Exhibit 10.1


 





 



 


ASSET PURCHASE AGREEMENT


 


by and between


 


TARSIER SYSTEMS, LTD


 


And


 


DEMANSYS ENERGY, INC.,


 


December 1, 2015


 





 



 




     


     


    

 


ASSET PURCHASE AGREEMENT


 


This ASSET PURCHASE AGREEMENT
(this “Agreement”), dated as of December 1, 2015, is entered into by and among Tarsier Systems, Ltd, a New York
corporation (“Buyer”) and Demansys Energy, Inc., a Delaware corporation (the “Company”) .
Capitalized terms used herein and not otherwise defined herein have the meanings given to such terms in the glossary attached hereto
as Exhibit A.


 


RECITALS


 


WHEREAS, the Company
is engaged in the business of developing and marketing smart grid hardware and software technology solutions for the management
of electrical grids (the “Business”); and


 


WHEREAS, the Company
desires to sell to Buyer, and Buyer desires to purchase from the Company, certain Assets of the Company, all on the terms and subject
to the conditions contained in this Agreement; and


 


WHEREAS, the Buyer and
the Company have agreed that it is an important and material consideration that the Buyer maintain its business between the date
hereof and the closing of the transactions contemplated herein, and therefore the Buyer has agreed to cover the Company’s
payroll and costs for operating the NOC (as defined in this Agreement) commencing on the December 1, 2015 through the date of closing.


 


NOW, THEREFORE, in consideration
of the mutual covenants, agreements and understandings herein contained, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto hereby agree as follows:


 


ARTICLE I

Purchase and Sale of Assets


 


1.1.          Transfer
of Purchased Assets.


 


(a)     On
the terms and subject to the conditions contained in this Agreement, effective as of December 1, 2015 (“Effective Date”)
assuming the conditions in Section 7.1 are satisfied on or before January 31, 2016, the Company shall sell, transfer, convey, assign
and deliver to Buyer, free and clear of all Liens (except Permitted Liens), and Buyer shall purchase and acquire from the Company,
all of the Company’s Assets (other than the Excluded Assets), including the following:


 


(i)          all
inventory, raw materials, work in process, supplies used in operations and finished goods, excluding the Company’s 1 MegaWatt
battery energy storage system at 711 Evesham Avenue, Somerdale, New Jersey (“Sommerdale BESS”);


 


(ii)         all
prepaid expenses, advances and deposits with or paid to third parties with respect to any Purchased Asset (other than prepaid expenses,
advances and deposits specified in Section 1.2(b));


 




     


     


    

 


(iii)        all
computer hardware of any type or nature, machinery, equipment, vehicles, fixtures, office furniture, tools and other tangible Assets
and properties, located in the Company’s office located at 350 Jordan Road in Troy, New York, 12180;


 


(iv)        
all rights under all Contracts and other agreements listed on Schedule 1.1(a)(iv) (collectively, the “Assigned
Contracts”);


 


(v)         all
Permits, to the extent their transfer is permitted by Law;


 


(vi)        all
Company Intellectual Property Rights, including those items listed on Schedule 5.9(a), including the right to sue and recover
for past, present and future infringements or misappropriations thereof; provided, however, (i) the Purchased Assets do not include
the corporate legal name “Demansys” and related domain name uses thereof and (ii) the Buyer’s rights to the Intellectual
Property related to the Company’s GRID Daemon software, including source code and object code, are subject to the rights
granted to Hitachi Capital, Hitachi America, LTD and HD One under the Hitachi Agreements as described on Schedule 1.1 (a) (vi)
annexed hereto;


 


(vii)       all
warranties and guarantees received from vendors, suppliers or manufacturers with respect to the Purchased Assets;


 


(viii)      rights,
recoveries, refunds, counterclaims, rights to offset, other rights, choses in action and Proceedings (known or unknown, matured
or unmatured, accrued or contingent) against third parties (including all warranty and other contractual claims (express, implied
or otherwise) against third parties), to the extent that any of the foregoing relate to the Purchased Assets or the Assumed Liabilities;
and


 


(ix)         the
goodwill of the Company relating to or arising out of the Purchased Assets.


 


(b)     For
convenience of reference, the Assets, properties, interests in properties and rights sold, transferred, conveyed and assigned to
Buyer by the Company pursuant to Section 1.1(a) are collectively called the “Purchased Assets” in
this Agreement.


 


1.2.          Assets
Not Being Transferred. Notwithstanding anything contained in this Agreement to the contrary, the following Assets are expressly
excluded from the Purchased Assets (the “Excluded Assets”):


 


(a)     all
cash;


 


(b)     all
prepaid expenses, advances, and deposits paid by the Company to NYISO, as set forth on Schedule 1.2(b); provided, that all
such amounts shall be subject to the provisions of Section 7.2(e);


 


(c)     the
Hitachi Agreement and all rights and interests of the Company arising thereunder or related thereto, including, without limitation,
membership ownership of HD One and the Somerdale BESS;


 




     


     


    

 


(d)     all
insurance policies and rights thereunder of the Company; 


 


(e)     any
prepayments of Taxes and rights to or claims for losses, loss carry-forwards, refunds of Taxes and other governmental charges for
periods (or portions thereof) ending on or prior to the Closing Date;


 


(f)     the
Company’s tax records, and its corporate minutes and other corporate documents;


 


(g)     all
bank accounts of the Company;


 


(h)     all
rights of the Company under this Agreement and/or any Ancillary Agreement;


 


(i)     any
of the assets not included in the Purchased Assets;


 


(j)     all
rights, claims and credits of the Company or any of its Affiliates to the extent relating to any other Excluded Assets or any Excluded
Liability; and


 


(k)     the
(i) sum of $to be determined, but no more than $20,000 representing a receivable owed by Buyer and Parent to the Company with respect
to a prior transfer of NYISO payments by the Company to Parent and (ii) all rights of the Company hereunder, including the right
to receive and collect the Purchase Price.


 


1.3.          Further
Assurances. The Company shall, at any time and from time to time after the Closing, upon the request of Buyer, do, execute,
acknowledge and deliver, and cause to be done, executed, acknowledged or delivered, all such further acts, deeds, assignments,
transfers, conveyances, powers of attorney or assurances as may be reasonably required to sell, transfer, convey, assign and deliver
to Buyer, or to aid and assist in the collection of or reducing to possession by Buyer, of the Purchased Assets, or to vest in
Buyer good and marketable title to the Purchased Assets, free and clear of any and all Liens, except Permitted Liens.


 


1.4.          Assignment
of Contracts, Rights, Etc. Anything contained in this Agreement to the contrary notwithstanding, this Agreement shall not constitute
an agreement or attempted agreement to transfer, sublease or assign any Contract, Proceeding, or right with respect to any benefit
arising thereunder or resulting therefrom, or any Permit, if an attempted transfer, sublease or assignment thereof, without the
required consent of any other party thereto, would constitute a breach thereof or in any way affect the rights of Buyer thereunder.
To the extent not obtained on or prior to the Closing Date, from and after the Closing, the Company shall use commercially reasonable
efforts to obtain the consent of any such third party to any of the foregoing to the transfer or assignment thereof to Buyer in
all cases in which such consent is required for such transfer or assignment. For so long as any such consent is not obtained, the
parties hereto and their respective Affiliates shall cooperate in any arrangements necessary or desirable to provide for Buyer
the benefits thereunder, including enforcement by the Company for the benefit of Buyer of any and all rights of the Company thereunder
against the other party thereto.


 




     


     


    

 


ARTICLE II

Assumed Liabilities; Excluded Liabilities


 


2.1.          Assumed
Liabilities. On the terms and subject to the conditions contained in this Agreement, simultaneously with the sale, transfer,
conveyance and assignment to Buyer of the Purchased Assets, Buyer shall assume only (i) those Liabilities of the Company relating
to the Purchased Assets that arise from facts, circumstances, actions, or events that occur on or after the Closing Date and (ii)
the obligations referred to under Section 7.2(c) below (collectively, the “Assumed Liabilities”); and from the
period commencing on December 1, 2015 to the Closing Date, the costs and expenses set forth on Schedule 2.1 hereof for operating
the NOC.


 


2.2.          Liabilities
Not Being Assumed. Except for the Assumed Liabilities, Buyer shall not assume any Liabilities of the Company or any of its
Affiliates, all of which Liabilities shall be “Excluded Liabilities” for all purposes hereunder. Without limiting
the generality of the foregoing, the following shall be Excluded Liabilities:


 


(a)     Any
and all Liabilities of the Company arising under or related to the Hitachi Agreement;


 


(b)     Any
and all Liabilities of the Company or any of its Affiliates arising out of or related to any Employee Benefits Plan, or after December
1, 2015, any salary or other payroll, bonus or other compensation obligation of the Company or any of its Affiliates that is not
expressly assumed by Buyer pursuant to an Assigned Contract;


 


(c)     Any
and all Liabilities of the Company or any of its Affiliates arising out of or related to any Excluded Asset;


 


(d)     Any
and all Liabilities of the Company or any of its Affiliates arising out of or related to any note, bond, warrant, indenture, guarantee
or other Indebtedness of the Company or any of its Affiliates;


 


(e)     Any
and all Liabilities of the Company or any of its Affiliates arising out of or related to this Agreement or any Ancillary Agreement;
and


 


(f)     Except
for the sum of $11,513 which is owed by Buyer to the Company, any expenses of operations of the Company incurred prior to December
1, 2015..


 




     


     


    

 


ARTICLE III

Purchase Price


 


3.1.          Purchase
Price. In consideration for the Purchased Assets, Buyer shall pay to the Company (a) 2,500,000 shares of common stock of Tarsier
Ltd., a Delaware corporation and the sole shareholder of Buyer (“Parent”, and such shares, the “Parent
Shares”), and (B) a convertible note issued by Parent and Buyer in the form of Exhibit A annexed hereto (the “Tarsier
Purchase Note”)in the principal amount of $450,000 which shall be due and payable in four tranches the initial tranche to
be paid after Tarsier receives initial funding of $150,000 from any source in the principal amount of $ 50,000 but no later than
January 31, 2016; the second tranche to be paid on or before January 31, 2016 in the principle amount of $115,000; the third and
fourth of tranche a total of $285,000 will be directed to Alcoa subject to be due and payable when the new Alcoa Contact is accepted
, which Tarsier Purchase Note shall bear default interest at the rate of six (6) per cent per annum. The Tarsier Purchase Note
shall be convertible, at the option of the Company, into shares of common stock of Parent at a 30% discount to the 10 day average
closing price of the Parent’s common stock on the market at which it is listed at the time of conversion.


 


3.2.          Closing
Date Payment; Share Escrow.


 


(a)     At
the Closing, Buyer shall deposit with the Escrow Agent the Tarsier Purchase Note and a certificate representing the Parent Shares
which shall be held and released by the Escrow Agent solely in accordance with the terms and conditions of the Escrow Agreement
attached hereto as Exhibit B (the “Escrow Agreement”). The Tarsier Purchase Note shall be released when
Company obtains shareholder approval and a renewed 4 year agreement with Alcoa as described in Section 8(k). The terms of the release
of the Parent Shares as described in the Escrow Agreement shall provide that if due to negligence, poor performance or failure
by Buyer or Parent to make customer payments due to Alcoa, and Alcoa thereafter cancels the Service Contract, the sum of $800,000
will be deemed satisfied with respect to the right of the Company to obtain release from escrow of the Parent Shares.


 


ARTICLE IV

The Closing


 


4.1.          The
Closing. The consummation of the transactions contemplated by this Agreement (the “Closing”) will take place
at the offices of Westerman Ball Ederer Miller Zucker & Sharfstein, LLP, 1201 RXR Plaza, Uniondale, New York 11556, at 10:00
am on the second Business Day following the satisfaction or waiver of all conditions to Closing contained in this Agreement (other
than those conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction thereof) or on such
date and by such means (including the electronic exchange of signatures to this Agreement and the Ancillary Agreements) as the
parties hereto shall agree (the date and time of the Closing are referred to as the “Closing Date”). The Closing
shall be deemed to have occurred effective as of 12:01 a.m., Eastern Standard Time on December 1, 2015, provided that the conditions
of Section 7.1 and Section 8 are satisfied on or before January 31, 2016.


 


4.2.          Allocation
of Purchase Price. Buyer and the Company shall allocate the Purchase Price and all other capitalizable costs among the Purchased
Assets for all purposes, including financial accounting and tax purposes, as set forth on Schedule 4.2. The Parties agree
to reasonably coordinate and cooperate in the filing of IRS Form 8594 (purchase price allocation statement) and any other State
or Federal tax documentation or forms attendant to or as a consequence of the transactions contemplated hereunder.


 


4.3.          Transfer
Taxes. The Company shall bear and pay any sales taxes, use taxes, transfer taxes, documentary charges, recording fees or similar
taxes, charges, fees or expenses that may be become payable in connection with sale of the Purchased Assets to Buyer.


 




     


     


    

 


ARTICLE V

Representations and Warranties of the Company


 


As a material inducement
to Buyer to enter into this Agreement and to consummate the transactions contemplated hereby, except as otherwise indicated on
the disclosure schedules (the “Schedules”) referenced in this ARTICLE V, the Company represents and warrants
to Buyer as follows:


 


5.1.          Organization
and Corporate Power. The Company is a corporation duly organized, validly existing and in good standing under the Laws of the
State of Delaware and is licensed or qualified to conduct its business and is in good standing in every jurisdiction where it is
required to be so licensed or qualified (which such jurisdictions are set forth on Schedule 5.1) except where the failure
to be so licensed or qualified would not have a material adverse effect upon the Purchased Assets. The Company possesses all requisite
corporate power and authority necessary to own and operate its Assets, to carry on its businesses as presently conducted, to execute
and deliver this Agreement and each Ancillary Agreement to which it is a party and except for the approval of its stockholders
of the sale of the Purchased Assets which shall be obtained prior to January 31, 2016, to carry out the transactions contemplated
by this Agreement and each such Ancillary Agreement.


 


5.2.          Authorization;
No Breach.


 


(a)     The
Company’s execution, delivery and performance of this Agreement and the Ancillary Agreements to which it is a party have
been duly authorized by all requisite corporate action on the part of the Company. This Agreement constitutes a valid and binding
obligation of the Company, enforceable in accordance with its terms, and all Ancillary Agreements to which the Company is a party,
when executed and delivered by such party in accordance with the terms hereof and thereof, shall constitute a valid and binding
obligation of the Company enforceable in accordance with its terms, except (i) for the approval of its stockholders of the sale
of the Purchased Assets which shall be obtained prior to January 31, 2016 and (ii) as may be limited by applicable bankruptcy,
insolvency or similar Laws affecting creditors rights generally or by general principles of equity.


 


(b)     Except
as set forth on Schedule 5.2(b), the execution and delivery by the Company of this Agreement and the Ancillary Agreements
to which it is a party, and the fulfillment of and compliance with the respective terms hereof and thereof by the Company does
not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under (whether with or without the passage of time, the giving of notice or both), (iii) result in the creation
of any Lien upon the Purchased Assets pursuant to, (iv) give any third party the right to modify, terminate or accelerate
any obligation under, (v) result in a violation of, or (vi) require any authorization, consent, approval, exemption or
other action by or notice or declaration to, or filing with, any third party or any Government Entity pursuant to (A) the
certificate of incorporation, bylaws or other fundamental organizational documents of the Company, (B) any Law or Order to
which the Company is subject, subject to the Company obtaining approval of its stockholders on or prior to January 31,2016, or
(C) any Contract, Permit, or other agreement or instrument to which the Company is a party or by which it or any of the Purchased
Assets is bound.


 




     


     


    

 


5.3.          Financial
Statements. Attached hereto as Schedule 5.3 are true and complete copies of the unaudited balance sheets and statements
of income for the Company as of and for the fiscal years ended December 31, 2014, December 31, 2013, and December 31, 2012, and
for the eight-month period ended June 30, 2015 (collectively the “Financial Statements”). Each of the Financial
Statements (including the notes thereto, if any) is correct and complete, has been prepared in accordance with GAAP from, and
is consistent with, the books and records of the Company (which are correct and complete in all material respects), and fairly
presents the financial condition of the Company as of the dates thereof, and the operating results of the Company for
the periods then ended.


 


5.4.          Absence
of Undisclosed Liabilities. Except as set forth on Schedule 5.4, the Company does not have any Liability or obligation,
other than (i) Liabilities set forth on the liabilities side of the Balance Sheet, or (ii) Liabilities and obligations
which have arisen after the date of the Balance Sheet in the ordinary course of business (none of which is a Liability resulting
from any breach of Contract, breach of warranty, tort, infringement, claim, lawsuit, violation of Law and none of which is material,
either individually or in the aggregate). Other than as set forth on Schedule 5.4, the Company is not a guarantor nor is it otherwise
liable for any Liability (including Indebtedness) of any other Person.


 


5.5.          Absence
of Certain Developments. Except as set forth on Schedule 5.5, since June 30, 2015, there has occurred no fact, event
or circumstance which has had or could reasonably be expected to have a Material Adverse Effect. Except as expressly contemplated
by this Agreement and as set forth on Schedule 5.5, since June 30, 2015, the Company has conducted its business only
in the ordinary course consistent with past practice, and the Company has not:


 


(a)     incurred
any Indebtedness;


 


(b)     delayed,
postponed or cancelled the payment of accounts payable or any other Liability, the purchase of inventory, or the replacement of
inoperable, worn out or obsolete assets with assets of comparable quality, other than in the ordinary course of business consistent
with past practice;


 


(c)     sold,
assigned, transferred, leased, licensed, failed to maintain or abandoned any of the Purchased Assets, or taken any action that
could reasonably be expected to result in the loss, lapse or abandonment of any Company Intellectual Property Rights, except (i)
sales of inventory in the ordinary course of business consistent with past practice, or (ii) disposition or replacement of furniture,
fixtures or equipment in the ordinary course of business consistent with past practice;


 


(d)     failed
to make any capital expenditures required to be made in the ordinary course to preserve and maintain the Assets of the Company;


 




     


     


    

 


(e)     made
any material Tax election or changed an annual accounting period, made any material change in its cash management practices or
in any method of accounting or accounting policies, or made any write-down in the value of its inventory that is material or outside
of the ordinary course of business consistent with past practice, except to the extent required by applicable law or GAAP;


 


(f)     suffered
any change, event or condition which, individually or in the aggregate, has had or could reasonably be expected to have a Material
Adverse Effect;


 


(g)     cancelled
or waived any right or claim (or series of related rights and claims) related to any Purchased Asset;


 


(h)     agreed,
whether orally or in writing, to do any of the foregoing.


 


5.6.          Tangible
Personal Property; Sufficiency of Assets.


 


(a)     The
Company has good and valid title to, or a valid and enforceable right to use, or an adequate leasehold interest in, the Purchased
Assets free and clear of all Liens except for those Liens expressly identified on Schedule 5.6(a) (“Permitted Liens”).


 


(b)     Each
tangible Purchased Asset is free from material defects, has been maintained in accordance with normal industry practice, is in
good operating condition and repair (subject to reasonable wear and tear) and is suitable for the purposes for which it is presently
used.


 


(c)     Except
as set forth on Schedule 5.6(c), the Purchased Assets and the rights conveyed to Buyer under this Agreement and the Ancillary
Agreements constitute all of the Assets used or held for use in the Business and together are sufficient for the conduct of the
Business immediately following the Closing in substantially the same manner as currently conducted.


 


5.7.          [Intentionally
omitted.]


 


5.8.          Tax
Matters.


 


(a)     The
Company has not filed or made any required tax filings during the three year period prior to date hereof. There are no Liens for
Taxes upon any of the Purchased Assets, except for statutory Liens for current Taxes not yet due.


 


(b)     The
Company is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code.         


 


5.9.          Contracts
and Commitments.


 


(a)     Schedule 5.9(a)
lists the following contracts and other agreements (whether written or oral) to which the Company is a party or by which it is
bound:


 




     


     


    

 


(i)          power
of attorney or other similar agreement or grant of agency related to any Purchased Asset;


 


(ii)         any
agreement (or group of related agreements) for the purchase or sale of raw materials, commodities, supplies, products, or other
tangible personal property, or for the furnishing or receipt of services;


 


(iii)        contract
or agreement with any Government Entity;


 


(iv)        agreement
relating to Indebtedness or the mortgaging, pledging or otherwise placing a Lien on any Purchased Asset (tangible or intangible)
or any letter of credit arrangements, or any guarantee therefor;


 


(v)         Lease
or other agreement under which it is (x) lessee of or holds or operates any personal property, owned by any other party, or
(y) lessor of or permits any third party to hold or operate any personal property owned or controlled by it;


 


(vi)        agreements
relating to the ownership of, investments in or loans and advances to any Person, including investments in joint ventures, partnerships
and minority equity investments, including, without limitation, the Hitachi Agreement;


 


(vii)       license,
agreement, assignment, royalty, indemnification or other agreement with respect to any Intellectual Property Rights to which the
Company is a party, either as licensee or licensor, in each case identifying the subject Intellectual Property Rights;


 


(viii)      contract
or agreement prohibiting it from freely engaging in any business or competing anywhere in the world, other than agreements described
in clause (viii) above, or restricting the use of any Intellectual Property Rights, including any nondisclosure or confidentiality
agreements;


 


(ix)         any
settlement, conciliation or similar agreement;


 


(x)          any
indemnification, guarantee or comparable agreement;


 


(xi)         any
agreement under which the consequences of a default or termination could reasonably be expected to have a Material Adverse Effect
on the Purchased Assets; or


 


(xii)        any
other agreement (or group of related agreements) which is material to the Business.


 




     


     


    

 


(b)     All
of the contracts, agreements and instruments which are Purchased Assets set forth or required to be set forth on Schedule 5.9(a)
(collectively, the “Material Contracts”) are legal, valid, binding and enforceable by the Company, and to the
Company’s Knowledge, the counterparties thereto, in accordance with their respective terms, and in full force and effect,
except as may be limited by applicable bankruptcy, insolvency or similar law affecting creditors’ rights generally or by
general principles of equity. Subject to the matters referred to on Schedule 5.2(b), each of the Material Contracts
shall continue to be legal, valid, binding and enforceable by the Company, in accordance with their respective terms, and in full
force and effect without penalty in accordance with its terms upon consummation of the transactions contemplated hereby, except
as may be limited by applicable bankruptcy, insolvency or similar law affecting creditors’ rights generally or by general
principles of equity. Except as set forth on Schedule 5.9(a), the Company has not received any notice that any party has repudiated
any material provision of any Material Contract. Except as set forth on schedule 5.9(a), the Company is not in default under, or
in breach of any Material Contract. Except as set forth on Schedule 5.9(a), no event has occurred which with the passage of time
or the giving of notice or both would result in a material default or breach by the Company under any Material Contract and the
Company does not have any Knowledge of any existing or threatened breach or cancellation by the other parties to any Material Contract.


 


(c)     Buyer
has been supplied with a true, complete and correct copy of each written Material Contract, together with all amendments, waivers
or other changes thereto, and true and accurate description of the terms and conditions of each oral Material Contract.


 


5.10.         Intellectual
Property Rights.


 


(a)     Schedule
5.10(a) contains a true, complete and correct list of all of the following that are owned by the Company: (i) patented or registered
Intellectual Property Rights, (ii) pending patent applications and applications for registration of other Intellectual Property
Rights, (iii) trade names and Internet domain names, and (iv) unregistered trademarks, service marks or copyrights.


 


(b)     Except
as set forth on Schedule 5.10(b), the Company owns all right, title and interest in and to, or has the right to use pursuant
to a valid and enforceable license as set forth on Schedule 5.9(a), free and clear of all Liens (other than Permitted
Liens), all Intellectual Property Rights used in the operation of the Business as currently conducted. All Company Intellectual
Property Rights are valid and enforceable and no loss, other than by expiration of patents at the end of their respective statutory
terms, of any of such Company Intellectual Property Rights is threatened or pending. The Company has taken all commercially reasonable,
customary and necessary action, including the payment of all fees and taxes (to the extent applicable), to maintain and protect
all Company Intellectual Property Rights.


 


(c)     Except
as set forth on Schedule 5.10(c), (i) there are no claims against the Company that were either made since January 1, 2012,
or are presently pending contesting the validity, use, enforceability, ownership or registerability of any of the Company Intellectual
Property Rights, and to the Knowledge of the Company, there is no reasonable basis for any such claim, (ii) the Company has not
infringed, misappropriated, misused or otherwise conflicted with, and the operation of the business of the Company as currently
conducted does not infringe, misappropriate, misuse or conflict with, any Intellectual Property Rights of any other Persons, (iii)
the Company has not received any notices (including cease-and-desist letters or offers to license) alleging infringement, misuse
or misappropriation of, or other conflict with, any Intellectual Property Rights of other Persons, and (iv) to the Knowledge of
the Company, no other Person is infringing, misusing, misappropriating or otherwise conflicting with any of the Intellectual Property
Rights owned by the Company. The transactions contemplated by this Agreement and such transactions shall not impair the right,
title or interest of the Business in and to the Company Intellectual Property Rights.


 




     


     


    

 


(d)     The
computer systems, including the software, firmware, hardware (whether general or special purpose), networks and interfaces (collectively,
the “Computer Systems”) that are used or relied on by the Company in the conduct of the Business are sufficient
for the immediate needs of the Company. Except as set forth in Schedule 5.10(d), all Computer Systems used in the business
of the Company are operated by and are under the control of the Company and, other than with respect to Company Intellectual Property
Rights used pursuant to valid and enforceable licenses, are not wholly or partly dependent on any facilities which are not under
the operation or control of the Company. In the twelve-month period prior to the date hereof, there have been no bugs in, or failures,
breakdowns, or continued substandard performance of any such Computer Systems which has caused a material disruption or interruption
in or to the use of such Computer Systems or the operation of the business of the Company.


 


5.11.         Litigation.
Except as set forth on Schedule 5.11, there are no, and in the past three (3) years there have been no, actions, suits,
hearings, Proceedings or Orders pending or, to the Knowledge of the Company, threatened against or affecting the Company or any
of its Assets, or pending or threatened by the Company against any third party, at law or in equity, before or by any Government
Entity (including any Proceedings with respect to the transactions contemplated by this Agreement). The Company is not subject
to any Order of any Government Entity. The Proceedings required to be listed on Schedule 5.11 could not, individually or
in the aggregate, be reasonably expected to have a Material Adverse Effect.


 


5.12.         Brokerage.
There are and shall be no claims for brokerage commissions, finders’ fees or similar compensation in connection with the
transactions contemplated by this Agreement based on any arrangement or agreement to which the Company or any of its Affiliates
is a party for which Buyer could become obligated. The Company shall be solely responsible for any and all compensation, fees,
and other amounts payable to GDD Ventures LLC in connection with execution and delivery of this Agreement or the consummation of
the transactions contemplated hereby.


 


5.13.         Insurance.
Schedule 5.13 contains a description (including the name of the insurer, and the period, amount and scope of coverage)
of each insurance policy maintained by or on behalf of the Company with respect to its properties, assets and business.
The Company is not in default with respect to its obligations under any insurance policy maintained by it. Each such insurance
policy (a) is legal, valid, binding and enforceable and (b) will continue to be legal, valid, binding, enforceable, and
in full force and effect on identical terms immediately following the consummation of the transactions contemplated hereby. Schedule
5.13 sets forth a list of all claims, if any, made by the Company since January 1, 2012 against an insurer in respect of coverage
under an insurance policy. There have been no denials of claims or reservation of rights letters with regard to such claims. Except
as set forth on Schedule 5.13, the Company does not have any self-insurance or co-insurance programs.


 




     


     


    

 


5.14.         Compliance
with Laws; Permits.


 


(a)     The
Company is in compliance, and, since January 1, 2012, has been in compliance, in all material respects, with all applicable Laws.
Except as set forth on Schedule 5.14(a), no notices have been received by and no claims have been filed against the
Company alleging a violation of any Laws.


 


(b)     The
Company holds all Permits required for the conduct of the Business as presently conducted and Schedule 5.144(b) sets
forth a list of all of such Permits held by the Company. Since January 1, 2012, no notices have been received by the Company alleging
the failure to hold any required Permit. The Company is in compliance with all material terms and conditions of all Permits which
it holds. Except as set forth on Schedule 5.14(b), all of such Permits are in full force and effect and will remain in full
force and effect and will be available for use by Buyer immediately after the Closing. No loss or expiration to the Business
of any Permit is pending or, to the Knowledge of the Company, threatened, other than expiration in accordance with the terms thereof,
which terms do not expire as a result of the consummation of the transactions contemplated hereby.


 


5.15.         Environmental
and Safety Matters. Except as set forth on Schedule 5.155:


 


(a)     The
Company is, and at all times since January 1, 2012 has been, in compliance with all Environmental Laws. Without limiting the foregoing,
the Company is currently in compliance with, and currently holds, all Permits required pursuant to any Environmental Laws for the
occupancy of its properties or facilities or the operation of the Business.


 


(b)     The
Company has not, since January 1, 2012, received any written notice, request for information, citation, complaint, summons or Order
relating to any alleged violation of any applicable Environmental Laws from any Governmental Entity or any other Liability arising
under Environmental Laws relating to the Real Property, any Purchased Asset, or the Business.


 


(c)      The
Company has furnished to Buyer all environmental audits, reports and other material environmental documents relating to the former
or current properties, facilities or operations of the Company or its predecessors or Affiliates.


 


5.16.         Affiliate
Transactions. Except as set forth on Schedule 5.166, no employee, officer, director, shareholder or Affiliate of
the Company (including Parent and its Affiliates) and, to the Company’s Knowledge, no individual related by blood, marriage
or adoption to any such individual, and no entity in which any such Person owns any beneficial interest (a) is, or during
any portion of the two (2) year period prior to the date hereof has been, a party to any agreement, contract, commitment, arrangement,
or transaction with or related to the Company, excluding employment, non-competition, confidentiality or other similar agreements
between the Company and any Person who is an officer, director, or employee of the Company; or (b) owns, leases, or has, or
during any portion of the two (2) year period prior to the date hereof has owned, leased or had, any economic or other interest
in any asset, tangible or intangible, that is used by the Company in carrying out the Business.


 




     


     


    

 


5.17.         Real
Property.


 


(a)     The
Company does not own, and has not owned at any time prior to the date of this Agreement, any interest in real property.


 


(b)     Schedule 5.17(b)
sets forth the address of each leased real property and a true and complete list of all leases, subleases and other occupancy agreements
(written and oral), including all amendments, extensions and other modifications pursuant to which the Company holds leased real
property (the “Leases”), and whether consent is required pursuant to such Lease for the consummation of the
transactions contemplated hereby, and security deposited by the Company with the landlord or sublandlord, if any. The Company has
previously delivered to Buyer true, complete and correct copies of all the Leases. Except as set forth on Schedule 5.17(b),
the Company has a good and valid leasehold interest in and to all of the leased real property, subject to no Liens except for Permitted
Liens. Except as set forth in Schedule 5.17(b), with respect to each of the Leases: (i) the Company’s possession
and quiet enjoyment of the leased real property under such Lease has not been disturbed since the commencement date of such Lease,
Buyer will have such rights to possession and quiet enjoyment upon consummation of the transactions contemplated hereby, and neither
party to any Lease is in material default thereof which default has not been cured, and no circumstances or state of facts presently
exists which, with the giving of notice or passage of time, or both, would constitute a default under any Lease or would permit
the landlord or sublandlord under any Lease to terminate any Lease; (ii) no security deposit or portion thereof deposited with
respect such Lease has been applied in respect of a breach or default under such Lease which has not been redeposited in full;
(iii) the Company does not owe, nor will it or Buyer owe in the future pursuant to any agreement entered into by the Company prior
to the Closing, any brokerage commissions or finder’s fees with respect to such Lease; (iv) the other party to such Lease
is not an Affiliate of, and otherwise does not have any economic interest in, the Company; (v) the Company does not sublease, license
or otherwise grant any Person the right to use or occupy such leased real property or any portion thereof; (vi) no written, or
to the Knowledge of the Company, oral, notice has been received by the Company at any time within one year prior to the date of
this Agreement indicating the desire or intention of any other party to a Lease to amend, modify, rescind or terminate the same;
(vii) with respect to leased real property, there have been no agreements whether written or oral to extend Leases scheduled to
expire within twelve (12) months at the date of this Agreement nor has the Company received written correspondence from such landlord
concerning the renewal of such Lease; and (viii) the Company has not collaterally assigned or granted any other security interest
or Lien in the Company’s interest in such Lease which security interest or Lien shall survive the Closing.



 


5.18.         Other
Information. The information concerning the Company and the Purchased Assets set forth in this Agreement and the Schedules
and Exhibits attached to this Agreement and any statement or certificate furnished or to be furnished to Buyer pursuant to this
Agreement, does not and will not contain any untrue statement of a material fact or omit to state a material fact required to be
stated herein or therein or necessary to make the statements and facts contained herein or therein, in light of the circumstances
in which they are made, not false or misleading. The Company has provided to Buyer all information which might reasonably be expected
to materially and adversely affect the value of the Business or the Purchased Assets and which might otherwise be material to a
prospective purchaser for the value of the Business and the Purchased Assets. All information provided to Buyer by the Company
with respect to the Purchased Assets and the Business (including the information set forth in the Schedules and Exhibits to this
Agreement) is true, accurate and complete in all material respects.


 




     


     


    

 


ARTICLE VI

Representations and Warranties of Buyer


 


As a material inducement
to the Company to enter into this Agreement and to consummate the transactions contemplated hereby, except as otherwise indicated
on the Schedules referenced in this ARTICLE VI, Buyer represents and warrants to the Company as follows:


 


6.1.          Organization,
Power and Authority. Buyer is duly organized, validly existing and in good standing under the Laws of the State of Delaware.
Buyer possesses all requisite corporate power and authority necessary to carry out the transactions contemplated by this Agreement.
No consent or approval of any third party is required to be obtained under the governing documents of either Buyer or under any
applicable Law in connection with the execution and delivery by Buyer of this Agreement or any Ancillary Agreements to which Buyer
is a party, or its performance of its obligations hereunder or thereunder, including the consummation of the transactions contemplated
hereby and thereby.


 


6.2.          Authorization;
No Breach.


 


(a)     The
execution, delivery and performance of this Agreement and all Ancillary Agreements to which Buyer is a party or by which Buyer
is bound have been duly authorized by all requisite corporate action on the part of Buyer. This Agreement and all Ancillary Agreements
to which Buyer is a party, when executed and delivered by Buyer in accordance with the terms hereof, shall each constitute a valid
and binding obligation of Buyer, enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency
or similar Laws affecting creditors rights generally or by general principles of equity.


 


(b)     Except
as set forth on Schedule 6.2(b), the execution and delivery by Buyer of this Agreement and the Ancillary Agreements
contemplated hereby to which it is a party, and the fulfillment of and compliance with the respective terms hereof and thereof
by such Buyer does not and shall not (i) conflict with or result in a breach of the terms, conditions or provisions of, (ii) constitute
a default under (whether with or without the passage of time, the giving of notice or both), (iii) give any third party the
right to modify, terminate or accelerate any obligation under, (iv) result in a violation of, or (v) require any authorization,
consent, approval, exemption or other action by or notice or declaration to, or filing with, any third party or Government Entity
pursuant to, (A) the organizational documents of Buyer, (B) any Law or Order to which Buyer is subject, or (C) any
material agreement or instrument, to which Buyer is subject.


 


6.3.          Brokerage.
There are no claims for brokerage commissions, finders’ fees or similar compensation in connection with the transactions
contemplated by this Agreement based on any arrangement or agreement to which Buyer or any of its Affiliates is a party or to which
Buyer or any of its Affiliates is subject for which the Company or any of its Affiliates could become liable or obligated.


 




     


     


    

 


6.4.          Litigation.
There are no Proceedings (including any arbitration Proceedings) or Orders, pending or, to the Knowledge of Buyer, threatened against
Buyer in which it is sought to restrain or prohibit or to obtain damages or other relief in connection with the transactions contemplated
by this Agreement.


 


ARTICLE VII

Covenants


 


7.1.          Pre-Closing
Covenants.


 


(a)     General.
Each of the parties hereto will use its commercially reasonable efforts to take all action and to do all things necessary, proper
or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction,
but not waiver, of the closing conditions set forth in Article VIII below).


 


(b)     Notices
and Consents. The Company shall give all notices to third parties, including its stockholders and the Company and Buyer shall
use their respective commercially reasonable efforts to obtain any and all necessary third party consents including the approval
of its stockholders, in connection with the transactions contemplated by this Agreement. Each of the parties will give any notices
to, make any filings with and use its commercially reasonable efforts to obtain any authorizations, consents and approvals of any
Government Entity necessary in connection with the transactions contemplated by this Agreement.


 


(c)     Operation
of Business. Until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, the Company
will not, without the prior written consent of Buyer, engage in any practice, take any action or enter into any transaction outside
the ordinary course of business; provided, however, the Buyer understands and agrees that the Company is negotiating new terms
with (i) Hitachi Capital and the other parties to the Hitachi Agreements and (ii) Alcoa, as contemplated to obtain new agreements
with such parties under Sections 7.1 (h) and 7.1(i). The Company will keep its business, assets and properties substantially intact,
including its present operations, physical facilities, working conditions and relationships with lessors, licensors, suppliers,
customers and employees.


 


(d)     Full
Access. The Company will permit representatives of Buyer to have full access, at reasonable times, upon reasonable notice,
and in a manner so as not to interfere with the normal business operations of the Company, to offices, properties, personnel, books,
and records of the Company, and shall furnish such persons with all information (including financial and operating data) as they
may reasonably request. The Company will use its commercially reasonable efforts to facilitate and arrange calls or meetings between
Buyer and any business relation of the Company or applicable Government Entity that Buyer reasonably requests.


 




     


     


    

 


(e)     Notice
of Developments. The Company will give prompt written notice to Buyer of any matter hereafter arising or discovered, which
would or would be reasonably expected to cause a breach of any of the representations and warranties of the Company contained in
this Agreement. No such notice or disclosure shall have any effect for the purpose of determining the satisfaction of the conditions
to Closing set forth in Article VII, or constitute a waiver of any Person’s entitlement to indemnification pursuant
to Article IX or the amount of such indemnification.


 


(f)     Exclusivity.
Prior to the termination of this Agreement, the Company will not, and will cause its Affiliates, agents and representatives not
to: (a) solicit, initiate or encourage the submission of any proposal or offer from any Person relating to the acquisition
of any capital stock or other voting securities, or any substantial portion of the assets, of the Company (including any acquisition
structured as a merger, consolidation or share exchange), or (b) participate in any discussions or negotiations regarding,
furnish any information, assist or participate in, or facilitate in any other manner, any effort or attempt by any Person to do
or seek any such transaction. The Company will notify Buyer immediately if any Person makes any such proposal, offer, inquiry or
contact and shall provide to Buyer a copy of all written materials and communications received by the Company or any of its representatives
or Affiliates in connection therewith.


 


(g)     Employee
Matters.


 


(i)          Termination.
Commencing as of December 1, 2015, Buyer shall make payment to the Company (or pay directly to the Company’s employees) all
employee salaries and related payroll deductions and taxes payable by the Company with respect to its employees. Effective immediately
prior to the Closing, but effective on the Closing, the Company shall terminate the employment of all of its employees, other than
those identified on Schedule 7.1(g)(i). The Company shall be solely responsible for any and all severance and any other
compensation or employee benefits payable with respect to any period or part thereof occurring prior to the Closing Date, not otherwise
payable by Buyer under this clause (g), whether required by state or federal law or otherwise, including but not limited to any
wages, bonuses or commissions that may be earned through the Closing and payable after the Closing as permitted by state or federal
law. The Company will bear all responsibility, obligation and Liability for, and all costs associated with, and will defend and
indemnify Buyer for: (x) any and all claims and Liabilities related to any unemployment fund contributions that are due and unpaid
on the Closing Date; and (y) any and all claims and Liabilities relating to the employees and any other employee employed by the
Company prior to the Closing Date and resulting from or arising out of their employment by the Company, prior to the Closing Date
and/or the subsequent termination by the Company and/or any subsequent decision by Buyer not to hire some or all of the employees,
including all claims and Liabilities incurred or asserted under the Fair Labor Standards Act, the Family and Medical Leave Act,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act, the Age Discrimination in Employment Act, ERISA,
the Occupational Health and Safety Act, the federal Worker Adjustment Retraining and Notification Act, any other Laws and/or the
common-law doctrines of breach of contract, breach of covenant of good faith and fair dealing, promissory estoppel, violation of
public policy, fraud or misrepresentation, defamation, intentional or negligent infliction of emotional distress, negligence, wrongful
termination of employment and/or any other employment-related doctrines under the statutes or common law of any state. Effective
at the Closing, the Company shall and does hereby release all employees hired by Buyer from any employment and/or confidentiality
agreement previously entered into between the Company and such Employee but only to the extent necessary for Buyer to operate the
Business and the Purchased Assets in the same manner as operated by the Company prior to the Closing.


 




     


     


    

 


(ii)         Workers’
Compensation. The Company will be solely liable for all workers’ compensation claims made by any of the employees based
on occurrences through and before the Closing. Buyer will be solely liable for all workers’ compensation claims made by any
of the employees based on occurrences from, including and after the Closing.


 


(iii)        Other
Employment-Related Liabilities. The Company will be liable for all employment-related Liabilities (other than wages and related
payroll deductions required by law) with respect to the employees through the Closing, including any obligation or commitment to
pay severance to any of the employees. Other than its agreement and obligation to pay employee wages commencing on December 1,
2015 through the Closing, for the Company’s employees, including William May. Notwithstanding the foregoing, Buyer shall
pay Jeffrey Lines base salary and commission and COBRA benefits from December 1, 2015 to December 15, 2015. Other than as provided
hereunder, Buyer will not assume or be bound by any previous or existing employment agreement or arrangement or termination, severance
or change of control agreement between the Company and any of the employees prior to the Closing.


 


(iv)        Plan
Assets or Liabilities. The Company will remain solely liable and Buyer will not assume or otherwise have any Liabilities, for
any contributions or benefits due with respect to any period prior to the Closing Date under any of the Company’s Employee
Benefit Plans.


 


(v)         COBRA
and Other Notices. For notices and payments related to events occurring prior the Closing, the Company shall be responsible
for any notices required to be given to employees pursuant to WARN, COBRA and/or § 402(f) of the Code, and for any payments
or benefits required pursuant to such laws or on account of any violation of any requirement of such laws, other than COBRA payments
due to Jeffrey Lines. Should Buyer not hire any employee of the Company, the Company shall be liable for any “M&A qualified
beneficiary” payments that may be required by and as defined in 26 C.F.R. § 54.4980B-9, et seq.


 


(vi)        Limitation
on Enforcement. Nothing in this Section 7.1(g), whether express or implied, confers upon any employee of the Company
or any other person, any rights or remedies, including (a) any right to employment or recall, or (b) any right to claim any particular
compensation, benefit or aggregation of benefits, of any kind or nature whatsoever, as a result of this Section7.1.


 


(vii)       Buyer
shall enter into employment agreements with William May upon terms mutually acceptable to Buyer and such persons


 


(h)     Alcoa
Agreement. Buyer and the Company shall use their respective commercially reasonable efforts to cause Alcoa to enter into a
Services Agreement directly with Buyer as described in Section 8 (k).


 




     


     


    

 


(i)          From
the period commencing on December 1, 2015 to the Closing Date, the Buyer shall timely and promptly pay the costs and expenses set
forth on Schedule 2.1 hereof for operating the NOC.


 


7.2.          Post-Closing
Covenants.


 


(a)     General.
In case at any time after the Closing any further action is necessary or desirable to carry out the purposes of this Agreement,
any Ancillary Agreement, or any of the transactions contemplated hereby or thereby, each of the parties hereto will take such further
action (including the execution and delivery of further instruments and documents) as any other party reasonably may request, all
at the sole cost and expense of the requesting party (unless the requesting party is entitled to indemnification hereunder). From
and after the Closing, the Company shall make available to Buyer all documents, books, records (including Tax records), agreements
and financial data of any sort relating to the Purchased Assets that are Excluded Assets.


 


(b)     Accounts
Receivable. All amounts received by the Company or its Affiliates in respect of the Purchased Assets on or after the Closing
Date in payment of any accounts receivable (whether related to transactions occurring prior to, on, or following the Closing Date)
shall be forwarded to Buyer within two Business Days of receipt thereof unless and until the Buyer and Parent default on payment
of the Tarsier Purchase Note.


 


(c)     Confidentiality.
The parties hereto acknowledge and agree that they are bound by the confidentiality provisions of the term sheet, dated September
2, 2015, by and between the Company and Buyer. From and after the Closing, the Company will treat and hold as confidential all
information concerning the Business and the Purchased Assets that is not already generally available to the public (“Confidential
Information”), refrain from using any of the Confidential Information except in connection with enforcing its rights
under this Agreement, and deliver promptly to Buyer or destroy, at the request and option of Buyer, all tangible embodiments (and
all copies) of the Confidential Information that are in its possession. In the event that the Company is requested or required
by any Government Entity (by oral question or request for information or documents in any Proceeding, interrogatory, subpoena,
civil investigative demand or similar process) to disclose any Confidential Information, the Company will notify Buyer promptly
of the request or requirement so that Buyer may seek an appropriate protective order. If, in the absence of a protective order,
the Company is, on the advice of counsel, compelled to disclose any Confidential Information to the Government Entity or else stand
liable for contempt, the Company may disclose the Confidential Information to the Government Entity but only to the extent necessary
and only upon providing Buyer with at least five Business Days advance notice. The Company must use its commercially reasonable
efforts to obtain, at the reasonable request of Buyer, an order or other assurance that confidential treatment will be accorded
to such portion of the Confidential Information required to be disclosed.


 


(d)     Services to HD Project One, LLC. Buyer shall perform in good faith and in a commercially responsible manner consistent with the
services provided by the Company prior to the Closing, the services to HD One as described in Schedule 1.1(vi) and shall place
into escrow with Hitachi America, LTD the source code for the Company’s technology.


 




     


     


    

 


ARTICLE VIII

Conditions to Closing


 


8.1.          Conditions
to Obligation of Buyer. Buyer’s obligation to consummate the transactions contemplated by this Agreement is subject to
satisfaction of the following conditions:


 


(a)     the
representations and warranties of the Company set forth in Article V shall have been true and correct as of the date hereof
and shall be true and correct as of the Closing Date;


 


(b)     all
covenants contained in this Agreement required to be performed by the Company at or prior to the Closing shall have been performed
in all material respects;


 


(c)     [reserved]


 


(d)     no
Proceeding shall be pending or threatened before any Government Entity in which an unfavorable injunction, judgment, order, decree,
ruling or charge would prevent consummation of any of the transactions contemplated by this Agreement;


 


(e)     the
Company will have procured the consent of its stockholders to this Agreement and the sale of the Purchase Assets to the Buyer,
all of the third party and Government Entity consents, authorizations and approvals set forth on Schedule 8.1(e), all of
which shall be final and non-appealable;


 


(f)     the
Company shall have delivered to Buyer (i) each of the Ancillary Agreements, (ii) a certificate dated as of the Closing Date certifying
as to the satisfaction of the conditions contained in Sections 8.1(a), (b) and (c), and (iii) a certificate dated as of
the Closing certifying as to (x) the resolutions of the board of directors and stockholders of the Company authorizing the execution,
delivery, and performance of this Agreement and each of the Ancillary Agreements to which it is a party, and (y) the articles of
incorporation, and bylaws of the Company, in each case, duly executed by an authorized representative of the Company;


 


(g)     the
Company shall have delivered to Buyer payoff letters from those creditors of the Company entitled to any Lien on any Purchased
Asset, together with UCC-3 releases or similar termination statements with respect to all such Liens; provided, however, Buyer
and Parent understand and agree that liens and encumbrances in favor of Hitachi Capital shall not be released.


 


(h)     Buyer
and Alcoa shall have entered into a Services Agreement with a term of not less than four years on terms and conditions satisfactory
to Buyer; provided that, if such agreement does not provide for (i) a term of not less than four years and (ii) a revenue share
of not less than 20% to Buyer (subject to a 5% adjustment in favor of Alcoa until such time as Alcoa receives a total of $571,757.96
in revenue above and beyond their 20% share which includes payments on January 31, 2016 and June 30, 2016) such agreement shall
not satisfy the conditions of this Section 8.1(k);


 




     


     


    

 


(i)          the
Company shall have deposited a copy of the Grid Daemon software source code with Hitachi Capital Hitachi America LTD or their designee;
and


 


(j)          the
Company shall have executed and delivered all such other certificates, instruments and other documents reasonably required by Buyer
in connection with the consummation of the transactions contemplated hereby.


 


8.2.          Conditions
to Obligation of the Company. The Company’s obligation to consummate the transactions contemplated by this Agreement
is subject to satisfaction of the following conditions:


 


(a)     the
representations and warranties of Buyer set forth in Article VI shall have been true and correct as of the date hereof and
shall be true and correct as of the Closing Date;


 


(b)     all
covenants contained in this Agreement required to be performed by Buyer at or prior to the Closing shall have been performed in
all material respects;


 


(c)     no
Proceeding shall be pending or threatened before any Government Entity in which an unfavorable injunction, judgment, order, decree,
ruling or charge would prevent consummation of any of the transactions contemplated by this Agreement;


 


(d)     the
Buyer shall have delivered to the Company (i) each of the Ancillary Agreements, and (ii) a certificate dated as of the Closing
Date certifying as to the satisfaction of the conditions contained in Sections 8.1(a) and (b); and


 


(e)     Buyer
shall have delivered by January 31, 2016 (i) the certificate representing the Parent Shares to the Escrow Agent. Subject to the
Company having obtained (A) the approval of its stockholders for this Agreement and the sale and transfer of the Purchased Assets
and (B) the Alcoa Agreement, at the Closing, Buyer shall deliver a note for $450,000 which shall be due and payable in four tranches
the initial tranche to be paid one day after Tarsier receives initial funding of $150,000 from any source but no later than January
31, 2016 in the principal amount of $50,000; the second tranche to be due and payable on January 31, 2016 in the principal amount
of $115,000 and the third and fourth tranche of $285,000 to be due and payable to Alcoa on based on new acceptable 4 year agreement
with Alcoa.


 


ARTICLE IX

Indemnification


 


9.1.          Survival
of Representations and Warranties. The representations and warranties in this Agreement (a) contained in Sections 5.1,
5.2, 5.6, 5.12, 5.18 and Article VI shall survive the Closing indefinitely; (b) contained in
Sections 5.3, 5.4, 5.8, and 5.10 shall survive the Closing survive until ninety (90) days after
the end of the applicable statute of limitations period; and (c) contained in any other Section of Article V shall survive
the Closing for a period of two years following the Closing Date. Notwithstanding the foregoing, any claim made in writing with
reasonable specificity by the parties seeking to be indemnified within the time period set forth in this Section 9.1 shall
survive until such claim is finally and fully resolved. The agreements and covenants set forth in this Agreement shall survive
indefinitely, unless specifically stated otherwise.


 




     


     


    

 


9.2.          Indemnification
Obligations.


 


(a)     Indemnification
Obligations of the Company. Subject to the provisions of this ARTICLE IX, after the Closing, the Company shall indemnify
Buyer and its Affiliates, officers, directors, employees, agents, representatives, successors and permitted assigns (collectively,
“Buyer Indemnified Parties”) and save and hold each of them harmless against and pay on behalf of or reimburse
Buyer Indemnified Parties as and when incurred for any Losses, whether or not arising out of third party claims, which any Buyer
Indemnified Party may suffer, sustain or become subject to as a result of or arising from:


 


(i)          any
facts or circumstances which constitute a breach of any representation or warranty of the Company under this Agreement or in an
Ancillary Agreement; provided, that for purposes of this Section 9.2(a)(i), the qualifications as to materiality
and Material Adverse Effect contained in such representations and warranties shall not be given effect;


 


(ii)         any
non-fulfillment or breach of any covenant, agreement or other provision by the Company under this Agreement;


 


(iii)        any
Excluded Liability;


 


(iv)        any
Liability arising out of Buyer’s performance or failure to perform any of its obligations under Section 7.2(d); or


 


(v)         any
fraud by the Company.


 


(b)     Indemnification
Obligations of Buyer. Subject to the provisions of this ARTICLE IX, after the Closing, Buyer shall indemnify the Company
and its Affiliates, officers, directors, employees, agents, representatives, successors and permitted assigns (collectively, “Company
Indemnified Parties”) and save and hold each of them harmless against and pay on behalf of or reimburse Company Indemnified
Parties as and when incurred for any Losses, whether or not arising out of third party claims, which any Company Indemnified Parties
may suffer, sustain or become subject to as a result of or arising from:


 


(i)          any
facts or circumstances which constitute a breach of any representation or warranty of Buyer under this Agreement or in any Ancillary
Agreement; provided, that for purposes of this Section 9.2(b)(i), the qualifications as to materiality contained
in such representations and warranties shall not be given effect;


 


(ii)         any
non-fulfillment or breach of any covenant, agreement or other provision by Buyer under this Agreement;


 


(iii)        any
Assumed Liability; or


 




     


     


    

 


(iv)        any
fraud by Buyer.


 


(c)     No
Limitation. Notwithstanding anything to the contrary contained herein, no investigation by or knowledge or Buyer or any of
its representatives or Affiliates shall in any way limit or otherwise affect the indemnity obligations of the Company and May under
this Article IX (it being understood that the disclosures contained in the Schedules shall be considered in determining
the existence of a misrepresentation or breach by the Company hereunder).


 


9.3.          Resolution
of Claims. After the giving of any notice of claims (a “Claim Notice”) by an indemnified party to the party(ies)
from whom indemnification is sought (the “Indemnitor”), the amount of indemnification to which an indemnified
party shall be entitled under this Article IX shall be determined: (i) by written agreement between the indemnified party and the
Indemnitor; (ii) by a final judgment or decree of any court of competent jurisdiction; or (iii) by any other means to which the
indemnified party and the Indemnitor shall agree in writing. The judgment or decree of a court shall be deemed final when the time
for appeal, if any, shall have expired and no appeal shall have been taken or when all appeals taken shall have been finally determined.


 


9.4.          Manner
of Payment. Any indemnification amount payable by Buyer to any Company Indemnified Party pursuant to this Article IX
shall be paid within thirty (30) days after the determination thereof by wire transfer of immediately available funds to an account
designated in writing by such Company Indemnified Party. Any indemnification amount payable by the Company to any Buyer Indemnified
Party pursuant to this Article IX shall be paid and satisfied, by the cancellation of a number of Parent Shares determined
in accordance with the express provisions of the Escrow Agreement; within thirty (30) days after the determination thereof.


 


(a)     Purchase
Price Adjustment. All indemnification payments under this ARTICLE IX shall be deemed adjustments to the Purchase Price.


 


ARTICLE X

Termination


 


10.1.          Termination
of Agreement. This Agreement may be terminated solely in accordance with the following provisions:


 


(a)     Buyer
and the Company may terminate this Agreement by mutual written consent at any time prior to the Closing;


 


(b)     Buyer
may terminate this Agreement by giving written notice to the Company at any time prior to the Closing (i) in the event the
Company has breached any representation, warranty or covenant contained in this Agreement in any respect, Buyer has notified the
Company of the breach, and the breach has continued without cure or written waiver of the breach by Buyer for a period of 10 days
after the notice of breach, or (ii) if the Closing has not occurred on or before December 31, 2015 (the “Outside Date”)
by reason of the failure of any condition precedent under Section 8.1 (unless the failure results primarily from Buyer
itself breaching any representation, warranty or covenant contained in this Agreement); and


 




     


     


    

 


(c)     the
Company may terminate this Agreement by giving written notice to Buyer at any time prior to the Closing (i) in the event Buyer
has breached any representation, warranty or covenant contained in this Agreement in any respect, the Company has notified Buyer
of the breach and the breach has continued without cure or written waiver of the breach by the Company for a period of 10 days
after the notice of breach, or (ii) if the Closing has not occurred on or before the Outside Date by reason of the failure
of any condition precedent under Section 8.2 (unless the failure results primarily from the Company breaching any representation,
warranty or covenant contained in this Agreement).


 


10.2.          Effect
of Termination. If any party terminates this Agreement in accordance with foregoing, all rights and obligations of the parties
under this Agreement will terminate without any Liability of any party to any other party except for (i) any Liability of any party
then in breach or otherwise for fraud, (ii) (iii) Liabilities for any breach of Section 7.1(f), which shall survive the
termination of this Agreement indefinitely.


 


ARTICLE XI

Miscellaneous


 


11.1.          Fees
and Expenses. Each party hereto shall pay all costs and expenses incurred thereby or by any of its respective Affiliates in
connection with the negotiation, preparation and execution of this Agreement and the consummation of the transactions contemplated
hereby.


 


11.2.          Bulk
Sales Waiver. The parties hereto waive compliance with any “bulk sales”, “bulk transfer” or similar
Laws applicable to the transactions contemplated by this Agreement.


 


11.3.          Removing
Excluded Assets. The removal of Excluded Assets by the Company, if any, from any facilities or properties of the Business shall
be done in such manner as to avoid any damage to such facilities and other properties to be occupied by Buyer and any disruption
of the Business after the Closing Date. Any damage to the Purchased Assets or to such facilities or properties resulting from such
removal shall be promptly paid by the Company.


 


11.4.          Press
Release and Announcements. None of the parties hereto nor any of their respective representatives shall issue any press releases
or make any public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written
consent of the other parties hereto. Notwithstanding the foregoing, any such press release or public announcement may be made if
required by applicable Law or a securities exchange rule.


 


11.5.          Amendments;
Waivers. This Agreement may be amended, or any provision of this Agreement may be waived upon the written agreement of Buyer
and the Company. No course of dealing between or among the parties hereto shall be deemed effective to modify, amend or discharge
any part of this Agreement or any rights or obligations of any such party or such holder under or by reason of this Agreement.


 




     


     


    

 


11.6.          Successors
and Assigns. This Agreement and all covenants and agreements contained herein and rights, interests or obligations hereunder,
by or on behalf of any of the parties hereto, shall bind and inure to the benefit of the respective successors and permitted assigns
of the parties hereto whether so expressed or not, except that neither this Agreement nor any of the covenants and agreements herein
or rights, interests or obligations hereunder may be assigned or delegated by the Company without the prior written consent of
Buyer.


 


11.7.          Severability.
Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable
Law, but if any provision of this Agreement or the application of any such provision to any Person or circumstance shall be held
to be prohibited by, illegal or unenforceable under applicable law or rule in any respect by a court of competent jurisdiction,
such provision shall be ineffective only to the extent of such prohibition, illegality or unenforceability, without invalidating
the remainder of such provision or the remaining provisions of this Agreement.


 


11.8.          Counterparts.
This Agreement may be executed in counterparts (including by means of .pdf signature pages), any one of which need not contain
the signatures of more than one party, but all such counterparts taken together shall constitute one and the same agreement.


 


11.9.          Descriptive
Headings; Interpretation. The headings and captions used in this Agreement and any Exhibits or Schedules to this Agreement
are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. Any capitalized
terms used in any Schedule or Exhibit attached hereto and not otherwise defined therein shall have the meanings set forth
in this Agreement. The use of the word “including” herein shall mean “including without limitation.”


 


11.10.         Entire
Agreement. This Agreement and the agreements and documents referred to herein contain the entire agreement and understanding
among the parties hereto with respect to the subject matter hereof and, except as expressly provided in Section 7.2(f),
supersede all prior agreements and understandings, whether written or oral, relating to such subject matter in any way.


 


11.11.         No
Third-Party Beneficiaries. This Agreement is for the sole benefit of the parties hereto and their permitted successors and
assigns and nothing herein expressed or implied shall give or be construed to give any Person, other than the parties hereto and
such permitted successors and assigns, any legal or equitable rights hereunder.


 


11.12.         Schedules
and Exhibits. All Schedules and Exhibits attached hereto or referred to herein are hereby incorporated in and made a part of
this Agreement as if set forth in full herein.


 




     


     


    

 


11.13.         Governing
Law. All issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement and the
Schedules and Exhibits hereto shall be governed by, and construed in accordance with, the laws of the State of New York without
giving effect to any choice of law or conflict of law rules or provisions (whether of the State of New York or any other
jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of New York. In furtherance
of the foregoing, the internal law of the State of New York shall control the interpretation and construction of this Agreement
(and all Schedules and Exhibits hereto), even though under that jurisdiction’s choice of law or conflict of law analysis,
the substantive law of some other jurisdiction would ordinarily apply.


 


11.14.         Waiver
of Jury Trial. EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
ON, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, VERBAL OR WRITTEN STATEMENT
OR ACTION OF ANY PARTY HERETO.


 


11.15.         Jurisdiction.
Each of the parties hereto submits to the jurisdiction of any state or federal court sitting in New York, New York, in any action
or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may
be heard and determined in any such court and hereby expressly submits to the personal jurisdiction and venue of such court for
the purposes hereof and expressly waives any claim of improper venue and any claim that such courts are an inconvenient forum.
Each of the parties hereby irrevocably consent to the service of process of any of the aforementioned courts in any such suit,
action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, to its address set forth
herein.


 


11.16.         Notices.
All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall
be in writing and shall be deemed to have been given when delivered personally to the recipient or when sent by facsimile (with
hard copy to follow), three (3) Business Days after being sent to recipient by U.S. First Class mail (postage prepaid), or one
(1) Business Day after being sent to the recipient by reputable overnight courier service (charges prepaid). Such notices, demands
and other communications shall be sent to the applicable addresses indicated below or to such other address or to the attention
of such other Person as the recipient party has specified by prior written notice to the sending party. All notices, demands and
other communications hereunder may be given by any other means (including telecopy or electronic mail), but shall not be deemed
to have been duly given unless and until it is actually received by the intended recipient.


 


the Company


 


Demansys Energy, Inc.


350 Jordan Road

Troy, NY 12180


Attention: Jeffrey M. Lines


Facsimile No.:______________


E-mail: jlines@demansys.com


 




     


     


    

 


Buyer:


 


Tarsier Systems, Ltd


475 Park Avenue South


30th Floor


New York, NY 10016


Attention: Isaac H. Sutton


Facsimile No.: 973-996-9857


E-mail: ISutton@TarsierLtd.com


 


with a copy to (which shall constitute
notice):


 


Westerman Ball Ederer Miller Zucker & Sharfstein
LLP


1201 RXR Plaza


Uniondale, NY 11556


Attention: Alan C. Ederer, Esq


Facsimile: No.: (516) 612-9212


E-mail: aederer@westermanllp.com


 


11.17.         No
Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the
event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the
parties hereto, and no presumption or burden of proof shall arise favoring or disfavoring any party hereto by virtue of the authorship
of any of the provisions of this Agreement.


 


[Signature page follows.]


 




     


     


    

 


IN WITNESS WHEREOF, the
parties hereto have executed this Asset Purchase Agreement on the date first written above.


 


	 	BUYER:
	 	 
	 	TARSIER SYSTEMS, LTD
	 	 	 
	 	By:	/s/ Isaac H. Sutton
	 	 	Name: 
	 	 	
        Title: 

	 	 	 
	 	COMPANY:
	 	 
	 	DEMANSYS ENERGY, INC.
	 	 	 
	 	By:	/s/ Jeffrey M. Lines
	 	 	Name:  Jeffrey M. Lines
	 	 	Title:    CEO


 




     


     


    

 


Exhibit A


 


Glossary


 


As used in this Agreement,
the following terms have the meanings set forth below:


 


“Affiliate”
of any particular Person means any other Person controlling, controlled by or under common control with such particular Person,
where “control” means the possession, directly or indirectly, of the power to direct the management and policies of
a Person whether through the ownership of voting securities, contract or otherwise.


 


“Agreement”
has the meaning set forth in the Preamble.


 


“Alcoa”
has the meaning set forth in Section 3.2(b).


 


“Ancillary
Agreements” collectively means (i) the Escrow Agreement, (ii) the Intellectual Property Assignment Agreement attached
hereto as Exhibit C, (iii) the Employment Agreements, (iv) the Consulting Agreement, (v) the Restrictive Covenant and Release
Agreement, (vi) the Bill of Sale, (vii) the Assignment and Assumption Agreement, and (viii) each other document, agreement, and
certificate delivered in connection herewith.


 


“Assets”
means, with respect to any Person, all of the assets, rights, interests and other properties, real, personal and mixed, tangible
and intangible, owned by such Person.


 


“Assigned
Contracts” has the meaning set forth in Section 1.1(a)(vi).


 


“Assumed Liabilities”
has the meaning set forth in Section 2.1.


 


“Balance Sheet”
means the Company’s balance sheet as of August 31, 2015 delivered to Buyer as part of the Financial Statements pursuant to
this Agreement.


 


“Business
Day” means each day which is not a day on which banking institutions in the city of New York, New York are authorized
or obligated by law or executive order to close.


 


“Business”
has the meaning set forth in the Recitals.


 


“Buyer Indemnified
Parties” has the meaning set forth in Section 9.2(a).


 


“Buyer”
has the meaning set forth in the Preamble.


 


“Closing”
has the meaning set forth in Section 4.1.


 


“Closing
Date” has the meaning set forth in Section 4.1.


 


“Company”
has the meaning set forth in the Preamble.


 




    i


     


    

 


“Company
Intellectual Property Rights” means all of the Intellectual Property Rights owned by the Company.


 


“Computer
Systems” has the meaning set forth in Section 5.10(d).


 


“Contract”
means any agreement, contract, lease, consensual obligation, or undertaking (whether written or oral and whether express or implied).


 


“Employee
Benefits Plan” has the meaning set forth in Section 5.15.


 


“Environmental
Laws” shall mean whenever enacted or in effect all federal, state, local and foreign statutes, regulations, ordinances
and other provisions having the force or effect of law, all judicial and administrative orders and determinations, all contractual
obligations and all common law, in each case concerning public health and safety, worker health, safety and pollution or protection
of the environment and natural resources.


 


“Escrow Agent”
means Westermann Ball Ederer Miller Zucker & Sharfstein LLP.


 


“Escrow Agreement”
has the meaning set forth in Section 3.2.


 


“Excluded
Assets” has the meaning set forth in Section 1.2.


 


“Excluded
Liabilities” has the meaning set forth in Section 2.2.


 


“Excluded
Representations” has the meaning set forth in Section 8.1.


 


“Existing
Alcoa Agreement” has the meaning set forth in Section 3.2(b).


 


“Financial
Statements” has the meaning set forth in Section 5.4.


 


“GAAP”
means United States generally accepted accounting principles consistently applied, as in effect from time to time.


 


“Government
Entity” means any nation, any state or other political subdivision thereof, or any entity exercising executive, legislative,
judicial, regulatory or administrative functions of government, including any court.


 


“Hitachi Agreement”
means, taken collectively, the following agreements: Loan and Security Agreement No. 129564 dated as of July 20, 2015 among Hitachi
Capital America Corp. (“Hitachi Capital”), HD Project One, LLC (“HD One”) and the Company; (ii) Pledge
and Security Agreement dated as of July 20, 2015 among Hitachi Capital, Hitachi America, LTD and the Company; and (iii) Operating
Agreement of HD Project One, LLC dated as of July 20, 2015 and (iv) one or more written agreement whereby Hitachi Capital forgives
all claims against the Company and terminates any and all liens against the Purchased Assets.


 




    ii


     


    

 


“Indebtedness” of the
Company means at a particular time, without duplication, (i) any obligations under any indebtedness for borrowed money (including
all obligations for principal, interest premiums, penalties, fees, expenses, breakage costs and bank overdrafts thereunder), (ii)
any indebtedness evidenced by any note, bond, debenture or other debt security, (iii) any commitment by which a Person assures
a financial institution against loss (including contingent reimbursement obligations with respect to letters of credit), (iv) any
off-balance sheet financing, including synthetic leases and project financing, (v) all obligations under leases that have been
or should be, in accordance with GAAP, recorded as capital leases, (vi) any payment obligations in respect of banker’s acceptances
or letters of credit, (vii) any Liability with respect to interest rate swaps, collars, caps and similar hedging obligations, (viii)
all obligations for the deferred and unpaid purchase price of property or services (other than trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice that are not more than ninety (90) days past due), (ix)
any indebtedness referred to in clauses (i) through (viii) above of any Person which is either guaranteed by, or secured by a Lien
upon the Company or any of its assets and (x) accrued and unpaid interest of any such foregoing obligation.


 


“Intellectual
Property Rights” means any and all of the following in any jurisdiction throughout the world: (i) inventions (whether
or not patentable or reduced to practice), patents, patent applications and patent disclosures and improvements thereto together
with all reissuances, continuations, continuations in part, divisions, revisions, extensions and reexaminations thereof, (ii) trademarks,
service marks, trade dress, trade names, slogans, logos, designs, and internet domain names, together with all translations, adaptations,
derivations, and combinations thereof, and all goodwill associated with any of the foregoing, and all applications, registrations
and renewals in connection therewith, (iii) copyrights and copyrightable works and all applications, registrations and renewals
in connection therewith, (iv) computer software (including source code, executable code, data, databases and related documentation),
(v) trade secrets and other proprietary or confidential information (including ideas, know how, manufacturing and production processes
and techniques, research and development, drawings, specifications, layouts, designs, plans, proposals, technical data, financial,
business and marketing plans and proposals, customer and supplier lists, price and cost information, and other business materials)
and all advertising and promotional materials), (vi) all other intellectual property and proprietary rights, whether registered
or unregistered and (vii) all copies and tangible embodiments of any of the foregoing (in whatever form or medium).


 


“Known”
or “Knowledge” means, with respect to any Person, actual knowledge of such Person after reasonable inquiry and
investigation. As it relates to the Company, the term “Known” or “Knowledge” means the knowledge after
reasonable inquiry and investigation of William May, Jeffrey Lines, and/or Adam Todorski.


 


“Law”
or “Laws” means all statutes, laws, codes, ordinances, regulations, rules, Orders, judgments, writs, injunctions,
assessments, awards, acts or decrees of any Government Entity.


 


“Leases”
has the meaning set forth in Section 5.20(b).


 




    iii


     


    

 


“Liability”
means any liability (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become due).


 


“Lien”
or “Liens” means any mortgage, pledge, security interest, encumbrance, deed of trust, right-of-way, right of
setoff, claim, lien, charge of any kind, title defect or imperfection, easement, option, proxy, power-of-attorney, voting agreement,
or any restriction on transfer.


 


“Loss”
or “Losses” means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands,
injunctions, Orders, rulings, and damages, dues, penalties, interest, fines, costs, amounts paid in settlement, Liabilities, Taxes,
Liens, losses, expenses, and fees, including court costs and reasonable attorneys’, consultants’ and experts’
fees and expenses and all amounts paid in investigation, defense or settlement of any of the foregoing.


 


“Material
Adverse Effect” means a material and adverse effect upon (i) the ability of the Company to use or enforce its rights
with respect to the Purchased assets or (ii) the ability of the Company to consummate the transactions contemplated hereby or perform
its obligations hereunder.


 


“Material
Contracts” has the meaning set forth in Section 5.9(b).


 


“May”
has the meaning set forth in the Preamble.


 


“NYISO”
has the meaning set forth in Section 1.2(b).


 


“NYISO Receivables”
has the meaning set forth in Section 3.2(a).


 


“NOC”
means the 24 by 7 Network Operations Center, comprised of equipment and personnel used to operate the Demansys energy assets in
the wholesale markets.


 


“Orders”
means judgments, writs, decrees, compliance agreements, injunctions or judicial or administrative orders and determinations of
any Government Entity or arbitrator.


 


“Outside
Date” has the meaning set forth in Section 10.1(b).


 


“Permits”
means all permits, licenses, authorizations, registrations, franchises, approvals, certificates, variances and similar rights obtained,
or required to be obtained, from Government Entities.


 


“Permitted
Liens” has the meaning set forth in Section 5.6(a).


 


“Person”
means an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust,
a joint venture, an unincorporated organization and a governmental entity or any department, agency or political subdivision thereof.


 


“Pre-Closing
Payment” has the meaning set forth in Section 3.2(c).


 




    iv


     


    

 


“Proceeding”
means any lawsuit, proceeding, investigation or other claim or action before any Government Entity or arbitrator.


 


“Purchase
Price” has the meaning set forth Section 3.5(d).


 


“Purchased
Assets” has the meaning set forth Section 1.1(b).


 


“Schedules”
has the meaning set forth in Article V.


 


“Statement
of Allocation” has the meaning set forth in Section 3.6.


 


“Tax”
or “Taxes” means federal, state, province, county, local, foreign or other income, gross receipts, ad valorem,
franchise, profits, windfall profits, value-added, goods and services, sales or use, transfer, registration, excise, utility, environmental
(including taxes under Code Section 59A) communications, real or personal property, capital stock, license, payroll, wage or other
withholding, employment, unemployment, disability, social security (or similar), severance, stamp, occupation, alternative or add
on minimum, estimated, customs duties, fees, assessments charges and other taxes of any kind whatsoever, whether disputed or not,
including all interest, penalties, fines, additions to tax or additional amounts imposed by any taxing authority in connection
with any item described above, whether disputed or not, including any obligations to indemnify or otherwise assume or succeed to
the Tax liability of any other Person.


 


“Tax Return”
means any return, declaration, report, claim for refund, estimate, information report, return statement or filing relating to Taxes,
including any schedule or attachment thereto and including any amendment thereof; filed or required to be filed with any Government
Entity.


 




    v


     


    

 


Schedule 1.1 (a)(v) - Demansys Assets


 


	Asset	 	Serial Number	 	Location	 	Date

 Acquired	 	Purchase

 Price	 	Fair

 Market

 Value	 	Life Expectancy
	Cisco model 1941 router	 	FTX1630822J	 	Troy	 	Aug-12	 	2454	 	400	 	5+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cisco model 2901 router with four port ethernet module	 	FTX1617Y0TC	 	Albany Colo	 	Jun-12	 	1580	 	500	 	5+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Elecsys Director Z	 	34703-0001	 	Troy	 	Aug-12	 	1695	 	1500	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dell Power Edge Server	 	1FLWPS1	 	Albany Colo	 	Jun-12	 	2977	 	500	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	RTU from Hartford Steam	 	00:0b:ab:5c:44:35	 	Troy (returned)	 	Jun-12	 	471	 	200	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	PLC from Hartford Steam	 	 	 	Troy (returned)	 	Aug-12	 	465	 	300	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	RTU at Wesleyan	 	00:0b:ab:68:17:ae	 	Wesleyan	 	May-12	 	229	 	100	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Unallocated RTU	 	00:0b:ab:6c:14:33	 	Troy	 	May-13	 	471	 	200	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Moxa MB3270 for Wesleyan substation	 	00:90:E8:32:2F:EF	 	Wesleyan	 	May-13	 	536	 	250	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	FieldServer ProtoNode/QuickServer FPC-N34-103-126-0737	 	1215201162MSH	 	Wesleyan	 	May-13	 	775	 	500	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Samsung LCD display	 	 	 	Troy	 	Feb-13	 	 	 	100	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Samsung LCD display	 	 	 	Troy	 	Feb-13	 	 	 	100	 	4 years



 






    vi


     


    

 


	Dell Power Edge Server	 	6ZS09Y1	 	Albany Colo	 	Aug-13	 	3528	 	1500	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dell Power Edge Server	 	6ZN09Y1	 	Albany Colo	 	Aug-13	 	1500	 	500	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dell Power Edge Server	 	6ZS19Y1	 	Albany Colo	 	Aug-13	 	3528	 	1500	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dell Power Edge Server	 	6ZN19Y1	 	Albany Colo	 	Aug-13	 	1500	 	500	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	RTU for Alcoa East	 	 	 	Massena NY	 	Aug-13	 	650	 	300	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	RTU for Alcoa West	 	 	 	Massena NY	 	Aug-13	 	650	 	300	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cisco 1921 Router	 	FTX174182MK	 	Albany Colo	 	Oct-13	 	1582	 	500	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Cisco 1921 Router	 	FTX174182MP	 	Albany Colo	 	Oct-13	 	1582	 	500	 	10+ years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	NOC Server	 	7Q1PZ12	 	Troy	 	Sep-14	 	4000	 	1000	 	4 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Server Rack	 	 	 	Troy	 	Sep-14	 	850	 	400	 	infinite
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Epson LCD projector	 	TV6K4400328	 	Troy	 	Sep-14	 	650	 	300	 	5 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Dell LCD display(6) with stands	 	 	 	Troy	 	Sep-14	 	1000	 	300	 	5 years
	 	 	 	 	 	 	 	 	 	 	 	 	 
	Honda e2000i Generator	 	EAAJ-2463334	 	Troy	 	Apr-14	 	1100	 	800	 	10+ years


 




    vii


     


    

 


Schedule 1.1(a) (vi)


 


Obligations of Buyer to Provide Services to HD Project One,
LLC:


 


1.          Buyer
SCADA and software will provide all communications between the grid operator and BESS, dispatching commands from the grid operator
to the BESS on site and provide telemetering of load data back to the grid operator.


 


2.          Monitor
the BESS to the extent required to maintain correct operation within PJM’s rules and regulations and will make all observed
issues known to HAL in a timely manner.


 


3.          Actively
manage all bidding and other activity with PJM. Buyer will collect from BESS equipment/facility schedule information as well as
economic parameters (where applicable and permissible) and use these inputs to take positions in the PJM Market to provide the
relevant Services with the BESS.


 


4.          Will
respond to manual instructions from PJM on behalf of the 1MW BESS and will communicate extraordinary operating conditions to PJM
on behalf of the HD Project One, LLC.


 


5.          Reporting.
Historical performance, revenue information and other relevant operational and settlement data will be provided electronically
to HAL.


 


6.          Buyer
will provide Frequency Regulation and battery operating data for HD Project One, LLC as follows:


 


		a.	PJM signal (24/7 basis)



Date and Time


Reg D signal


 


		b.	BES system operation data (24/7 basis)



Date and Time


Charge/discharge signal from the Network Operation
Center


Actual charge/discharge power


State Of Charge of the batteries


Temperature inside the container


Charge/discharge signal from the Network Operation
Center


		c.	Equipment status (All accessible information from BES system,
not limited to below)



PCS status


PCS failure status


AC Voltage, Ampere, Active power, Reactive
power


DC Voltage and Ampere


 




    viii


     


    

 


Battery SOC (State Of Charge)


Battery SOH (State OF Health)


Battery temperature


Battery failure status


Air conditioner status


Temperature inside Cabinet


Fan failure status


		d.	Revenue data (24/7 basis)



Date and Time


Capability Offer ($/MW)


Performance Offer ($/delta-MW)


Offered Capability (MW)


Actual Performance Score and accessible component
values


Historic Performance Score


Marginal Benefit Factor


Mileage Ratio


Regulation Market Clearing Price Credit (RMCPC)


Regulation Market Total Clearing Price (RMTCP)


Regulation CCP Credit (Capacity portion of
RMCPC)


Regulation PCP Credit (Performance portion
of RMCPC)


Any other relevant PJM market data such as
Capacity.


		e.	Market data



Regulation Market Clearing Price


Capacity Market Clearing Price


		f.	Climate data



Date and Time


Climate


Temperature


Humidity


 




    ix


     


    

 


Schedule 1.1 (a)(vi)


 


Alcoa contract attached.


All MNDAs with channel partners and or contracts executed by
Demansys, except those with Hitachi:


Constellation NewEnergy MNDA


DR2 Referral partner agreement


DR2- master services Agreement


Energenic US - MNDA


Energy Innovative Products – Demansys CPA


EnPowered Solutions – Demansys CPA


Flanagan Mechanical Services – MNDA


Fresh Meadow Chiller services – MNDA


Greenwors Energy solutions – MNDA


Groom Energy Solutions - Demansys CPA


H2Pump – MNDA


Nectar Partners – MNDA


NRG Curtailment Services – MNDA


Power Assure – Teaming agreement


REGEN Energy – MNDA


RPI MNDA


Schneider Electric MNDA


Tesla – MNDA


White Rogers MNDA


Bloomfield Max MNDA


GreeNEWit - MNDA


 




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Schedule 1.2 (b)


 


Prepaid assets - NYISO


Security Payment - $200,000


Financial Assurance - $80,524


ISONE Blackrock security account – approximately $500


 




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Schedule 2.1


Assumed Liabilities of the NOC to be paid
by the Buyer


 


Monthly NOC payments due commencing December 1, 2015


 


	Rent to RPI Tech Park	 	$	3,041.00	 
	First Light (telemetry)	 	$	4,463.06	 
	Verizon (telemetry)	 	$	531.00	 
	AT&T (telemetry)	 	$	300.70	 
	National Grid (utilities)	 	$	300.00	 
	Time Warner	 	$	99.00	 
	Amazon Web Services	 	$	615.00	 
	BNC Voice	 	$	67.01	 
	 	 	 	 	 
	Total	 	$	9,416.77	 



 




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Schedule 4.2


 


Allocation of Purchase Price


TBD


 




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Schedule 5.1


 


Jurisdictions


State of New York


 




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Schedule 5.3


 


Financial Statements


Financial statements are attached.


 




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Schedule 5.4


 


Undisclosed Liabilities


 


Demansys is a guarantor of a $2.5 million loan from Bank of
America which is currently in breach.


Demansys owes Hitachi Capital America approximately $526,000
for a bridge loan related to the Somerdale battery system.


Demansys owes Alcoa $571,757.96 for back customer payments.


 




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Schedule 5.6(a)


 


Liens


 


Hitachi Capital America has a lien on Demansys related to a
bridge loan for the Somerdale, NJ battery system.


 




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Schedule 5.9 (a)


 


Intellectual property


Rights to patent application 13/783,784 filed on 3/04/13


Grid Daemon trademark


Software source code - verified by Tarsier


 




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Schedule 5.11


 


Litigation


Demansys was sued by GlidePath Power, LLC for $1 million for
an alleged breach of contract. The case was heard in an Illinois court and a decision is pending. Demansys believes that the case
will likely be dismissed but has created a $250,000 liability on its balance sheet for a settlement.


 




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Schedule 5.144(b)


 


Permits


There are no permits required except for the Somerdale NJ battery
which is not part of the APA.


There are many authorization levels to participate in the NYISO
DSASP program on which Tarsier has done due diligence.


 




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Schedule 5.17


 


Insurance


 


There are no insurance policies other than that for the Somerdale
NJ battery system.


 




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Schedule 5.17(b)


 


Leases


The lease with RPI Tech Park is attached in this document. The
lease for the Somerdale NJ battery system is not relevant to this APA.


 




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Schedule 5.20 (b)


 


Lease with RPI for office (NOC) located on 350 Jordan Rd., Troy,
NY 12180, attached


 




    xxiii