Geospatial Corporation S-1


EXHIBIT
10.7


 


CONVERSION AGREEMENT


 


This
Conversion Agreement ("Agreement") is made and entered into as of August, 20, 2013, by and among Geospatial Holdings,
Inc., a Nevada corporation (the "Company"), Geospatial Mapping Systems, Inc., a Delaware corporation and a wholly
owned subsidiary of the Company ("GMS") and Mark A. Smith, Chairman and Chief Executive Officer of the Company
("Smith").


 


RECITALS


 


WHEREAS,
Smith holds
the following notes
evidencing the Company
's
obligation to
repay certain loans
made by Smith to
the Company: (i) an unsecured convertible note dated October 30, 2009 in the original
principal amount of One Million Dollars ($1,000,000 (the "Convertible Note") and (ii) an unsecured demand note
dated October 30, 2009 in the original principal amount of $128,262.70
(the "Demand Note"); and


 


WHEREAS,
the total
principal and accrued
interest owed by
the Company as
of August 1, 2013
(the "Effective
Date")
(i) under the Convertible
Note is $40,638.l 0 (the "Convertible
Note Amount") and (ii) under the Demand Note is $173,011.45 (the "Demand
Note Amount"); and


 


·


WHEREAS,
subsequent to the issuance
of the Convertible
Note and the
Demand Note, Smith
made additional loans
to the Company
in the
amount of $140,000, which Joans together with accrued and
unpaid interest thereon, aggregate $184,203.78 as of August 1, 2013 (the "Additional
Loan Amount"); and


 


WHEREAS,
GMS and
Smith entered into
a Lease Agreement
dated May 1,
2006 (the "Lease
Agreement") pursuant
to which Smith
leased an office to the Company; and


 


WHEREAS,
from December
1,
2009 to June
30, 2012, Smith incurred
expenses and made
disbursements in the course of performing
his duties for the
Company, which have not been reimbursed to Smith by the Company and Smith was
not paid rent by GMS as required by the terms
of the Lease Agreement , all of which unreimbursed and
unpaid amounts aggregate $282,156.20 (the "Unpaid Expense
Amount"); and


 


WHEREAS,
from July
1, 2012
through the Effective
Date, Smith has
incurred expenses and made
disbursements in
the course of
performing his duties for the Company,
which has not been reimbursed to Smith by the Company and Smith was not paid
rent by GMS as required by the terms of
the Lease Agreement, all of which unreimbursed and unpaid amounts aggregate $21,366.40
(the "Recent Unpaid  Expense Amount");
and


 


WHEREAS
, GMS
has not paid
to Smith his
Base Salary as
provided for in
the Employment Agreement
dated as of December 1,
2007 between GMS and Smith (the "Employment Agreement"),
and such unpaid Base Salary aggregated (a) $573,634.70
for the
period prior to
and including
June 30,
2012 (the
"Unpaid Salary
Amount") and
(b) $97,500.00
for the
period from July
1, 2012 through the
Effective Date (the
"Recent Unpaid
Salary Amount"); and


   






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WHEREAS,
the Company
and GMS desire
that Smith
exchange (i)
the principal
and interest owed
to him
pursuant to the
Convertible Note
and the Demand Note,
(ii) the
Additional
Loan Amount, (iii)
the Unpaid
Expense Amount
and (iv) the
Unpaid Salary Amount
for shares of
common stock,
par value $.001 per
share,
of the Company ("Common
Stock") and a
warrant to purchase shares of Common
Stock of the Company; and


 


WHEREAS,
the Company
and Smith desire
to memorialize the
Recent Unpaid Expense
Amount and
the Recent Unpaid
Salary Amount,
and agree upon
the terms of their
payment;
and


 


WHEREAS,
the Company
desires to
grant certain
registration rights
to Smith.


 


NOW
THEREFORE, for
good
and valuable
consideration,
the receipt
and sufficiency
of which
is hereby acknowledged,
the Company, GMS and
Smith hereby agrees
as follows:


 


AGREEMENT


 


		1.	CONVERSION
                                         AND RELEASE.



 


1.1              
Conversion into
Common Stock
and Warrant.  Upon
the terms and
subject to
the  conditions 
of this  Agreement
, Smith
 hereby delivers 
and surrenders to the Company
the Convertible
Note and the
Demand Note, and surrenders
and releases to the Company
his right to receive payment
of the Additional Loan Amount,
the Unpaid Expense Amount and
the Unpaid Salary
Amount, and
in exchange therefor, the
Company hereby issues and
delivers to Smith (a) 17,909,203 shares of
Common Stock (the "Conversion
Stock") and (b)
a warrant to purchase
1,790,920 shares of Common
Stock in the form of
Exhibit A
hereto (the "Warrant").


 


1.2             
Release. Smith hereby
accepts the
Conversion Stock and
the Warrant
in full payment and
satisfaction of
the Convertible
Note Amount, the
Demand Note Amount, the Additional Loan Amount,
the Unpaid Expense Amount and the Unpaid
Salary Amount, and releases
and discharges the
Company, GMS and
all of their respective employees,
agents, successors,
assigns, affiliates,
directors and
officers from and against
any and all other obligations or
liabilities relating to the Convertible Note
, the Demand Note,
the Additional Loan
Amount, the Unpaid
Expense Amount and the Unpaid Salary
Amount. Notwithstanding anything in this Agreement
to the contrary,
nothing contained herein
is intended to, and
this Agreement shall
not operate
to, release any claims
Smith may have to enforce any rights
conferred under this Agreement.




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1.3              
Payment of Taxes.
To the
extent  that  the
issuance
of the
 Conversion
Stock and the
Warrant
to
Smith would be
subject to
taxes imposed
against Smith under
the Internal
Revenue Code
of 1986,
as amended,
the Federal
 Insurance Contributions Act,
as amended,
and any
state or local tax
code
or regulation, if applicable
(collectively, the "Taxes"),
then Smith
shall be
entitled to receive a
payment from
the Company
(the "Gross-Up Payment")
in an
amount such that after payment
by Smith of all federal,
state and local taxes
(including income taxes and
excise
taxes) imposed
on the
Gross-Up Payment,
Smith retains an amount of the
Gross-Up Payment
equal to the Taxes.


 


1.4              
Repayment of
Recent Unpaid
Expense Amount
and Recent Unpaid
Salary Amount.The
Company hereby
acknowledges its
obligation and liability to pay
the Recent Unpaid Expense Amount and the
Recent Unpaid Salary Amount
to Smith and agrees to
use its reasonable commercial efforts to pay such
amounts to Smith as soon as possible.


 


1.5             
Registration Rights. Concurrently with
the execution and
delivery of
this Agreement,
the Company
and Smith are entering
into a Registration Rights
Agreement in the form of Exhibit
B hereto (the
"Registration Rights Agreement").


 


 


		2.	REPRESENTATIONS
                                         AND WARRANTIES OF THE COMPANY. The Company
                                         hereby
                                         represents and
                                         warrants to
                                         Smith that
                                         as of
                                         the Effective
                                         Date:



 





2.1             
Organization.The Company
is duly organized,
validly existing and
in good standing
under the
laws of
the State
of Nevada. The Company
has full power and
authority to own or
lease its
properties and to carry
on its
business as presently
conducted.


 


2.2             
Due  Authorization 
and  Valid
 Issuance.The
Company has
all requisite corporate
power and
authority to execute,
deliver and
perform its obligations under
this Agreem ent,
the Warrant and
the Registration Rights Agreement. This
Agreement, the Warrant and
the Registration Rights Agreement have
been duly authorized
and validly executed and delivered
by the Company and
each constitutes the 1ega1, valid and binding agreement
of the Company enforceable
against the Company in accordance
with its terms, except as
(a) rights to indemnity and contribution
may be limited by state or federal
securities Jaws of the public policy
underlying such
laws, (b) enforceability may be limited
by applicable bankruptcy , insolvency ,
reorganization , moratorium
or similar laws affecting
creditors' rights and
contracting parties' rights generally and
(c) enforceability may
be subject to general
principles of
equity (regardless
of whether such enforceability
is considered
in a proceeding in
equity or at law).


 


2.3               Capitalization. Immediately prior to giving effect to the transactions contemplated by this Agreement , the authorized capital stock of the Company consists
of (i) 100,000,000 shares of common
stock, par value $.001
per share, of which 45,871,374
shares are issued and outstanding, and
(ii) 5,000,000 shares of preferred stock, par value $.001
per share, 5,000,000 of
which are designated as "Series B Convertible Preferred Stock",
of
which 4,460,429 are
issued and outstanding.
As of the
date hereof, 15,000,000
shares of common
stock are reserved for issuance
upon exercise of stock options granted or
to be granted under the Company's Stock Incentive Plans.
As of
the date hereof there are outstanding warrants
to purchase 5,942,242 shares of common
stock and outstanding warrants to purchase 446,023
shares of Series B Convertible Preferred Stock.


 




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2.4             
Issuance of
Shares.The shares of
Conversion
Stock, when
issued,
sold and delivered
in accordance with the
terms of this Agreement, and the shares
of Common Stock issuable pursuant to the Warrant, when issued,
sold and delivered
in accordance with the terms of the Warrant, will be duly authorized, validly
issued, fully-paid and nonassesable.


 


2.5              
Private Offering.
Assuming the correctness of
the representations and warranties
of Smith set
forth in Section
3 hereof, the issuance of the
Conversion Stock and the Warrant is exempt from registration
under the Securities Act of 1933, as
amended , and the
rules and regulations promulgated thereunder (the
"Securities Act"). Neither the Company
nor any person acting on behalf of
the Company has offered or sold the Conversion Stock
or the Warrant by any form
of general solicitation or general advertising.


 


		3.	REPRESENTATIONS
                                         AND WARRANTIES OF  SMITH. The Company
                                         hereby
                                         represents and
                                         warrants to
                                         Smith that
                                         as of
                                         the Effective
                                         Date:



 


3.1             
Authorization. Smith
has the requisite
legal power and
authority to enter into
this Agreement and
this Agreement constitutes
a valid and
legally binding obligation of Smith, except
as the same may be limited
by bankruptcy, insolvency, moratorium
or other laws of general application affecting
the enforcement of creditors' rights.


 


3.2            
Conversion Stock and Warrant Not Registered;
Reliance Upon Smith's
Representations. Smith
understands and acknowledges
(i) that the
Conversion Stock and
the Warrant are
not registered or qualified under any federal, foreign or state securities laws,
(ii) that the Conversion Stock and the Warrant  are
being  issued  to Smith on the ground that
the issuance of securities hereunder is exempt
from  registration
under all applicable securities laws pursuant  to exemptions thereunder,
and (iii) that the Company's
reliance on such exemptions is  predicated on Smith's representations set forth herein.


 


3.3             
Accredited Investor. Smith is
an "accredited
investor" within the meaning
of Rule 501
of Regulation D
under the Securities Act, as presently
in effect.


 


3.4              Restricted
Securities.  Smith understands that the Conversion Stock and
the Warrant constitute restricted securities under applicable securities laws
and may not be resold or transferred unless they are first registered
on qualified under applicable securities laws
or unless an exemption from such registration or
qualification is available. Accordingly , Smith hereby
acknowledges that he is prepared to hold the Conversion Stock
and the Warrant
for an indefinite
period of time,
until resale is
permitted under applicable
securities laws.


 




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3.5             
Experience; Risk.
Smith has
such knowledge and
experience in financial and
business matters that
Smith is capable
of evaluating the
merits and risks
of his acquisition
of the Conversion Stock
and the Warrant and of protecting Smith's interests
in connection therewith. Smith
is able to fend for
himself in the transactions
contemplated by this Agreement and
has the ability to bear the economic risk
of the investment, including complete loss of the
investment.


 


3.6             
Investment. Smith
is acquiring
the Conversion
Stock and
the Warrant
for investment for his
own account,
not as
a nominee
or agent
and not with
a view to,
or for resale in
connection with
any distribution thereof, and Smith has no
present intention of
selling, granting
any participation in,
or otherwise distributing
the same.


 


		4.	RESTRICTED  SECURITIES.



 


4.1             
Restrictive Legends.


 


(a)                
Unless and
until otherwise
permitted by
this  Section,  each certificate
for Conversion Stock
issued to
Smith or any
subsequent transferee of
any such certificate shall be stamped
or otherwise imprinted with a legend
of substantially the following form:


 


"THE
SHARES  REPRESENTED 
BY  THIS  CERTIFICATE HAVE
NOT BEEN REGISTERED 
UNDER  THE  SECURITIES 
ACT OF 1933
OR ANY OTHER APPLICABLE FEDERAL OR STATE SECURITIES
LAWS, AND THUS MAY NOT BE TRANSFERRED UNLESS REGISTERED
UNDER THE SECURITIES ACT OR 1933 AND
SUCH OTHER LAWS OR UNLESS AN EXEMPTION FROM
REGISTRATION IS AVAILABLE ."


 


(b)                
In addition
to the legend
required by this
Section 4.1,
each certificate
for Company
shares issued under
or pursuant to this Agreement to
Smith or any
subsequent transferee shall be stamped or
otherwise imprinted with any legend required pursuant to applicable state
corporation and securities laws.


 


4.2              
Transfer.The
Company may
decline to acknowledge
or register a
transfer of
any Company
shares bearing
any legend pursuant
to Section 4.1,
and may instruct any transfer agent for
its Company shares
to decline the same, unless the Company is
reasonably satisfied that the Company shares
being transferred
have been registered or
are exempt from registration
under applicable securities laws.


 


4.3              Removal of Legends. Whenever the
legend described in Section 4.1 shall no longer be required by law, the
holder of any particular Company
shares bearing such legends
shall be entitled
to receive
from the Company,
without
expense to such
holder,
one or
more new certificates for such particular
Company shares not bearing restrictive legends
pursuant
to Section
4.1 hereof.


 




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		5.	MISCELLANEOUS.



 


5.1             
Further  Instruments  and 
Actions.The
parties agree to
execute such
further instruments
and to take such further action as
may reasonably be necessary to carry out the intent of this Agreement.


 


5.2             
Expenses. Each party
hereto agrees to
pay its expenses
incurred in connection with
this Agreement and
the documents and
transactions contemplated herein.


 


5.3             
Notices. All
notices and other
communications required
or permitted hereunder shall
be given
in writing
and
shall be delivered
by person al
delivery, facsimile,
electronic mail,
overnight delivery
service, or U .S.
mail service,
addressed as follows:


 


The
Company:
Geospatial Holdings,
Inc. 229
Howes Run Road Sarver,
PA 16055


Attn:
Thomas Oxenreiter,
Chief Financial
Officer T: 724-353-3400


F:
724-353-3049


Email:
toxenreiter @geospatialcorporation
.com


 


Smith:


Mark
A. Smith 1001 Carlisle
Street


Natrona
Heights,
PA 15065 T:
724-994-8055


H:
724-226-2067


Email:
mark@gooselakeventures.com


 


Any
notice or other
communication delivered in
accordance with this
Section 5 shall
be deemed
to have been
given upon actual receipt or refusal
of such delivery.


 


5.4             
Governing Law.
This Agreement
shall be governed
in all respects
by the
laws of the
Commonwealth of Pennsylvania
without giving effect to
the conflicts of laws principles hereof.


 


5.5             
Successors and Assigns; Assignment. No party
may
assign this
Agreement or any
rights or obligations
hereunder
without the prior written consent
of the other
party,
which consent may
not be unreasonably
withheld, including
by
merger or consolidation.  Subject to
the preceding , this Agreement shall be
binding upon,
inure to


 




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IN
WITNESS WHEREOF, the
parties hereto have
executed this Agreement
as of the day
and year written
above.


 


 


	COMPANY:	SMITH:	 
	 	 	 
	GEOSPATIAL HOLDINGS, INC.	 	 
	 	 	 
	By:	/s/ Thomas R. Oxenreiter	By:	/s/ Mark A. Smith	 
	 	Thomas R. Oxenreiter: CFO	 	Mark A. Smith	 
	 	 	 
	GMS:	 	 
	 	 	 
	GEOSPATIAL MAPPING SYSTEMS, INC.	 	 
	 	 	 
	By:	/s/ Thomas R. Oxenretier	 	 
	 	Thomas R. Oxenreiter: CFO	 	 
	 	 	 
	 	 	 







 




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 EXHIBIT
A


 


FORM
OF WARRANT


 


See
Attached


 


 






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NEITHER
THIS WARRANT NOR
THE SECURITIES ISSUABLE
UPON EXERCISE
HEREOF HAVE BEEN
REGISTERED UNDER THE
SECURITIES ACT
OF 1933,
AS AMENDED, OR ANY
STATE SECURITIES LAWS.
NEITHER THIS WARRANT NOR THE
SECURITIES ISSUABLE UPON EXERCISE HEREOF
MAY BE TRANSFERRED EXCEPT (A)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
,UNDER THE SECURITIES
ACT OF 1933,
AS AMENDED, AND APPLICABLE
STATE SECURITIES LAWS,
OR (B) IN A TRANSACTION WHICH IS
EXEMPT FROM REGISTRATION UNDER
THE SECURITIES ACT OF
1933, AS AMENDED, AND
APPLICABLE STATE SECURITIES LAWS.


 


 


Warrant
Issue
Date: August,
2013


 


 


COMMON
STOCK PURCHASE 
WARRANT


 


For
value received,
Geospatial Holdings,
Inc. (the "Company"),
a Nevada corporation, hereby
certifies that(the
"Holder")
or its
permitted assign(s) is
entitled to purchase from the Company,
at any time or from time
to time during the
Exercise Period (as defined below),
in whole or in
part,   shares
of the Company's Common Stock,
par value $.001 per share ("Common Stock"),
at a price per share equal to $0.25 (the
"Exercise  Price").This Warrant
is subject the
following terms and
conditions. This Warrant is issued pursuant to
that certain Conversion Agreement dated as
of August,
2013,
by and among
the Company, Geospatial
Mapping Systems, Inc.
and the Holder (the "Conversion Agreement")
. This Warrant
is subject to the
terms of the Conversion Agreement
and the following additional
terms and conditions.


 


I
.            Certain
Definitions.


 


(a)               
"Change  in 
Control"  means 
any  sale 
of  capital  stock 
of  the Company
or consolidation or
merger of
the Company
with or into any
other corporation
or other entity
or person,
or any other corporate
reorganization , in
which the stockholders of the Company
immediately prior to such
sale, consolidation, merger or
reorganization, do not
hold at least a majority of
the resulting or surviving corporation's
voting power immediately
after such
consolidation, merger or
reorganization, or the sale, lease,
or other
disposition of all
or substantially all of the assets of the
Company .


 


(b)              
"Exercise Period"
means the period
commencing on
the Warrant Issue
Date and ending
on the date
that is the
earliest to occur of
(i) 5:00
p.m. (prevailing local time at the
principal executive office
of the Company) on the
fifth anniversary of the Warrant Issue Date, (ii)
a Change in Control,
or (iii)
the closing of
a Qualified Public Offering (as
defined in the Certificate
of Designation of Series B Preferred
Stock of the Company).


 




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		2.	 Exercise
of Warrant.



 


(a)              
The purchase rights
represented by this
Warrant are exercisable
by the Holder, in
whole or in
part, during the
Exercise Period by the surrender
of this Warrant, with the
form of Subscription Agreement attached hereto as Annex A duly completed and
executed by the
Holder, to the Company at its principal executive
office, accompanied by payment in cash, in lawful money
of the United States of America, including by
certified or official bank check made payable
to the order of the Company or by wire transfer of
immediately available funds to an account designated
by the Company, of an amount equal to the Exercise
Price multiplied by the number of shares of Common Stock being purchased pursuant
to such exercise of the Warrant.


 


(b)              
This Warrant may
be exercised for
less than the
full number of shares
of Common Stock
first shown above, provided that this
Warrant may not be exercised
in part for less than a whole number
of shares of Common Stock. Upon any such partial exercise, the Company at its expense
will forthwith issue to the Holder a new Warrant or Warrants of like tenor exercisable for the number of shares of Common Stock
as to which rights have not been
exercised (subject to adjustment as
herein provided), such Warrant or Warrants to be issued in the name of the Holder or its nominee.


 


(c)               
As soon as
practicable after the
exercise of this
Warrant and payment of
the Exercise Price,
and in any event within 20 business days thereafter, the Company ,
at its expense, will cause to be issued in the name of and delivered to the Holder a certificate
or certificates for the number of duly authorized, validly issued, fully paid and
non-assessable shares of Common Stock to which the Holder shall be entitled upon such exercise, plus, in lieu of any fractional
share to which the Holder would otherwise be entitled, cash in
an amount determined in accordance with Section 3(d) hereof. The Company agrees that the shares so purchased shall
be deemed to be issued to the Holder as the record owner of such
shares as of the close of business on
the date on which this Warrant
shall have been surrendered and payment made for such shares
as aforesaid .


 


(d)              
Prior to the
exercise of this
Warrant, the Holder
shall not be entitled to
any rights of
a stockholder of
the Company with respect to
shares for which this Warrant shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled
to receive any notice of any proceedings of the Company. ·


 


(e)               
In the event
that the Company
proposes to engage
in a Change
in Control or Qualified
Public Offering, it
shall give the Holder
written of its intention not less
than ten (10) days prior to the
date of the proposed closing of
such transaction. The notice shall
describe the material terms and conditions upon which the Company proposes to consummate such transaction.




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		3.	 Adjustments
.



 


(a)               
Adjustments Generally. In order to
prevent dilution of
the rights granted hereunder
in the specific
circumstances contemplated by
this Section 3, the Exercise
Price shall be subject to adjustment
from time to time in accordance with this
Section 3. Upon each adjustment of the Exercise Price
pursuant to this Section 3, the
Holder shall thereafter be entitled to
acquire upon exercise, at the Exercise
Price resulting from such adjustment, the number
of shares of Common Stock determined by (i)
multiplying (A) the Exercise Price
in effect immediately prior to such
adjustment by (B) the number of shares of Common
Stock issuable upon exercise hereof immediately prior to such
adjustment, and (ii) dividing the
product thereof by the Exercise Price resulting from such
adjustment; provided that no such adjustments shall be made in
the Exercise Price and/or the number
of shares of Common Stock subject to this Warrant if the conversion
ratio of the Common Stock already
reflects such event.


 


(b)              
Subdivisions,  Stock Dividends 
and  Recapitalizations. 
In case
the Company shall
at any time
subdivide its outstanding
shares of Common Stock into a greater number of shares (including, without limitation,
through any stock split effected by means of a dividend on the Common Stock which
is payable in Common Stock), the Exercise Price in effect immediately
prior to such subdivision shall be
proportionately reduced, and, conversely,
in case the outstanding shares of Common
Stock of the Company shall be combined into a smaller number of shares, the Exercise
Price in effect immediately prior to such combination shall be proportionately
increased, unless the conversion ratio of such Common Stock already reflects such event.


 


(c)               
Reorganization, Reclassification, Consolidation,
Merger or Sale
of Assets. If any
capital reorganization or
reclassification of the
capital stock of the Company, or consolidation or merger of the Company
with another corporation,
or the sale of a significant amount
of assets to another corporation
shall be effected in such
a way that (i) does not constitute
a Change in Control, and (ii) holders of Common
Stock shall be entitled
to receive stock, securities, cash
or other property with respect to or in
exchange for Common Stock, then, as a
condition of such reorganization, reclassification, consolidation,
merger or sale, lawful and adequate
provision shall be made whereby the Holder shall have the right to acquire
and receive upon exercise of this
Warrant such shares of stock, securities, cash or other property of the successor
 corporation that a holder of the shares deliverable
upon exercise of this Warrant would have
been entitled to receive in such reorganization,
reclassification, consolidation, merger or sale
if this Warrant had been exercised immediately before such reorganization, reclassification, consolidation, merger or sale. The
foregoing provisions shall similarly apply  to successive reorganizations, reclassifications,
consolidations, mergers or sales and to the stock or securities of any
other corporation that are at the time receivable upon the exercise of this Warrant.
In all events, appropriate adjustments (as
determined by the Board of Directors of the Company) shall be made in the application
of the provisions of this Warrant with
respect to the rights and interests of the
Holder after the transaction, to the end that the provisions of
this Warrant shall be applicable after
that event, as near as reasonably may
be, in relation to any shares
or other property
deliverable after that event upon exercise
of this Warrant.


 



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(d)              
Fractional Shares.
 The Company
shall not
issue
fractions of
shares
of Common Stock
upon exercise
of this
Warrant or
scrip in lieu thereof.
 If
any fraction of
a share
of Common
Stock would, except
for the provisions
of this Section  3(d),
be issuable upon exercise of this Warrant,
then the Company shall in lieu thereof pay
to the person entitled thereto an amount
in cash equal to the
current value of such fraction, calculated to the nearest
one-hundredth (11100) of a share, to be
computed on the basis of the fair market value per share
as determined in good faith by the
Board of Directors of
the Company
.


 


(e)              
Certificate as
to Adjustments.Whenever
the Exercise
Price shall
be adjusted
as provided
in Section 3
hereof, the Company
shall promptly compute
such adjustment and furnish to
the Holder a certificate setting forth
such adjustment and showing
in reasonable detail the facts
requiring such adjustment,
the Exercise Price that will be
effective after such adjustment and the
number of shares
and the amount, if
any, of other property
that at the time
would be
received upon
the exercise of this Warrant.


 


4.
              Reservation of Stock Issuable on Exercise of Warrants. The  Company shall at all times reserve and keep available out of its
authorized but unissued stock, solely for the issuance
and delivery upon the exercise of this
Warrant, such number of its duly authorized shares
of Common Stock as from time to time shall be  issuable
upon the exercise of this
Warrant. All of the shares of
Common Stock issuable upon exercise of this Warrant, when issued
and delivered in accordance with
the terms hereof and thereof, will be duly authorized, validly issued, fully
paid and non-assessable,
subject to no lien or other
encumbrance other than restrictions on transfer
arising under applicable securities laws
and restrictions imposed by Section 6(a) hereof
and the Agreements to which reference is
made in Section 6(b) hereof.


 


5.                 
Replacement of
Warrant. Upon
receipt of
evidence reasonably satisfactory
to the Company
of the
loss, theft,
destruction or
mutilation of
this Warrant and (in the
case of loss,
theft or destruction) upon delivery
of an indemnity agreement
reasonably satisfactory to the
Company (with surety if
reasonably required), or (in the
case of mutilation) upon surrender and
cancellation thereof, the Company
will issue, in lieu thereof, a new Warrant of like
tenor and amount.


 


		6.	Negotiability.
This Warrant
is issued upon
the following terms:



 


(a)               
Transfer. By
acceptance hereof, the
Holder acknowledges
and agrees that the Holder
is acquiring the
Warrant and the
shares of Common
Stock issuable upon exercise
hereof for
investment for its
own account,
not as a nominee or
agent, and not
with a view
to, or
for resale
in connection with,
any distribution thereof, and Holder
has no present intention of
selling, granting
any participation in,
or otherwise
distributing the same.


 


 




    	12



    	 



    

(b)              
Agreements. As a
condition to the
Company's obligation to
issue shares of Common Stock upon
exercise hereof, the
Holder shall execute
the Subscription Agreement attached hereto
as Annex A.


 


(c)               
Transfer Taxes.
The Company
shall not be
required to pay
any federal or
state transfer tax or charge that
may be payable in
respect of any transfer involved in the transfer
or delivery of this Warrant or the
issuance or conversion or delivery of certificates
for Common Stock in a name other than that of the Holder
or to issue or deliver any certificates for Common Stock upon
the exercise of this Warrant until
any and all such taxes
and charges shall have been paid by the Holder or until it has been established
to the Company's reasonable satisfaction that no such tax or charge is due.


 


(d)              
Compliance with Securities Laws.The Holder,
by acceptance
hereof,
acknowledges that
this Warrant and
the shares of
Common Stock to
be issued upon exercise hereof are being acquired solely
for the Holder's own account and not as a nominee
for any other party, and for investment, and that
the Holder will not offer, sell or otherwise dispose of
this Warrant or any
shares of Common
Stock to be issued upon exercise
hereof except under circumstances that will not
result in a violation of applicable federal and state securities laws.


 


7.                 
Subdivision of
Rights. Subject to
Section 6, this
Warrant (as well
as any new Warrants
issued pursuant to
the provisions of
this Section 7)
is exchangeable, upon the
surrender hereof by
the Holder,
at the principal executive office of
the Company for any number
of new Warrants of like tenor
and date representing in the aggregate the right to subscribe for and
purchase the number of shares of Common
Stock of the Company which may be subscribed
for and purchased hereunder.


 


		8.	Miscellaneous.



 


(a)              
Notices.
Any notice
or other communication
required or permitted to
be given hereunder
shall be in
writing and given
as provided in the Conversion Agreement .


 


(b)              
Books of
the Company. The Company
may treat the
holder hereof as appearing
on the Company's
books at any
time as the
holder for all
purposes.


 


(c)               
Headings. The
headings in this
Warrant are for
purposes of reference only,
and shall not
limit or otherwise affect the
meaning hereof.


 


(d)              
Amendment; Waiver.
This Warrant
and any term
hereof may be amended,
waived, discharged or
terminated only by
an instrument in writing signed by
the party against whom enforcement of such amendment, waiver, discharge or termination
is sought. No waivers of any term, condition or provision of this
Warrant, in any one
or more instances, shall be
deemed to be, or construed as, a further
or continuing waiver of any such term, condition
or provision.




    	13



    	 



    

 (e)                Benefits 
of  this  Warrant. 
Nothing  in  this 
Warrant  shall  be
construed to give
any person or
corporation other than the
Company and the Holder any legal
or equitable right, remedy or claim under
this Warrant and this Warrant shall
be for the sole and exclusive benefit of the
Company and the Holder and any other
permitted holder or holders of the Warrant.


 


 


[REMAINDER
OF PAGE INTENTIONALLY
LEFT BLANK]


 




    	14



    	 



    

IN
 WITNESS  WHEREOF, 
the  Company  has 
caused  this  Warrant 
to  be  duly executed
and delivered by
its authorized officer,
as of
the date first above written .


 


	 	Geospatial
    Holdings ,
    Inc
	 	 
	 	By:	/s/
    Mark A. Smith
	 	Name:	Mark
    A. Smith
	 	Title:	Chief
    Executive Officer


 







    	15



    	 



    

 ANNEX
A


 


SUBSCRIPTION
AGREEMENT


 


 


 


Date: _____________________


 


To:
_____________________ 


 


 


The
undersigned (the "Purchaser"),
pursuant to the
provisions set forth
in the attached  Warrant
, hereby
 irrevocably  elects 
(a) to purchaseshares
of Common Stock (the "Warrant Shares")
covered by such  Warrant and herewith
makes payment of $  , representing the
full purchase price for such shares
at the price per share provided for in such Warrant or (b) to exercise the Warrant
with respect to ________ shares of Common Stock, pursuant to Section 2(b) of the Warrant
[STRIKE (a) OR (b) AS APPLICABLE] .


 


Purchaser
represents and warrants
to the Company
as follows:


 


1.                                  
Investment Representations.
Purchaser understands
that the Warrant Shares
have not been registered
under the Securities
Act. Purchaser also
understands that the Warrant
Shares are being offered and sold
pursuant to an exemption from
registration contained in the Securities Act
based in part upon Purchaser's representations
contained in this Agreement.


 


2.                                   
Experience; Risk.
Purchaser has such
knowledge and experience
in financial and business
matters that Purchaser
is capable of
evaluating the merits and risks
of the purchase of the Warrant Shares and of protecting Purchaser's
interests in connection therewith. Purchaser
is able to fend for itself in the
transactions contemplated by this Agreement and has the ability
to bear the economic risk of the investment,
including complete loss of the investment.


 


3.                                    
Investment. Purchaser
is acquiring the
Warrant Shares for
investment for its own
account, not as
a nominee or agent, and
not with a view to, or for resale
in connection with, any distribution thereof, and Purchaser has no present intention
of selling, granting any participation in, or otherwise distributing
the same. Purchaser understands that the Warrant
Shares have not been registered under the Securities Act and applicable state securities laws
(collectively, the "Acts")
by reason of a specific exemption from the
registration provisions of the Acts which depends upon, among other things, the bona
fide nature of the investment intent and the
accuracy of Purchaser's representations as expressed herein.


 


 







    	16



    	 



    

4.                                    
 Information.
Purchaser has been
furnished with
all information
which it deems necessary
to evaluate
the merits
and risks
of purchasing the
Warrant Shares and has
had the opportunity to ask
questions concerning the Warrant Shares
and the Company and
all questions posed have
been answered to its satisfaction. Purchaser
has been given the
opportunity to obtain
any additional information it deems necessary
to verify the
accuracy of
any information obtained concerning
the Warrant Shares and the Company. Purchaser has
such knowledge and
experience in financial
and business matters that
it is able to
evaluate the
merits and risks of
purchasing the Warrant
Shares and
to make an
informed decision relating
thereto.


 


5.                                   
Restricted Securities;
Restrictions on
Transfer.  Purchaser understands
that the Warrant
Shares will be
"restricted securities"
under applicable securities laws inasmuch
as they are being
acquired from the Company
in a transaction not
involving a public offering
and that
under such laws and applicable
regulations the Warrant Shares may
be resold without registration
under the Acts
only in certain limited
circumstances. Purchaser
acknowledges that Warrant
Shares must be
held indefinitely unless subsequently registered under
the Acts or an exemption from
such registration is
available.
To the extent that
Purchaser is not
already a party
to such agreements, Purchaser agrees to
execute and deliver a counterpart
signature page, and become a party,
to such stockholder
and registration rights
agreements as
are then in effect by and among the
Company and its
stockholders.


 


6.                                   
No Public Market.
Purchaser understands that
no public market
now exists for
any of
the securities
issued by the
Company and that there is
no assurance that a
public market will
ever exist for such
securities.


 


7.                                  
Accredited Inve
stor.Purchaser
is an "accredited
investor" within
the meaning of
Rule 501
promulgated under the Securities Act.
The Purchaser has considered
the Federal and state income
tax implications of the exercise of the
Warrant and the purchase and subsequent
sale of the Warrant Shares.


 


8.                                  
Residence.
If
Purchaser is
an individual,
then Purchaser
resides in
the state
or province
identified in the address
of Purchaser set
forth below; if
Purchaser is a partnership,
corporation, limited
liability company or other entity,
then the office or
offices of Purchaser
in which its investment
decision was made is
located at
the address
or addresses of Purchaser
set forth below.


 





	 		
	 		Signature
	 	 	 
	 		Print
    name:	 
	 	 	Address:	 


 


 







    	17



    	 



    

NOTICE
OF TRANSFER


 


[To
be signed only
upon transfer of
Warrant]


 


 


 


FOR
VALUE RECEIVED, the
undersigned hereby sells,
assigns and transfers
unto the Assignee named
below the rights
and obligations represented by the within Warrant with respect to the number of
shares of Common Stock ofset
forth below:


 


	Name of
    Assignee	Address	No. of
    Shares









 


and
appoints ____________________  attorney to transfer said right on the warrant
register of ____________________ with full
power of substitution
in the premises.


 


 


 


 


Dated : ________________


 


(Signature
must conform in
all respects to name
of Holder as
specified on the
face of the Warrant)


 


Address: 


_____________________________ 


_____________________________


_____________________________


 


 


 


 


 


 


 


 


 


 







    	18



    	 



    

EXHIBIT B


 


FORM
OF REGISTRATION RIGHTS AGREEMENT


 


See
Attached


 


 


 





 


 


 


 


 


 


 


 




    	19



    	 



    

REGISTRATION
 RIGHTS AGREEMENT


 


THIS
REGISTRATION RIGHTS AGREEMENT
(this "Agreement")
is entered into as
of this __
day of August, 2013
(the "Effective Date")
by and between Geospatial Holdings, Inc.,
a Nevada corporation (the
"Company"),
and Mark A. Smith,
an individual resident of Natrona Heights, Pennsylvania ("Smith") .


 


AGREEMENT


 


WHEREAS,
the Company,
Geospatial
Mapping Systems, Inc.
and Smith are
parties to a
Conversion Agreement dated the date
hereof (the "Conversion Agreement"); and


 


WHEREAS,
the Conversion
Agreement requires that,
upon execution of
the Conversion Agreement, Geospatial
and Smith will
enter into this Agreement.


 


NOW,
THEREFORE, in
consideration of the
mutual covenants and
agreements set forth herein
and for good
and valuable
consideration , the
receipt and adequacy of which is hereby
acknowledged, the parties hereby agree
as follows:


 


ARTICLE
I DEFINITIONS


 


1.1Definitions.
As used in
this Agreement, and
unless the context
requires a different
meaning, the following
terms have the meanings indicated:


 


"Agreement"has
the meaning set
forth in the
preamble .
"Board"means
the board
of directors
of the Company.


 


Company.


 


"Common
Stock"
means the
common stock,
par value $.00l
per share,
of the "Company"
has the meaning set forth in the preamble.


 


"Contractual
Obligation" means as
to any Person,
any material provision
of any security issued
by such Person
or any material
provision of any agreement, lease of
real or personal property, undertaking, contract, indenture,
mortgage, deed of trust or other instrument
including , without limitation, the organizational or governing
documents of such Person, to
which such Person is a party or by which it or any of its property
is bound.


 


"Effective
Date" has the
meaning set forth
in the preamble.


 


"Exchange
Act" means the
Securities Exchange Act
of 1934, as
amended. "Governmental
Authority"
means any court, tribunal, arbitrator, authority, agency, commission, official or other
instrumentality of any government of any nation, state, city,
locality or
other political subdivision.


 




    	20



    	 



    

"Holder"
means
(i) any person
owning of
record
Registrable Shares that
have not been sold
to
the public or (ii) any assignee
of record of
such Registrable Shares in accordance
with Section
4.9 hereof.


 


"Initial
Offering"
means the
Company's first
firm commitment underwritten public offering
of its
Common Stock registered
under the Securities
Act.


 


"Person"
means any
individual, firm,
corporation, partnership
, trust
, incorporated
or unincorporated association,
joint venture,
joint stock
company, Governmental Authority or other entity of
any kind, and shall include
any successor (by merger
or otherwise) of such entity.


 


"Register,"
"registered"
and "registration"
refer to a
registration effected
by preparing and filing
a registration statement
in compliance
with the
Securities Act, and
the declaration or ordering of effectiveness
of such registration statement
or document.


 


"Registrable
Shares"
means (a) Common
Stock of
the Company
issued to
Smith pursuant to the
Conversion Agreement;
(b) any
other shares of
Common Stock hereafter
owned or held by Smith;
and (c) any
"Registrable Shares"
as defined in any
other agreement pursuant to which the
Company has granted
registration rights. Notwithstanding the foregoing,
Registrable Shares shall not
include any securities
sold by a Person to the
public either pursuant
to a registration statement
or Securities Act Rule 144 or
sold in a private transaction in
which the transferor's rights pursuant to
Section IV of this
Agreement are not assigned.


 


"Registration
Expenses" means
all expenses
incurred by
the Company 
in complying
with Sections 4.1,
4.2 and
4.3 hereof,
including, without
limitation , all
registration and filing fees,
printing expenses, fees
and disbursements of counsel
for the Company
, reasonable fees and
disbursement s of a
single special counsel for the Holders,
blue sky fees and expenses
and the expense of
any special
audits incident
to or
required by any
such registration.


 


"Requirements
of Law"
means,
as to
any Person,
the provisions
of the charter
and bylaws
or other organizational or governing
documents of
such Person, and
any law,
treaty, rule, regulation,
right , privilege,
qualification, license
or franchise, order,
judgment, or determination of
an arbitrator or a
court or other Governmental Authority applicable
to or binding upon
such Person or
any of its property (or to which such Person
or any of its property is
subject) or applicable to any or
all of the transactions
contemplated by,
or referred to
in, this Agreement.


 


"Restricted
Period" has
the meaning set
forth in Section
4.9.


 


"SEC"
or "Commission"
means the
Securities and
Exchange Commission.


 


"SEC
Reports"
shall mean
all reports
required to
be filed
with the
SEC under
the Securities Act and
the Exchange Act.


 


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


 


"Selling
Expenses" means
all underwriting
discounts and
selling commissions applicable
to the sale.


 




"Violation"
bas the meaning
set forth in
Section 4.7(a) .


 



    	21



    	 



    
ARTICLE
II


REPRESENTATIONS
AND WARRANTIES OF
THE COMPANY


 


The
Company hereby represents
and warrants to
Smith follows:


 


2.1              
Authorization; Binding Effect.
The Company has
full power and
authority to enter into
and perform its
obligations under this Agreement.
This Agreement constitutes the valid and legally binding obligation of the Company, enforceable against the Company in accordance
with its terms except (i) as may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of creditors' rights generally, and (ii)
as may be limited by laws relating to the availability of specific performance,
injunctive relief, or other equitable remedies.


 


2.2             
Non-contravention.The execution,
delivery and
performance of this
Agreement by the
Company and the
consummation of the
transactions contemplated hereby, do
not and will not (i) violate
any Requirements of Law applicable to the
Company , or (ii)
result in a material
breach or default under any of the Contractual
Obligations of the Company, or under any
order, writ, judgment,
injunction, decree, determination or award of any
Governmental Authority , in
each case applicable to the Company
or its properties.


 


ARTICLE
III


REPRESENTATIONS AND WARRANTIES OF SMITH


 


Smith
hereby represents and
warrants as
of the date
hereof as follows:


 


3.1             
Authorization;  Binding  Effect.
 Smith  has 
the requisite  legal 
power  and authority 
to  enter  into 
and  perform  his 
obligations under this Agreement.  This Agreement
constitutes the valid
 and legally binding 
obligation of Smith, enforceable against
Smith in accordance
with its terms, except (i) as may
be limited by applicable bankruptcy , insolvency,
reorganization, moratorium, and other laws of
general application affecting enforcement of
creditors' rights generally,  and  (ii)
as may be 
limited by laws relating to the availability  of specific
performance, injunctive relief, or other equitable remedies .


 


3.2               
Non-contravention.The execution, delivery
and performance of
this Agreement by Smith,
and the consummation
of the transactions
contemplated hereby ,
do not and will not (a) violate any Requirements of Law
applicable to Smith, or (b) result in a material breach or default under any
of the Contractual Obligations of Smith, or under any order, writ,
judgment, injunction, decree, determination or award
of any Governmental Authority, in each case applicable to Smith
or Smith's properties .


 


ARTICLE
IV


REGISTRATION;
COVENANTS OF THE
COMPANY


 


4.1        
Registration.
The Company
shall, within six
(6) months following the Effective
Date, file a
registration statement under
the Securities Act covering the
Registrable Shares and thereafter shall use its
reasonable commercial efforts to cause  such registration statement
to be declared effective as soon thereafter as reasonably practicable. Such registration
shall provide for sale or distribution of such Registrable Shares on a delayed or continuous
basis pursuant to Rule 415 under the Securities Act to the extent it is available.






    	22



    	 



      


4.2        
Piggyback
Registration.
The
Company shall notify
all
Holders
of Registrable Shares in
writing at least
thirty (30) days
prior to the filing
of any registration
statement under the Securities Act for purposes of
a public offering of securities of
the Company (including , but
not limited to,
registration statements
relating to secondary offerings
of securities
of the Company, but excluding registration statements
relating to employee benefit plans or
with respect to corporate reorganizations
or other transactions
under Rule 145 of the Securities Act), which notice will specify the proposed
offering price, the kind and number of securities proposed to be registered,
the distribution arrangements and such other information that at the time
would be appropriate to include in
such notice,
and will
afford each such Holder an opportunity
to include in such registration
statement all or part of such Registrable
Shares held by
such Holder
on terms and conditions
at least as favorable
as those
applicable to the securities to be sold
by the Company and by any other person thereunder .
Each Holder
desiring to include in any such
registration statement all or any
part of the Registrable
Shares held by it shall, within fifteen
(15) days after the above-described
notice from the Company,
so notify the Company in writing. If
a Holder decides not to
include some or all of its Registrable
Shares in any registration statement thereafter filed by the Company or decides to withdraw its Registrable
Shares from any underwriting or registration pursuant
to Section 4.1,
such Holder shall
nevertheless
continue to have the right
to include any Registrable Shares in any subsequent
registration statement
or registration statements
as may be filed by the Company with
respect to offerings of
its
securities, all upon
the terms and conditions set forth
herein


 


a.                  
Underwriting.If
the registration statement
under which the Company
gives notice
under this Section
4.
2
is for an underwritten offering, the Company
shall so advise the Holders of Registrable Shares.
In such event, the right of
any such Holder to be included
in a
registration pursuant to this Section 4.2 shall be
conditioned upon such Holder's
participation in such underwriting and the inclusion of
such Holder's Registrable Shares in the underwriting to the extent provided
herein . All
Holders proposing to distribute their Registrable Shares
through such underwriting shall
enter into
an underwriting agreement in customary
form with the underwriter or underwriters selected
for such underwriting by
the Company. Notwithstanding any other provision of this Agreement, if the underwriter
determines in good faith that marketing
factors require a limitation
of the number of securities to be underwritten
and advises
the
Holders of Registrable Shares in writing,
the number of shares that may be included in the underwriting
shall be allocated ,
first, to the Company; second,
to the Holders on a pro rata basis based
on the total number of Registrable Shares
held by the Holders; and third, to any holder of securities of
the Company (other
than a Holder)
on a pro rata basis .
In making any such reduction ,
all shares held by employees of
the Company
which are not Registrable
Shares shall first be excluded.
No such reduction
shall (i) reduce
the securities being
offered
by the Company for its own account to be
included in the registration and underwriting
or (ii) reduce
the amount of Registrable Shares of
the selling Holders included in the registration
below thirty three and one-third percent (33 1/3%)
of the
total amount of securities included
in such
registration, unless such offering is the Initial Offering, in which
event any
or all of the Registrable Shares of the
Holders may be excluded. If
any Holder disapproves of the terms
of any such underwriting ,
such Holder
may elect to
withdraw therefrom by  written notice to
the




    	23



    	 



    

--'


 


Company
and the underwriter
, delivered
at least
ten (10)
business days
prior to
the effective date
of the registration
statement. Any Registrable
Shares excluded or withdrawn from such
underwriting shall
be excluded
and withdrawn from the registration. For
any Holder which
is a partnership
, limited liability company
or corporation, the partners
and members, retired
partners and members
and shareholders of such Holder,
or the estates and family members
of any such partners and
members and retired partners and
members and any trusts
for the benefit of
any of the foregoing
person shall be deemed to be a single "Holder,"
and any pro rata reduction with respect to such "Holder" shall be
based upon the aggregate amount of shares carrying
registration rights owned by
all entities and individuals
included in such "Holder,” as
defined in this sentence.


 


b.
 Right to
Terminate Registration.  The
Company shall
have the
right to
terminate or withdraw
any registration initiated
by it under
this Section 4.2
prior to the effectiveness
of such registration whether
or not any
Holder has elected to
include securities in such registration.
The Registration Expenses
of such withdrawn registration shall be borne by
the Company in accordance
with Section 4.4 hereof.


 


4.3        
Form S-3
Registration.
If the
Company shall
receive from
Holders of
at least seventy
five percent
(75%) of
the Registrable
Shares then
outstanding a written request or requests
that the Company effect a registration
on Form S-3 or any
similar short-form registration statement
and any related qualification
or compliance with
respect to
all or
a part of the Registrable
Shares owned by such
Holder or Holders,
the Company will
:


 


a.                  
promptly give written
notice of the
proposed registration, and
any related qualification
or compliance,
to all
other Holders of Registrable Securities; and


 


b.                  
as soon
as practicable,
effect such
registration and
all such qualifications
and compliances
as may
be so requested
and as would
permit or facilitate the
sale and distribution
of all or
such portion of such Holder's
or Holders' Registrable Shares
as are specified in such request,
together with all or such
portion of the Registrable
Shares of any other
Holder or Holders
joining in such request
as are specified in a written
request given within fifteen
(15) days after receipt
of such written
notice from
the Company;
provided , however,
that the Company shall not
be obligated to
effect any such
registration, qualification or
compliance pursuant to
this Section 4.3: 


 


Holders,
or


 



(i)              
if Form 
S-3  is  not 
available  for  such
 offering  by
 the 


 


(ii)             
if the
Holders, together with
the holders
of any other securities
of the
Company entitled to
inclusion in such
registration, propose
to sell
Registrable Shares and
such other securities (if any)
at an aggregate price to the public
of less than
five hundred thousand dollars
($500,000), or


 


(iii)            
if the Company
shall furnish
to the Holders
a certificate signed
by the chairman
of the Board
of the
Company or
its chief executive officer stating that
in the good faith judgment of
the Board of the
Company, it would
be seriously detrimental
to the Company and its shareholders for such
Form S-3 registration to be effected at such time,
in







    	24



    	 



    


which event
the Company shall
have the right
to defer the
filing of the
Form S-3 registration statement
for a period of not
more than ninety (90) days after receipt
of the request of the Holder or Holders
under this Section 4.3; provided,
that such right to delay
a request shall be exercised by the Company not more than once in any twelve (12) month
period, or


 


(iv)            
if the
Company has, within
the twelve (12)
month period preceding the
date of such
request, already effected
one (1) registration
on Form S-3
for the Holders pursuant to this Section 4.3.


 


c.                  
Subject to the
foregoing, the Company
shall file a
Form S-3 registration statement
covering the Registrable
Shares and other securities so requested to be registered as soon as practicable
after receipt of the request or requests of the Holders. Registrations effected
pursuant to this Section 4.3
shall not be counted as demands for registration
or registrations effected pursuant to Section 4. 1 or Section 4.2,
respectively.


 


4.4        
Expenses of Registration.Except as
specifically provided herein,
all Registration Expenses incurred
in connection with
any registration, qualification
or compliance pursuant to
Sections 4.1, 4.2
or 4.3 herein shall be borne by
the Company. All
Selling Expenses applicable to Registrable
Shares sold by Holders incurred in connection
with any registrations hereunder shall be borne
by the Holders of the securities so registered
pro rata on the basis of the number of
shares so registered.


 


4.5         
Obligations of
the Company. Whenever
required to effect
the registration of any
Registrable Securities, the
Company shall,
as expeditiously
as reasonably possible:


 


a.                  
Prepare and
file with the
SEC a registration
statement with respect to
such Registrable Shares
and use its
best efforts to
cause such registration
statement to become effective as
soon as possible, and in any event within thirty
(30) days of the date on which the obligation to effect such registration arises,
and, upon
the request of
the Holders of a
majority of the Registrable Shares
registered thereunder, keep
such registration statement
effective for up to one
hundred eighty (180) days
or, if a
shelf registration pursuant to Securities
Act Rule 415,
until the Holder or Holders have completed the distribution related thereto .


 


b.                  
Prepare and
file with the
SEC such amendments
and supplements to such
registration statement and
the prospectus used
in connection with such registration
statement as may be necessary to comply with the provisions of the Securities Act
with respect to the disposition of all securities
covered by such registration statement for
the period set forth in paragraph (a) above.


 


c.                   
Furnish to
the Holders such
number of copies
of a prospectus, including
a preliminary prospectus,
in conformity with
the requirements of the Securities
Act, and such other documents as they may reasonably request in order to facilitate
the disposition of Registrable Shares owned by them.


 


d.                  
Use its
best efforts to
register and qualify the
securities covered by such
registration statement under
such other securities
or Blue Sky
laws of such jurisdictions as shall be reasonably requested
by the Holders.




    	25



    	 



    

e.                  
 In
the event of
any underwritten public
offering, enter
into and perform
its obligations under
an underwriting agreement , in
usual and customary form,
with the managing underwriter(s) of such offering.
Each Holder participating in such
underwriting  shall also enter into
and perform its obligations
under such an agreement, provided
that such underwriting agreement shall not provide for indemnification or contribution
obligations on the part of the Holders greater
than the obligations set forth in
Sections 4.7(b) and (d).


 


f.                  
Notify each
Holder of Registrable
Shares covered by
such registration statement at
any time when
a prospectus relating
thereto is required to be delivered under
the Securities Act of the happening of any event as a result of which the prospectus
included in such registration statement, as
then in effect, includes an untrue statement
of a material fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in
the light of the circumstances then existing and correct such
misrepresentation or omission as expeditiously as
reasonably possible .


 


g.                  
Use its
best efforts to
furnish,
on the
date that such
Registrable Shares are
delivered to the
underwriters for sale,
if such securities are being sold through underwriters ,
(i) an opinion,
dated as of such date,
of the counsel representing
the Company for the purposes of such registration ,
in form and substance as is customarily
given to underwriters in an underwritten public offering,
addressed to the underwriters
, if any,
and (ii) to the
Holders requesting registration of Registrable Securities,
a letter dated as of such date,
from the independent certified public
accountants of the Company, in form and substance as is customarily given by
independent certified public accountants to underwriters in an underwritten public
offering addressed to the underwriters.


 


h.                  
Cooperate and
assist in any
filings to be
made with the
Financial Industry Regulatory Authority,
Inc.


 


i.                    
Cause all
such Registrable Shares
to be listed
on each securities exchange
on which similar
securities issued
by the Company are then listed, or cause such
Registrable Shares to be authorized for trading on the Nasdaq Stock Market if
any similar securities issued by the Company are
then so authorized, if requested by the Holders
of a majority of such Registrable Securities.


 


j.                    
Provide a
transfer agent and
registrar for all
Registrable Shares registered pursuant
hereunder and a
CUSIP number for
all such Registrable Securities,
in each case not later than the effective date of such registration.


 


k.                    In
connection with an
underwritten offering,
to the extent requested
by the managing
underwriters or Holders,
participate in and support
customary efforts to sell the
Registrable Shares in the offering;
including without limitation,
participating in "road
shows."
·


 


4.6        
Delay of
Registration;
Furnishing Information. 
It shall
be a  condition
precedent to the
obligations of the Company to
take any action pursuant to Section
4.1,
4.2 or 4.3
that the selling Holders shall furnish to the Company such information regarding themselves,
the




    	26



    	 



    

Registrable Shares
held by them
and the intended
method of disposition
of such securities
as shall be required
to effect the registration of
their Registrable Securities.


 


4.7         
Indemnification.
In the
event any Registrable
Shares are included
in a registration statement
under Section 4.1,
4.2 or 4.3:


a.                   
To the
extent permitted by
law, the
Company will indemnify
and hold harmless
each Holder, the
partners, stockholders, members,
officers and directors
of each Holder, any underwriter (as defined in the Securities Act)
for such Holder and
each person, if any, who
controls such Holder
or underwriter within the
meaning of the Securities
Act or the Exchange Act, against any losses,
claims, damages, or liabilities Goint or several) to which they
may become subject under the Securities Act,
the Exchange Act or other federal or
state law, insofar as such losses,
claims, damages or liabilities (or actions in
respect thereof) arise out of or are based
upon any of the following statements, omissions
or violations (collectively a "Violation")
by the Company: (i)
any untrue statement or alleged untrue statement of a material fact contained
in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, (ii) the omission or alleged omission to state
therein a material fact required to be stated therein, or
necessary to make the statements therein not misleading, or (iii) any violation
or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation
promulgated under the Securities Act, the Exchange
Act or any state securities law in connection
with the offering covered by such registration statement; and the Company
will pay as incurred to
each such Holder, partner, stockholder,
member, officer, director,
underwriter or controlling person any
legal or other expenses reasonably
incurred by them in connection
with investigating or defending any such
loss, claim, damage, liability
or action; provided , however, that
the indemnity agreement contained in this Section 4.7(a)
shall not apply to amounts paid in settlement of any such loss,
claim,
damage, liability or action if such settlement is effected
without the consent of the Company, which consent shall not be unreasonably withheld, nor shall the Company be
liable in any such case for any
such loss, claim, damage, liability
or action to the extent that it
arises out of or is based upon a Violation
which occurs in reliance upon
and in conformity
with written information furnished
expressly for use in connection with such registration
by such Holder, partner, officer,
director, underwriter
or controlling person of such Holder.


 


b.                  
To the
extent permitted by
law, each Holder
will, if Registrable Shares
held by such
Holder are included
in the securities as
to which such registration, qualifications or compliance is being
effected, indemnify and hold harmless the Company,
each of its stockholders, directors, officers and each person, if any, who controls the Company within the meaning of the Securities
Act, any underwriter and any other Holder selling securities under such registration
statement or any of such other Holder's partners, stockholders,
members, officers
and directors, any
underwriter (as defined in the Securities Act) for such Holder
and each person, if any, who
controls such Holder or underwriter within
the meaning of the Securities Act or the
Exchange Act, against any losses,
claims, damages or liabilities joint or several)
to which the Company or any such stockholder, director,
officer, controlling person, underwriter or other
such Holder, or the partners, stockholders , members,
officers and directors of such other Holder, any underwriter (as defined in the
Securities Act) for such Holder and each person , if any,
who controls such Holder or underwriter within the meaning of the Securities Act







    	27



    	 



    

or
the Exchange Act,
may become subject
under the Securities
Act, the Exchange
Act or other federal
or state law, insofar as
such losses, claims, damages
or liabilities (or actions
in respect thereto) arise out
of or are based upon any
Violation, in each case to the
extent (and only to the extent) that such
Violation occurs in reliance upon
and in conformity
with written information furnished by
such Holder under an instrument duly executed by
such Holder and stated
to be specifically for use in connection
with such registration ; and
each such Holder will pay as incurred any legal
or other expenses reasonably incurred by the Company
or any such director, officer, controlling person, underwriter
or other Holder, or the partners, stockholders,
members, officers and directors of such other Holder,
any underwriter (as defined in the Securities Act) for such Holder and each
person, if any, who controls such Holder or underwriter
 within the meaning  of the Securities
Act  or the Exchange  Act, in connection
with  investigating or defending any such
loss, claim, damage,
liability or action if it is judicially determined
that there was such a Violation; provided
, however,
that the
indemnity agreement contained in
this Section 4.7
(b) shall not
apply to amounts
paid in settlement of any such
loss, claim, damage, liability
or action if such settlement is effected without the consent of the Holder,
which consent shall not be unreasonably withheld ;provided
further , that
in no event shall any indemnity
under this
Section 4.7 exceed the proceeds from the
offering received by such Holder;
provided further, that any payments will
be repaid to each such Holder if the Company acted recklessly .


 



c.                  Promptly after
receipt by an
indemnified party under
this Section 4.7
of notice of
the commencement of any
action (including any
governmental action), such indemnified
party will, if
a claim in
respect thereof is to be made against any indemnifying party under this
Section 4.7, deliver to the
indemnifying party a written notice of the
commencement thereof and the indemnifying
party shall have the right to participate
in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly noticed, to assume
the defense thereof with counsel mutually satisfactory to the parties; provided,
however, that an indemnified party shall have the right
to retain its own counsel, with the fees and expenses to be paid by the indemnifying
party, if in the reasonable opinion of counsel representation of such indemnified party
by the counsel retained by the indemnifying party would be inappropriate due
to actual or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to deliver
written notice to the indemnifying party within a reasonable time of the commencement
of any such action, if (and only to the extent) materially
prejudicial to its ability to defend such action, shall relieve such indemnifying party
of any liability to the indemnified party under this Section 4.7,
but the omission so to deliver written notice
to the indemnifying party will not relieve it of any liability
that it may have to any indemnified party otherwise than under this
Section 4.7.


 


d.                  
If
the indemnification
provided for in
this Section 4.7
is held by
a court of competent jurisdiction
to be unavailable to an indemnified party with respect to any losses, claims, damages
or liabilities referred to herein, the indemnifying party, in
lieu of indemnifying such indemnified party thereunder,
shall to the extent permitted by applicable
law contribute to the amount paid or payable
by such indemnified party as a
result of such loss, claim, damage or liability in such proportion as is appropriate
to reflect the relative fault of the indemnifying party on the one hand and
of the indemnified party on the
other in connection with the Violation(s) that resulted in such loss, claim, damage
or liability, as well as any other relevant equitable considerations. The relative
fault of the indemnifying party
and of the indemnified party shall be determined by a court
of law by reference to, among other things,


 







    	28



    	 



    

whether the
untrue or alleged
untrue statement
of a material
fact or 
the  omission
 to  state
a material fact
relates to
information supplied by the indemnifying party
or by the indemnified party and the parties '
relative intent, knowledge, access
to information and opportunity
to correct or prevent
such statement or
omission; provided,
that in no event shall
any contribution by a Holder hereunder exceed
the proceeds from the offering
received  by such Holder


.


e.            The obligations of the Company and Holders under this Section 4.7  shall survive completion of any offering of Registrable Shares in a registration statement and the termination of this Agreement.
No indemnifying party, in the defense
of any such claim or
litigation, shall, except with the
consent of each indemnified party, consent
to entry of
any judgment or enter into any settlement which does
not include as an unconditional term
thereof the giving by the claimant or plaintiff to such indemnified
party of a release from
all liability in respect to such claim
or litigation.


 


4.8             
Assignment of
Registration Rights.
The rights to
cause the Company
to register Registrable
Shares pursuant to
this Article IV may be
transferred or assigned by a
Holder to a transferee or assignee
of Registrable
Shares which
(a) is a subsidiary,
parent, stockholder ,
general partner, limited partner, retired partner,
member, retired member or Affiliate of a Holder,
(b) is a Holder's
Immediate Family member or an
estate or trust of
or for the benefit of an individual Holder, or
(c) acquires at least
twenty percent (20%) of the Registrable Shares held by
such Holder; provided,
however, (i) the transferor
shall, within ten (10) days after such
transfer, furnish to the Company written notice of the
name and address of such
transferee or assignee and
the securities with respect to which such
registration rights are being assigned
and (ii) such
transferee shall become
a party to thfa Agreement.


 


4.9             
" Market
Stand-Off '
Agreement; Agreement
to Furnish Information.
Each Holder hereby
agrees that such
Holder shall,
if requested by the underwriter of any underwritten
public offering of the Company's Common Stock, agree
with such underwriter not to sell, transfer ,
make any short sale
of,
grant any option for
the purchase of,
or enter into any
hedging or similar transaction with the same economic
effect as a sale of, any Common
Stock (or other
securities) of the Company held
by such Holder (other
than those
included in the registration) for a
period specified by
the representative of the underwriters of Common
Stock (or other securities) of the Company (the
"Restricted Period")
not to exceed ninety (90) days
following the effective date
of any registration statement of the
Company filed under the Securities Act in connection with
the Initial Offering ;provided
that such agreements shall not apply to
Registrable Shares included
in such registration statement or sales or similar transactions effected
pursuant to a
valid exemption from
the registration requirements of the Securities
Act. Each Holder
agrees to execute and deliver such other agreements
as may be reasonably requested
by the Company
or the underwriter which are
consistent with the foregoing or which are necessary
to give further effect
thereto. In addition, if requested by the Company
or the representative of the underwriters
of Common Stock (or other securities)
of the Company, each Holder shall provide
, within ten
(10) days of such request, such information concerning
such Holder as may be reasonably requested by
the Company or
such representative in connection with the completion
 of  any public offering of the Company's
securities pursuant to a registration
statement filed under the Securities Act. The obligations
described in this Section 4.9 shall not apply to a
registration relating solely to employee benefit plans
on Form S-1 or Form S-8 or similar forms that
may be promulgated in the future,
or a registration relating solely to
a Rule 145 transaction on Form S-4


 




    	29



    	 



    

or similar
forms that may
be promulgated in
the future. The
Company may impose
stop-transfer instructions with respect
to the shares of Common Stock (or other
securities) subject to the foregoing restriction until the
end of the Restricted Period.


 


4.10         
Information Regarding
the Company.  With
a view to
making available to
Smith the benefits
of certain rules
and regulations of the SEC which may permit
the sale of the Shares to the public without registration,
the Company agrees to:


 


a.                  
Following the date
upon which the
Company registers the Common
Stock with the
Commission under Section
12 of the Exchange
Act, the Company will file with the
SEC, in a timely manner, all reports and
other documents required of the Company under the Exchange Act; and


b.                  
So long as
Smith owns any
Shares, furnish to
Smith forthwith upon request:
(i) a written
statement by the
Company as to
its compliance with the reporting requirements of
the Exchange Act (at any time after it has become
subject to such reporting requirements);  (ii) a copy of the most 
recent  annual or quarterly report of the Company; and (iii) such other reports
and documents as Smith may reasonably
request in availing itself of any rule or regulation of the SEC allowing it to sell
the Notes without registration.


 


ARTICLE
V


GENERAL  PROVISIONS


 


5.1              
Indemnification. Smith
agrees to indemnify
and hold harmless
the Company, its officers,
managers, affiliates, counsel,
agents and each
other Person, if
any, who controls or is controlled by it, within the meaning of Section
15 of the Securities Act, against any and all loss, liability, claim, damage and expense whatsoever
(including, but not limited to, any and all expenses reasonably incurred in
investigating, preparing or defending against any litigation commenced or threatened or .any
claim whatsoever) arising out
of or based upon any false representation
or warranty or breach or failure by Smith to
comply with any covenant or agreement made by
Smith herein or in any other document furnished by Smith to any of the foregoing in
connection with this transaction.


 


5.2              
Amendment.ThisAgreementmaybeamended,modifiedor supplemented
at any time
by the parties
hereto only by
an instrument in
writing signed on
behalf of each of the parties hereto. No agreement made through the use of electronic
records or electronic signatures, as those terms
are used in the Electronic Signatures
in Global and National Commerce Act, 15 U.S.C.
Sec. 7001 et. seq., shall be enforceable or binding on either party hereto. Notwithstanding the previous sentence, facsimile signatures,
telecopied signatures, or copies
of signatures in PDF format sent by
e-mail, will constitute a sufficient
form of writing for purposes of this Section
5.2 and Section 5.3.


 


5.3              
Counterparts.This Agreement may
be executed in
one or more counterparts, each
of which shall
be deemed an
original, but all of which together shall constitute one
and the same instrument.


 


5.4              
Headings.The
headings in this
Agreement are for
convenience of reference only
and shall not
limit or otherwise
affect the meaning
hereof.




    	30



    	 



    

5.5             
GOVERNING
LAW. THIS AGREEMENT SHALL
BE GOVERNED BY
AND CONSTRUED IN
ACCORDANCE WITH THE
LAWS OF
THE STATE
OF NEW
YORK.


5.6             
Severabilitv. If
any one
or more
of the
provisions contained herein,
or the
application thereof
in any circumstance ,
is held
invalid, illegal or
unenforceable in
any respect for
any reason, the
validity ,
legality and enforceability
of any such
provision in
every other respect
and of the
remaining provisions hereof shall not
be in any way impaired.


 


5.7             
Entire Agreement;Waivers.This
 Agreement,together
with the
Settlement Agreement, is
intended by
the parties as
a final
expression
of their
agreement and
is intended
to be a complete and exclusive
statement of the agreement
and understanding of the
parties hereto in respect of the
subject matter contained herein. There are no restrictions,
promises, warranties
or undertakings, other than
those set forth herein and in the Conversion Agreement. This Agreement
and the Conversion Agreement
supersede all prior agreements
and understandings
between the parties with
respect to
such subject matter.
No waiver
of any of the provisions
of this Agreement shall
be deemed or shall
constitute a waiver of
any other provision hereof (whether or not similar), nor shall
such waiver constitute a continuing
waiver unless otherwise expressly provided.


 


5.8             
Further Assurances.
Each of
the parties shall
execute such documents
and perform such
further acts
(including, without limitation, obtaining any
consents, exemptions,
authorizations, or other actions by,
or giving any
notices to, or making any filings with, any Governmental
Authority or any other Person) as may be
reasonably required or
desirable to carry out or to
perform the provisions
of this Agreement.


 


5.9             
Notices. All notices
or other communications
given or made
hereunder shall be
in writing and
shall be
delivered or mailed
by registered or first
class mail, postage prepaid, or express
overnight courier service, to
the address set forth in the Conversion Agreement.


 


(Signature
Page Follows)


 


 


 


 


 


 


 


 


 


 


 


 







    	31



    	 



    

IN
WITNESS WHEREOF, the
Company and Smith
have executed this
Agreement as of, 2013.


 


 


 





			GEOSPATIAL
                                         HOLDINGS,  INC.
	 	 	
	 	 	 
	 	By:	 
	 	 	Thomas R. Oxenreiter, CFO
	 	 	 
	 	 	 
	 	 	 
	 	 	Mark
A. Smith