Document:

Exhibit

Exhibit 10.5
TAX MATTERS AGREEMENT
BY AND BETWEEN
SEACOR HOLDINGS INC.
AND
SEACOR MARINE HOLDINGS INC.
DATED AS OF MAY 10, 2017

TAX MATTERS AGREEMENT
THIS TAX MATTERS AGREEMENT (this “Agreement”), dated as of May 10, 2017, is by and between SEACOR Holdings Inc., a Delaware corporation (“SEACOR”), and SEACOR Marine Holdings Inc., a Delaware corporation (“Spinco”).  Each of SEACOR and Spinco is sometimes referred to herein as a “Party” and, collectively, as the “Parties.”
WHEREAS, SEACOR, through its various subsidiaries, is engaged in the SEACOR Business (as defined below) and the SEACOR Marine Business (as defined below);
WHEREAS, the board of directors of SEACOR has determined that it is in the best interests of SEACOR, its shareholders and Spinco to create a separate publicly traded company that will operate the SEACOR Marine Business;
WHEREAS, SEACOR and Spinco have entered into the Distribution Agreement, pursuant to which SEACOR will distribute all of the stock of Spinco to its shareholders (the “Distribution”) as described therein;
WHEREAS, prior to consummation of the Distribution, SEACOR was the common parent corporation of an affiliated group of corporations within the meaning of Section 1504 of the Code (as defined below) of which Spinco was a member;
WHEREAS, the Parties intend that, for U.S. federal income tax purposes, the Distribution shall qualify as a tax-free transaction pursuant to Section 355 and related provisions of the Code; and
WHEREAS, the Parties wish to (a) provide for the payment of Tax liabilities and entitlement to refunds thereof, allocate responsibility for, and cooperation in, the filing of Tax Returns, and provide for certain other matters relating to Taxes, and (b) set forth certain covenants and indemnities relating to the preservation of the tax-free status of the Distribution.
NOW, THEREFORE, in consideration of the foregoing and the terms, conditions, covenants and provisions of this Agreement, each of the Parties mutually covenants and agrees as follows:

ARTICLE I
DEFINITIONS
Section 1.01.    General.  As used in this Agreement, the following terms shall have the following meanings:
“2016 Prior Payment Amount” means the amount, which may be a positive or negative number, equal to the aggregate amount, if any, paid by SEACOR to Spinco prior to the date hereof in respect of Spinco’s estimated NOL, NCL and FTC for the taxable period beginning on January 1, 2016 and ending on December 31, 2016 minus the aggregate amount, if any, paid by Spinco to SEACOR prior to the date hereof in respect of Spinco’s estimated taxable income for the taxable period beginning on January 1, 2016 and ending on December 31, 2016.
“2016 Tentative Excess” has the meaning set forth in Section 2.02(b).
“2017 Estimated Excess” has the meaning set forth in Section 2.03(a).
“2017 Prepayment Amount” means the amount, which may be a positive or negative number, equal to the aggregate amount, if any, paid by SEACOR to Spinco prior to the date hereof in respect of Spinco’s estimated NOL, NCL and FTC for the taxable period beginning on January 1, 2017 and ending (with respect to the Spinco Group) on the Closing Date minus the aggregate amount, if any, paid by Spinco to SEACOR prior to the date hereof in respect of Spinco’s estimated taxable income for the taxable period beginning on January 1, 2017 and ending (with respect to the Spinco Group) on the Closing Date.
2017 Prior Payment Amount” means the amount, which may be a positive or negative number, equal to the 2017 Prepayment Amount plus the amount, if any, paid by SEACOR to Spinco pursuant to Section 2.03(a) minus the amount, if any, paid by Spinco to SEACOR pursuant to Section 2.03(a).
“2017 Tentative Excess” has the meaning set forth in Section 2.03(b).
“Accounting Firm” has the meaning set forth in Section 5.01.
“Affiliate” has the meaning set forth in the Distribution Agreement.
“Affiliated Group” means an affiliated group of corporations, within the meaning of Section 1504(a) of the Code, including the common parent corporation, and any member of such group.
“Agreement” has the meaning set forth in the preamble to this Agreement.
“Ancillary Agreements” has the meaning set forth in the Distribution Agreement.
“Closing Date” means the date on which the Distribution occurs.

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“Code” means the Internal Revenue Code of 1986, as amended from time to time.
“Convertible Notes” means Spinco’s 3.75% Convertible Senior Notes due 2022.
“Counsel” means Milbank, Tweed, Hadley & McCloy LLP.
“Disqualifying Action” means a SEACOR Disqualifying Action or a Spinco Disqualifying Action.
“Distribution” has the meaning set forth in the preamble to this Agreement.
“Distribution Agreement” means the Distribution Agreement by and between the Parties dated as of           , 2017.
“Due Date” means (i) with respect to a Tax Return, the date (taking into account all valid extensions) on which such Tax Return is required to be filed under applicable Law and (ii) with respect to a payment of Taxes, the date on which such payment is required to be made to avoid the incurrence of interest, penalties and/or additions to Tax.
“Effective Time” has the meaning set forth in the Distribution Agreement.
“Employee Matters Agreement” means the Employee Matters Agreement by and between the Parties dated as of           , 2017.
“Extraordinary Transaction” shall mean any action that is not in the ordinary course of business, but shall not include any action that is undertaken pursuant to the Distribution.
“Fifty-Percent or Greater Interest” has the meaning ascribed to such term for purposes of Sections 355(d) and (e) of the Code.
“Final Determination” means the final resolution of liability for any Tax for any taxable period, by or as a result of (i) a final decision, judgment, decree or other order by any court of competent jurisdiction that can no longer be appealed; (ii) a final settlement with the IRS, a closing agreement or accepted offer in compromise under Section 7121 or 7122 of the Code, or a comparable agreement under the Laws of other jurisdictions, that resolves the entire Tax liability for any taxable period; (iii) any allowance of a refund or credit in respect of an overpayment of Tax, but only after the expiration of all periods during which such refund or credit may be recovered by the jurisdiction imposing the Tax; or (iv) any other final resolution, including by reason of the expiration of the applicable statute of limitations or the execution of a pre-filing agreement with the IRS or other Taxing Authority.
“FTC” means a foreign tax credit as computed for U.S. federal income tax purposes under Sections 27(a) and 901 through 909 of the Code and utilized (including by way of carryback) by the SEACOR Consolidated Group.
“Indemnifying Party” means the Party from which the other Party is entitled to seek indemnification pursuant to the provisions of Section 2.01.
“Indemnified Party” means the Party that is entitled to seek indemnification from the other Party pursuant to the provisions of Section 2.01.
“Information” has the meaning set forth in Section 4.01.
“Information Request” has the meaning set forth in Section 4.01.
“IRS” means the U.S. Internal Revenue Service or any successor thereto, including its agents, representatives and attorneys.
“Law” means any U.S. or non-U.S. federal, national, supranational, state, provincial, local or similar statute, law, ordinance, regulation, rule, code, administrative pronouncement, order, requirement or rule of law (including common law).
“NCL” shall mean a net capital loss as computed for U.S. federal income tax purposes under Section 1222(10) of the Code and utilized (including by way of carryback) by the SEACOR Consolidated Group.
“NOL” shall mean a net operating loss as computed for U.S. federal income tax purposes under Section 172 of the Code and utilized (including by way of carryback) by the SEACOR Consolidated Group.
“Notified Action” has the meaning set forth in Section 3.03(a).
“Opinion” means the opinion of Counsel with respect to certain Tax aspects of the Distribution.
“Ordinary Course of Business” means an action taken by a Person only if such action is taken in the ordinary course of the normal day-to-day operations of such Person.
“Party” has the meaning set forth in the preamble to this Agreement.
“Person” has the meaning set forth in the Distribution Agreement.

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“Post-Closing Period” means any taxable period (or portion thereof) beginning after the Closing Date.
“Pre-Closing Period” means any taxable period (or portion thereof) ending on or before the Closing Date.
“Proposed Acquisition Transaction” means a transaction or series of transactions (or any agreement, understanding or arrangement, within the meaning of Section 355(e) of the Code and Treasury Regulation Section 1.355-7, or any other regulations promulgated thereunder, to enter into a transaction or series of transactions), whether such transaction is supported by Spinco management or shareholders, is a hostile acquisition, or otherwise, as a result of which Spinco would merge or consolidate with any other Person or as a result of which one or more Persons would (directly or indirectly) acquire, or have the right to acquire, from Spinco and/or one or more holders of outstanding shares of Spinco capital stock, as the case may be, a number of shares of Spinco capital stock that would, when combined with any other changes in ownership of Spinco capital stock pertinent for purposes of Section 355(e) of the Code, comprise 25% or more of (A) the value of all outstanding shares of stock of Spinco as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series, or (B) the total combined voting power of all outstanding shares of voting stock of Spinco as of the date of such transaction, or in the case of a series of transactions, the date of the last transaction of such series.  Notwithstanding the foregoing, a Proposed Acquisition Transaction shall not include (i) the adoption by Spinco of a shareholder rights plan or (ii) issuances by Spinco that satisfy Safe Harbor VIII (relating to acquisitions in connection with a person’s performance of services) or Safe Harbor IX (relating to acquisitions by a retirement plan of an employer) of Treasury Regulation Section 1.355-7(d).  For purposes of determining whether a transaction constitutes an indirect acquisition, any recapitalization resulting in a shift of voting power or any redemption of shares of stock shall be treated as an indirect acquisition of shares of stock by the non-exchanging shareholders.  This definition and the application thereof is intended to monitor compliance with Section 355(e) of the Code and shall be interpreted accordingly.  Any clarification of, or change in, the statute or regulations promulgated under Section 355(e) of the Code shall be incorporated in this definition and its interpretation.
“Restriction Period” has the meaning set forth in Section 3.02(b).
“SAG” has the meaning ascribed to the term “separate affiliated group” in Section 355(b)(3)(B) of the Code.
“SEACOR” has the meaning set forth in the preamble to this Agreement.
“SEACOR Business” has the meaning set forth in the Distribution Agreement.
“SEACOR Consolidated Group” means the Affiliated Group of which SEACOR is the common parent corporation.
“SEACOR Consolidated Return” shall mean any U.S. federal income Tax Return filed by SEACOR as the common parent of its Affiliated Group.
“SEACOR Disqualifying Action” means (i) any action (or the failure to take any action) within its control by SEACOR or any SEACOR Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions) that, (ii) any event (or series of events) involving the capital stock of SEACOR, any assets of SEACOR or any assets of any SEACOR Entity that, or (iii) any breach by SEACOR or any SEACOR Entity of any representation, warranty or covenant made by them in this Agreement that, in each case, would negate the Tax-Free Status of the Transactions; provided, however, the term “SEACOR Disqualifying Action” shall not include any action described in the Distribution Agreement or any Ancillary Agreement or that is undertaken pursuant to the Distribution.
“SEACOR Entity” means any Subsidiary of SEACOR immediately after the Effective Time.
“SEACOR Group” means, individually or collectively, as the case may be, SEACOR and any SEACOR Entity.
“SEACOR Marine Business” has the meaning set forth in the Distribution Agreement.
“Section 3.02(d) Acquisition Transaction” means any transaction or series of transactions that is not a Proposed Acquisition Transaction but would be a Proposed Acquisition Transaction if the percentage reflected in the definition of Proposed Acquisition Transaction were 10% instead of 25%.
“Spinco” has the meaning set forth in the preamble to this Agreement.
“Spinco Disqualifying Action” means (i) any action (or the failure to take any action) within its control by Spinco or any Spinco Entity (including entering into any agreement, understanding or arrangement or any negotiations with respect to any transaction or series of transactions) that, (ii) any event (or series of events) involving the direct or indirect acquisition of the capital stock of Spinco, or involving any assets of Spinco or any assets of any Spinco Entity that, or (iii) any breach by Spinco or any Spinco Entity of any representation, warranty or covenant made by them in this Agreement that, in each case, would negate the Tax-Free Status of the Transactions; provided, however, the term “Spinco Disqualifying Action” shall not include any action (x) described in the Distribution Agreement or any Ancillary Agreement, (y) previously approved in writing by SEACOR or (z) that is undertaken pursuant to the Distribution.

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“Spinco Entity” means any Subsidiary of Spinco immediately after the Effective Time.
“Spinco Group” means, individually or collectively, as the case may be, Spinco and any Spinco Entity.
“Subsidiary” has the meaning set forth in the Distribution Agreement.
“Tax” means (i) all taxes, charges, fees, duties, levies, imposts, or other similar assessments, imposed by any U.S. federal, state or local or foreign governmental authority, including income, gross receipts, excise, property, sales, use, license, capital stock, transfer, franchise, payroll, withholding, social security, value added and other taxes of any kind whatsoever, (ii) any interest, penalties or additions attributable thereto and (iii) all liabilities in respect of any items described in clause (i) or (ii) payable by reason of assumption, transferee or successor liability, operation of Law or Treasury Regulation Section 1.1502-6(a) (or any predecessor or successor thereof or any analogous or similar provision under Law).
“Tax Benefit” shall mean a reduction in the Tax liability (or increase in refund or credit or any item of deduction or expense) of a taxpayer (or of the Affiliated Group of which it is a member) for any taxable period.  Except as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have been realized or received from a Tax Item in a taxable period only if and to the extent that the Tax liability of the taxpayer (or of the Affiliated Group of which it is a member) for such period, after taking into account the effect of the Tax Item on the Tax liability of such taxpayer in the current period and all prior periods, is less than it would have been had such Tax liability been determined without regard to such Tax Item.
“Tax Detriment” shall mean an increase in the Tax liability (or reduction in refund or credit or item of deduction or expense) of a taxpayer (or of the Affiliated Group of which it is a member) for any taxable period.
“Tax-Free Status of the Transactions” means the tax-free treatment accorded to the Distribution as set forth in the Opinion.
“Taxing Authority” means any governmental authority or any subdivision, agency, commission or entity thereof or any quasi-governmental or private body having jurisdiction over the assessment, determination, collection or imposition of any Tax (including the IRS).
“Tax Item” shall mean any item of income, gain, loss, deduction, expense or credit, or other attribute that may have the effect of increasing or decreasing any Tax.
“Tax Materials” has the meaning set forth in Section 3.01(a).
“Tax Matter” has the meaning set forth in Section 4.01.
“Tax Notice” has the meaning set forth in Section 2.06(a).
“Tax Rate Percentage” means the highest marginal U.S. federal income tax rate (expressed as a percentage) payable by a U.S. corporation in effect for the applicable taxable year (which shall be the taxable year of utilization in the case of a net operating loss or a net capital loss).
“Tax Return” means any return, report, certificate, form or similar statement or document (including any related or supporting information or schedule attached thereto and any information return, or declaration of estimated Tax) supplied or required to be supplied to, or filed with, a Taxing Authority in connection with the payment, determination, assessment or collection of any Tax or the administration of any Laws relating to any Tax and any amended Tax return or claim for refund.
“Transaction Taxes” shall mean (i) any Tax or Tax Detriment (determined by applying the Tax Rate Percentage) resulting from any income or gain recognized by SEACOR, Spinco or their Affiliates as a result of the Distribution failing to qualify for tax-free treatment under Section 355 (including Section 355(e)) and related provisions of the Code or corresponding provisions of other applicable Tax Laws and (ii) any Tax resulting from any income or gain recognized by SEACOR or its Affiliates under Treasury Regulation Section 1.1502-13 or 1.1502-19 (or any corresponding provisions of other applicable Tax Laws) as a result of the Distribution.
“Transfer Taxes” means all sales, use, transfer, real property transfer, intangible, recordation, registration, documentary, stamp or similar Taxes imposed on the Distribution.
“Treasury Regulations” means the final and temporary (but not proposed) income Tax regulations promulgated under the Code, as such regulations may be amended from time to time (including corresponding provisions of succeeding regulations).
“Unqualified Tax Opinion” means a “will” opinion, without substantive qualifications, of a nationally recognized law, accounting or tax consulting firm to the effect that a transaction will not affect the Tax-Free Status of the Transactions.
“U.S.” means the United States of America.
Section 1.02.    Additional Definitions.  Capitalized terms not defined in this Agreement shall have the meaning ascribed to them in the Distribution Agreement.

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ARTICLE II
ALLOCATION, PAYMENT AND INDEMNIFICATION
Section 2.01.    Responsibility for Taxes; Indemnification.
(a)    SEACOR shall indemnify and hold harmless the Spinco Group for all Tax liabilities (and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs, incurred in connection therewith) attributable to (i) except as otherwise provided in Section 2.02, 2.03 or 2.06(b), any Taxes of SEACOR or any member of the SEACOR Consolidated Group imposed upon the Spinco Group by reason of the Spinco Group being severally liable for such Taxes pursuant to Treasury Regulation Section 1.1502-6 or any analogous provision of state or local Law; (ii) all Transaction Taxes, except as otherwise specifically provided in Section 2.01(b)(iii); (iii) SEACOR’s portion of any Transfer Taxes determined pursuant to Section 2.05; (iv) any Taxes of the Spinco Group resulting from the breach of any representation, obligation or covenant of SEACOR under this Agreement; and (v) any Taxes of the SEACOR Group for any Post-Closing Period.
(b)    Spinco shall indemnify and hold harmless the SEACOR Group for all Tax liabilities (and any loss, cost, damage or expense, including reasonable attorneys’ fees and costs, incurred in connection therewith) attributable to (i) any Taxes of the Spinco Group for any Post‐Closing Period other than Taxes described in Section 2.01(a); (ii) any Taxes of the SEACOR Group resulting from the breach of any representation, obligation or covenant of Spinco under this Agreement; (iii) Transaction Taxes, but only to the extent such Transaction Taxes arise from (x) a breach by Spinco or any of its Affiliates of the representations or covenants under Article III, or (y) a Spinco Disqualifying Action; and (iv) Spinco’s portion of any Transfer Taxes determined pursuant to Section 2.05.
(c)    If the Indemnifying Party is required to indemnify the Indemnified Party pursuant to this Section 2.01, the Indemnified Party shall submit its calculations of the amount required to be paid pursuant to this Section 2.01, showing such calculations in sufficient detail so as to permit the Indemnifying Party to understand the calculations.  Subject to the following sentence, the Indemnifying Party shall pay to the Indemnified Party, no later than ten (10) business days after the Indemnifying Party receives the Indemnified Party’s calculations, the amount that the Indemnifying Party is required to pay the Indemnified Party under this Section 2.01.  If the Indemnifying Party disagrees with such calculations, it must notify the Indemnified Party of its disagreement in writing within ten (10) business days of receiving such calculations.
(d)    For all Tax purposes, the SEACOR Group and the Spinco Group agree to treat (i) any payment required by this Agreement as either a contribution by SEACOR to Spinco or a distribution by Spinco to SEACOR, as the case may be, occurring immediately prior to the Distribution and (ii) any payment of interest or non-federal Taxes by or to a Taxing Authority as taxable or deductible, as the case may be, to the party entitled under this Agreement to retain such payment or required under this Agreement to make such payment, in either case except as otherwise mandated by applicable Law or by a Final Determination.
(e)    The amount of any indemnification payment pursuant to this Section 2.01 with respect to any Tax liability shall be reduced by any current Tax Benefits actually realized by the Indemnified Party in respect of such Tax liability by the end of the taxable year in which the indemnity payment is made.  The calculation of such Tax Benefit shall be included in the calculation required to be submitted pursuant to Section 2.01(c).  If, notwithstanding the treatment required by Section 2.01(d), any indemnification payment pursuant to this Section 2.01 is determined to be taxable to the Indemnified Party by any Taxing Authority, the indemnity payment payable by the Indemnifying Party shall be increased as necessary to ensure that, after all required Taxes on the indemnity payment are paid (including Taxes applicable to any increases in the indemnity payment under this Section 2.01(e)), the Indemnified Party receives the amount it would have received if the indemnity payment was not taxable.
Section 2.02.    2016 Tax Sharing Payments.
(a)    Following the filing of the SEACOR Consolidated Return for the taxable year ending on December 31, 2016, SEACOR shall calculate the net operating loss (as computed for U.S. federal income tax purposes), if any, and the NOL, if any, of the Spinco Group or the taxable income (as computed for U.S. federal income tax purposes), if any, of the Spinco Group as well as the NCL, if any, and the FTC, if any, of the Spinco Group, in each case for the taxable period beginning on January 1, 2016 and ending December 31, 2016 as reflected in such SEACOR Consolidated Return, and
(i)    if a net operating loss is calculated and the 2016 Prior Payment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (x) the sum of (I) 35% of such NOL, if any, (II) 35% of such NCL, if any, and (III) such FTC, if any, over (y) the 2016 Prior Payment Amount, and if the amount of such excess is a positive number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess, or if the amount of such excess is a negative number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess (viewed as a positive number);
(ii)    if a net operating loss is calculated and the 2016 Prior Payment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (w) the 2016 Prior Payment Amount (viewed as a positive number), (x) 35% of such NOL, if any, (y) 35% of such NCL, if any, and (z) such FTC, if any; or

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(iii)    if taxable income is calculated, then SEACOR shall calculate the excess, if any, of (x) 35% of such taxable income over (y) the sum of (I) such FTC, if any, and (II) 35% of such NCL, if any (such excess, the “2016 Tentative Excess”), and
a.    if the amount of the 2016 Tentative Excess is a positive number and the 2016 Prior Payment Amount is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR an amount equal to the sum of (I) the 2016 Prior Payment Amount and (II) the 2016 Tentative Excess;
b.    if the amount of the 2016 Tentative Excess is a negative number and the 2016 Prior Payment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (I) the 2016 Tentative Excess (viewed as a positive number) over (II) the 2016 Prior Payment Amount, and if the amount of such excess is a positive number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess, or if the amount of such excess is a negative number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess (viewed as a positive number);
c.    if the amount of the 2016 Tentative Excess is a positive number and the 2016 Prior Payment Amount is a negative number, then SEACOR shall calculate the excess, if any, of (I) the 2016 Tentative Excess over (II) the 2016 Prior Payment Amount (viewed as a positive number), and if the amount of such excess is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess, or if the amount of such excess is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess (viewed as a positive number); or
d.    if the amount of the 2016 Tentative Excess is a negative number and the 2016 Prior Payment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (I) the 2016 Prior Payment Amount (viewed as a positive number) and (II) the 2016 Tentative Excess (viewed as a positive number).
For purposes of determining the net operating loss and NOL or taxable income as well as the NCL, if any, and the FTC, if any, of the Spinco Group for 2016, such net operating loss and NOL or taxable income as well as NCL and FTC shall be computed solely by reference to the members of the Spinco Group that are members of the SEACOR Consolidated Group for 2016, and shall be determined as though such members filed on a consolidated basis with Spinco as the common parent.
(b)    SEACOR shall prepare and deliver to Spinco a schedule showing in reasonable detail SEACOR’s calculation of any amount payable by SEACOR to Spinco pursuant to Section 2.02(a) or (b) or any amount payable by Spinco to SEACOR pursuant to Section 2.02(a) or (b), as the case may be, and, subject to Section 5.01, Spinco shall pay to SEACOR, or SEACOR shall pay to Spinco, as applicable, the amount shown on such schedule no later than fifteen days following the delivery of such schedule by SEACOR to Spinco.
Section 2.03    2017 Tax Sharing Payments.
(a)    Following the completion of SEACOR’s financial statements for the fiscal year ending on December 31, 2017, SEACOR shall, in good faith, estimate the net operating loss (as computed for U.S. federal income tax purposes), if any, and the NOL, if any, of the Spinco Group or the taxable income (as computed for U.S. federal income tax purposes), if any, of the Spinco Group as well as the NCL, if any, and the FTC, if any, of the Spinco Group, in each case for the taxable period beginning on January 1, 2017 and ending (with respect to the Spinco Group) on the Closing Date, and 
(i)    if taxable income is estimated, then SEACOR shall calculate the excess, if any, of (x) the Tax Rate Percentage of such estimated taxable income over (y) the sum of (I) such estimated FTC, if any, and (II) the Tax Rate Percentage of such estimated NCL, if any (such excess, the “2017 Estimated Excess”), and
a.    if the amount of the 2017 Estimated Excess is a positive number and the 2017 Prepayment Amount is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR the sum of (I) the 2017 Prepayment Amount and (II) the 2017 Estimated Excess;
b.    if the amount of the 2017 Estimated Excess is a negative number and the 2017 Prepayment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (I) the 2017 Prepayment Amount over (II) the 2017 Estimated Excess (viewed as a positive number), and if the amount of such excess is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess (viewed as a positive number), or if the amount of such excess is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess;
c.    if the amount of the 2017 Estimated Excess is a positive number and the 2017 Prepayment Amount is a negative number, then SEACOR shall calculate the excess, if any, of (I) the 2017 Estimated Excess over (II) the 2017 Prepayment Amount (viewed as a positive number), and if the amount of such excess is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess, or if the amount of such excess is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess (viewed as a positive number); or

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d.    if the amount of the 2017 Estimated Excess is a negative number and the 2017 Prepayment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (I) the 2017 Prepayment Amount (viewed as a positive number) and (II) the 2017 Estimated Excess (viewed as a positive number);
(ii)    if a net operating loss is estimated and the 2017 Prepayment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (x) the sum of (I) the Tax Rate Percentage of such estimated NOL, if any, (II) the Tax Rate Percentage of such estimated NCL, if any, and (III) such estimated FTC, if any, over (y) the 2017 Prepayment Amount, and if the amount of such excess is a negative number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess (viewed as a positive number), or if the amount of such excess is a positive number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess; or
(iii)    if a net operating loss is estimated and the 2017 Prepayment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (w) the 2017 Prepayment Amount (viewed as a positive number), (x) the Tax Rate Percentage of such NOL, if any, (y) the Tax Rate Percentage of such NCL, if any, and (z) such FTC, if any.
For purposes of estimating the net operating loss and NOL or taxable income as well as the NCL, if any, and the FTC, if any, of the Spinco Group for such portion of 2017, such net operating loss and NOL or taxable income as well as NCL and FTC shall be computed solely by reference to the members of the Spinco Group that are members of the SEACOR Consolidated Group for such portion of 2017, and shall be determined as though such members filed on a consolidated basis with Spinco as the common parent.
(b)    Following the filing of the SEACOR Consolidated Return for the taxable year ending on December 31, 2017, SEACOR shall calculate the net operating loss (as computed for U.S. federal income tax purposes), if any, and the NOL, if any, of the Spinco Group or the taxable income (as computed for U.S. federal income tax purposes), if any, of the Spinco Group as well as the NCL, if any, and the FTC, if any, of the Spinco Group, in each case for the taxable period beginning on January 1, 2017 and ending (with respect to the Spinco Group) on the Closing Date as reflected in such SEACOR Consolidated Return, and
(i)    if a net operating loss is calculated and the 2017 Prior Payment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (x) the sum of (I) the Tax Rate Percentage of such NOL, if any, (II) the Tax Rate Percentage of such NCL, if any, and (III) such FTC, if any, over (y) the 2017 Prior Payment Amount, and if the amount of such excess is a positive number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess, or if the amount of such excess is a negative number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess (viewed as a positive number);
(ii)    if a net operating loss is calculated and the 2017 Prior Payment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (w) the 2017 Prior Payment Amount (viewed as a positive number), (x) the Tax Rate Percentage of such NOL, if any, (y) the Tax Rate Percentage of such NCL, if any, and (z) such FTC, if any; or
(iii)    if taxable income is calculated, then SEACOR shall calculate the excess, if any, of (x) the Tax Rate Percentage of such taxable income over (y) the sum of (I) such FTC, if any, and (II) the Tax Rate Percentage of such NCL, if any (such excess, the “2017 Tentative Excess”), and
a.    if the amount of the 2017 Tentative Excess is a positive number and the 2017 Prior Payment Amount is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR an amount equal to the sum of (I) the 2017 Prior Payment Amount and (II) the 2017 Tentative Excess;
b.    if the amount of the 2017 Tentative Excess is a negative number and the 2017 Prior Payment Amount is a positive number, then SEACOR shall calculate the excess, if any, of (I) the 2017 Tentative Excess (viewed as a positive number) over (II) the 2017 Prior Payment Amount, and if the amount of such excess is a positive number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess, or if the amount of such excess is a negative number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess (viewed as a positive number);
c.    if the amount of the 2017 Tentative Excess is a positive number and the 2017 Prior Payment Amount is a negative number, then SEACOR shall calculate the excess, if any, of (I) the 2017 Tentative Excess over (II) the 2017 Prior Payment Amount (viewed as a positive number), and if the amount of such excess is a positive number, then Spinco shall pay, or cause to be paid, to SEACOR the amount of such excess, or if the amount of such excess is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco the amount of such excess (viewed as a positive number); or
d.    if the amount of the 2017 Tentative Excess is a negative number and the 2017 Prior Payment Amount is a negative number, then SEACOR shall pay, or cause to be paid, to Spinco an amount equal to the sum of (I) the 2017 Prior Payment Amount (viewed as a positive number) and (II) the 2017 Tentative Excess (viewed as a positive number).

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For purposes of determining the net operating loss and NOL or taxable income as well as the NCL, if any, and the FTC, if any, of the Spinco Group for such portion of 2017, such net operating loss and NOL or taxable income as well as NCL and FTC shall be computed solely by reference to the members of the Spinco Group that are members of the SEACOR Consolidated Group for such portion of 2017, and shall be determined as though such members filed on a consolidated basis with Spinco as the common parent.
(c)    SEACOR shall prepare and deliver to Spinco a schedule showing in reasonable detail SEACOR’s calculation of any amount payable by SEACOR to Spinco pursuant to Section 2.03(a) or (b) or any amount payable by Spinco to SEACOR pursuant to Section 2.03(a) or (b), as the case may be, and, subject to Section 5.01, Spinco shall pay to SEACOR, or SEACOR shall pay to Spinco, as applicable, the amount shown on such schedule no later than fifteen days following the delivery of such schedule by SEACOR to Spinco.
Section 2.04.    Preparation of Tax Returns.
(a)    SEACOR shall prepare and timely file (taking into account applicable extensions) all SEACOR Consolidated Returns, and shall timely pay all Taxes (subject to any indemnification rights it may have against Spinco) and shall be entitled to all refunds shown to be due and payable on such Tax Returns.  Prior to filing any SEACOR Consolidated Return for the taxable year ended on December 31, 2016 or the taxable year ending on December 31, 2017, SEACOR shall permit Spinco to review and comment on such SEACOR Consolidated Return and shall consider any such comment in good faith, but SEACOR shall not be obligated to accept any such comment.
(b)    Unless otherwise required by a Taxing Authority, the Parties agree to prepare and file all Tax Returns, and to take all other actions, in a manner consistent with this Agreement.
(c)    Notwithstanding anything to the contrary in this Agreement, for all Tax purposes, the parties shall report any Extraordinary Transactions that are caused or permitted by Spinco or any of its Subsidiaries on the Closing Date after the completion of the Distribution as occurring on the day after the Closing Date pursuant to Treasury Regulation Section 1.1502‐76(b)(1)(ii)(B) or any similar or analogous provision of state, local or foreign Law.  SEACOR shall not make a ratable allocation election pursuant to Treasury Regulation Section 1.1502-76(b)(2)(ii)(D) or any similar or analogous provision of state, local or foreign Law.
Section 2.05.    Payment of Sales, Use or Similar Taxes.  All Transfer Taxes shall be borne equally by SEACOR on the one hand and Spinco on the other.  Notwithstanding anything in Section 2.04 to the contrary, the Party required by applicable Law shall remit payment for any Transfer Taxes and duly and timely file such Tax Returns, subject to any indemnification rights it may have against the other Party, which shall be paid in accordance with Section 2.01(c).  Spinco, SEACOR and their respective Affiliates shall cooperate in (i) determining the amount of such Taxes, (ii) providing all requisite exemption certificates and (iii) preparing and timely filing any and all required Tax Returns for or with respect to such Taxes with any and all appropriate Taxing Authorities.
Section 2.06.    Audits and Proceedings.
(a)    Notwithstanding any other provision hereof, if after the Closing Date, an Indemnified Party or any of its Affiliates receives any notice, letter, correspondence, claim or decree from any Taxing Authority (a “Tax Notice”) and, upon receipt of such Tax Notice, believes it has suffered or potentially could suffer any Tax liability for which it is indemnified pursuant to Section 2.01, the Indemnified Party shall promptly deliver such Tax Notice to the Indemnifying Party; provided, however, that the failure of the Indemnified Party to provide the Tax Notice to the Indemnifying Party shall not affect the indemnification rights of the Indemnified Party pursuant to Section 2.01, except to the extent that the Indemnifying Party is more than insignificantly prejudiced by the Indemnified Party’s failure to deliver such Tax Notice.  The Indemnifying Party shall have the right to handle, defend, conduct and control, at its own expense, any Tax audit or other proceeding that relates to such Tax Notice; provided, however, that, in all events, each of SEACOR and Spinco shall have the right to participate, at its own expense, in any Tax audit or proceeding relating to Transaction Taxes or to the extent that such Tax audit or proceeding could have an impact on SEACOR or Spinco, as applicable.  The Indemnifying Party shall also have the right to compromise or settle any such Tax audit or other proceeding that it has the authority to control pursuant to the preceding sentence subject, in the case of a compromise or settlement that would adversely affect the Indemnified Party, to the Indemnified Party’s consent, which consent shall not be unreasonably withheld, conditioned or delayed.  If the Indemnifying Party fails within a reasonable time after notice to defend any such Tax Notice or the resulting audit or proceeding as provided herein, the Indemnifying Party shall be bound by the results obtained by the Indemnified Party in connection therewith.  The Indemnifying Party shall pay to the Indemnified Party the amount of any Tax liability within 15 days after a Final Determination of such Tax liability.
(b)    If, as a result of a Final Determination, an amended SEACOR Consolidated Return described in Section 2.07(a) or a carryback described in Section 2.07(c), there is an adjustment that would have the effect of increasing or decreasing the Spinco Group’s NOL, taxable income (as computed for U.S. federal income tax purposes), NCL or FTC for any Pre-Closing Period, then Spinco shall pay, or cause to be paid, to SEACOR an amount equal to any decrease in such FTC or the Tax Rate Percentage of any decrease in such NOL or NCL or increase in such taxable income or SEACOR shall pay, or cause to be paid, to Spinco an amount equal to any increase in such FTC or the Tax Rate Percentage of any increase in such NOL or NCL or decrease in such 

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taxable income, as applicable.  For purposes of determining the NOL or taxable income as well as the NCL, if any, and the FTC, if any, of the Spinco Group for such taxable period, such NOL or taxable income as well as NCL and FTC shall be computed solely by reference to the members of the Spinco Group that are members of the SEACOR Consolidated Group for such taxable period, and shall be determined as though such members filed on a consolidated basis with Spinco as the common parent.
Section 2.07.    Amended Returns; Carrybacks.
(a)    Except as required by Law, SEACOR may not amend any SEACOR Consolidated Return with respect to any Pre-Closing Period (i) to the extent such amendment adversely affects the Tax liability of Spinco or any of its Affiliates without the prior written consent of Spinco or one of its Affiliates (which consent shall not be unreasonably withheld, conditioned or delayed to the extent such amendment would not materially adversely affect the Tax liability of Spinco or any of its Affiliates) and (ii) with respect to all other such amendments, unless SEACOR provides Spinco with an opportunity to review and comment on such amended SEACOR Consolidated Return prior to filing (and SEACOR shall consider any such comment in good faith but shall not be obligated to accept any such comment).
(b)    Except as required by Law, without the consent of Spinco, SEACOR may not change any method of accounting for U.S. federal income tax purposes with respect to any Pre-Closing Period.
(c)    To the extent permitted by applicable Law, neither Spinco nor any of its Affiliates shall carry back any U.S. federal income Tax Item to a Pre-Closing Period.
Section 2.08.    Refunds.  Any refund of U.S. federal income Tax received from a Taxing Authority by any member of the SEACOR Group or the Spinco Group with respect to a SEACOR Consolidated Return shall be the property of the SEACOR Group, regardless of whether all or any portion of such refund is attributable to any credit or deduction of any member of the Spinco Group.  The Parties acknowledge and agree that this Agreement is intended to create a debtor-creditor relationship between the Parties, and that no member of the SEACOR Group shall be treated as receiving any such refund of U.S. federal income Tax as an agent or trustee of any member of the Spinco Group.
Section 2.09.    Earnings and Profits Allocation.  SEACOR will advise Spinco in writing of the decrease in SEACOR earnings and profits attributable to the Distribution under Section 312(h) of the Code on or before the first anniversary of the Distribution.

ARTICLE III
TAX-FREE STATUS OF THE DISTRIBUTION
Section 3.01.    Representations and Warranties.
(a)    Spinco.  Spinco hereby represents and warrants or covenants and agrees, as appropriate, that the facts presented and the representations made in (i) the Opinion, (ii) the representation letter from SEACOR addressed to Counsel supporting the Opinion, (iii) the representation letter from Spinco addressed to Counsel supporting the Opinion and (iv) any other materials delivered or deliverable by SEACOR or Spinco in connection with the rendering by Counsel of the Opinion (all of the foregoing, collectively, the “Tax Materials”), to the extent descriptive of the Spinco Group (including the plans, proposals, intentions and 

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policies of the Spinco Group), are, or will be from the time presented or made through and including the Effective Time and thereafter as relevant, true, correct and complete in all respects.
(b)    SEACOR.  SEACOR hereby represents and warrants or covenants and agrees, as appropriate, that (i) it has delivered complete and accurate copies of the Tax Materials to Spinco and (ii) the facts presented and the representations made therein, to the extent descriptive of the SEACOR Group (including the plans, proposals, intentions and policies of the SEACOR Group), are, or will be from the time presented or made through and including the Effective Time and thereafter as relevant, true, correct and complete in all respects.
(c)    No Contrary Knowledge.  Each of SEACOR and Spinco represents and warrants that it knows of no fact (after due inquiry) that may cause the Tax treatment of the Distribution to be other than the Tax-Free Status of the Transactions.
(d)    No Contrary Plan.  Each of SEACOR and Spinco represents and warrants that neither it, nor any of its Affiliates, has any plan or intent to take any action that is inconsistent with any statements or representations made in the Tax Materials.
Section 3.02.    Restrictions Relating to the Distribution.
(a)    General.  Neither SEACOR nor Spinco shall, nor shall SEACOR or Spinco permit any SEACOR Entity or any Spinco Entity, respectively, to take or fail to take, as applicable, any action that constitutes a Disqualifying Action described in the definitions of SEACOR Disqualifying Action and Spinco Disqualifying Action, respectively.
(b)    Restrictions.  Prior to the first day following the second anniversary of the Distribution (the “Restriction Period”), Spinco:
(i)    shall continue and cause to be continued the active conduct of the SEACOR Marine Business, in each case taking into account Section 355(b)(3) of the Code, in all cases as conducted immediately prior to the Distribution.
(ii)    shall not voluntarily dissolve or liquidate (including any action that is a liquidation for U.S. federal income tax purposes).
(iii)    shall not (A) enter into any Proposed Acquisition Transaction or, to the extent Spinco has the right to prohibit any Proposed Acquisition Transaction, permit any Proposed Acquisition Transaction to occur, (B) redeem or otherwise repurchase (directly or through an Affiliate) any stock, or rights to acquire stock, except to the extent such repurchases satisfy Section 4.05(1)(b) of Revenue Procedure 96-30 (as in effect prior to the amendment of such Revenue Procedure by Revenue Procedure 2003-48), (C) amend its certificate of incorporation (or other organizational documents), or take any other action, whether through a stockholder vote or otherwise, affecting the relative voting rights of its capital stock (including through the conversion of any capital stock into another class of capital stock), (D) merge or consolidate with any other Person or (E) take any other action or actions (including any action or transaction that would be reasonably likely to be inconsistent with any representation made in the Tax Materials) that in the aggregate (and taking into account any other transactions described in this Section 3.02(b)(iii) and assuming that any outstanding Convertible Notes are converted in connection with such action) would be reasonably likely to have the effect of causing or permitting one or more Persons (whether or not acting in concert) to acquire directly or indirectly stock representing a Fifty-Percent or Greater Interest in Spinco or otherwise jeopardize the Tax-Free Status of the Transactions.
(iv)    shall not, and shall not permit any member of its SAG to, sell, transfer, or otherwise dispose of or agree to sell, transfer or otherwise dispose (including in any transaction treated for U.S. federal income tax purposes as a sale, transfer or disposition) of assets (including any shares of capital stock of a Subsidiary) that, in the aggregate, constitute more than 30% of the gross assets of Spinco or more than 30% of the consolidated gross assets of Spinco and members of its SAG.  The foregoing sentence shall not apply to (A) sales, transfers, or dispositions of assets in the Ordinary Course of Business, (B) any cash paid to acquire assets from an unrelated Person in an arm’s-length transaction, (C) any assets transferred to a Person that is disregarded as an entity separate from the transferor for U.S. federal income tax purposes or (D) any mandatory or optional repayment (or prepayment) of any indebtedness of Spinco (or any member of its SAG).  The percentages of gross assets or consolidated gross assets of Spinco or its SAG, as the case may be, sold, transferred, or otherwise disposed of, shall be based on the fair market value of the gross assets of Spinco and the members of its SAG as of the Closing Date.  For purposes of this Section 3.02(b)(iv), a merger of Spinco (or a member of its SAG) with and into any Person shall constitute a disposition of all of the assets of Spinco or such member.
(c)    Exceptions.  Notwithstanding the restrictions imposed by Section 3.02(b), during the Restriction Period, Spinco may proceed with any of the actions or transactions described therein, if (i) Spinco shall first have requested SEACOR to obtain a ruling or an Unqualified Tax Opinion in accordance with Section 3.03(a) to the effect that such action or transaction will not affect the Tax-Free Status of the Transactions and SEACOR shall have received such a ruling or Unqualified Tax Opinion in form and substance reasonably satisfactory to it, (ii) SEACOR shall have waived in writing the requirement to obtain such ruling or opinion, or (iii) such action or transaction is explicitly contemplated by the Investment Agreement, dated as of November 30, 2015, by and among SEACOR, Spinco and the Investors party thereto, the Convertible Notes as in effect on the Closing Date, or any 

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other binding written agreement to which Spinco is a party as in effect on the Closing Date.  In determining whether a ruling or opinion is satisfactory, SEACOR shall exercise its discretion, in good faith, solely to preserve the Tax-Free Status of the Transactions and may consider, among other factors, the appropriateness of any underlying assumptions or representations used as a basis for the ruling or opinion and the views on the substantive merits.
(d)    Certain Issuances of Capital Stock.  If Spinco proposes to enter into any Section 3.02(d) Acquisition Transaction or, to the extent Spinco has the right to prohibit any Section 3.02(d) Acquisition Transaction, proposes to permit any Section 3.02(d) Acquisition Transaction to occur, in each case, during the Restriction Period, Spinco shall provide SEACOR, no later than ten (10) days following the signing of any written agreement with respect to any Section 3.02(d) Acquisition Transaction, with a written description of such transaction (including the type and amount of Spinco capital stock to be issued in such transaction).
(e)    Tax Reporting.  Each of SEACOR and Spinco covenants and agrees that it will not take, and will cause its respective Affiliates to refrain from taking, any position on any income or franchise Tax Return that is inconsistent with the Tax-Free Status of the Transactions.
Section 3.03.    Procedures Regarding Opinions and Rulings.
(a)    If Spinco notifies SEACOR that it desires to take one of the actions described in Section 3.02(b) (a “Notified Action”), SEACOR shall cooperate with Spinco and use its reasonable best efforts to seek to obtain, as expeditiously as possible, a ruling from the IRS or an Unqualified Tax Opinion for the purpose of permitting Spinco to take the Notified Action unless one of the exceptions set forth in clause (ii) or (iii) of Section 3.02(c) applies.  If such a ruling is to be sought, SEACOR shall apply for such ruling and SEACOR and Spinco shall jointly control the process of obtaining such ruling.  In no event shall SEACOR be required to file any ruling request under this Section 3.03(a) unless Spinco represents that (i) it has read such ruling request, and (ii) all information and representations, if any, relating to any member of the Spinco Group contained in such ruling request documents are (subject to any qualifications therein) true, correct and complete.  Spinco shall reimburse SEACOR for all reasonable costs and expenses incurred by the SEACOR Group in obtaining a ruling or Unqualified Tax Opinion requested by Spinco within ten (10) days after receiving an invoice from SEACOR therefor.
(b)    SEACOR shall have the right to obtain a ruling or an Unqualified Tax Opinion at any time in its sole and absolute discretion.  If SEACOR determines to obtain such ruling or opinion, Spinco shall (and shall cause each Spinco Entity to) cooperate with SEACOR and take any and all actions reasonably requested by SEACOR in connection with obtaining such ruling or opinion (including by making any representation or reasonable covenant or providing any materials requested by the IRS or the firm issuing such opinion); provided, however, that Spinco shall not be required to make (or cause a Spinco Entity to make) any representation or covenant that is inconsistent with historical facts or as to future matters or events over which it has no control.  In connection with obtaining such ruling, SEACOR shall apply for such ruling and shall have sole and exclusive control over the process of obtaining such ruling.  SEACOR and Spinco shall each bear its own costs and expenses in obtaining a ruling or Unqualified Tax Opinion requested by SEACOR.
(c)    Except as provided in Sections 3.03(a) and (b), neither Spinco nor any Spinco Affiliate shall seek any guidance from the IRS or any other Taxing Authority (whether written, verbal or otherwise) at any time concerning the Distribution (including the impact of any transaction on the Distribution).

ARTICLE IV
COOPERATION
Section 4.01.    General Cooperation.  The Parties shall each cooperate fully (and each shall cause its respective Subsidiaries to cooperate fully) with all reasonable requests in writing (“Information Request”) from another Party hereto, or from an agent, representative or advisor to such Party, in connection with the preparation and filing of Tax Returns, claims for Tax refunds, Tax proceedings, and calculations of amounts required to be paid pursuant to this Agreement, in each case, related or attributable to or arising in connection with Taxes of any of the Parties or their respective Subsidiaries covered by this Agreement and the establishment of any reserve required in connection with any financial reporting (a “Tax Matter”).  Such cooperation shall include the provision of any information reasonably necessary or helpful in connection with a Tax Matter (“Information”) and shall include, at each Party’s own cost:
(a)    the provision of any Tax Returns of the Parties and their respective Subsidiaries, books, records (including information regarding ownership and Tax basis of property), documentation and other information relating to such Tax Returns, including accompanying schedules, related work papers, and documents relating to rulings or other determinations by Taxing Authorities;
(b)    the execution of any document (including any power of attorney) in connection with any Tax proceedings of any of the Parties or their respective Subsidiaries, or the filing of a Tax Return or a Tax refund claim of the Parties or any of their respective Subsidiaries;

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(c)    the use of the Party’s reasonable best efforts to obtain any documentation in connection with a Tax Matter; and
(d)    the use of the Party’s reasonable best efforts to obtain any Tax Returns (including accompanying schedules, related work papers, and documents), documents, books, records or other information in connection with the filing of any Tax Returns of any of the Parties or their Subsidiaries.
Each Party shall make its employees, advisors, and facilities available, without charge, on a reasonable and mutually convenient basis in connection with the foregoing matters.
Section 4.02.    Retention of Records.  SEACOR and Spinco shall retain or cause to be retained all Tax Returns, schedules and workpapers, and all material records or other documents relating thereto in their possession, until sixty (60) days after the expiration of the applicable statute of limitations (including any waivers or extensions thereof) of the taxable periods to which such Tax Returns and other documents relate or until the expiration of any additional period that any Party reasonably requests, in writing, with respect to specific material records or documents.  A Party intending to destroy any material records or documents shall provide the other Party with reasonable advance notice and the opportunity to copy or take possession of such records and documents.  The Parties hereto will notify each other in writing of any waivers or extensions of the applicable statute of limitations that may affect the period for which the foregoing records or other documents must be retained.
Section 4.03.    Section 336(e) Election.  If SEACOR determines, in its sole discretion, exercised in good faith, that a protective election under Section 336(e) of the Code shall be made with respect to the Distribution for Spinco and, as determined by SEACOR in its sole discretion, exercised in good faith, any Spinco Entity, Spinco shall (and shall cause its relevant Affiliates to) join with SEACOR in the making of such election and shall take any action reasonably requested by SEACOR or that is otherwise necessary to effect such election.  If a protective election under Section 336(e) of the Code is made and any failure of the Tax-Free Status of the Transactions results in Taxes (including Taxes attributable to such election) that are not allocated to Spinco pursuant to Section 2.01, then SEACOR shall be entitled to periodic payments from Spinco equal to the product of (x) the Tax Benefit arising from the step-up in Tax basis resulting from such election and (y) the percentage of Taxes arising from such failure that are not allocated to Spinco pursuant to Section 2.01.

ARTICLE V
MISCELLANEOUS
Section5.01.    Dispute Resolution.  The Parties shall appoint a nationally recognized independent public accounting firm (the “Accounting Firm”) to resolve any dispute as to matters covered by this Agreement.  In this regard, the Accounting Firm shall make determinations with respect to the disputed items based solely on representations made by SEACOR and Spinco and their respective representatives, and not by independent review, and shall function only as an expert and not as an arbitrator and shall be required to make a determination in favor of one Party only.  The Parties shall require the Accounting Firm to resolve all disputes no later than thirty (30) days after the submission of such dispute to the Accounting Firm, but in no event later than the Due Date for the payment of Taxes or the filing of the applicable Tax Return, if applicable, and agree that all decisions by the Accounting Firm with respect thereto shall be final, conclusive and binding on the Parties.  The Accounting Firm shall resolve all disputes in a manner consistent with this Agreement and, to the extent not inconsistent with this Agreement, in a manner consistent with the past practices of SEACOR and its Subsidiaries, except as otherwise required by applicable Law.  The Parties shall require the Accounting Firm to render all determinations in writing and to set forth, in reasonable detail, the basis for such determination.  The fees and expenses of the Accounting Firm shall be paid by the non-prevailing Party.
Section 5.02.    Tax Sharing Agreements.  All Tax sharing, indemnification and similar agreements, written or unwritten, as between SEACOR or a SEACOR Entity, on the one hand, and Spinco or a Spinco Entity, on the other (other than this Agreement, the Distribution Agreement and any other Ancillary Agreement), shall be or shall have been terminated no later than the Effective Time and, after the Effective Time, none of SEACOR or a SEACOR Entity, or Spinco or a Spinco Entity shall have any further rights or obligations under any such Tax sharing, indemnification or similar agreement.
Section 5.03.    Interest on Late Payments.  With respect to any payment between the Parties pursuant to this Agreement not made by the due date set forth in this Agreement for such payment, the outstanding amount will accrue interest at a rate per annum equal to the rate in effect for underpayments under Section 6621 of the Code from such due date to and including the earlier of the ninetieth (90th) day after such date or the payment date and thereafter will accrue interest at a rate per annum equal to the rate of interest from time to time announced publicly by The Wall Street Journal as its prime rate, calculated on the basis of a year of 365 days.
Section 5.04.    Survival of Covenants.  Except as otherwise contemplated by this Agreement, all covenants and agreements of the Parties contained in this Agreement shall survive the Effective Time and remain in full force and effect in accordance with their applicable terms; provided, however, that the representations and warranties and all indemnification for Taxes shall survive until sixty (60) days following the expiration of the applicable statute of limitations (taking into account all extensions thereof), if any, of the Tax that gave rise to the indemnification; provided, further, that, in the event that notice for 

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indemnification has been given within the applicable survival period, such indemnification shall survive until such time as such claim is finally resolved.
Section 5.05.    Termination.  Notwithstanding any provision to the contrary, this Agreement may be terminated at any time prior to the Effective Time by and in the sole discretion of SEACOR without the prior approval of any Person, including Spinco.  In the event of such termination, this Agreement shall become void and no Party, or any of its officers and directors, shall have any liability to any Person by reason of this Agreement.  After the Effective Time, this Agreement may not be terminated except by an agreement in writing signed by each of the Parties to this Agreement.
Section 5.06.    Severability.  If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced under any Law or as a matter of public policy, all other conditions and provisions of this Agreement shall remain in full force and effect.  Upon such determination that any term or other provision is invalid, illegal or incapable of being enforced, the Parties to this Agreement shall negotiate in good faith to modify this Agreement so as to effect the original intent of the Parties as closely as possible in a mutually acceptable manner.
Section 5.07.    Entire Agreement.  Except as otherwise expressly provided in this Agreement, this Agreement constitutes the entire agreement of the Parties hereto with respect to the subject matter of this Agreement and supersedes all prior agreements and undertakings, both written and oral, between or on behalf of the Parties hereto with respect to the subject matter of this Agreement.  In the event of any conflict or inconsistency between the provisions of this Agreement and the provisions of the Distribution Agreement, the provisions of this Agreement shall govern and control.
Section 5.08.    Assignment; No Third-Party Beneficiaries.  This Agreement shall not be assigned by any Party without the prior written consent of the other Party hereto, except that SEACOR may assign (i) any or all of its rights and obligations under this Agreement to any of its Affiliates and (ii) any or all of its rights and obligations under this Agreement in connection with a sale or disposition of any assets or entities or lines of business of SEACOR; provided, however, that, in each case, no such assignment shall release SEACOR from any liability or obligation under this Agreement.  Except as provided in Article II with respect to indemnified Parties, this Agreement is for the sole benefit of the Parties to this Agreement and their respective Subsidiaries and their permitted successors and assigns and nothing in this Agreement, express or implied, is intended to or shall confer upon any other Person any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.
Section 5.09.    Specific Performance.  In the event of any actual or threatened default in, or breach of, any of the terms, conditions and provisions of this Agreement, the Party who is or is to be thereby aggrieved shall have the right to specific performance and injunctive or other equitable relief of its rights under this Agreement, in addition to any and all other rights and remedies at law or in equity, and all such rights and remedies shall be cumulative.  The Parties agree that the remedies at law for any breach or threatened breach, including monetary damages, may be inadequate compensation for any loss and that any defense in any action for specific performance that a remedy at law would be adequate is waived.  Any requirements for the securing or posting of any bond with such remedy are waived by the Parties to this Agreement.
Section 5.10.    Amendment.  No provision of this Agreement may be amended or modified except by a written instrument signed by the Parties to this Agreement.  No waiver by any Party of any provision of this Agreement shall be effective unless explicitly set forth in writing and executed by the Party so waiving.  The waiver by any Party of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any other subsequent breach.
Section 5.11.    Rules of Construction.  Interpretation of this Agreement shall be governed by the following rules of construction: (i) words in the singular shall be held to include the plural and vice versa and words of one gender shall be held to include the other gender as the context requires; (ii) references to the terms Article, Section, and clause are references to the Articles, Sections and clauses of this Agreement unless otherwise specified; (iii) the terms “hereof,” “herein,” “hereby,” “hereto,” and derivative or similar words refer to this entire Agreement; (iv) references to “$” shall mean U.S. dollars; (v) the word “including” and words of similar import when used in this Agreement shall mean “including, without limitation,” unless otherwise specified; (vi) the word “or” shall not be exclusive; (vii) references to “written” or “in writing” include in electronic form; (viii) provisions shall apply, when appropriate, to successive events and transactions; (ix) the headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement; (x) SEACOR and Spinco have each participated in the negotiation and drafting of this Agreement and if an ambiguity or question of interpretation should arise, this Agreement shall be construed as if drafted jointly by the Parties hereto and no presumption or burden of proof shall arise favoring or burdening either Party by virtue of the authorship of any of the provisions in this Agreement or any interim drafts of this Agreement; and (xi) a reference to any Person includes such Person’s successors and permitted assigns.
Section 5.12.    Counterparts.  This Agreement may be executed in one or more counterparts each of which when executed shall be deemed to be an original but all of which taken together shall constitute one and the same agreement.  Delivery of an executed counterpart of a signature page to this Agreement by facsimile or portable document format (PDF) shall be as effective as delivery of a manually executed counterpart of this Agreement.

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Section 5.13.    Coordination with the Employee Matters Agreement.  To the extent any covenants or agreements between the Parties with respect to employee withholding Taxes are set forth in the Employee Matters Agreement, such Taxes shall be governed exclusively by the Employee Matters Agreement and not by this Agreement.
Section 5.14.    Effective Date.  This Agreement shall become effective only upon the occurrence of the Distribution.
Section 5.15.    Notices.  All notices and other communications hereunder shall be in writing, shall reference this Agreement and shall be hand delivered or mailed by registered or certified mail (return receipt requested) to the Parties at the following addresses (or at such other addresses for a Party as shall be specified by like notice) and will be deemed given on the date on which such notice is received:
To SEACOR:
SEACOR Holdings Inc. 
2200 Eller Drive 
P.O. Box 13038 
Fort Lauderdale, FL 33316 
Attn:  Chief Legal Officer
To Spinco:
SEACOR Marine Holdings Inc. 
7910 Main Street, 2nd Floor
Houma, LA 70360
Attn:  Corporate Secretary
Section 5.16.    Applicable Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

[The remainder of this page is intentionally left blank.]

14

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed as of the day and year first above written.
	
		
	 
	SEACOR HOLDINGS INC.

	 
	 

	By:
	/s/ BILL LONG

	Name:
	Bill Long

	Title:
	Executive Vice President, Chief Legal Officer and Corporate Secretary

	 
	 

	 
	SEACOR MARINE HOLDINGS INC.

	 
	 

	By:
	/s/ MATTHEW CENAC

	Name:
	Matthew Cenac

	Title:
	Executive Vice President, Chief Financial Officer

15SECURITIES
PURCHASE AGREEMENT

 

THIS
SECURITIES PURCHASE AGREEMENT (the “Agreement”) is made as of the 5th day of May, 2017 by and between
Players Network, Inc. , a Nevada corporation (the “Company”), and the Investors listed on the
signature page below (the “Investors”).

 

WHEREAS,
upon the terms and condition stated in the Agreement and pursuant to Section 4(a)(2) of the 1933 Act (as defined below) and Rule
506 of Regulation D promulgated thereunder, the Investors wishes to purchase, and the Company wishes to sell promissory notes
in the aggregate original principal amount of $330,000, in the form attached hereto as Exhibit A (the “Notes”),
and (ii) will also receive in the aggregate 3,000,000 warrants in the form attached hereto as Exhibit B (the “Warrants”);

 

WHEREAS,
the parties have agreed that the obligation to repay the Note shall be an unsecured obligation of the Company; and

 

WHEREAS,
the Note, the shares of common stock issuable upon conversion of the Note, the Warrant and the Warrant Shares, are collectively
referred to herein as the “Securities” and the offering contemplated hereby is referred to herein as
the “Offering”.

 

NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and in consideration
of the premises and the mutual agreements, representations and warranties, provisions and covenants contained herein, the parties
hereto, intending to be legally bound hereby, agree as follows:

 

1.       Purchase
and Sale of Note and Warrant. On the Closing Date (as hereinafter defined), subject to the terms and conditions of this Agreement,
the Investors hereby agrees to purchase, and the Company hereby agrees to sell and issue, the Notes and the Warrants, with such
principal amount of Note and such number of Warrant Shares for which each Warrant is exercisable being as set forth for each Investor
on its signature page hereto. The Notes shall be issued with an original issue discount. 

 

2.       Purchase
Price. The aggregate purchase price for the Notes and the Warrants to be purchased by the Investors at the Closing shall be
$300,000 (the “Purchase Price”). At the Closing, the Investors shall fund the Purchase Price by wire
transfer of immediately available funds to the account specified in writing by the Company prior to the date hereof.

 

3.       The
Closing. Subject to the conditions set forth below, the purchase and sale of the Notes and Warrants shall take place at a
mutually agreeable location, on or about the date hereof (the “Closing” and the “Closing
Date”). At the Closing, the Company shall deliver to the Investors: (i) this Agreement duly executed by the Company,
(ii) the Notes purchased hereby duly executed by the Company and registered in the name of the Investors, and (iii) the Warrants
purchased hereby duly executed by the Company and registered in the name of the Investors. At the Closing, the Investors shall
deliver to the Company (x) this Agreement duly executed by the Investors and (y) the Purchase Price for the Notes and Warrants.

 

    	 

    	 

    

 

4.       Closing
Conditions; Certain Covenants. 

 

4.1       Conditions
to the Investor’s Obligations. The obligation of the Investors to purchase the Notes and Warrants to be issued to the
Investors at the Closing is subject to the fulfillment, to the Investors’ reasonable satisfaction, prior to or at the Closing,
of each of the following conditions:

 

Representations
and Warranties. The representations and warranties of the Company contained in this Agreement shall be true and correct in all
respects on the date hereof (except for representations and warranties that speak as of a specific date, which shall be true and
correct as of such specific date).

 

(b)       Covenants.
The Company shall have performed, satisfied and complied in all respects with the covenants, agreements and conditions required
to be performed, satisfied or complied with by the Company at or prior to the Closing Date.

 

Notes
and Warrants. At the Closing, the Company shall have duly executed and delivered to the Investors the Notes and Warrants purchased
hereby, in each case duly executed by the Company and registered in the name of the Investors.

 

No
Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before
any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit or obtain substantial damages in
respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

 

Proceedings
and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident
to such transactions shall be reasonably satisfactory in substance and form to the Investors, and the Investors shall have received
all such counterpart originals or certified or other copies of such documents as they may reasonably request.

 

(f)       No
Consents. The Company shall have obtained all governmental, regulatory or third party consents and approvals, if any, necessary
for the sale of the Securities.

 

4.2       Conditions
to the Company’s Obligations. The obligation of the Company to sell and issue the Notes and Warrants to the Investors
at the Closing is subject to the fulfillment, to the Company’s reasonable satisfaction, prior to or at the Closing, of each
of the following conditions:

 

Representations
and Warranties. The representations and warranties of the Investors contained in this Agreement shall be true and correct in all
respects on the date hereof (except for representations and warranties that speak as of a specific date, which shall be true and
correct as of such specific date).

 

Purchase
Price. At the Closing, the Investors shall have tendered to the Company the Purchase Price by wire transfer of immediately available
funds to the account specified in writing by the Company prior to the date hereof. 

 

    	 

    	 

    

 

No
Actions. No action, proceeding, investigation, regulation or legislation shall have been instituted, threatened or proposed before
any court, governmental agency or authority or legislative body to enjoin, restrain, prohibit, or obtain substantial damages in
respect of, this Agreement or the consummation of the transactions contemplated by this Agreement.

 

Proceedings
and Documents. All proceedings in connection with the transactions contemplated hereby and all documents and instruments incident
to such transactions shall be satisfactory in substance and form to the Company and the Company shall have received all such counterpart
originals or certified or other copies of such documents as the Company may reasonably request.

 

4.3       Securities
Law Disclosure; Publicity. If the Company determines in its sole discretion that a Form 8-K disclosing the material terms
of the transactions contemplated hereby is required, then it will file such Form 8-K timely. The Company represents to the Investors
that the Company has publicly disclosed all material, non-public information delivered to the Investor by the Company or any of
its Subsidiaries, or any of their respective officers, directors, employees or agents in connection with the transactions contemplated
by this Agreement. The Company shall not, and the Company shall cause each of its Subsidiaries and each of its and their respective
officers, directors, employees and agents not to, provide the Investors with any material, non-public information regarding the
Company or any of its Subsidiaries from and after the date hereof without the express prior written consent of the Investors (which
may be granted or withheld in the Investors’ sole discretion). To the extent that the Company or any Person acting on its
behalf delivers any material, non-public information to the Investors (as determined in the reasonable good faith judgment of
the Investor) without the Investors’ consent, (i) the Company hereby covenants and agrees that the Investors shall not have
any duty of confidentiality with respect to, or a duty not to trade on the basis of, such material, non-public information, and
(ii) in addition to any other remedy provided herein or in the Notes or Warrants, the Investors shall have the right to make a
public disclosure, in the form of a press release, public advertisement or otherwise, of such material, non-public information
without the prior approval by the Company; provided the Investors shall have first provided notice to the Company that it believes
it has received information that constitutes material, non-public information, the Company shall have at least 24 hours to publicly
disclose such material, non-public information prior to any such disclosure by the Investors, and the Company shall have failed
to publicly disclose such material, non-public information within such time period. The Company shall afford the Investors and
its counsel with a reasonable opportunity to review and comment upon, shall consult with the Investors and their counsel on the
form and substance of, and shall give due consideration to all such comments from the Investors or its counsel on, any press release,
Commission filing or any other public disclosure made by or on behalf of the Company relating to the Investors, its purchases
hereunder or any aspect of this Agreement or the transactions contemplated hereby, prior to the issuance, filing or public disclosure
thereof, and the Company shall not issue, file or publicly disclose any such information to which the Investors shall object.
For the avoidance of doubt, the Company shall not be required to submit for review any such disclosure contained in periodic reports
filed with the Commission under the Exchange Act if it shall have previously provided the same disclosure for review in connection
with a previous filing.

 

    	 

    	 

    

 

4.4       Legends.
The Securities may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of
Securities other than pursuant to an effective registration statement or Rule 144 (as defined below), to the Company or to an
affiliate of the applicable Investor, the Company may require the transferor thereof to provide to the Company an opinion of counsel
selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably
satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities under
the 1933 Act. Each Investor understands that the Securities, except as set forth below, may bear any legends as required by applicable
state securities or “Blue Sky” laws in addition to a restrictive legend in substantially the following form (and a
stop-transfer order may be placed against transfer of such stock certificates): 

 

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

 

The
Company shall use its reasonable best efforts to cause its transfer agent to remove the legend set forth above and to issue a
certificate without such legend to the holder of the Securities upon which it is stamped, or to issue to such holder by electronic
delivery at the applicable balance account at the Depository Trust Company (“DTC”), unless otherwise
required by state securities or “blue sky” laws, at such time as (i) such Securities are registered for resale under
the 1933 Act, (ii) in connection with a sale, assignment or other transfer, such holder provides the Company with an opinion of
counsel, in a form generally acceptable to the Company’s legal counsel, to the effect that such sale, assignment or transfer
of the Securities may be made without registration under the 1933 Act, or (iii) such holder provides the Company and its legal
counsel with reasonable assurance in writing that the Securities can be sold, assigned or transferred pursuant to Rule 144 or
Rule 144A. In furtherance of the foregoing, the Company agrees that, following the effective date of a registration statement
covering the resale of such Securities or at such time as such legend is not required pursuant to this Section 4.4, the Company
shall, no later than three Trading Days following the delivery by the Investor to the Company or the Company’s transfer
agent of a certificate representing the shares of common stock issuable upon conversion of the Note or the Warrant Shares, as
applicable, issued with a restrictive legend (such third Trading Day, the “Legend Removal Date”), either:
(A) issue and deliver (or cause to be issued and delivered) to such Investor a certificate representing such shares of common
stock that is free from all restrictive and other legends or (B) cause the Company’s transfer agent to credit such Investor’s
or its designee’s account at DTC through its Deposit/Withdrawal at Custodian (DWAC) system with a number of Common Shares
equal to the number of shares of common stock represented by the certificate so delivered by such Investor. If the Company fails
on or prior to the Legend Removal Date to either (i) issue and deliver (or cause to be issued and delivered) to such Investor
a certificate representing the shares of common stock that is free from all restrictive and other legends or (ii) cause the Company’s
transfer agent to credit the balance account of such Investor or its designee at DTC through its Deposit/Withdrawal at Custodian
(DWAC) system with a number of Common Shares equal to the number of shares of common stock represented by the certificate delivered
by such Investor pursuant hereto, then, in addition to all other remedies available to such Investor, the Company shall pay in
cash to the Investor on each day after the Legend Removal Date that the issuance or credit of such shares is not timely effected
an amount equal to 1.0% of the product of (A) the sum of the number of shares of common stock not issued to such Investor on a
timely basis and to which such Investor is entitled and (B) the VWAP for the five Trading Day period immediately preceding the
Legend Removal Date. In addition to the foregoing, if the Company fails to so properly deliver such unlegended certificates or
so properly credit the account of such Investor or its designee at DTC by the Legend Removal Date, and if on or after the Legend
Removal Date such Investor purchases (in an open market transaction or otherwise) Common Shares to deliver in satisfaction of
a sale by such Investor of shares of common stock that such Investor anticipated receiving from the Company without any restrictive
legend, then the Company shall, within three Trading Days after such Investor’s request, pay cash to such Investor in an
amount equal to such Investor’s total purchase price (including brokerage commissions, if any) for the Common Shares so
purchased, at which point the Company’s obligation to deliver a certificate or credit such Investor’s or its designee’s
account at DTC for such shares of common stock shall terminate and such shares shall be cancelled.

 

    	 

    	 

    

 

5.       Representations
and Warranties of the Company. Except as set forth in the Disclosure Schedules or the Public Reports (as defined herein),
which Disclosure Schedules shall be deemed a part hereof and shall qualify any representation or otherwise made herein to the
extent of the disclosure contained in the corresponding section of the Disclosure Schedules, the Company hereby makes the following
representations and warranties to the Investors:

 

5.1       Organization,
Good Standing and Qualification. The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Delaware. The Company is duly qualified to transact business and is in good standing in each jurisdiction
in which the failure to so qualify would have a Material Adverse Effect.

 

5.2       Capitalization
and Voting Rights. The authorized capital stock of the Company and the shares thereof issued and outstanding were as set forth
in the Public Reports (as defined in Section 5.6 hereof) as of the dates reflected therein. As of the date hereof, there are 547,394,239
Common Shares issued and outstanding. All of the outstanding Common Shares have been duly authorized and validly issued, and are
fully paid and nonassessable. Except as set forth in the Public Reports, no Common Shares are entitled to preemptive rights and
there are no outstanding debt securities and no contracts, commitments, understandings, or arrangements by which the Company is
or may become bound to issue additional shares of the capital stock of the Company or options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or securities or rights convertible into or exchangeable for,
any shares of capital stock of the Company other than those issued or granted in the ordinary course of business pursuant to the
Company’s equity incentive and/or compensatory plans or arrangements. Except for customary transfer restrictions contained
in agreements entered into by the Company to sell restricted securities or as set forth in the Public Reports, the Company is
not a party to, and it has no knowledge of, any agreement restricting the voting or transfer of any shares of the capital stock
of the Company. Except as set forth in the Public Reports, the offer and sale of all capital stock, convertible or exchangeable
securities, rights, warrants or options of the Company issued prior to the Closing Date complied with all applicable federal and
state securities laws, and no stockholder has any right of rescission or damages or any “put” or similar right with
respect thereto that would have a Material Adverse Effect. Except as set forth in the Public Reports, there are no securities
or instruments containing anti-dilution or similar provisions that will be triggered by the issuance of the Securities or this
Agreement or the consummation of the transactions described herein or therein.

 

    	 

    	 

    

 

5.3       Authorization;
Enforcement. All corporate action on the part of the Company, its officers, directors and stockholders necessary for the authorization,
execution and delivery of this Agreement, the Notes and the Warrants, and the performance of all obligations of the Company, and
the authorization (or reservation for issuance), sale and issuance of the Notes, the Warrants, and the Warrant Shares, have been
taken on or prior to the date hereof. Each of this Agreement, the Notes and the Warrants has been duly executed by the Company
and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company
enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable
bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’
rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable
remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

5.4       Valid
Issuance of the Securities; Reservation of Common Shares. The Notes and the Warrants are duly authorized and, when issued
and paid for in accordance with this Agreement, will be duly and validly issued, and free and clear of all Liens imposed by the
Company other than restrictions on transfer under this Agreement and under applicable state and federal securities laws. The Warrant
Shares when issued and delivered in accordance with the terms of this Agreement and the Warrant for the consideration expressed
herein and therein, will be duly and validly issued, fully paid and non-assessable and free and clear of all Liens imposed by
the Company other than restrictions on transfer under this Agreement and under applicable state and federal securities laws. As
of the Closing, the Company has reserved from its duly authorized capital stock not less than 100% of the maximum number of shares
of common stock issuable upon exercise of the Warrant.

 

5.5       Offering.
Subject to the truth and accuracy of the Investor’s representations set forth in Section 6 of this Agreement, the offer
and sale of the Securities, as contemplated by this Agreement are exempt from the registration requirements of the Securities
Act of 1933, as amended (the “1933 Act”), and the qualification or registration requirements of state
securities laws or other applicable blue sky laws. Neither the Company nor any authorized agent acting on its behalf will take
any action hereafter that would cause the loss of such exemptions.

 

    	 

    	 

    

 

5.6       Public
Reports. The Company is current in its filing obligations under the 1934 Act, including without limitation as to its filings
of Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K (collectively, the “Public
Reports”). The Public Reports do not contain any untrue statement of a material fact or omit to state any fact necessary
to make any statement therein not misleading. The financial statements included within Company’s Annual Report on Form 10-K
for the year ended December 31, 2015 and for each quarterly period thereafter (the “Financial Statements”)
have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on a
consistent basis throughout the periods indicated and with each other, except that unaudited Financial Statements may not contain
all footnotes required by generally accepted accounting principles. The Financial Statements fairly present, in all material respects,
the financial condition and operating results of the Company as of the dates, and for the periods, indicated therein, subject
in the case of unaudited Financial Statements to normal year-end audit adjustments.

 

5.7       Compliance
With Laws. The Company has not violated any law or any governmental regulation or requirement which violation has had or would
reasonably be expected to have a Material Adverse Effect on its business and the Company has not received written notice of any
such violation. The Company is not in violation of the requirements of the Trading Market and has no knowledge of any facts or
circumstances which could reasonably lead to delisting or suspension of the Common Shares in the foreseeable future.

 

5.8       Violations.
The consummation of the transactions contemplated by this Agreement and all other documents and instruments required to be delivered
in connection therewith will not result in or constitute any of the following: (a) a violation of any provision of the articles
of incorporation, bylaws or other governing documents of the Company; (b) a violation of any provisions of any applicable law
or of any writ or decree of any court or governmental instrumentality; (c) a default or an event that, with notice or lapse of
time or both, would be a default, breach, or violation of a lease, license, promissory notes, conditional sales contract, commitment,
indenture, mortgage, deed of trust, or other agreement, instrument, or arrangement to which the Company is a party or by which
the Company or its property is bound; (d) an event that would permit any party to terminate any agreement or to accelerate the
maturity of any indebtedness or other obligation of the Company; or (e) the creation or imposition of any lien, pledge, option,
security agreement, equity, claim, charge, encumbrance or other restriction or limitation on the capital stock or on any of the
properties or assets of the Company.

 

5.9       Consents;
Waivers. No consent, waiver, approval or authority of any nature, or other formal action, by any Person, or any agency, bureau
or department of any government or any subdivision thereof, not already obtained, is required in connection with the execution
and delivery of this Agreement by the Company or the consummation by the Company of the transactions provided for herein.

 

5.10       Sarbanes-Oxley
Act. The Company is in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective
as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective
as of the date hereof. 

 

    	 

    	 

    

 

5.11       Absence
of Litigation. Except as disclosed in the Company’s Public Reports, there is no action, suit, proceeding, inquiry or
investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the
knowledge of the Company, threatened against or affecting the Company, the Common Shares or any of the Company’s officers
or directors in their capacities as such. 

 

5.12       Material
Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included
within the Public Reports, except as specifically disclosed in a subsequent Public Report filed prior to the date hereof: (i)
there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company
has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock
and (v) the Company has not issued any equity securities to any officer, director or affiliate, except pursuant to existing Company
stock option plans. The Company does not have pending before the Commission any request for confidential treatment of information.
Except for the issuance of the Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence
or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries
or their respective businesses, properties, operations, assets or financial condition, that would be required to be disclosed
by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly
disclosed at least one Trading Day prior to the date that this representation is made.

 

5.13       Intellectual
Property. The Company has, or has rights to use, all patents, patent applications, trademarks, trademark applications, service
marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights
as described in the Public Reports as necessary or required for use in connection with their respective businesses and which the
failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
The Company has not received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated
or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement.
The Company has not received, since the date of the latest audited financial statements included within the Public Reports, a
written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights
of any Person, except as could not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the
Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any
of the Intellectual Property Rights. The Company has taken reasonable security measures to protect the secrecy, confidentiality
and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.

 

5.14       Intentionally
Deleted.

 

    	 

    	 

    

 

5.15       Disclosure.
Except with respect to the material terms and conditions of the transactions contemplated by this Agreement, the Company confirms
that neither it nor any other Person acting on its behalf has provided any Investor or its agents or counsel with any information
that it believes constitutes or might constitute material, non-public information. The Company understands and confirms that the
Investors will rely on the foregoing representation in effecting transactions in securities of the Company. All of the disclosure
furnished by or on behalf of the Company to the Investors regarding the Company and its Subsidiaries, their respective businesses
and the transactions contemplated hereby, including the Disclosure Schedules to this Agreement, is true and correct and does not
contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made
therein, in light of the circumstances under which they were made, not misleading. The press releases disseminated by the Company
during the twelve months preceding the date of this Agreement taken as a whole do not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in light
of the circumstances under which they were made and when made, not misleading. The Company acknowledges and agrees that the Investors
do not make nor has made any representations or warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 6 hereof.

 

5.16       No
Integrated Offering. Assuming the accuracy of each Investor’s representations and warranties set forth in Section 6,
neither the Company, nor any of its affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of (i) the 1933 Act which would require the
registration of any such securities under the 1933 Act, or (ii) any applicable shareholder approval provisions of any Trading
Market on which any of the securities of the Company are listed or designated.

 

5.17No
General Solicitation; Placement Agent’s Fees1.2. Neither the Company, nor any of its Subsidiaries or affiliates,
nor any Person acting on its or their behalf, has engaged in any form of general solicitation or general advertising (within the
meaning of Regulation D) in connection with the offer or sale of the Securities. The Company shall be responsible for the payment
of any placement agent’s fees, financial advisory fees, or brokers’ commissions (other than for Persons engaged by
the Investor) relating to or arising out of the transactions contemplated hereby. Neither the Company nor any of its Subsidiaries
has engaged any placement agent or other agent in connection with the offer or sale of the Securities.

 

    	 

    	 

    

 

5.18       Bankruptcy
Status; Indebtedness. Neither the Company nor any of its Subsidiaries has taken any steps to seek protection pursuant to any
law or statute relating to bankruptcy, insolvency, reorganization, receivership, liquidation or winding up, nor does the Company
or any Subsidiary have any knowledge or reason to believe that any of their respective creditors intend to initiate involuntary
bankruptcy proceedings or any actual knowledge of any fact which would reasonably lead a creditor to do so. Schedule 5.18 sets
forth as of the date hereof all outstanding secured and unsecured Indebtedness (as defined below) of the Company or any of its
Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness”
means (x) any liabilities for borrowed money or amounts owed (other than trade accounts payable incurred in the ordinary course
of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether
or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments due under leases required to be capitalized in accordance with GAAP. The Company
is not in default with respect to any Indebtedness. The Company and its Subsidiaries, individually and on a consolidated basis,
are not, and after giving effect to the transactions contemplated hereby to occur at the Closing will not be, Insolvent (as defined
below). “Insolvent” means, (I) with respect to the Company and its Subsidiaries, on a consolidated basis,
(i) the present fair saleable value of the Company’s and its Subsidiaries’ assets is less than the amount required
to pay the Company’s and its Subsidiaries’ total Indebtedness (as defined below), (ii) the Company and its Subsidiaries
are unable to pay their debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute
and matured or (iii) the Company and its Subsidiaries intend to incur or believe that they will incur debts that would be beyond
their ability to pay as such debts mature; and (II) with respect to the Company and each Subsidiary, individually, (i) the present
fair saleable value of the Company’s or such Subsidiary’s (as the case may be) assets is less than the amount required
to pay its respective total Indebtedness, (ii) the Company or such Subsidiary (as the case may be) is unable to pay its respective
debts and liabilities, subordinated, contingent or otherwise, as such debts and liabilities become absolute and matured or (iii)
the Company or such Subsidiary (as the case may be) intends to incur or believes that it will incur debts that would be beyond
its respective ability to pay as such debts mature. Neither the Company nor any of its Subsidiaries has engaged in any business
or in any transaction, and is not about to engage in any business or in any transaction, for which the Company’s or such
Subsidiary’s remaining assets constitute unreasonably small capital.

 

5.19       Regulation
M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company.

 

5.20Acknowledgment
Regarding Investor’s Purchase of Securities1.3. The Company acknowledges and agrees that each Investor is acting
solely in the capacity of an arm’s length purchaser with respect to this Agreement and the transactions contemplated hereby
and that such Investor is not (i) an officer or director of the Company or any of its Subsidiaries, (ii) an “affiliate”
(as defined in Rule 144) of the Company or any of its Subsidiaries or (iii) to its knowledge, a “beneficial owner”
of more than 10% of the Common Shares (as defined for purposes of Rule 13d-3 of the 1934 Act). The Company further acknowledges
that such Investor is not acting as a financial advisor or fiduciary of the Company or any of its Subsidiaries (or in any similar
capacity) with respect to this Agreement and the transactions contemplated hereby, and any advice given by such Investor or any
of its representatives or agents in connection with this Agreement and the transactions contemplated hereby is merely incidental
to such Investor’s purchase of the Securities. The Company further represents to such Investor that the Company’s
decision to enter into this Agreement has been based solely on the independent evaluation by the Company and its representatives.

 

    	 

    	 

    

 

5.21       Shell
Company Status. The Company is not a shell company (as defined in Rule 405 under the Securities Act) and has not been a shell
company within the past 2 years. The Company has filed “Form 10 information” with the Commission as described pursuant
to Rule 144 under the Securities Act and at least 12 months has passed since such “Form 10 information” was filed
with the Commission.

 

5.22Dilutive
Effect1.4. The Company acknowledges that its obligation to issue (i) shares of common stock upon the Warrant Shares upon
exercise of the Warrants in accordance with this Agreement is absolute and unconditional, regardless of the dilutive effect that
such issuance may have on the ownership interests of other stockholders of the Company.

 

5.23       Application
of Takeover Protections; Rights Agreement. The Company and its board of directors have taken all necessary action, if any,
in order to render inapplicable any control share acquisition, interested stockholder, business combination, poison pill (including,
without limitation, any distribution under a rights agreement), stockholder rights plan or other similar anti-takeover provision
under the articles of incorporation, bylaws or other organizational documents or the laws of the jurisdiction of its incorporation
or otherwise which is or could become applicable to either Investor as a result of the transactions contemplated by this Agreement,
including, without limitation, the Company’s issuance of the Securities and such Investor’s ownership of the Securities.
The Company and its board of directors have taken all necessary action, if any, in order to render inapplicable any stockholder
rights plan or similar arrangement relating to accumulations of beneficial ownership of Common Shares or a change in control of
the Company or any of its Subsidiaries.

 

5.24       Insurance.
The Company is insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as
management of the Company believes to be prudent and customary in the business in which the Company is engaged. The Company has
not been refused any insurance coverage sought or applied for, and the Company has no reason to believe that it will be unable
to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers
as may be necessary to continue its business at a cost that would not have a Material Adverse Effect.

 

5.25       Employee
Relations. The Company is not a party to any collective bargaining agreement and does not employ any member of a union. The
Company believes that its relations with its employees are good. No executive officer (as defined in Rule 501(f) promulgated under
the 1933 Act) or other key employee of the Company has notified the Company that such officer intends to leave the Company or
otherwise terminate such officer’s employment with the Company. No executive officer or other key employee of the Company
is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary
information agreement, non-competition agreement, or any other contract or agreement or any restrictive covenant, and the continued
employment of each such executive officer or other key employee (as the case may be) does not subject the Company to any liability
with respect to any of the foregoing matters. The Company is in compliance with all federal, state, local and foreign laws and
regulations respecting labor, employment and employment practices and benefits, terms and conditions of employment and wages and
hours, except where failure to be in compliance would not, either individually or in the aggregate, reasonably be expected to
result in a Material Adverse Effect.

 

    	 

    	 

    

 

5.26       Title.
The Company and its Subsidiaries have good and marketable title in fee simple to all real property, and have good and marketable
title to all personal property, owned by them which is material to the business of the Company and its Subsidiaries, in each case,
free and clear of all liens, encumbrances and defects except such as do not materially affect the value of such property and do
not interfere with the use made and proposed to be made of such property by the Company and any of its Subsidiaries. Any real
property and facilities held under lease by the Company or any of its Subsidiaries are held by them under valid, subsisting and
enforceable leases with such exceptions as are not material and do not interfere with the use made and proposed to be made of
such property and buildings by the Company or any of its Subsidiaries.

 

5.27       Environmental
Laws. The Company and its Subsidiaries (i) are in compliance with all Environmental Laws (as defined below), (ii) have received
all permits, licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses
and (iii) are in compliance with all terms and conditions of any such permit, license or approval where, in each of the foregoing
clauses (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate,
a Material Adverse Effect. “Environmental Laws” means all federal, state, local or foreign laws relating
to pollution or protection of human health or the environment (including, without limitation, ambient air, surface water, groundwater,
land surface or subsurface strata), including, without limitation, laws relating to emissions, discharges, releases or threatened
releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous
Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands or demand
letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations issued, entered, promulgated
or approved thereunder.

 

5.28       Tax
Status. The Company and each of its Subsidiaries (i) has timely made or filed all foreign, federal and state income and all
other tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has timely paid all taxes
and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and (iii) has set aside on its books provision reasonably adequate
for the payment of all taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company and its Subsidiaries know of no basis for any such claim. The Company is not operated in such a manner as to qualify
as a passive foreign investment company, as defined in Section 1297 of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”).

 

5.29       Transfer
Taxes. On the Closing Date, all stock transfer or other taxes (other than income or similar taxes) which are required to be
paid in connection with the issuance, sale and transfer of the Securities to be sold to the Investors hereunder will be, or will
have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

    	 

    	 

    

 

5.30Foreign
Corrupt Practices1.5. Neither the Company nor any of its Subsidiaries nor any director, officer, agent, employee or other
Person acting on behalf of the Company or any of its Subsidiaries has, in the course of its actions for, or on behalf of, the
Company or any of its Subsidiaries (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful
expenses relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government
official or employee from corporate funds; (iii) violated or is in violation of any provision of the U.S. Foreign Corrupt Practices
Act of 1977, as amended; or (iv) made any unlawful bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

 

5.31       Illegal
or Unauthorized Payments; Political Contributions. Neither the Company nor any of its Subsidiaries nor, to the best of the
Company’s knowledge (after reasonable inquiry of its officers and directors), any of the officers, directors, employees,
agents or other representatives of the Company or any of its Subsidiaries or any other business entity or enterprise with which
the Company or any Subsidiary is or has been affiliated or associated, has, directly or indirectly, made or authorized any payment,
contribution or gift of money, property, or services, whether or not in contravention of applicable law, (a) as a kickback or
bribe to any Person or (b) to any political organization, or the holder of or any aspirant to any elective or appointive public
office except for personal political contributions not involving the direct or indirect use of funds of the Company or any of
its Subsidiaries.

 

5.32       Money
Laundering. The Company and its Subsidiaries are in compliance with, and have not previously violated, the USA Patriot Act
of 2001 and all other applicable U.S. and non-U.S. anti-money laundering laws and regulations, including, without limitation,
the laws, regulations and Executive Orders and sanctions programs administered by the U.S. Office of Foreign Assets Control, including,
without limitation, (i) Executive Order 13224 of September 23, 2001 entitled, “Blocking Property and Prohibiting Transactions
With Persons Who Commit, Threaten to Commit, or Support Terrorism” (66 Fed. Reg. 49079 (2001)); and (ii) any regulations
contained in 31 CFR, Subtitle B, Chapter V.

 

5.33       Investment
Company Status. The Company is not, and upon consummation of the sale of the Securities will not be, an “investment
company,” an affiliate of an “investment company,” a company controlled by an “investment company”
or an “affiliated person” of, or “promoter” or “principal underwriter” for, an “investment
company” as such terms are defined in the Investment Company Act of 1940, as amended. 

 

5.34       U.S.
Real Property Holding Corporation. Neither the Company nor any of its Subsidiaries is, or has ever been, and so long as any
of the Securities are held by either Investor, shall become, a U.S. real property holding corporation within the meaning of Section
897 of the Code, and the Company and each Subsidiary shall so certify upon any Investor’s request.

 

5.35       No
Disqualification Events. None of the Company, any of its predecessors, any affiliated issuer, any director, executive officer,
other officer of the Company participating in the offering contemplated hereby, any beneficial owner of 20% or more of the Company's
outstanding voting equity securities, calculated on the basis of voting power, nor any promoter (as that term is defined in Rule
405 under the 1933 Act) connected with the Company in any capacity at the time of sale (each, an “Issuer Covered Person”)
is subject to any of the “Bad Actor” disqualifications described in Rule 506(d)(1)(i) to (viii) under the 1933 Act
(a “Disqualification Event”), except for a Disqualification Event covered by Rule 506(d)(2) or (d)(3)
under the 1933 Act. The Company has exercised reasonable care to determine whether any Issuer Covered Person is subject to a Disqualification
Event.

 

    	 

    	 

    

 

6.       Representations
and Warranties of the Investors. Each Investor hereby represents, warrants and covenants, as to itself only and not the other
Investor, that:

 

6.1       Authorization.
The Investor has full power and authority to enter into this Agreement, to perform its obligations hereunder and to consummate
the transactions contemplated hereby and has taken all action necessary to authorize the execution and delivery of this Agreement,
the performance of its obligations hereunder and thereunder and the consummation of the transactions contemplated hereby and thereby.

 

6.2       No
Public Sale or Distribution. The Investor is (i) acquiring its Note and Warrant, and (ii) upon conversion of the Note and
upon exercise of its Warrant will acquire its shares of common stock, in each case for its own account, not as a nominee or agent,
and not with a view towards, or for resale in connection with, the public sale or distribution of any part thereof, except pursuant
to sales registered or exempted under the 1933 Act. The Investor is acquiring the Securities hereunder in the ordinary course
of its business. The Investor does not presently have any contract, agreement, undertaking, arrangement or understanding, directly
or indirectly, with any individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof (a “Person”) to sell, transfer, pledge,
assign or otherwise distribute any of the Securities. 

 

6.3       Accredited
Investor Status; Investment Experience. The Investor is an “accredited investor” as that term is defined in Rule
501(a) of Regulation D. The Investor can bear the economic risk of its investment in the Securities, and has such knowledge and
experience in financial and business matters that it is capable of evaluating the merits and risks of an investment in the Securities.

 

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

 

6.5       Information.
The Investor and its advisors, if any, have been furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities which have been requested by the Investor. The Investor
and its advisors, if any, have been afforded the opportunity to ask questions of the Company. Neither such inquiries nor any other
due diligence investigations conducted by the Investor or its advisors, if any, or its representatives shall modify, amend or
affect the Investor’s right to rely on the Company’s representations and warranties contained herein. The Investor
understands that its investment in the Securities involves a high degree of risk. The Investor has sought such accounting, legal
and tax advice as it has considered necessary to make an informed investment decision with respect to its acquisition of the Securities.
The Investor is relying solely on its own accounting, legal and tax advisors, and not on any statements of the Company or any
of its agents or representatives, for such accounting, legal and tax advice with respect to its acquisition of the Securities
and the transactions contemplated by this Agreement.

 

    	 

    	 

    

 

6.6       No
Governmental Review. The Investor understands that no United States federal or state agency or any other government or governmental
agency has passed on or made any recommendation or endorsement of the Securities or the fairness or suitability of the investment
in the Securities nor have such authorities passed upon or endorsed the merits of the offering of the Securities. 

 

6.7       Validity;
Enforcement; No Conflicts. This Agreement has been duly and validly authorized, executed and delivered on behalf of the Investor
and shall constitute the legal, valid and binding obligation of the Investor enforceable against the Investor in accordance with
its terms, except as such enforceability may be limited by general principles of equity or to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or affecting generally, the enforcement of applicable
creditors’ rights and remedies. The execution, delivery and performance by the Investor of this Agreement and the consummation
by the Investor of the transactions contemplated hereby will not (i) result in a violation of the organizational documents of
the Investor or (ii) conflict with, or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture
or instrument to which the Investor is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or
decree (including federal and state securities or “Blue Sky” laws) applicable to the Investor, except in the case
of clause (ii) above, for such conflicts, defaults or rights which would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of the Investor to perform its obligations hereunder. 

 

7.       Use
of Proceeds. The Company shall use the proceeds from the sale of the Securities for general working capital purposes. 

 

8.       Rule
144 Availability; Public Information. At all times during the period commencing on the Closing Date and ending at such time
that all of the Securities can be sold without the requirement to be in compliance with Rule 144(c)(1) under the 1933 Act and
otherwise without restriction or limitation pursuant to Rule 144 under the 1933 Act, the Company shall use its reasonable best
efforts to ensure the availability of Rule 144 under the 1933 Act to the Investors with regard to the Warrant Shares, including
compliance with Rule 144(c)(1) under the 1933 Act. If, (i) at any time any Investor owns any Securities, the Company shall fail
for any reason to satisfy the current public information requirement under Rule 144(c) under the 1933 Act (a “Public
Information Failure”), or (ii) the Company shall fail to take such action as is reasonably requested by any Investor
to enable such Investor to sell the Warrant Shares pursuant to Rule 144 under the 1933 Act (including, without limitation, delivering
all such legal opinions, consents, certificates, resolutions and instructions to the Company’s transfer agent as may be
reasonably requested from time to time by such Investor and otherwise fully cooperate with Investor and Investor’s broker
to effect such sale of securities pursuant to Rule 144 under the 1933 Act), then, in either case, in addition to such Investor’s
other available remedies, the Company shall pay to such Investor, in cash, as liquidated damages and not as a penalty, by reason
of any such delay in or reduction of its ability to sell the Securities, an amount in cash equal to one percent (1.0%) of the
aggregate Purchase Price of such Investor’s Securities on the day of a Public Information Failure and on every thirtieth
(30th) day (pro rated for periods totaling less than thirty days) thereafter until the earlier of (a) the date such Public Information
Failure is cured and (b) such time that such public information is no longer required for such Investor to transfer the Warrant
Shares pursuant to Rule 144 under the 1933 Act. The payments to which the Investor shall be entitled pursuant to this Section
8 are referred to herein as “Rule 144 Failure Payments.” Rule 144 Failure Payments shall be paid on
the earlier of (i) the last day of the calendar month during which such Rule 144 Failure Payments are incurred and (ii) the third
(3rd) Trading Day after the event or failure giving rise to the Rule 144 Failure Payments is cured.

 

    	 

    	 

    

 

9.       Indemnification.
In consideration of each Investor’s execution and delivery of this Agreement and acquiring the Securities hereunder and
in addition to all of the Company’s other obligations under this Agreement, the Notes and the Warrants, the Company shall
defend, protect, indemnify and hold harmless each Investor and each holder of any Securities and all of their stockholders, partners,
members, officers, directors, employees and direct or indirect investors and any of the foregoing Persons’ agents or other
representatives (including, without limitation, those retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Indemnitees”) from and against any and all actions, causes of action, suits, claims,
losses, costs, penalties, fees, liabilities and damages, and expenses in connection therewith (irrespective of whether any such
Indemnitee is a party to the action for which indemnification hereunder is sought), and including reasonable attorneys’
fees and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as a result of, or
arising out of, or relating to (a) any misrepresentation or breach of any representation or warranty made by the Company in this
Agreement, the Notes or the Warrants, (b) any breach of any covenant, agreement or obligation of the Company contained in any
of this Agreement, the Notes or the Warrants, or (c) any cause of action, suit, proceeding or claim brought or made against such
Indemnitee by a third party (including for these purposes a derivative action brought on behalf of the Company or any Subsidiary)
or which otherwise involves such Indemnitee that arises out of or results from (i) the execution, delivery, performance or enforcement
of any of this Agreement, the Notes or the Warrants, (ii) any transaction financed or to be financed in whole or in part, directly
or indirectly, with the proceeds of the issuance of the Securities, or (iii) the status of the Investor or holder of the Securities
either as an investor in the Company pursuant to the transactions contemplated by this Agreement or as a party to this Agreement
(including, without limitation, as a party in interest or otherwise in any action or proceeding for injunctive or other equitable
relief). To the extent that the foregoing undertaking by the Company may be unenforceable for any reason, the Company shall make
the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable
law.

 

10.       Listing;
Blue Sky. The Company shall promptly secure the approval for listing of the maximum number of Warrant Shares issuable upon
exercise of the Warrant (without taking into account any limitations on the exercise of the Warrant set forth therein) that may
from time to time be issuable under the terms of the Warrant, in each case on the Trading Market, if required by the Trading Market.
The Company shall not take any action which could be reasonably expected to result in the delisting or suspension of the quotation
of the Common Shares on the Trading Market. The Company shall take such action as the Company shall reasonably determine is necessary
in order to obtain an exemption for, or to, qualify the Securities for sale to the Investors at the Closing pursuant to this Agreement
under applicable securities or “Blue Sky” laws of the states of the United States (or to obtain an exemption from
such qualification), and shall provide evidence of any such action so taken to the Investors on or prior to the Closing Date.
Without limiting any other obligation of the Company under this Agreement, the Company shall timely make all filings and reports
relating to the offer and sale of the Securities required under all applicable securities laws (including, without limitation,
all applicable federal securities laws and all applicable “Blue Sky” laws), and the Company shall comply with all
applicable federal, foreign, state and local laws, statutes, rules, regulations and the like relating to the offering and sale
of the Securities to the Investor. The Company shall pay all fees and expenses in connection with satisfying its obligations under
this Section 10.

 

    	 

    	 

    

 

11.       Intentionally
Deleted.

 

12.       Conduct
of Business. The business of the Company and its Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any governmental entity, except where such violations would not result, either individually or in the aggregate,
in a Material Adverse Effect.

 

13.       Passive
Foreign Investment Company. The Company shall conduct its business, and shall cause its Subsidiaries to conduct their respective
businesses, in such a manner as will ensure that the Company will not be deemed to constitute a passive foreign investment company
within the meaning of Section 1297 of the Code.

 

14.       Restriction
on Redemption and Cash Dividends. So long as any Note is outstanding, the Company shall not, directly or indirectly, redeem,
or declare or pay any cash dividend or distribution on, any securities of the Company without the prior express written consent
of each Investor still holding a Note.

 

15.       Corporate
Existence. So long as any Note or Warrant is outstanding, the Company shall not be party to any Fundamental Transaction (as
defined in the Notes) unless the Company is in compliance with the applicable provisions governing Fundamental Transactions set
forth in the Notes and the Warrants.

 

16.       Limitation
Section 3(a)(10) Transactions.

 

(a)       So
long as any Note or Warrant is outstanding, the Company agrees not to enter into any debt settlement agreements pursuant to Section
3(a)(10) of the Securities Act of 1933.

 

    	 

    	 

    

 

17.       Miscellaneous

 

17.1       Successors
and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of
and be binding upon the respective successors and assigns of the parties (including transferees of the Securities). Nothing in
this Agreement, express or implied, is intended to confer upon any party, other than the parties hereto or their respective successors
and assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided
in this Agreement.

 

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

 

17.3       Titles
and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered
in construing or interpreting this Agreement.

 

17.4Notices1.6.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given: (a) upon personal delivery
to the party to be notified, (b) when sent by confirmed telex or facsimile or email if sent during normal business hours of the
recipient; if not, then on the next Trading Day, (c) five (5) Trading Days after having been sent by registered or certified mail,
return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying
next day delivery, with written verification of receipt. All communications shall be sent to (a) in the case of the Company, to
Players Network, Inc. , 400 South Australian Ave., 8th Floor, West Palm Beach, FL 33401 and (b) in the case of the
Investors to the address listed below on the signature page..

 

17.5       Amendments
and Waivers. No provision of this Agreement may be amended other than by a written instrument signed by both parties hereto.
No provision of this Agreement may be waived other than in a written instrument signed by the party against whom enforcement of
such waiver is sought. No failure or delay in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercises thereof
or of any other right, power or privilege.

 

    	 

    	 

    

 

17.6       Brokers
or Finder’s Fees. The Company shall indemnify and hold harmless each Investor from any liability for any commission
or compensation in the nature of a broker’s or finders’ fee (and the costs and expenses of defending against such
liability or asserted liability) for which the Company or any of its officers, employees or representatives is responsible.

 

17.7       Severability.
If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded
from this Agreement and the balance of the Agreement shall be interpreted as if such provision were so excluded and shall be enforceable
in accordance with its terms.

 

17.8       Entire
Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties and no party
shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically
set forth herein or therein.

 

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

 

17.10       Interpretation.
Unless the context of this Agreement clearly requires otherwise, (a) references to the plural include the singular, the singular
the plural, the part the whole, (b) references to any gender include all genders, (c) “including” has the inclusive
meaning frequently identified with the phrase “but not limited to” and (d) references to “hereunder” or
“herein” relate to this Agreement.

 

17.11       Remedies.
In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Investor
and the Company will be entitled to specific performance under this Agreement. The parties agree that monetary damages may not
be adequate compensation for any loss incurred by reason of any breach of obligations contained in this Agreement and hereby agree
to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would
be adequate.

 

18.       Additional
Defined Terms. In addition to the terms defined elsewhere in this Agreement, the Note and the Warrant, the following terms
have the meanings set forth in this Section 18:

 

18.1       “1934
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

18.2       “Commission”
means the United States Securities and Exchange Commission.

 

18.3       “Common
Shares” means the common stock, par value $0.01 per share, of the Company.

 

18.4       “Liens”
means a lien, charge pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

    	 

    	 

    

 

18.5       “Material
Adverse Effect” means (i) a material adverse effect on the legality, validity or enforceability of this Agreement,
the Note or the Warrant, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and its Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations under this Agreement, the Note or the Warrant.

 

18.6       “Registrable
Securities” means (i) the Warrant Shares issuable upon exercise of the Warrant (without taking into account any
limitations on the exercise of the Warrant set forth therein), and (ii) any capital stock of the Company issued or issuable with
respect to the Warrant Shares, including, without limitation, (1) as a result of any stock split, stock dividend, recapitalization,
exchange or similar event or otherwise and (2) shares of capital stock of the Company into which the Common Shares are exercised
or exchanged and shares of capital stock of a successor entity into which the Common Shares are converted or exchanged.

 

18.7       “Subsidiary”
means any corporation or other entity of which at least a majority of the securities or other ownership interest having ordinary
voting power for the election of directors or other persons performing similar functions are at the time owned directly or indirectly
by the Company and/or any of its other Subsidiaries.

 

18.8       “Trading
Day” means any day on which the Common Shares are traded on the Trading Market, provided that “Trading
Day” shall not include any day on which the Common Shares are scheduled to trade on the Trading Market for less
than 4.5 hours or any day that the Common Shares are suspended from trading during the final hour of trading on the Trading Market
(or if the Trading Market does not designate in advance the closing time of trading on the Trading Market, then during the hour
ending at 4:00:00 p.m., Eastern time) unless such day is otherwise designated as a Trading Day in writing by the Investor.

 

18.9       “Trading
Market” means the OTCQB operated by the OTC Markets Group, Inc. (or any nationally recognized successor thereto);
provided, however, that in the event the Company’s Common Shares are ever listed or traded on The NASDAQ Capital Market,
The NASDAQ Global Market, The NASDAQ Global Select Market, the New York Stock Exchange, the NYSE MKT, or the OTCQX operated by
the OTC Markets Group, Inc. (or any nationally recognized successor to any of the foregoing), then the “Trading Market”
shall mean such other market or exchange on which the Company’s Common Shares are then listed or traded.

 

18.10       “VWAP”
means the volume weighted average price (the aggregate sales price of all trades of Common Shares during a Trading Day divided
by the total number of Common Shares traded during such Trading Day) of the Common Shares during a Trading Day as reported by
www.NASADAQ.com.

 

    	 

    	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be duly executed and delivered as of the date provided above.

 

THE
COMPANY

 

PLAYERS
NETWORK, INC. 

 

By:__________________________________________

Name:
Mark Bradley, Chief Executive Officer

 

INVESTORS:

 

BLACK
MOUNTAIN EQUITIES, INC.

13366
Greenstone Court, San Diego, CA 92131

By:_______________________

Name:
Adam Baker

Its:
President

 

Original
Principal Amount of Note: $330,000

Purchase
Price: $300,000

Warrants:
3,000,000

 

    	 

    	 

    

 

EXHIBIT
A

 

FORM
OF NOTE

 

(attached)

 

    	 

    	 

    

 

EXHIBIT
B

 

FORM
OF WARRANT

 

(attached)

 

    	 

    	 

    

 

Schedule
5.18

 

INDEBTEDNESS

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