Exhibit 10.1
 
EXCHANGE AGREEMENT
 
This EXCHANGE AGREEMENT (the “Agreement”), dated as of October 27, 2010, is by
and between EcoBlu Products, Inc., a Colorado corporation with offices located
at 909 West Vista Way, Vista, California 92083 (the “Company”), and ___________
(the “Holder”).

RECITALS

A.           The Company, the Holder and certain other parties (such other
parties and their successors and assigns, the “Other Holders”) entered into that
certain Securities Purchase Agreement, dated as of March 26, 2010 (as amended
and modified by this Agreement, the “Purchase Agreement”).
 
B.           [Simultaneously with the consummation of the transactions
contemplated by the Purchase Agreement, (i) the Company issued and sold to the
Holder and Hudson Bay Fund, LP (i) Notes (as defined in the Purchase Agreement)
in the original principal amounts set forth across from their respective names
on the Schedule of Buyers attached to the Purchase Agreement (collectively, the
“2010 Note”), which are convertible into shares of the Company’s common stock,
$0.001 par value per share (the “Common Stock”), in accordance with their
respective terms and (ii) various Warrants (as defined in the Purchase
Agreement).]1 [Simultaneously with the consummation of the transactions
contemplated by the Purchase Agreement, the Company issued and sold to the
Holder (i) a Note (as defined in the Purchase Agreement) in the original
principal amount set forth across from the Holder’s name on the Schedule of
Buyers attached to the Purchase Agreement (the “2010 Note”), which is
convertible into shares of the Company’s common stock, $0.001 par value per
share (the “Common Stock”), in accordance with the terms thereof and (ii)
various Warrants (as defined in the Purchase Agreement).]2

C.           Since the issuance of the 2010 Note, one or more Events of Default
(as defined in the 2010 Note) have occurred thereunder.

D.           In exchange for the 2010 Note, the Company has authorized the
issuance to the Holder of a senior secured convertible note, in the form
attached hereto as Exhibit A (including all senior secured convertible notes
issued in exchange therefor or replacement thereof, the “Note”), which Note
shall be convertible into shares of Common Stock (as converted, the “Conversion
Shares”), in accordance with the terms thereof. The Note and the Conversion
Shares are collectively referred to herein as the “Securities.”
 
E.           The exchange of the 2010 Note for the Note is being made in
reliance upon the exemption from registration provided by Section 3(a)(9) of the
1933 Act, as amended (the “1933 Act”).
 
 

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1 Use only for Hudson Bay
 
2 Use for all noteholders other than Hudson Bay
 
 
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AGREEMENT

NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and the Holder hereby
agree as follows:
 
1.  
EXCHANGE OF 2010 NOTE.

 
(a)  2010 Note. Simultaneously with the execution of this Agreement, the Holder
shall, and the Company shall, pursuant to Section 3(a)(9) of the 1933 Act,
exchange the 2010 Note for the Note.
 
(b) Closing. The closing (the “Closing”) of the exchange of the 2010 Note shall
occur at the offices of Greenberg Traurig, LLP, 77 W. Wacker Drive, Suite 3100,
Chicago, Illinois 60601. The Closing shall occur on the date hereof
simultaneously with the execution of this Agreement (the “Closing Date”). As
used herein “Business Day” means any day other than a Saturday, Sunday or other
day on which commercial banks in New York, New York are authorized or required
by law to remain closed.
 
(c) Delivery. Within seven (7) Business Days following the Closing Date, the
Holder shall deliver the 2010 Note to the address specified in writing by the
Company. Within two (2) Business Days following the Closing Date, the Company
shall deliver the Note to the address specified in writing by the Holder duly
executed on behalf of the Company and registered in the name of the Holder or
its designee.
 
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
 
The Company hereby makes, subject to the exceptions set forth in the Disclosure
Schedules attached to this Agreement, each and every representation and warranty
to the Holder that is contained in the Purchase Agreement as if each and every
such representation and warranty was originally made on the date hereof and made
with respect to the Securities and the transactions contemplated by this
Agreement, and each and every such representation and warranty is hereby
incorporated herein by reference. The Company also represents and warrants that
the Company has not incurred or paid, or agreed to incur or pay, any placement
agent’s fees, financial advisory fees, or broker’s commissions relating to or
arising out of the transactions contemplated hereby. For purposes of this
Agreement, “Exchange Documents” means this Agreement, the Note and each of the
other agreements and instruments entered into by the parties hereto in
connection with the transactions contemplated hereby and thereby.
 
 
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3.  
COVENANTS.

 
(a) Fees.  [The Company shall reimburse the Holder or its designee(s) for all
costs and expenses incurred by it or its affiliates in connection with the
transactions contemplated by the Exchange Documents (including, without
limitation, all legal fees and disbursements in connection therewith,
structuring, documentation and implementation of the transactions contemplated
by the Exchange Documents and due diligence in connection therewith) and in
connection with its dealings with the Company with respect to the Transaction
Documents (as defined in the Purchase Agreement) a non-accountable amount equal
to $22,500, (x) $10,000 of which was previously advanced to the Holder by the
Company and (y) the remainder thereof shall be paid by the Company by wire
transfer of immediately available funds simultaneously with the Closing or on
demand by the Holder upon termination of this Agreement so long as such
termination did not occur as a result of a material breach by the Holder of any
of its obligations hereunder (as the case may be).]3 [Except as otherwise
expressly set forth in the Transaction Documents, each party to this Agreement
shall bear its own expenses in connection with the transactions contemplated by
this Agreement.]4
 
(b) Disclosure of Transactions and Other Material Information. The Company
shall, after 4:00 p.m., New York time, and prior to 5:30 p.m., New York time, on
the first (1st) Business Day after the date of this Agreement, file a Current
Report on Form 8-K describing all the material terms of the transactions
contemplated by the Exchange Documents in the form required by the 1934 Act (as
defined in the Purchase Agreement) and attaching all the material Exchange
Documents (including, without limitation, this Agreement and the form of the
Note) (including all attachments, the “8-K Filing”). From and after the filing
of the 8-K Filing, the Company shall have disclosed all material, non-public
information delivered to the Holder by the Company or any of its subsidiaries,
or any of their respective officers, directors, employees or agents (if any) in
connection with the transactions contemplated by the Exchange Documents. Neither
the Company, its subsidiaries nor the Holder shall issue any press releases or
any other public statements with respect to the transactions contemplated
hereby; provided, however, the Company shall be entitled, without the prior
approval of the Holder, to make any press release or other public disclosure
with respect to such transactions (i) in substantial conformity with the 8-K
Filing and contemporaneously therewith and (ii) as is required by applicable law
and regulations (provided that in the case of clause (i) the Holder shall be
consulted by the Company in connection with any such press release or other
public disclosure prior to its release). Without the prior written consent of
the Holder, the Company shall not (and shall cause each of its subsidiaries and
affiliates to not) disclose the name of the Holder in any filing (other than the
8-K Filing), announcement, release or otherwise, except (a) as required by
federal securities law in connection with the filing of final Exchange Documents
(including signature pages thereto) with the SEC (as defined in the Purchase
Agreement) and (b) to the extent such disclosure is required by applicable law
or market regulations, in which case the Company shall provide the Holder with
prior notice of such disclosure permitted hereunder. Without implication that
the contrary would otherwise be true, the Company expressly acknowledges and
agrees that the Holder has not had, and shall not have (unless expressly agreed
to by the Holder after the date hereof in a written definitive and binding
agreement executed by the Company and the Holder), any duty of confidentiality
with respect to, or a duty not to trade on the basis of, any material,
non-public information regarding the Company or any of it subsidiaries.
 

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3 Include only for Hudson Bay
 
4 Include for all noteholders other than Hudson Bay
 
 
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(c) Transaction Documents. It is expressly understood and agreed that (i) this
Agreement and the other Exchange Documents shall be “Transaction Documents,”
(ii) for all purposes of all the Transaction Documents (including, without
limitation, with respect to all rights, powers, remedies and benefits provided
to the Holder thereunder), the Note, the Conversion Shares and the Securities
shall be deemed to have been issued pursuant to the Purchase Agreement and shall
be treated as if they were the “Notes,” “Conversion Shares” and “Securities”
under the Purchase Agreement and the other Transaction Documents and (iii) the
Transaction Documents are hereby amended to give full force and effect to the
transactions contemplated by this Agreement, the other Exchange Documents and
the Other Exchange Agreements (as defined below). Except as otherwise expressly
provided herein, (1) the Purchase Agreement and each other Transaction Document
is, and shall continue to be, in full force and effect and is hereby ratified
and confirmed in all respects, except that on and after the Closing Date (A) all
references in the Purchase Agreement to the “Purchase Agreement,” “hereto,”
“hereof,” “this Agreement,” “hereunder” or words of like import referring to the
Purchase Agreement shall mean the Purchase Agreement as amended by this
Agreement, (B) all references in the other Transaction Documents to the
“Purchase Agreement,” “thereto,” “thereof,” “thereunder” or words of like import
referring to the Purchase Agreement shall mean the Purchase Agreement as amended
by this Agreement, (C) all references in Transaction Documents to the
“Transaction Documents,” “thereto,” “thereof,” “thereunder” or words of like
import referring to the Transaction Documents shall mean the Transaction
Documents as amended by this Agreement and (D) the Note shall supersede and
replace the 2010 Note and (2) the execution, delivery and effectiveness of this
Agreement shall not operate as an amendment or waiver of any right, power,
benefit or remedy of the Holder under any Transaction Document, nor constitute
an amendment of any provision of any Transaction Document and all of them shall
continue in full force and effect (including, without limitation, the Security
Interests (as defined in the Security Agreement (as defined in the Note))
created thereunder in favor of the Holder), as amended or modified by this
Agreement.
 
(d) Rule 144. The Company expressly acknowledges and agrees that for purposes of
Rule 144(d) the Holder shall be deemed to have acquired the Note on March 26,
2010, and that the holding period for the Note may be tacked onto the holding
period of the 2010 Note. The Company shall not (and shall cause each of its
officers, directors, employees and agents to not) take any action or omit to
take any action inconsistent with the foregoing. The Company shall take all
actions necessary (including, without limitation, to cause the issuance by its
legal counsel of any necessary legal opinions) to issue to the Holder Conversion
Shares that are immediately freely tradable without restriction and not
containing any restrictive legend, all without the need for any action by the
Holder so long as the holding period for a non-affiliate under Rule 144 is met.
 
(e) Anti-Dilution Acknowledgment. It is expressly understood and agreed that no
security (as such term is defined in the 1933 Act) of the Company or any of its
subsidiaries that has been issued, or is issued or issuable on or after the date
hereof, to JMJ Financial or any of its affiliated or related Persons (as defined
in the Purchase Agreement) shall be an Excluded Security (as defined in the
Purchase Agreement) and that Section 7 of the Note and Section 2 of the Warrants
shall apply to the issuance of all securities of the Company or any of its
subsidiaries (including, without limitation, Common Stock issuable upon
conversion of any promissory note and disregarding any floor price set forth
therein) to JMJ Financial or any of its affiliated or related Persons.
 
(f) Acknowledgments. The Company expressly acknowledges and agrees that the Note
does not extinguish the indebtedness evidenced by the 2010 Note and is not a
novation, repayment or reborrowing thereof but rather is given in replacement
and substitution of the 2010 Note.
 
 
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(g) Registration Obligations. The Holder hereby agrees that the Company (i)
shall no longer be obligated from and after the date hereof to register the
Holder’s Registrable Securities (as defined in the Registration Rights
Agreement) as required by the Registration Rights Agreement and (ii) has paid
all Registration Delay Payments (as defined in the Registration Rights
Agreement) owed to the Holder. Without limiting any provision of the Warrants
and without implication that the contrary would otherwise be true, the Company
expressly acknowledges and agrees that all exercises of the Holder’s Warrants
may be made by Cashless Exercise (as defined in the Warrants).
 
4.  
TERMINATION.

 
In the event that the Closing shall not have occurred on or before three (3)
days from the date hereof, any non-breaching party at any time shall have the
right to terminate its obligations under this Agreement with respect to any
breaching party on or after the close of business on such date without liability
of such non-breaching party to any other party[; provided, however,
notwithstanding any such termination the Company shall remain obligated to
reimburse the Holder for the expenses described in Section 3(a) above].5 Nothing
contained in this Section 4 shall be deemed to release any party from any
liability for any breach by such party of the terms and provisions of this
Agreement or the other Exchange Documents or to impair the right of any party to
compel specific performance by any other party of its obligations under this
Agreement or the other Exchange Documents.
 
5.  
MISCELLANEOUS.

 
(a) Governing Law; Jurisdiction; Jury Trial. The parties hereby agree that
pursuant to 735 Illinois Compiled Statutes 105/5-5 they have chosen that all
questions concerning the construction, validity, enforcement and interpretation
of this Agreement shall be governed by the internal laws of the State of
Illinois, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Illinois or any other jurisdictions)
that would cause the application of the laws of any jurisdictions other than the
State of Illinois. Each party hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Chicago, Illinois, for
the adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
 

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5 Include only for Hudson Bay
 
 
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(b) Counterparts. This Agreement may be executed in two or more identical
counterparts, all of which shall be considered one and the same agreement and
shall become effective when counterparts have been signed by each party and
delivered to the other party. In the event that any signature is delivered by
facsimile transmission or by an e-mail which contains a portable document format
(.pdf) file of an executed signature page, such signature page shall create a
valid and binding obligation of the party executing (or on whose behalf such
signature is executed) with the same force and effect as if such signature page
were an original thereof.
 
(c) Headings; Gender. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement. Unless the context clearly indicates otherwise, each pronoun herein
shall be deemed to include the masculine, feminine, neuter, singular and plural
forms thereof. The terms “including,” “includes,” “include” and words of like
import shall be construed broadly as if followed by the words “without
limitation.”  The terms “herein,” “hereunder,” “hereof” and words of like import
refer to this entire Agreement instead of just the provision in which they are
found.
 
(d) Severability. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.  Notwithstanding anything to the contrary
contained in this Agreement or any other Transaction Document (including,
without limitation, the other Exchange Documents) (and without implication that
the following is required or applicable), it is the intention of the parties
that in no event shall amounts and value paid by the Company and/or its
subsidiaries (as the case may be), or payable to or received by the Holder,
under the Transaction Documents (including, without limitation, under the
Exchange Documents), including without limitation, any amounts that would be
characterized as “interest” under applicable law, exceed amounts permitted under
any such applicable law. Accordingly, if any obligation to pay, payment made to
the Holder, or collection by the Holder pursuant any of the Transaction
Documents (including, without limitation, under the Exchange Documents) is
finally judicially determined to be contrary to any such applicable law, such
obligation to pay, payment or collection shall be deemed to have been made by
mutual mistake of the Holder and the Company and such amount shall be deemed to
have been adjusted with retroactive effect to the maximum amount or rate of
interest, as the case may be, as would not be so prohibited by the applicable
law. Such adjustment shall be effected, to the extent necessary, by reducing or
refunding, at the option of the Holder, the amount of interest or any other
amounts which would constitute unlawful amounts required to be paid or actually
paid to the Holder under the Transaction Documents (including, without
limitation, under the Exchange Documents). For greater certainty, to the extent
that any interest, charges, fees, expenses or other amounts required to be paid
to or received by the Holder under any of the Transaction Documents (including,
without limitation, under the Exchange Documents) or related thereto are held to
be within the meaning of “interest” or another applicable term to otherwise be
violative of applicable law, such amounts shall be pro-rated over the period of
time to which they relate.
 
 
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(e) Entire Agreement; Amendments. This Agreement, the other Exchange Documents
and the schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein supersede all other prior oral or written
agreements between the Holder, the Company, its subsidiaries, their affiliates
and Persons acting on their behalf solely with respect to the matters contained
herein and therein, and this Agreement, the other Exchange Documents, the
schedules and exhibits attached hereto and thereto and the instruments
referenced herein and therein contain the entire understanding of the parties
solely with respect to the matters covered herein and therein; provided,
however, nothing contained in this Agreement or any other Transaction Document
shall (or shall be deemed to) (i) except as expressly contemplated by Section
3(c), have any effect on any agreements the Holder has entered into with the
Company or any of its subsidiaries prior to the date hereof with respect to any
prior investment made by the Holder in the Company or (ii) except as expressly
contemplated by Section 3(c), waive, alter, modify or amend in any respect any
obligations of the Company or any of its subsidiaries, or any rights of or
benefits to the Holder or any other Person, in any agreement entered into prior
to the date hereof between or among the Company and/or any of its subsidiaries
and the Holder and all such agreements shall continue in full force and effect.
Except as specifically set forth herein, neither the Company nor the Holder
makes any representation, warranty, covenant or undertaking with respect to such
matters. No provision of this Agreement may be amended other than by an
instrument in writing signed by the Company and the Holder. No provision of this
Agreement may be waived other than by an instrument in writing signed by the
waiving party. Without limiting the foregoing, the Company confirms that the
Holder has not made any commitment or promise or has any other obligation to
provide any financing to the Company, any subsidiary or otherwise.
 
(f) Notices. Any notices, consents, waivers or other communications required or
permitted to be given under the terms of this Agreement must be in writing and
will be deemed to have been delivered: (i) upon receipt, when delivered
personally; (ii) upon receipt, when sent by facsimile (provided confirmation of
transmission is mechanically or electronically generated and kept on file by the
sending party); or (iii) one (1) Business Day after deposit with an overnight
courier service with next day delivery specified, in each case, properly
addressed to the party to receive the same. The addresses and facsimile numbers
for such communications shall be as set forth in Section 9(f) of the Purchase
Agreement or such other address and/or facsimile number and/or to the attention
of such other Person as the recipient party has specified by written notice
given to each other party five (5) days prior to the effectiveness of such
change. Written confirmation of receipt (A) given by the recipient of such
notice, consent, waiver or other communication, (B) mechanically or
electronically generated by the sender’s facsimile machine containing the time,
date, recipient facsimile number and an image of the first page of such
transmission or (C) provided by an overnight courier service shall be rebuttable
evidence of personal service, receipt by facsimile or receipt from an overnight
courier service in accordance with clause (i), (ii) or (iii) above,
respectively.
 
(g) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective successors and assigns,
including, as contemplated below, any assignee or transferee of any of the
Securities. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the Holder,
including, without limitation, by way of a Fundamental Transaction (as defined
in the Note and Warrants) unless the Company is in compliance with the
applicable provisions governing Fundamental Transactions set forth in the Note
and Warrants. The Holder may assign some or all of its rights hereunder in
connection with any assignment or transfer of any of its Securities without the
consent of the Company, in which event such assignee or transferee shall be
deemed to be a Holder hereunder with respect to such assigned rights.
 
 
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(h) No Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person, other than the Released Parties (as defined below) referred to in
Section 5(m).
 
(i) Survival. The representations, warranties, agreements and covenants shall
survive the Closing.
 
(j) Further Assurances. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.
 
(k) Construction. The language used in this Agreement will be deemed to be the
language chosen by the parties to express their mutual intent, and no rules of
strict construction will be applied against any party. For clarification
purposes, the Recitals are part of this Agreement and are hereby incorporated by
reference.
 
(l) Terms. The Company represents, warrants and covenants that the Company has
not entered into, and will not, directly or indirectly, enter into, any
agreement, understanding or instrument with, or for the benefit of, any Other
Holder, any holder of Other Notes (as defined in the Note) or any of their
respective affiliates with any terms and/or conditions which are more favorable
to any such Person than the terms and conditions provided to, or for the benefit
of, the Holder. To the extent the Company enters into any, direct or indirect,
agreement, understanding or instrument with, or for the benefit of, any Other
Holder, any holder of Other Notes or any of their respective affiliates that
contains any terms and/or conditions which are more favorable to any such Person
than the terms and/or conditions provided to, or for the benefit of, the Holder,
then the Holder, at its option, shall be entitled to the benefit of such more
favorable terms and/or conditions (as the case may be) and this Agreement shall
be automatically amended to reflect such more favorable terms or conditions (as
the case may be). To the extent the Company, directly or indirectly, enters into
any agreement, understanding or instrument with, or for the benefit of, any
Other Holder, any holder of Other Notes or any of their respective affiliates
that contains any terms or conditions which are not identical to the terms and
conditions provided to, or for the benefit of, the Holder, then the Company
shall immediately notify the Holder of, and contemporaneously with such
notification publicly disclose, any such terms. The Company further represents
and warrants that (i) except as set forth on Schedule I attached hereto, no
consideration has been offered or paid to any Other Holder, any holder of Other
Notes or any of their respective affiliates with respect to any of the matters
addressed in this Agreement or otherwise, (ii) except as set forth on Schedule I
attached hereto, no agreement, understanding or instrument has been entered into
with any Other Holder, any holder of Other Notes or any of their respective
affiliates with respect to any of the matters addressed in this Agreement that
contains any terms or conditions that are different in any respect from any of
the terms or conditions contained in this Agreement, (iii) other than the
Transaction Documents previously filed with the SEC and except as set forth on
Schedule I attached hereto, no agreement, understanding or instrument has been
entered into with any Other Holder, any holder of Other Notes or any of their
respective affiliates with respect to any other matter and (iv) simultaneously
herewith all of the Other Holders and holders of Other Notes are also entering
into agreements identical to this Agreement (the “Other Exchange Agreements”).
 
 
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(m) RELEASE. FOR VALUE RECEIVED (INCLUDING, WITHOUT LIMITATION, THE AGREEMENTS
OF THE HOLDER IN THIS AGREEMENT), THE COMPANY HEREBY RELEASES THE HOLDER AND ALL
THE OTHER INDEMNITEES (AS DEFINED IN THE PURCHASE AGREEMENT) (COLLECTIVELY, THE
“RELEASED PARTIES”) OF AND FROM ANY AND ALL DEMANDS, ACTIONS, CAUSES OF ACTION,
SUITS, CONTROVERSIES, ACTS AND OMISSIONS, LIABILITIES, AND OTHER CLAIMS OF EVERY
KIND OR NATURE WHATSOEVER, BOTH IN LAW AND IN EQUITY, KNOWN OR UNKNOWN, WHICH
THE COMPANY NOW HAS OR EVER HAD AGAINST ANY OF THE RELEASED PARTIES (INCLUDING,
WITHOUT LIMITATION, ANY ARISING OUT OF OR RELATING TO THE NEGOTIATIONS IN
CONNECTION WITH ANY EVENTS OF DEFAULT), AND THE COMPANY FURTHER ACKNOWLEDGES AND
AGREES THAT, AS OF THE DATE HEREOF, THE COMPANY DOES NOT HAVE ANY COUNTERCLAIM,
SETOFF, OR DEFENSE AGAINST ANY OF THE RELEASED PARTIES, EACH OF WHICH THE
COMPANY HEREBY EXPRESSLY WAIVES.
 
(n) Independent Obligations. The obligations of the Holder hereunder are several
and not joint with the obligations of any Other Holder or any other holder of
Other Notes, and the Holder shall not be responsible in any way for the
performance of the obligations of any Other Holder or any other holder of Other
Notes under any of the Other Exchange Agreements or any other similar agreement.
Nothing contained herein, and no action taken by the Holder pursuant hereto,
shall be deemed to constitute the Holder, the Other Holder and the holders of
the Other Notes as, and the Company acknowledges that the Holder, the Other
Holders and the holders of the Other Notes do not so constitute, a partnership,
an association, a joint venture or any other kind of group or entity, or create
a presumption that the Holder, any of the Other Holders or any holder of Other
Notes are in any way acting in concert or as a group or entity with respect to
such obligations or the transactions contemplated by this Agreement or any
matters, and the Company acknowledges that the Holder, the Other Holders and the
holders of the Other Notes are not acting in concert or as a group or entity,
and the Company shall not assert any such claim, with respect to such
obligations or the transactions contemplated by this Agreement or any other
similar agreement. The decision of the Holder to enter into this Agreement has
been made by the Holder independently of any Other Holder and any holder of
Other Notes. The Company and the Holder confirms that the Holder has
independently participated with the Company in the negotiation of the
transaction contemplated hereby with the advice of its own counsel and advisors.
The Holder shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement or out
of any other Transaction Documents, and it shall not be necessary for any Other
Holder or any other holder of Other Notes to be joined as an additional party in
any proceeding for such purpose. To the extent that any Other Holder or any
holder of Other Notes enters into an agreement with the same or similar terms
and conditions or pursuant to the same or similar documents, all such matters
are solely in the control of the Company, not the action or decision of the
Holder, and would be solely for the convenience of the Company and not because
it was required or requested by the Holder.
 
 
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(o) Confirmation of Company Redemption; Consequence of Failure to Pay
Installment Amount.
 
(i) The Company hereby elects to redeem pursuant to a Company Redemption (as
defined in the Note) the entire Installment Amount (as defined in the Note) due
with respect to the Installment Date (as defined in the Note) that is November
24, 2010 in accordance with the provisions of Section 8 of the Note. The parties
hereby agree that the foregoing constitutes a Company Installment Notice (as
defined in the Note) that was delivered to the Holder on the date hereof.
 
(ii) If the Company fails to so redeem pursuant to a Company Redemption the
entire Installment Amount due with respect to the Installment Date that is
November 24, 2010 in accordance with the provisions of Section 8 of the Note,
then at 8:00 a.m. (New York time) on November 25, 2010, (x) the Exercise Prices
(as defined in the Holder’s Series D Warrants (as defined in the Purchase
Agreement) of the Series D Warrants held by the Holder are hereby automatically
reduced to $0.01 (as adjusted for stock splits, combinations and other similar
transactions occurring after the date hereof), subject to further adjustment as
provided therein, and (y) the aggregate number of Warrant Shares (as defined in
the Holder’s Series D Warrants) for which all the Holder’s Series D Warrants are
exercisable will automatically adjust upward to ______________6 Warrant Shares.
The parties further agree that the Holder’s Series D Warrants are hereby amended
to reflect the foregoing. The Holder hereby agrees that the Conversion Price (as
defined in the Note) of the Note and the Exercise Prices (as defined in the
Warrants) of the Warrants (other than the Holder’s Series D Warrants) held by
the Holder shall not be reduced solely as a result of (1) the reduction of the
Exercise Prices of the Holder’s Series D Warrants as contemplated by this
Section 5(o)(ii) and (2) any similar reduction to the exercise prices of the
Series D Warrants held by the Other Holders that is contemplated in the Other
Exchange Agreements.
 
(p) [Special Acknowledgement. The Company expressly acknowledges and agrees that
(i) the Holder’s former name was Hudson Bay Overseas Fund, Ltd. and (ii) Hudson
Bay Fund, LP transferred all of its Notes (as defined in the Purchase Agreement)
and Warrants to the Holder prior to the date hereof.]7
 
[signature pages follow]
 

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6 Insert number of shares equal to quotient of (i) original aggregate exercise
price of Holder’s Series D Warrants divided by (ii) $0.01. The total number of
shares for the Holder and all Other Holders will be equal to 150,000,000.
 
7 Only use for Hudson Bay
 
 
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IN WITNESS WHEREOF, the Holder and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.
 

 
COMPANY:
 
 
ECOBLU PRODUCTS, INC.
 
 
 
By:                                      
    Name:
    Title:
 

 
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IN WITNESS WHEREOF, the Holder and the Company have caused their respective
signature page to this Agreement to be duly executed as of the date first
written above.
 

 
HOLDER:
 
 
[________________________]
 
____________________________________
By:
Its:
 

 
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Schedule I

None, other than Hudson Bay Master Fund Ltd is entitled to expense reimbursement
in cash for fees and expenses incurred in connection with its separate Exchange
Agreement in a non-accountable amount equal to $22,500.
 
 
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Disclosure Schedules

None.
 
 
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