who is not a Party to this Agreement, including a
Related Person of a Party, any domestic or foreign court, or Governmental Body.

 

Threat of Release means a reasonable likelihood of a Release that may require
action in order to prevent or mitigate damage to the Environment that may result
from such Release.

 

Trading Day means any day during which the Principal Market shall be open for
business.

 

Transaction Documents shall mean this Agreement, and any and all documents,
instruments and certificates executed, delivered and/or issued before, at and
after Closing in connection herewith and therewith and all further actions and
transactions included in the Contemplated Transactions, including all schedules
and exhibits hereto and thereto, each of which are hereby incorporated by
reference herein.

 

Schedules to Membership Interest Purchase Agreement8

 

 

SCHEDULE 2.0

 

The Seller Acquisition

 

On and subject to the terms and conditions of this Agreement and the Transaction
Documents, at the Closing and at all relevant times thereafter, Buyer shall pay
the Purchase Price to Seller and/or Seller’s Permitted Designee in exchange for
the sale, assignment, transfer, and delivery of the Purchased Equity to Buyer
and/or Buyer’s Permitted Designee in accordance with the terms of this Schedule
2.0. As used herein, the term “Acquisition” shall mean and refer to the purchase
of the Purchased Equity in exchange for payment of the Purchase Price.

 

2.1 Purchased Equity. As used herein, the term “Purchased Equity” shall mean the
Seller Units issuable to Buyer and/or Buyer’s Permitted Designee at the Closing
and at all relevant times thereafter in exchange for the Purchase Price in
accordance with the terms of this Schedule 2.0 and, as applicable, the Agreement
and Transaction Documents.

 

2.1.1 Seller Units. On and subject to the terms and conditions of this Agreement
and the Transaction Documents, in consideration of Buyer’s agreement to the
terms of this Agreement and the Transaction Documents, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, effective immediately prior to the Closing hereunder, Seller shall
execute and deliver (i) the form of assignment attached hereto in Exhibit 2.1(a)
to give effect to the assignment by Seller of the GFD Units directly to JVCo as
Buyer’s Permitted Designee (“GFD Unit Assignment”), and (ii) the form of
assignment attached hereto in Exhibit 2.1(b) to give effect to the assignment by
Seller of the ALB Units directly to JVCo as Buyer’s Permitted Designee (“ALB
Unit Assignment” and, together with the GFD Unit Assignment, the “Seller Unit
Assignment”), in each case free and clear of all Liens.

 

2.1.2 Seller Interests. Notwithstanding Seller’s execution and delivery of the
Seller Unit Assignment, free and clear of all Liens, in an abundance of caution,
Principal shall execute and deliver to Buyer the form of assignment attached
hereto in Exhibit 2.1(c) to give effect to the assignment by Principal to JVCo
as Buyer’s Permitted Designee, of any right, title and interest of any kind that
Principal may have prior to or at the Closing in, to and under the Seller Units,
or in respect of any other interest involving GFD and ALB (“Seller Interests”).

 

2.1.3 ALB MIPA. Seller and Principal, as applicable, shall surrender and deliver
to Buyer at the Closing 100% of any shares of Buyer Common Stock or other Buyer
Stock previously issued and delivered to Seller and/or Principal in connection
with the ALB MIPA.

 

2.2 Purchase Price. As used herein, the term “Purchase Price” shall mean the
Earn-Out Payment, including, without limitation, the Floor Price and the sum of
all Buyer Securities and other amounts payable to Seller and/or Seller’s
Permitted Designee(s) at the Closing and at all relevant times thereafter in
exchange for the Purchased Equity in accordance with the terms of this Schedule
2.0 and, as applicable, the Agreement and Transaction Documents.

 

2.2.1 Earn-Out Payment. On and subject to the terms and conditions of this
Agreement and the Transaction Documents, and at all relevant times thereunder,
Buyer and Attis shall, on a joint and several basis, pay the greater of the
following to Seller and Seller’s Permitted Designee (the “Earn-Out Payment”):
(i) $2,266,667 (“Floor Price”), plus (ii), if, and only if approved by Buyer’s
Board of Directors on an annual basis, 8% of Attis’ annual Consolidated EBITDA,
and (iii) 8% of Buyer’s and/or Attis’ MRPA Net Proceeds.

 

2.2.1.1 Consolidated EBITDA. The term “Consolidated EBITDA” shall mean the
positive aggregate earnings before interest, taxes, depreciation and
amortization (“EBITDA”) deriving from the consolidated operations of Attis and
Attis’ now and hereinafter-existing subsidiaries (“Attis Entities”), the
operations, assets, investments, licenses and other agreements of the Attis
Entities. The Consolidated EBITDA and applicable Earn-Out Payment shall be
measured as of each fiscal year end commencing on December 31, 2018, and paid on
a rolling, quarterly basis commencing on March 31, 2019, with a rolling
quarterly true-up to prior payments, as may be applicable (each, a “Measurement
and Payment Date”). Any Earn-Out Payment payable hereunder as of any one or more
Measurement and Payment Dates shall be due and payable in full as of each
applicable date, and shall be paid in the form of (i) immediately available U.S.
cash funds, or (ii), at Buyer’s option for so long as Buyer and Attis are in
compliance with the terms of this Agreement and the Transaction Documents,
additional registered shares of Series G Stock at the rate of ONE HUNDRED
DOLLARS ($100.00) per share of Series G Stock (“Earn-Out Shares”).

 

Schedules to Membership Interest Purchase Agreement9

 

 

2.2.2 Buyer Securities. On and subject to the terms and conditions of this
Agreement and the Transaction Documents, at the Closing, as an initial payment
against the Purchase Price due hereunder, Buyer shall issue to Seller and/or
Seller’s Designee(s):

 

2.2.2.1 ONE MILLION (1,000,000) shares of Buyer’s issued and outstanding Common
Stock as of the Closing Date (“Closing Common Shares”), and

 

2.2.2.2 TWENTY TWO THOUSAND SIX HUNDRED (22,600) shares of Buyer’s Series G
Preferred Stock (“Closing Preferred Shares” and, together with all Earn-Out
Shares, Series G Conversion Shares, and the Closing Common Shares, the “Buyer
Securities”).

 

2.2.3 Series G Stock. The Series G Stock shall be convertible into Buyer’s
Common Stock at the sole and exclusive option of the holder in one or more
installments at the rate equal to ONE HUNDRED DOLLARS ($100.00) per share of
Series G Stock divided by the Fair Market Value Conversion Price on a per share
basis, up to 9.9% of the Company’s issued and outstanding Common Stock at the
time of conversion (when taken with any other shares of Common Stock held by the
holder at the time of conversion), subject to the terms, conditions, rights and
privileges set forth in the certificate of designations for Buyer’s Series G
Preferred Stock attached hereto in Exhibit 2.2.3 (“Series G Certificate of
Designations”), and which shall in all relevant respects govern notwithstanding
anything stated herein to the contrary. Voting and cumulative dividend rights
shall be on an as converted basis. As used herein, the term “Fair Market Value
Conversion Price” shall mean the greater of $0.50 (“Conversion Floor”) or 100%
of the lowest closing market price per share for the Common Stock on the
Principal Market for the thirty (30) Trading Days preceding conversion (“Market
Price”); provided, however, that upon the occurrence of any Event of Default,
and continuing for so long as any such Event of Default remains uncured, the
Conversion Floor shall cease to apply, and the Fair Market Conversion Price
shall equal the Market Price.

 

2.2.4 Registration. Buyer shall register the Buyer Securities on a best efforts,
TIME IS OF THE ESSENCE basis after the Closing Date, such that the Closing
Common Shares and Series G Conversion Shares shall be registered and
freely-trading on or before August 31, 2018 (“Registration Date”).

 

2.2.5 Leakage. Seller agrees, in the event and to the extent it decides to sell
Series G Conversion Shares or Closing Common Shares, that it shall not, in the
absence of Buyer’s prior written consent, sell Series G Conversion Shares or
Closing Common Shares in public market transactions at a monthly rate that
exceeds the greater of (i) $50,000 worth of Common Stock, (ii) 50,000 shares of
Common Stock, or (iii) 0.15% of the average monthly trading volume for Buyer’s
Common Stock for the three months prior to sale.

 

2.2.6 Conversion. Upon receipt of each Conversion Notice, Buyer shall, within
three (3) Business Days following its receipt of each applicable Conversion
Notice, cause its transfer agent to issue and deliver certificates representing
such additional freely-tradable shares of Common Stock to Seller and/or Seller’s
Permitted Designee.

 

2.2.7 Net Cash Proceeds. If, in the event that Seller has not been able to sell
the Buyer Securities, or for any other reason, the Net Cash Proceeds are less
than the Floor Price due and payable as of JUNE 1, 2022, then Buyer and Attis
shall, on a joint and several basis, pay the difference between the Floor Price
and the Net Cash Proceeds in full in immediately available U.S. cash funds on or
before JULY 1, 2022. Upon receipt of any such payment from Buyer, in the event
and to the extent that Seller still holds any portion of the Closing Preferred
Shares, then Seller shall assign and surrender to Buyer any such shares on or
before AUGUST 1, 2022. As used herein, the term “Net Cash Proceeds” shall mean
the sum of (i) Seller’s (and/or Seller’s Permitted Designee’s) gross cash sales
proceeds upon sale of the Series G Conversion Shares (less applicable legal,
issuance, deposit and/or clearance costs incurred by Seller and/or Seller’s
Permitted Designee), (ii) all Earn-Out Payments paid in cash hereunder, and
(iii), except for amounts payable under the Principal Employment Agreement, any
and all other cash amounts paid by Buyer, Attis and/or JVCo to Seller and/or
Seller’s Permitted Designee(s) in connection with this Agreement and the
Transaction Documents. No failure by Seller to submit any Conversion Notice or
other document on or before any specific date, or any other action, shall be
deemed to constitute a waiver of any rights hereunder. Seller hereby agrees that
any sales of Buyer’s Common Stock by or on behalf of Seller shall be completed
in accordance with applicable securities laws and in good faith for the highest
prices reasonably available at the time of each individual sale. Buyer hereby
grants, for any shares of Common Stock issuable hereunder, including, without
limitation, upon conversion of the Series G Stock, registration rights on Form
S-3, S-1 or such other form as may be applicable pursuant to the Securities Act,
which the Buyer shall file with the Securities Exchange Commission (the “SEC”)
as soon as shall be reasonably practicable. Buyer shall respond to all SEC
comments and correspondence in connection with each registration statement filed
hereunder as soon as shall be reasonably practicable. Except as provided herein,
Buyer shall pay all expenses in connection with all registration, issuance,
deposit and clearance of Common Stock issuable to Seller and/or Seller’s
Permitted Designee hereunder. Notwithstanding the foregoing, Seller and/or
Seller’s Permitted Designee shall be responsible for its own internal
administrative and similar costs, which shall not constitute registration
expenses.

 

Schedules to Membership Interest Purchase Agreement10