Document:

Exhibit 10.1

 

SEPARATION AND CONSULTING AGREEMENT

 

This Separation and Consulting Agreement (the “Agreement”) is made effective as of November 20, 2014 (the “Effective Date”), by and between Greg Hann (“Executive”), Wesco Aircraft Hardware Corp., a California corporation (the “Company”) and, solely for purposes of Section 2(b)(v) hereof, Wesco Aircraft Holdings, Inc., a Delaware corporation (“Holdings”).

 

WHEREAS, Executive and the Company have previously entered into that certain employment offer letter agreement, dated as of January 22, 2009 (the “Employment Agreement”) pursuant to which the Executive has served as the Company’s Chief Financial Officer;

 

WHEREAS, Executive and the Company have previously entered into that certain Executive Severance Agreement, dated as of May 8, 2014 (the “Severance Agreement”);

 

WHEREAS, Executive and the Company desire that Executive’s employment with the Company shall terminate effective March 31, 2015 (the “Termination Date”) and that for a service continuation period thereafter, the Executive shall continue to provide transitional consulting services to Holdings, the Company and the Company’s subsidiaries (collectively, the “Company Group”); and

 

WHEREAS, in connection with such anticipated termination of employment, the Company, Holdings and Executive desire to enter into this Agreement upon the terms set forth herein.

 

NOW, THEREFORE, in exchange for the good and valuable consideration set forth herein, the adequacy of which is specifically acknowledged, Executive, the Company and, solely for purposes of Section 2(b)(v) hereof, Holdings (collectively referred to as the “parties” or individually as a “party”) hereby agree as follows:

 

1.                                                Termination; Service Through Termination Date.  Executive’s employment with the Company shall terminate effective as of 12:01 a.m., Pacific Time, on the Termination Date.  Effective as of the Termination Date, Executive shall no longer serve as Chief Financial Officer of the Company or Holdings and shall no longer serve in any employee or officer role or in any other position with the Company or any of its affiliates, except as specifically provided in Section 2.  Effective as of the Termination Date, Executive shall cease to hold any position (whether as an officer, director, manager, employee, trustee, fiduciary, or otherwise) with, and shall cease to exercise or convey any authority (actual, apparent, or otherwise) on behalf of, the Company Group, except as otherwise specifically provided in Section 2.

 

2.                                                Consulting Services.

 

(a)                                      Service Continuation Period.  For a period of twelve (12) months following the Termination Date (the “Service Continuation Period”), Executive agrees to provide such transitional consulting services (“Consulting Services”) to the Company Group as may be requested by the Company from time to time during the Service Continuation Period, including without limitation, advising and assisting the Company Group on finance, accounting, strategy, Sarbanes-Oxley compliance, operations, merger integration and related matters.  Notwithstanding the foregoing, the Company may terminate the Service Continuation Period at 

 

 

any time upon written notice to Executive, subject to Section 2(b), and the Service Continuation Period may be extended by mutual written agreement of the Company and Executive.  From and after the Termination Date, the Company and Executive intend that the level of bona fide services which Executive shall perform for the Company Group pursuant to this Section 2(a) shall not exceed nineteen percent (19%) of the average level of bona fide services performed by Executive for the Company Group over the thirty-six (36) month period immediately preceding the Termination Date.

 

(b)                                      Compensation.  Subject to Section 2(e) and Section 7, Executive shall be entitled to receive the following payments and benefits, less applicable withholdings (as set forth in Section 11).

 

(i)                                     Executive shall be entitled to a base consulting fee in the amount of $30,000 per month during the Service Continuation Period (the “Base Consulting Fee”), payable in regular installments in accordance with the Company’s regular payment practices for Company consultants.  If the Executive dies or the Company terminates the Service Continuation Period, in either case prior to the one-year anniversary of the Termination Date, except in the event of a termination for Cause, the Company shall continue to pay the Base Consulting Fee to Executive (or his estate, as applicable) until the one-year anniversary of the Termination Date, such that, if this sentence applies, Executive shall receive not less than an aggregate of $360,000 in Consulting Fee payments.

 

(ii)                                  Executive shall be eligible to receive a partial annual bonus for the first half of fiscal year 2015 with a target amount equal to $108,000 (i.e., thirty percent (30%) of his current annual base salary) (the “2015 First Half Bonus”).  The actual amount of the 2015 First Half Bonus may be different than the target amount and will be determined based on actual performance relative to performance goals to be established by the Company.  If earned, the 2015 First Half Bonus will be paid to the Executive (or, in the event Executive dies prior to the Termination Date or prior to the date of payment, to the Executive’s estate) within thirty (30) days after the Termination Date.  For the avoidance of doubt, Executive shall not be entitled to any bonus or other incentive or similar payment in respect of any period after the first half of the Company’s fiscal year 2015, including for the Service Continuation Period or any portion thereof.

 

(iii)                               Executive shall be entitled to continued use for a period of six (6) months following the Termination Date of Executive’s Company-owned or leased automobile and continued reimbursement of operating and maintenance expenses (excluding fuel costs), if applicable, in each case only to the extent and in the same manner as such benefits were provided as of the date of this Agreement.

 

(iv)                              Executive shall be entitled to a monthly payment in an amount equal to the amount of premiums Executive would be required to pay to continue Executive’s and Executive’s covered dependents’ medical, dental and vision coverage in effect on the Termination Date under the Company’s group healthcare plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), which amount shall be based on the premium for the first month of COBRA coverage and shall be paid on the Company’s first regular pay date of each calendar month during the Service Continuation Period.

 

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If the Executive dies or the Company terminates the Service Continuation Period, in either case prior to the one-year anniversary of the Termination Date, except in the event of a termination for Cause, the Company shall continue to make the payments required under this Section 2(b)(iv) until the one year anniversary of the Termination Date, such that Executive shall receive 12 such monthly payments.

 

(v)                                 During the Service Continuation Period, Executive will continue to vest in any previously granted awards held by him under Wesco Aircraft Holdings, Inc. 2011 Equity Incentive Award Plan or any predecessor or successor plan (each a “Plan” and collectively, the “Plans”).  Executive expressly acknowledges that upon the expiration or termination of the Service Continuation Period for any reason, no further vesting shall apply and all unvested awards held by him under the Plans will be immediately forfeited, provided, however, that if the Executive dies or the Company terminates the Service Continuation Period, in either case prior to September 30, 2015, except in the event of a termination for Cause, any awards held by the Executive under the Plans that would have vested if he remained in service with the Company through September 30, 2015 will immediately vest.  Holdings also agrees that the Executive’s termination of service with the Company as contemplated by this Agreement will constitute a “Wesco Approved Retirement” under the Wesco Aircraft Holdings, Inc. Retirement Policy such that the period during which Executive may exercise any of his or her vested stock options previously granted under the Plans shall be extended until the earlier of (i) the one year anniversary of the Termination Date and (ii) the regular expiration date of the options (i.e., the date upon which the options would have become unexercisable had the Executive remained in service with Holdings and its affiliates), provided that such options shall in all events remain subject to earlier termination in connection with a corporate transaction or other extraordinary event or occurrence in accordance with the terms of the applicable Plan.

 

(c)                                       Business Expenses.  During the Service Continuation Period, the Company shall reimburse Executive for reasonable travel and other business expenses incurred by Executive at the request of the Company in the performance of Consulting Services, subject to the Company’s advance review and approval of any such expenses and the Company’s expense reimbursement policies in effect from time to time.

 

(d)                                      Independent Contractor.  It is hereby understood and agreed by the Company and Executive that his rendering of the Consulting Services pursuant to this Agreement is as an independent contractor and not as an officer or employee of the Company or any of its affiliates.  Consultant acknowledges and agrees and it is the intent of the parties hereto that, except pursuant to COBRA or as otherwise may be required by applicable law or expressly set forth herein, during the Service Continuation Period, Consultant shall receive no Company-sponsored benefits from the Company either as a Consultant or employee.

 

(e)                                       Release.  As a condition to Executive’s receipt of any amounts set forth in Section 2(b), Executive shall execute on the Termination Date and not revoke a general release of all claims in favor of the Company (the “Release”) in the form substantially similar to the form attached hereto as Exhibit A.  If Executive does not sign or if Executive revokes the Release, this Agreement shall automatically terminate and Executive shall not be entitled to any payments or benefits under Section 2(b).

 

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(f)                                        Exclusive Remedy; Other Arrangements.  Except as otherwise expressly required by law (e.g., COBRA) or as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other amounts (if any) accruing after the termination of Executive’s employment shall cease on the Termination Date.  In addition, the payments and benefits provided for in Section 2(b) are intended to be paid in lieu of any severance payments Executive may otherwise be entitled to receive under any other plan, program, policy or agreement with the Company or any of its affiliates, including the Employment Agreement and the Severance Agreement (collectively, “Other Arrangements”).  Therefore, Executive shall not be entitled to receive any severance payments or severance benefits pursuant to any Other Arrangements.  In addition, to the extent Executive is a party to any employment agreement, offer letter or other agreement or arrangement with the Company or any of its affiliates, in each case that was entered into prior to the date of this Agreement, and that provides for the payment or provision of severance pay or severance benefits upon an involuntary termination or a resignation of employment for good reason (or term of similar meaning) (such agreement a “Prior Agreement”), Executive hereby agrees that the severance pay and severance benefit provisions of such Prior Agreement shall be and hereby are superseded by this Agreement and from and after the date of this Agreement, such severance pay and severance benefit provisions of the Prior Agreement shall be and are null and void and of no further force or effect.  For the avoidance of doubt, except as may otherwise be agreed in writing between Executive and the Company or one of its affiliates after the date of this Agreement, it is intended that the other terms and conditions of any Prior Agreement that do not provide for severance pay or severance benefits, including any non-competition, non-solicitation, non-disparagement, confidentiality, assignment of inventions covenants and other similar covenants contained therein, shall remain in effect in accordance with their terms (and shall not be limited by the provisions of any similar covenants set forth herein) for the periods set forth in the Prior Agreement.

 

(g)                                       Definitions.  For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

(i)                                     “Cause” means any of the following: (i) Executive’s failure in any material respect (other than due to physical or mental incapacity) to carry out or comply with any lawful and reasonable directive of the board of directors of Holdings or the Company’s Chief Executive Officer, in each case that is consistent with the terms of this Agreement; (ii) Executive’s willful misconduct, gross negligence or breach of fiduciary duty with respect to the Company or any of its affiliates that, in each case or in the aggregate, results in material harm to the Company or any of its affiliates; (iii) Executive’s conviction, plea of no contest, plea of nolo contendere, or imposition of unadjudicated probation for any felony or crime involving moral turpitude; (iv) Executive’s unlawful use (including being under the influence) or possession of illegal drugs on the Company’s (or any of its affiliate’s) premises or while performing Executive’s duties and responsibilities; (v) Executive’s commission of an act of fraud, embezzlement or misappropriation against the Company or any of its affiliates, or (vi) Executive’s directly or indirectly engaging in, acquiring any equity interest in (other than passive ownership of not more than 2% of the outstanding equity interest in any entity that is publicly traded, so long as Executive has no active participation in the business of such entity), or managing, providing services to or operating any person, firm, corporation, partnership or business (whether as director, officer, employee, agent, representative, partner, security holder, consultant or otherwise) that engages in any business which competes with any portion of the 

 

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Business of the Company Group anywhere in the Territory.  Notwithstanding the foregoing, in the event of any circumstance described in clause (i) of the foregoing sentence, the Company may not terminate Executive’s employment for Cause unless, to the extent such failure can be fully cured, the Company has provided Executive with at least thirty (30) days’ notice of such failure and Executive has not remedied the failure within the 30-day period.

 

(ii)                                  “Business” means the business of the Company Group, as such business may be expanded or altered prior to or during the Service Continuation Period, including, without limitation, the business of (A) providing inventory management services and the purchase and distribution of aerospace parts, machined parts, electrical components, bearings, and fastener installation tooling, and (B) procuring, delivering and otherwise managing the inventory of chemicals for or on behalf of any person or entity, training and managing the waste produced by other persons or entities or providing services ancillary thereto, including process improvement, consultation, environmental health and safety compliance or waste handling services.

 

(iii)                               “Territory” means any geographic area in which any member of the Company Group, directly or indirectly, engages in the Business as of the Termination Date or during the Service Continuation Period.

 

3.                                                Return of Company Property.  On the Termination Date, as a condition to Executive’s receipt of the payments and benefits under Section 2(b), Executive shall return any property of the Company or its affiliates (including, without limitation, proprietary information or intellectual property) that is within Executive’s custody or control, except to the extent such property is reasonably necessary for Executive to perform the Consulting Services, as determined by the Company.  Executive shall return any Company property retained by Executive as provided in the preceding sentence upon the expiration of the Service Continuation Period.

 

4.                                                Restrictive Covenants.

 

(a)                                 Executive recognizes and agrees that in order to adequately protect the Company’s investment in its proprietary information and trade secrets and to protect such information and secrets and all other confidential information from disclosures to competitors and to protect the Company from unfair competition, certain restrictive covenants as set forth below, are necessary, reasonable and desirable.  Executive understands and agrees that the restrictions imposed in these covenants represent a fair balance of the Company’s rights to protect its business and Executive’s right to pursue employment.

 

(b)                                 During the 2-year period from the Termination Date until March 31, 2017, Executive will not, directly or indirectly, (i) solicit for employment or employ (or attempt to solicit for employment or employ), for Executive or on behalf of any sole proprietorship, partnership, corporation, limited liability company or business or any other person (other than the Company or any of its affiliates), any employee of the Company or any of its affiliates or any person who was such an employee during the one-year period preceding the date of such solicitation, employment or attempted solicitation or employment, or (ii) encourage any such employee to leave his or her employment with the Company or any of its affiliates.

 

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(c)                                  In the event the terms of this Section 4 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to apply only for the maximum period of time for which it may be enforceable, in the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

 

5.                                                Non-disclosure of Proprietary Information

 

(a)                                 Except in connection with the faithful performance of Executive’s Consulting Services or pursuant to Section 5(b), Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose or publish, or use for his benefit or the benefit of any person, firm, corporation or other entity any confidential or proprietary information or trade secrets of or relating to the Company or any of its affiliates (including, without limitation, intellectual property in the form of patents, trademarks and copyrights and applications therefor, ideas, inventions, works, discoveries, improvements, information, documents, formulae, practices, processes, methods, developments, source code, modifications, technology, techniques, data, programs, other know-how or materials, owned, developed or possessed by the Company or any of its affiliates, whether in tangible or intangible form, information with respect to the Company’s or its affiliates’ operations, processes, products, inventions, business practices, finances, principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships, regulatory status, prospects and compensation paid to employees or other terms of employment), or deliver to any person, firm, corporation or other entity any document, record, notebook, computer program or similar repository of or containing any such confidential or proprietary information or trade secrets.  The parties hereby stipulate and agree that as between them the foregoing matters are important, material and confidential proprietary information and trade secrets and affect the successful conduct of the businesses of the Company and its affiliates (and any successors or assignees thereof).

 

(b)                                 Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest practicable notice thereof, shall, as much in advance of the return date as practicable, make available to the Company and its counsel the documents and other information sought and shall reasonably assist such counsel at the Company’s expense in resisting or otherwise responding to such process.

 

(c)                                  Nothing in this Agreement shall prohibit Executive from (i) disclosing information and documents when required by law, subpoena or court order (subject to the requirements of Section 5(b)), (ii) disclosing information and documents to his professional adviser(s), (iii) disclosing the restrictions in this Agreement in confidence to any potential new employer or (iv) disclosing information that has been or is hereafter disclosed and made public through no act or omission of Executive in violation of this Agreement, any other confidentiality obligation or duty owed to any member of the Company Group or any act or omission of any person which to the knowledge of Executive has any legally binding confidentiality obligation or duty to the Company or its affiliates, or is otherwise ascertainable from public or trade sources or otherwise generally known in the trade.

 

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6.                                                Non-Disparagement.  Each party to this Agreement (which, in the case of the Company and Holdings, shall mean their officers and the members of the Board of Directors of Holdings) agrees, during the Service Continuation Period and thereafter, to refrain from Disparaging (as defined below) the other party and its affiliates, including, in the case of the Company, any of its services, technologies or practices, or any of its directors, officers, agents, representatives or stockholders, either orally or in writing.  Nothing in this paragraph shall preclude any party from making truthful statements that are reasonably necessary to comply with applicable law, regulation or legal process, or to defend or enforce a party’s rights under this Agreement.  For purposes of this Agreement, “Disparaging” means making remarks, comments or statements, whether written or oral, that impugn the character, integrity, reputation or abilities of the person being disparaged.

 

7.                                                Condition to Consulting Compensation.  The Company shall be entitled to cease all payments and benefits to Executive under Section 2(b) in the event the Service Continuation Period is terminated by the Company for Cause or in the event of Executive’s breach any of the provisions of Sections 4, 5, 6 or 8 or of any other non-competition, non-solicitation, non-disparagement, confidentiality or assignment of inventions covenants contained in any other agreement between Executive and the Company or any of its affiliates, which other covenants are hereby incorporated by reference into this Agreement.

 

8.                                                Inventions.  All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto) related to the business of the Company and its affiliates, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing, that Executive may discover, invent or originate during the Service Continuation Period, either alone or with others and whether or not during working hours or by the use of the facilities of the Company (“Inventions”), shall be the exclusive property of the Company.  Executive shall promptly disclose all Inventions to the Company, shall execute at the request of the Company any assignments or other documents the Company may deem reasonably necessary to protect or perfect its rights therein, and shall assist the Company, upon reasonable request and at the Company’s expense, in obtaining, defending and enforcing the Company’s rights therein.  Executive hereby appoints the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any assignments or other documents reasonably deemed necessary by the Company to protect or perfect its rights to any Inventions.

 

9.                                                Injunctive Relief.  It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 4, 5, 6 and 8 will cause irreparable damage to Company and its goodwill, the exact amount of which will be difficult or impossible to ascertain, and that the remedies at law for any such breach will be inadequate.  Accordingly, Executive agrees that in the event of a breach of any of the covenants contained in Sections 4, 5, 6 and 8, in addition to any other remedy which may be available at law or in equity, the Company will be entitled to specific performance and injunctive relief without the requirement to post bond.

 

10.                                         Agreement to Arbitrate.  Any controversy, claim or dispute arising out of or relating to this Agreement, shall be settled solely and exclusively by binding arbitration in Los Angeles, California.  Such arbitration shall be conducted in accordance with the then prevailing JAMS Streamlined Arbitration Rules & Procedures, with the following exceptions if in conflict:  (a) one arbitrator shall be chosen by JAMS; (b) each party to the arbitration will pay its pro rata 

 

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share of the expenses and fees of the arbitrator, together with other expenses of the arbitration incurred or approved by the arbitrator; and (c) arbitration may proceed in the absence of any party if written notice (pursuant to the JAMS’ rules and regulations) of the proceedings has been given to such party.  Each party shall bear its own attorneys’ fees and expenses. The parties agree to abide by all decisions and awards rendered in such proceedings.  Such decisions and awards rendered by the arbitrator shall be final and conclusive.  All such controversies, claims or disputes shall be settled in this manner in lieu of any action at law or equity; provided, however, that nothing in this Section 10 shall be construed as precluding the bringing an action for injunctive relief pursuant to any applicable Other Arrangement.

 

11.                                         Taxes.  The Company shall be entitled to (and intends to) withhold from any amounts payable under this Agreement any federal, state, local or foreign withholding or other taxes or charges.  To the extent any taxes may be due on the payments to Executive provided in this Agreement beyond any withheld by the Company, Executive agrees to pay them himself.  Executive further agrees to provide any and all information pertaining to Executive upon request as reasonably necessary for the Company and its affiliates to comply with applicable tax laws.

 

12.                                         General Provisions.

 

(a)                                 Successors and Assigns.  The rights of the Company and Holdings under this Agreement may, without the consent of Executive, be assigned by the Company or Holdings, as applicable, in its sole and unfettered discretion, to any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly, acquires all or substantially all of the assets or business of the Company or Holdings.  The Company will require any successor (whether direct or indirect, by purchase, merger or otherwise) to all or substantially all of the business or assets of the Company expressly to assume and to agree to perform this Agreement in the same manner and to the same extent that the Company or Holdings, as applicable, would be required to perform it if no such succession had taken place.  The failure of any such successor to so assume this Agreement shall constitute a material breach of this Agreement by the Company.  As used in this Section 12(a), the “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.  Executive shall not be entitled to assign any of Executive’s rights or obligations under this Agreement.  This Agreement shall inure to the benefit of and be enforceable by Executive’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.

 

(b)                                 Severability.  In the event any provision of this Agreement is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law.  If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

 

(c)                                  Interpretation; Construction.  The headings set forth in this Agreement are for convenience only and shall not be used in interpreting this Agreement.  This Agreement has 

 

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been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Agreement and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.  Either party’s failure to enforce any provision of this Agreement shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Agreement.

 

(d)                                 Governing Law and Venue.  This Agreement will be governed by and construed in accordance with the laws of the United States and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof.  Any suit brought hereon shall be brought in the state or federal courts sitting in Los Angeles, California, the parties hereby waiving any claim or defense that such forum is not convenient or proper.  Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized by California law.

 

(e)                                  Notices.  Any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated:  (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or facsimile transmission upon acknowledgment of receipt of electronic transmission; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.  Notice shall be sent to Executive at the address set forth below and to the Company at its principal place of business, or such other address as either party may specify in writing.

 

(f)                                   Survival.  Sections 4 (“Restrictive Covenants”), 5 (“Non-Disclosure of Proprietary Information”), 6 (“Non-Disparagement”), 7 (“Condition to Consulting Compensation”), 8 (“Inventions”), 9 (“Injunctive Relief”), 10 (“Agreement to Arbitrate”) and 12 (“General Provisions”) of this Agreement shall survive the expiration or termination of the Service Continuation Period.

 

(g)                                  Entire Agreement.  This Agreement and any covenants and agreements incorporated herein by reference as set forth in Section 7 together constitute the entire agreement between the parties in respect of the subject matter contained herein and therein and supersede all prior or simultaneous representations, discussions, negotiations, and agreements, whether written or oral, provided, however, that for the avoidance of doubt, all Other Arrangements (as such Other Arrangements may be amended, modified or terminated from time to time) shall remain in effect in accordance with their terms, subject to Section 2(f) hereof.  This Agreement may be amended or modified only with the written consent of Executive and an authorized representative of the Company.  No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

 

(h)                                 Code Section 409A.

 

(i)                                     The intent of the parties is that the payments and benefits under this Agreement comply with or be exempt from Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (collectively,

 

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“Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.

 

(ii)                                  Notwithstanding anything in this Agreement to the contrary, any compensation or benefits payable under this Agreement that is considered nonqualified deferred compensation under Section 409A and is designated under this Agreement as payable upon Executive’s termination of employment shall be payable only upon Executive’s “separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”) and, except as provided below, any such compensation or benefits shall not be paid, or, in the case of installments, shall not commence payment, until the sixtieth (60th) day following Executive’s Separation from Service (the “First Payment Date”).  Any installment payments that would have been made to Executive during the sixty (60) day period immediately following Executive’s Separation from Service but for the preceding sentence shall be paid to Executive on the First Payment Date and the remaining payments shall be made as provided in this Agreement.

 

(iii)                               Notwithstanding anything in this Agreement to the contrary, if Executive is deemed by the Company at the time of Executive’s Separation from Service to be a “specified employee” for purposes of Section 409A, to the extent delayed commencement of any portion of the benefits to which Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A, such portion of Executive’s benefits shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death.  Upon the first business day following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due to Executive under this Agreement shall be paid as otherwise provided herein.

 

(iv)                              Executive’s right to receive any installment payments under this Agreement shall be treated as a right to receive a series of separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct payment as permitted under Section 409A.  Except as otherwise permitted under Section 409A, no payment hereunder shall be accelerated or deferred unless such acceleration or deferral would not result in additional tax or interest pursuant to Section 409A.

 

(v)                                 To the extent that any reimbursements under this Agreement are subject to Section 409A, any such reimbursements payable to Executive shall be paid to Executive no later than December 31 of the year following the year in which the expense was incurred; provided, that Executive submits Executive’s reimbursement request promptly following the date the expense is incurred, the amount of expenses reimbursed in one year and the amount of in-kind benefits provided in one year shall not affect the amount eligible for reimbursement or in-kind benefits to be provided in any subsequent year, other than medical expenses referred to in Section 105(b) of the Code, and Executive’s right to reimbursement or in-kind benefits under this Agreement will not be subject to liquidation or exchange for another benefit.

 

(i)                                     Administration.  This Agreement shall be interpreted and administered by 

 

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the Board of Directors of Wesco Aircraft Holdings, Inc. (the “Board”), or a committee thereof to which the Board may delegate such function (the “Committee”).  The Board or the Committee shall have the exclusive power, subject to and within the limitations of the express provisions of this Agreement, to interpret this Agreement and to make factual findings and determinations and take such action in connection with the Agreement as it, in its sole discretion, deems appropriate. The Board’s or the Committee’s determination shall be binding and conclusive on all parties, and the Board or the Committee shall not be liable for any action or determination made in good faith with respect to this Agreement.

 

(j)                                    Source of Funds.  Amounts payable to Executive under this Agreement shall be from the general funds of the Company.  Executive’s rights to unpaid amounts under this Agreement shall be solely those of an unsecured creditor of the Company.

 

(k)                                 Consultation with Legal and Financial Advisors.  By executing this Agreement, Executive acknowledges that this Agreement confers significant legal rights, and may also involve the waiver of rights under other agreements; that the Company has encouraged Executive to consult with Executive’s personal legal and financial advisors; and that Executive has had adequate time to consult with Executive’s advisors before executing this Agreement.

 

(l)                                     Counterparts.  This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

 

(Signature Page Follows)

 

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IN WITNESS WHEREOF, and intending to be legally bound, the parties have executed the foregoing on the dates shown below.

 

	
WESCO AIRCRAFT HARDWARE CORP.
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/   John Holland
    	
 
    	
Date:
    	
November 20,   2014
    
	
 
    	
Name:
    	
John   Holland
    	
 
    	
 
    
	
 
    	
Title:
    	
Senior   Vice President and General
   Counsel
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
EXECUTIVE
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
/s/   Greg Hann
    	
 
    	
Date:
    	
November 20,   2014
    
	
 
    	
Greg   Hann
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Address:
    	
1482   Caitlyn Circle
    	
 
    	
 
    	
 
    
	
 
    	
Westlake   Village, CA 91361
    	
 
    	
 
    	
 
    
							

 

 

EXHIBIT A

 

GENERAL RELEASE OF CLAIMS

 

[The language in this Release may change based on legal developments and evolving best practices; this form is provided as an example of what will be included in the final Release document.]

 

This General Release of Claims (“Release”) is entered into as of this            day of                 ,         , between                  (“Executive”), and Wesco Aircraft Hardware Corporation, Inc., a California corporation (the “Company”) (collectively referred to herein as the “Parties”).

 

WHEREAS, Executive and the Company are parties to that certain Separation and Consulting Agreement dated as of                     ,          (the “Agreement”);

 

WHEREAS, the Parties agree that Executive is entitled to certain payments and benefits under the Agreement, subject to Executive’s execution of this Release; and

 

WHEREAS, the Company and Executive now wish to fully and finally to resolve all matters between them.

 

NOW, THEREFORE, in consideration of, and subject to, the payments and benefits payable to Executive pursuant to the Agreement, the adequacy of which is hereby acknowledged by Executive, and which Executive acknowledges that he would not otherwise be entitled to receive, Executive and the Company hereby agree as follows:

 

1.                                      General Release of Claims by Executive.

 

(a)                                 Executive, on behalf of himself and his executors, heirs, administrators, representatives and assigns, hereby agrees to release and forever discharge the Company and all predecessors, successors and their respective parent corporations, affiliates, related, and/or subsidiary entities, and all of their past and present investors, directors, shareholders, officers, general or limited partners, employees, attorneys, creditors, agents and representatives, and the employee benefit plans in which Executive is or has been a participant by virtue of his employment with or service to the Company (collectively, the “Company Releasees”), from any and all claims, debts, demands, accounts, judgments, rights, causes of action, equitable relief, damages, costs, charges, complaints, obligations, promises, agreements, controversies, suits, expenses, compensation, responsibility and liability of every kind and character whatsoever (including attorneys’ fees and costs), whether in law or equity, known or unknown, asserted or unasserted, suspected or unsuspected (collectively, “Claims”), which Executive has or may have had against such entities based on any events or circumstances arising or occurring on or prior to the date hereof, arising directly or indirectly out of, relating to, or in any other way involving in any manner whatsoever Executive’s employment by or service to the Company or the termination thereof, including any and all claims arising under federal, state, or local laws relating to employment, including without limitation claims of wrongful discharge, breach of express or implied contract, fraud, misrepresentation, defamation, or liability in tort, and claims of any kind that may be brought in any court or administrative agency including, without

 

A-1

 

limitation, claims under Title VII of the Civil Rights Act of 1964, as amended, 42 U.S.C. Section 2000, et seq.; the Americans with Disabilities Act, as amended, 42 U.S.C. § 12101 et seq.; the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701 et seq.; the Civil Rights Act of 1866, and the Civil Rights Act of 1991; 42 U.S.C. Section 1981, et seq.; the Age Discrimination in Employment Act, as amended, 29 U.S.C. Section 621, et seq. (the “ADEA”); the Equal Pay Act, as amended, 29 U.S.C. Section 206(d); regulations of the Office of Federal Contract Compliance, 41 C.F.R. Section 60, et seq.; the Family and Medical Leave Act, as amended, 29 U.S.C. § 2601 et seq.; the Fair Labor Standards Act of 1938, as amended, 29 U.S.C. § 201 et seq.; the Employee Retirement Income Security Act, as amended, 29 U.S.C. § 1001 et seq.; and any similar state or local law.

 

Notwithstanding the generality of the foregoing, Executive does not release the following:

 

(i)                                     Claims for unemployment compensation or any state disability insurance benefits pursuant to the terms of applicable state law;

 

(ii)                                  Claims for workers’ compensation insurance benefits under the terms of any worker’s compensation insurance policy or fund of the Company;

 

(iii)                               Claims pursuant to the terms and conditions of the federal law known as COBRA;

 

(iv)                              Claims for indemnity under the bylaws of the Company or its affiliates, as provided for by law or under any applicable insurance policy with respect to Executive’s liability as an employee, director or officer of the Company pursuant to which Executive is covered as of the effective date of Executive’s termination of employment with the Company and its subsidiaries;

 

(v)                                 Claims based on any right Executive may have to enforce the Company’s executory obligations under the Agreement;

 

(vi)                              Claims Executive may have to vested or earned compensation and benefits and for payments and benefits expressly provided for under Section 2(b) of the Agreement; and

 

(vii)                           Any rights that cannot be released as a matter of applicable law, but only to the extent such rights may not be released under such applicable law.

 

(b)                                 Executive acknowledges that this Release was presented to him on the date indicated above and that Executive is entitled to have [twenty-one (21)/forty-five (45)] days’ time in which to consider it.  Executive further acknowledges that the Company has advised him that he is waiving his rights under the ADEA, and that Executive should consult with an attorney of his choice before signing this Release, and Executive has had sufficient time to consider the terms of this Release.  Executive represents and acknowledges that if Executive executes this Release before [twenty-one (21)/forty-five (45)] days have elapsed, Executive does so knowingly, voluntarily, and upon the advice and with the approval of Executive’s legal counsel (if any), and that Executive voluntarily waives any remaining consideration period.

 

A-2

 

(c)                                  Executive understands that after executing this Release, Executive has the right to revoke it within seven (7) days after his execution of it.  Executive understands that this Release will not become effective and enforceable unless the seven (7) day revocation period passes and Executive does not revoke the Release in writing.  Executive understands that this Release may not be revoked after the seven (7) day revocation period has passed.  Executive also understands that any revocation of this Release must be made in writing and delivered to the Company at its principal place of business within the seven (7) day period.

 

(d)                                 Executive understands that this Release shall become effective, irrevocable, and binding upon Executive on the eighth (8th) day after his execution of it, so long as Executive has not revoked it within the time period and in the manner specified in clause (c) above.  Executive further understands that Executive will not be given any severance benefits under the Agreement unless this Release is effective on or before the date that is sixty (60) days following the date of Executive’s termination of employment.

 

2.                                      No Assignment.  Executive represents and warrants to the Company Releasees that there has been no assignment or other transfer of any interest in any Claim that Executive may have against the Company Releasees.  Executive agrees to indemnify and hold harmless the Company Releasees from any liability, claims, demands, damages, costs, expenses and attorneys’ fees incurred as a result of any such assignment or transfer from Executive.

 

3.                                      Severability.  In the event any provision of this Release is found to be unenforceable by an arbitrator or court of competent jurisdiction, such provision shall be deemed modified to the extent necessary to allow enforceability of the provision as so limited, it being intended that the parties shall receive the benefit contemplated herein to the fullest extent permitted by law.  If a deemed modification is not satisfactory in the judgment of such arbitrator or court, the unenforceable provision shall be deemed deleted, and the validity and enforceability of the remaining provisions shall not be affected thereby.

 

4.                                      Interpretation; Construction.  The headings set forth in this Release are for convenience only and shall not be used in interpreting this Agreement.  This Release has been drafted by legal counsel representing the Company, but Executive has participated in the negotiation of its terms.  Furthermore, Executive acknowledges that Executive has had an opportunity to review and revise the Release and have it reviewed by legal counsel, if desired, and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Release.  Either party’s failure to enforce any provision of this Release shall not in any way be construed as a waiver of any such provision, or prevent that party thereafter from enforcing each and every other provision of this Release.

 

5.                                      Governing Law and Venue.  This Release will be governed by and construed in accordance with the laws of the United States of America and the State of California applicable to contracts made and to be performed wholly within such State, and without regard to the conflicts of laws principles thereof.  Any suit brought hereon shall be brought in the state or federal courts sitting in Los Angeles, California, the Parties hereby waiving any claim or defense that such forum is not convenient or proper.  Each party hereby agrees that any such court shall have in personam jurisdiction over it and consents to service of process in any manner authorized

 

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by California law.

 

6.                                      Waiver of Civil Code Section 1542.  It is the intention of Executive in executing this Release that the same shall be effective as a bar to each and every Claim hereinabove specified (except for those Claims specifically not covered by the release set forth above).  In furtherance of this intention, Executive hereby expressly waives any and all rights and benefits conferred upon his by the provisions of SECTION 1542 OF THE CALIFORNIA CIVIL CODE and expressly consents that this Release shall be given full force and effect according to each and all of its express terms and provisions, including those related to unknown and unsuspected Claims, if any, as well as those relating to any other Claims hereinabove specified (except, in each case, for those Claims specifically not covered by the release set forth above).  SECTION 1542 provides:

 

“A GENERAL RELEASE DOES NOT EXTEND TO A CLAIM WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR.”

 

Executive acknowledges that he  may hereafter discover Claims or facts in addition to or different from those which Executive now knows or believes to exist with respect to the subject matter of this Release and which, if known or suspected at the time of executing this Release, may have materially affected this settlement.  Nevertheless, Executive hereby waives any right, Claim or cause of action that might arise as a result of such different or additional Claims or facts.  Executive acknowledges that he  understands the significance and consequences of such release and such specific waiver of SECTION 1542.

 

7.                                      Entire Agreement.  This Release and the Agreement constitute the entire agreement of the Parties in respect of the subject matter contained herein and therein and supersede all prior or simultaneous representations, discussions, negotiations and agreements, whether written or oral.  This Release may be amended or modified only with the written consent of Executive and an authorized representative of the Company.  No oral waiver, amendment or modification will be effective under any circumstances whatsoever.

 

8.                                      Counterparts.  This Release may be executed in multiple counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument.

 

IN WITNESS WHEREOF, and intending to be legally bound, the Parties have executed the foregoing Release as of the date first written above.

 

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EXECUTIVE
    	
WESCO   AIRCRAFT HARDWARE CORP.
    
	
 
    	
 
    
	
 
    	
 
    	
By:
    	
 
    
	
Greg   Hann
    	
 
    	
 
    
	
 
    	
Print   Name:
    	
 
    
	
 
    	
 
    
	
 
    	
Title:
    	
 
    
					

 

A-5SECURITIES
PURCHASE AGREEMENT

 

This
SECURITIES PURCHASE AGREEMENT
(the "Agreement"),
dated as of September
4, 2014, by
and between AL.KAME HOLDINGS, INC.,
a Nevada corporation, with headquarters
located at 3651 Lindell Road - Suite D #356, Las Vegas, NV 89013 (the "Company"),
and KBM WORLDWIDE, INC., a New York corporation, with its address at 80 Cuttermill Road,
Suite 410, Great Neck, NY 11021 (the "Buyer").

 

WHEREAS:

 

A.          
The Company
and the Buyer
are executing and
delivering this Agreement
in reliance upon the
exemption from securities registration afforded by
the rules and
regulations as promulgated by the United States Securities and
Exchange Commission
(the "SEC") under the Securities
Act of 1933, as amended (the "1933
Act");

 

B.          
Buyer desires
to purchase and
the Company desires
to issue and
sell, upon the terms
and conditions set
forth in this Agreement an
8% convertible note of the Company, in the form
attached hereto as Exhibit A, in the
aggregate principal amount of
$42,500.00 (together with any note(s) issued in replacement
thereof or as a dividend thereon or otherwise with respect thereto in accordance
with the terms thereof, the "Note"),
convertible into shares of common stock,
$0.001 par value per share, of the Company
(the "Common Stock"),
upon the terms and subject to the limitations and conditions set forth in such Note.

 

C.               
The Buyer
wishes to purchase,
upon the terms
and conditions stated
in this Agreement, such
principal amount of
Note as is set
forth immediately below its name on
the signature pages
hereto; and

 

NOW
THEREFORE, the Company
and the Buyer
severally (and not
jointly) hereby agree as
follows:

 

1.               
Purchase and
Sale of Note.

 

a.                
Purchase of
Note. On the
Closing Date (as
defined below), the Company
shall issue and
sell to the
Buyer and the Buyer agrees to purchase
from the Company such principal amount
of Note as is set forth immediately below the Buyer's name on the signature pages hereto.

    	 

    	 

    

 

 

b.                
Form of
Payment. On the
Closing Date (as
defined below), (i)
the Buyer shall pay
the purchase price
for the Note to be issued and sold
to it at the Closing (as defined below) (the "Purchase
Price") by wire transfer
of immediately available funds to the Company, in accordance with the Company's
written wiring instructions, against delivery
of the Note in the principal amount
equal to the Purchase Price as is set forth
immediately below the Buyer's name on the
signature pages hereto,
and (ii) the Company
shall deliver such duly executed Note
on behalf of the Company,
to the Buyer, against delivery of such Purchase Price.

 

c.                 
Closing
Date. Subject to
the satisfaction (or
written waiver) of
the conditions thereto set
forth in Section
6 and Section 7
below, the date and time of the
issuance and sale of the Note pursuant to this Agreement (the "Closing
Date") shall
be 12:00 noon, Eastern Standard Time on
or about September 8, 2014,
or such other mutually agreed upon
time. The closing of the
transactions contemplated by this Agreement (the "Closing")
shall occur on the Closing
Date at such location as may be agreed to by the parties.

 

2.                
Buyer's  Representations
 and  Warranties.
The  Buyer 
represents  and warrants to
the Company that:

 

a.                
Investment
Purpose. As of
the date hereof,
the Buyer  is purchasing
the Note and
the shares of
Common Stock issuable upon conversion of or otherwise pursuant to
the Note (including,
without limitation, such additional shares of Common Stock,
if any,
as are issuable (i) on account of interest on
the Note, (ii)
as a result of the events described in Sections
1.3 and 1.4(g) of the Note or (iii) in payment
of the Standard Liquidated Damages Amount (as
defined in Section 2(f) below) pursuant
to this Agreement, such shares
of Common Stock being collectively
referred to herein as the "Conversion
Shares" and, collectively with the Note, the
"Securities")
for its
own account and not
with a present view towards
the public sale or distribution thereof,
except pursuant to
sales registered or exempted from registration under the 1933
Act; provided, however, that by making the
representations herein, the Buyer does not agree
to hold any
of the Securities for any minimum
or other specific term and
reserves the right to
dispose of the Securities at
any time in accordance with or pursuant
to a registration statement or an exemption under the 1933 Act.

 

b.               
Accredited
Investor Status. The
Buyer is an
"accredited
investor" as
that term is
defined in Rule
501(a) of
Regulation D (an "Accredited
Investor").

 

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

    	2

    	 

    

 

d.                
Information.
The Buyer and
its advisors, if
any, have been,
and for so long
as the Note remain
outstanding will continue to be, 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 Buyer or
its advisors. The Buyer
and its advisors, if any, have been, and for so
long as the Note remain outstanding will
continue to be, afforded the opportunity
to ask questions of the Company. Notwithstanding the foregoing, the Company has not
disclosed to the Buyer
any material nonpublic information and 
will not disclose such information unless such information is disclosed
to the public prior to or promptly
following such disclosure to the Buyer. Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives shall modify,
amend or affect Buyer's right to
rely on the Company's representations
and warranties  contained in Section 3 below.
The Buyer understands that its investment in
the Securities involves
a significant degree of risk. The
Buyer is not aware of any
facts that may constitute a breach
of any of the Company's representations and warranties
made herein.

 

e.                
Governmental
Review. The Buyer
understands that no
United States federal or
state agency or
any other government
or governmental agency
has passed upon or
made any recommendation or endorsement of
the Securities.

 

f.                    
Transfer
or Re-sale. The
Buyer understands that (i)
the sale or
re- sale of the
Securities has not
been and is not being registered under the
1933 Act or any applicable state securities
laws, and the Securities may not be transferred unless (a) the Securities are sold
pursuant to an effective registration statement under the 1933 Act, (b) the Buyer shall
have delivered to the Company, at the cost
of the Buyer, an opinion of counsel that shall be in
form, substance and scope
customary for opinions of counsel in comparable transactions
to the effect that the Securities to be sold
or transferred may be sold or transferred pursuant
to an exemption from such registration, which opinion shall be accepted by the Company,
(c) the Securities are sold or transferred
to an "affiliate"
(as defined
in Rule 144 promulgated under the 1933 Act (or a
successor rule) ("Rule 144")) of the Buyer who agrees to
sell or otherwise transfer the Securities
only in accordance with this Section 2(f)
and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule
144, or (e) the Securities are sold pursuant to Regulation S
under the 1933 Act (or a successor
rule) ("Regulation S"), and
the Buyer shall have delivered to the
Company, at the cost of
the Buyer, an opinion of counsel
that shall be in form, substance and scope customary
for opinions of counsel in corporate
transactions, which opinion shall be accepted by the Company; (ii) any sale
of such Securities made in reliance on Rule 144 may be made only in accordance with
the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances
in which the seller (or the person through whom the sale is made) may be deemed
to be an underwriter (as that term is defined
in the 1933 Act) may require compliance
with some other exemption under the 1933
Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company
nor any other person is under any obligation to register such Securities under the 1933 Act
or any state securities laws or to comply
with the terms and conditions of any exemption
thereunder (in each case). Notwithstanding the foregoing or anything else contained
herein to the contrary, the Securities may be pledged as
collateral in connection with a bona fide
margin account or other lending arrangement.

 

    	3

    	 

    

 

g.                
Legends.
The Buyer understands
that the Note
and, until such
time as the Conversion Shares
have been registered under the 1933
Act may be sold
pursuant to Rule 144 or Regulation S without any
restriction as to the number of securities as of a particular date that
can then be immediately sold, the Conversion Shares may bear a restrictive legend
in substantially the following form
(and a stop-transfer order may be
placed against transfer of the certificates for such
Securities):

 

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

 

The
legend set forth
above shall be
removed and the
Company shall issue
a certificate without such
legend to the
holder of any Security upon which it
is stamped, if, unless otherwise required by applicable state securities laws,
(a) such Security is
registered for sale under an effective registration
statement filed under the 1933 Act
or otherwise may be
sold pursuant to Rule 144 or Regulation
S without any restriction as to the number
of securities as of a particular date that can then be immediately sold, or (b) such
holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel
in comparable transactions, to the effect
that a public sale or transfer of such Security
may be made without registration under the 1933 Act, which opinion shall be accepted
by the Company so that the
sale or transfer is effected. The Buyer
agrees to sell all Securities,
including those represented by a certificate(s) from which the
legend has been removed, in compliance with applicable prospectus delivery requirements, if
any. In the event that the Company does not accept the opinion of counsel
provided by the Buyer with respect to the transfer of Securities pursuant to
an exemption from registration, such as Rule
144 or Regulation S, at the Deadline, it will be considered
an Event of Default pursuant to Section 3.2 of the
Note.

 

h.                
Authorization;
Enforcement. This Agreement
has been duly
and validly authorized. This
Agreement has been
duly executed and
delivered on behalf
of the Buyer,
and this Agreement
constitutes a valid and binding agreement of the Buyer enforceable in accordance with
its terms.

i
. Residency.
The Buyer
is a resident
of the jurisdiction
set forth immediately below
the Buyer's
name on the signature pages hereto.

 

3.                
Representations 
and  Warranties  of 
the  Company.The  Company
represents and warrants
to the Buyer
that:

 

a.                
Organization 
and  Qualification.  The 
Company  and  each 
of  its Subsidiaries
(as defined below),
if any,
is a
corporation duly organized
, validly
existing and in good standing under the laws of the jurisdiction in which it
is incorporated, with full power 
and authority (corporate and other) to own,
lease,
use and operate its properties and to carry on 
its business as and where now owned,
leased,
used,
operated and conducted. Schedule 3(a) sets forth a list
of all  of the Subsidiaries of the  Company
 and the jurisdiction in which each is incorporated.
The Company and each of its Subsidiaries  is
duly  qualified as  a foreign corporation
to do business and
is in good standing in every jurisdiction in which its ownership
or use of property or the nature
of the business conducted by it makes such
qualification necessary except where the failure to be so qualified 
or in good  standing would not have
a Material Adverse Effect. "Material
Adverse Effect" means any material adverse effect on the business,
operations, assets,
financial condition
or prospects of the Company or its Subsidiaries, if any,
taken as a whole,
or on the transactions
contemplated hereby or by the agreements or
instruments to be entered into in
connection herewith. "Subsidiaries"
means any corporation or other organization, whether
incorporated or unincorporated, in
which the Company owns, directly or indirectly, any equity or other ownership interest.

 

b.                
Authorization;
Enforcement. (i) The
Company has all
requisite corporate power and
authority to enter
into and perform
this Agreement,
the Note and to consummate the transactions contemplated
hereby and thereby and to issue the
Securities, in accordance with the terms hereof
and thereof, (ii) the execution and delivery
of this Agreement, the Note by the Company and the consummation
by it of the transactions contemplated hereby and thereby (including without
limitation , the
issuance of the Note and the
issuance and reservation for issuance of
the Conversion Shares issuable upon
conversion or exercise thereof) have been
duly authorized by the
Company's Board of Directors and no
further consent or authorization
of the Company, its Board of Directors,
or its shareholders is required, (iii) this Agreement
has been duly executed and delivered
by the Company by
its authorized representative, and such authorized representative is the true
and official representative with authority
to sign this Agreement and the other documents executed in
connection herewith and bind the Company
accordingly, and
(iv) this Agreement constitutes, and
upon execution and delivery by the Company
of the Note, each of such instruments
will constitute, a
legal, valid
and binding obligation of the
Company  enforceable  against the
Company in accordance  with its terms.

    	4

    	 

    

 

		c.	Capitalization.  As
of the date
hereof, the authorized
capital stock

of
the Company consists
of: (i) 900,000,000
authorized shares of
Common Stock, $0.001
par value per share,
of which 69,878,939 shares are issued
and outstanding; and (ii) 20,000,000 shares
of Preferred Stock, $0.001 par value per share:

 

Series
A  Convertible  Preferred 
stock - $.001
par value,  12,000,000 shares
designated; 12,000,000 shares 
issued and outstanding

 

Series
B  Convertible  Preferred 
stock  - $.001
par  value,  70,000,000 shares
designated; 65,210,834  shares 
issued and outstanding

 

Series
C Convertible  Preferred 
stock  - $.001
par value,  10,000,000 shares
designated;  no shares
issued and outstanding

 

no
shares are reserved
for issuance pursuant
to the Company's
stock option plans,
no shares are reserved
for issuance pursuant
to securities (other than the Note and
a prior convertible promissory note in
favor of the Buyer:

 

(a)
prior convertible promissory
note in favor of
the Buyer dated
August 6, 2014
in the amount of
$68,000.00 for which
6,000,000 shares of Common Stock are presently reserved)

exercisable
for, or convertible
into or exchangeable
for shares of
Common Stock and
1,500,000 shares are reserved
for issuance upon conversion of the
Note. All of such outstanding shares of capital stock
are, or upon issuance will be, duly
authorized, validly issued, fully paid and nonassessable. No shares of
capital stock of the Company are subject
to preemptive rights or any other
similar rights of the shareholders
of the Company or any liens or encumbrances
imposed through the actions
or failure to act of the Company.
As of the effective date
of this Agreement, (i) there are no outstanding options, warrants, scrip, rights to subscribe for, puts, calls, rights of
first refusal, agreements, understandings, claims or other commitments or rights of any character whatsoever
relating to, or securities or rights convertible into or exchangeable for any shares of capital stock of the Company or
any of its Subsidiaries, or arrangements by which the Company or any of its Subsidiaries
is or may become bound to issue additional shares of capital stock of the Company or
any of its Subsidiaries, (ii) there are no agreements or arrangements under which the Company
or any of its
Subsidiaries is obligated
to register the sale of
any of its
or their securities under the 1933 Act and (iii) there are no anti-dilution
or price adjustment provisions contained in any security issued by the Company
(or in any agreement providing
rights to security holders) that will be
triggered by the issuance of the
Note or the Conversion Shares. The Company has furnished to the Buyer true and
correct copies of the Company's Certificate of Incorporation as in effect on the date hereof ("Certificate of Incorporation"),
the Company's By laws, as in effect on the date hereof (the "By-laws"),
and the terms of all securities converti ble into or
exercisable for Common Stock of the Company
and the material rights of the holders thereof in
respect thereto. The Company shall provide
the Buyer with a written update of this
representation signed by the Company's Chief Executive on behalf of the
Company as of the Closing Date.

 

    	5

    	 

    

 

d.               
Issuance of  Shares.
 The Conversion Shares
are  duly  authorized
and reserved for
issuance and, upon
conversion of the Note
in accordance with
its  respective terms, will be validly
issued, fully paid and non-assessable, and free from all taxes,  liens, claims and
encumbrances with respect to the issue thereof
and shall not be subject to preemptive rights or other similar
rights of shareholders of the Company and will not impose personal liability
upon the holder thereof.

 

e.                
Acknowledgment  of 
Dilution.  The  Company 
understands  and acknowledges
the potentially dilutive effect
to the Common 
Stock  upon  the 
issuance  of the Conversion Shares
upon conversion of the Note. The Company further acknowledges that its obligation to
issue Conversion Shares upon conversion 
of the Note in  accordance 
with this Agreement, the Note is absolute
and unconditional regardless  of the dilutive effect that such issuance may have on
the ownership interests of other
shareholders of the Company.

 

f.                
No Conflicts.
The execution, delivery
and performance of
this Agreement, the Note by
the Company and
the consummation by
the Company of the transactions contemplated
hereby and thereby (including, without
limitation,
the issuance and reservation for
issuance of the Conversion Shares) will not (i) conflict with
or result in a violation of any provision
of the Certificate of Incorporation or
By-laws, or (ii) violate or conflict
with, or result in a breach of any
provision of, or constitute a default (or an
event which with notice or lapse of time
or both could become a default) under, or
give to others any rights of
termination, amendment, acceleration or cancellation of, any agreement, indenture, patent, patent license or instrument
to which the Company
or any of its Subsidiaries
is a party, or
(iii) result in a violation of any
law, rule, regulation, order, judgment
or decree (including federal and state securities
laws and regulations and regulations of any
self-regulatory organizations to which the Company or
its securities are subject) applicable
to the Company or
any of its Subsidiaries or by which any
property or asset of the Company or any of its Subsidiaries
is bound or affected (except for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not,
individually or in the aggregate,
have a Material  Adverse 
Effect). Neither the Company nor any of
its Subsidiaries is in violation of its Certificate of Incorporation ,
By-laws or other
organizational documents and neither the Company nor any
of its Subsidiaries is in default (and no event has
occurred which with notice or lapse
of time or both could put the Company or
any of its Subsidiaries in default) under, and neither the Company nor any of
its Subsidiaries has taken any action
or failed to take any
action that would give to others any rights
of termination,
amendment, acceleration
or cancellation of,
any agreement, indenture or instrument to which the Company
or any of its Subsidiaries is a party or
by which any property or assets of the Company or any of its Subsidiaries is bound or affected,
except for possible defaults as would 
not, individually or in the aggregate, have
a Material Adverse Effect. The businesses
of the Company and its Subsidiaries,
if any, are
not being conducted, and
shall not be conducted so long as
the Buyer owns any of the Securities, in violation
of any law, ordinance or regulation of any governmental entity. Except as specifically contemplated by this Agreement and as
required under the 1933 Act and any applicable state
securities laws, the Company is
not required to obtain any consent,
authorization or order of, or
make any filing or registration with,
any court,
governmental agency, regulatory agency,
self regulatory organization or stock
market or any third party in order
for it to execute, deliver or
perform any of its obligations under this Agreement,
the Note in accordance with the terms hereof or
thereof or to issue and sell the Note in
accordance with the terms hereof and to issue
the Conversion Shares upon conversion of the Note. All consents,
authorizations, orders,
filings and registrations which the Company
is required to obtain pursuant to the
preceding sentence have been obtained or
effected on or prior to the date
hereof. If the Company is
listed on the OTCBB, the Company is
not in violation of the listing requirements of the Over-the-Counter
Bulletin Board (the "OTCBB")
and does not reasonably anticipate that the Common Stock
will be delisted by the OTCBB in the foreseeable future. The Company
and its Subsidiaries are unaware of any facts or circumstances which might give
rise to any
of the foregoing.

 

    	6

    	 

    

 

g.                
SEC Documents;
Financial Statements. The
Company has timely filed
all reports,
schedules,
forms,
statements
and other documents required to
be filed by it
with the SEC pursuant to the reporting
requirements of the Securities Exchange Act of 1934,
as amended (the "1934
Act")
(all of the foregoing filed prior to the
date hereof and all exhibits included therein
and financial statements and schedules
thereto and documents (other than exhibits
to such documents) incorporated by
reference therein,
being hereinafter referred
to herein as the "SEC
Documents"). Upon written request the
Company will deliver to the Buyer true and complete copies
of the SEC Documents, except
for such exhibits and incorporated documents.
As of their respective dates,
the SEC Documents
complied in all material respects with
the requirements of the 1934 Act and the rules and regulations
of the SEC prom ulgated thereunder applicable to
the SEC Documents, and
none of the SEC
Documents,
at the
time they were filed with
the SEC,
contained any
untrue statement of
a material fact or omitted 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,
not misleading.
None of the statements made in any such SEC Documents is,
or has been,
required to be amended or updated under applicable
law (except for such statements as have been amended
or updated in subsequent filings prior the
date hereof). As of
their respective
dates, the financial statements  of the Company included in the
SEC Documents complied as to form in all material respects with applicable accounting
requirements and the published rules and regulations
of the SEC with respect thereto. Such financial statements have been prepared
in accordance with United States generally
accepted accounting principles,
consistently applied,
during the periods involved and fairly present in all material respects
the consolidated financial position of the Company and its
consolidated Subsidiaries
as of the dates thereof and the consolidated
results of their operations and cash
flows for the periods then ended
(subject,
in the case of unaudited
statements, to
normal year-end audit adjustments). Except as set forth in the financial statements
of the Company included in the SEC Documents, the Company has no liabilities,
contingent or otherwise,
other
than (i) liabilities incurred in the ordinary course of
business subsequent to June 30, 2014, and (i) obligations
under contracts and commitments incurred
in the ordinary course of business and
not required under generally accepted accounting
principles to be reflected in such financial statements,
which, individually or in the
aggregate, are not material to the financial condition
or operating results of the Company. The Company is
subject to the reporting requirements of
the 1934 Act.

 

    	7

    	 

    

 

h.               
Absence
of Certain Changes.
Since June 30,
2014, there has
been no material adverse
change and no
material adverse development in the assets,
liabilities, business, properties, operations, financial condition, results of
operations, prospects or 1934 Act reporting
status of the Company or any of its
Subsidiaries.

 

i.
Absence of Litigation.
There is no
action, suit, claim,
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 or any of its Subsidiaries, threatened against
or affecting the Company or any of its Subsidiaries, or their
officers or directors in their capacity
as such, that could have a Material Adverse Effect. Schedule
3(i) contains a complete list and summary description of any pending or, to the knowledge
of the Company, threatened proceeding against or affecting the Company or any of its Subsidiaries, without regard
to whether it would have a Material Adverse Effect. The Company and
its Subsidiaries are unaware of any facts
or circumstances which might give rise to any of the foregoing.

 

j.                  
Patents,  Copyrights, 
etc. The  Company  and 
each  of  its
Subsidiaries  owns  or 
possesses  the  requisite 
licenses  or  rights 
to  use all patents, patent applications, patent rights, inventions,
 know-how, trade
secrets, trademarks, trademark applications, service marks,
service names, trade names and
copyrights ("Intellectual Property") necessary to enable it to conduct
its business as now operated (and, as presently contemplated to be operated
in the future); there is no claim or action by
any person pertaining to, or proceeding
pending, or to the Company's knowledge threatened,
which challenges the right of the
Company or of a Subsidiary with respect to any
Intellectual Property necessary to enable it to
conduct its business as now operated (and, as
presently contemplated to be operated in
the future); to the best of the Company's knowledge, the Company's or its Subsidiaries' current and intended products, services
and processes do not
infringe on any Intellectual Property or other rights held
by any person; and the Company is
unaware of any facts or circumstances which might give rise to
any of the foregoing. The Company
and each of its Subsidiaries have taken reasonable security measures to protect the
secrecy, confidentiality and value of their Intellectual Property.

 

k.                
No  Materially 
Adverse  Contracts,  Etc. 
Neither the Company
 nor any
of its Subsidiaries is
subject to
any charter, corporate or other legal
restriction,  or any judgment, decree, order,
rule or regulation which in the
judgment of the Company's officers has
or is expected in the future to have a
Material Adverse Effect. Neither the Company
nor any of its
Subsidiaries is a party to any contract
or agreement which in the judgment 
of the Company's
officers has or is expected to have a Material Adverse Effect.

 

    	8

    	 

    

 

I.           
Tax Status.
The Company
and each of
its Subsidiaries has
made or filed all federal,
state and
foreign  income and all other tax returns,
reports and declarations required
by any jurisdiction to which it is
subject (unless and only to
the extent that
the Company
and each of its
Subsidiaries has set aside on its books provisions reasonably
adequate for the payment
of all unpaid and unreported
taxes) and has 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 has set aside on its books
provisions 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 know of
no basis for any such claim. The Company has not executed
a waiver with respect to the statute of limitations relating to the assessment or collection
of any foreign,
federal, state or local tax. None
of the Company's
tax returns is presently being audited by any
taxing
authority.

 

m.              
Certain Transactions.
Except for
arm 's
 length  transactions
pursuant to which
the Company or
any of its
Subsidiaries makes payments in the
ordinary course of business
upon terms no less favorable than the Company or any of its Subsidiaries could
obtain from third parties and other than the grant of stock options disclosed on Schedule 3(c),
none of the
officers, directors,
or employees
of the Company is
presently a party to any transaction with the Company or
any of its Subsidiaries (other than for services as employees,
officers and directors),
including any contract,
agreement or other
arrangement providing for the furnishing
of services to or by,
providing for rental of real or
personal property to or from,
or otherwise
requiring payments to or
from any officer,
director or
such employee or,
to the knowledge of
the Company, any corporation ,
partnership,
trust or other entity
in
which any officer,
director,
or any such
employee has a substantial interest
or is an officer, director,
trustee or partner.

 

n.                
Disclosure. All
information relating to
or concerning the
Company or any of
its Subsidiaries set
forth in this
Agreement and provided to the Buyer pursuant to Section 2(d) hereof
and otherwise in connection with the transactions contemplated hereby
is true
and correct in all material respects and the
Company has not omitted to state any material fact necessary in order to make the
statements made herein or therein,
in light of the circumstances
under which they were made,
not misleading. No event
or circumstance has occurred or exists
with respect to the Company or any of its Subsidiaries
or its or their business,
properties, prospects,
operations or
financial conditions, which,
under applicable law,
rule or regulation,
requires public disclosure
or announcement by the Company but
which has not been so
publicly announced
or disclosed (assuming for this purpose that the Company'
s reports filed under
the 1934 Act are being
incorporated into an effective registration statement
filed by
the Company
under the 1933 Act).

 

    	9

    	 

    

 

o.                
Acknowledgment 
Regarding  Buyer'  Purchase 
of  Securities.  The
Company acknowledges and
agrees that the
Buyer is acting
solely in the capacity of arm's
length purchasers with respect to
this Agreement and  the transactions contemplated
hereby.  The Company further acknowledges that the
Buyer is not acting
as a financial advisor or fiduciary of
the Company (or in any similar capacity) with respect to this Agreement and the transactions contemplated hereby and any statement
made by the  Buyer  or any of 
its respective representatives or agents in connection with this Agreement and
the transactions contemplated hereby is not advice or
a recommendation and
is merely incidental to the Buyer '
purchase of the Securities.
The Company
further represents to the Buyer that the Company's
decision to enter into this
Agreement has been based solely on the independent evaluation of the
Company and its representatives.

 

p.                
No  Integrated
 Offering.  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
in any security
or solicited any offers to buy any security under circumstances that would require registration
under the 1933 Act of the issuance
of the Securities to the Buyer. The issuance
of the Securities to the Buyer will not be integrated with any other issuance of the Company's securities (past,
 current or
future) for purposes of  any shareholder approval provisions applicable to the Company
or its securities.

 

q.                
No Brokers.
The Company
has taken no
action which would
give rise to
any claim by any
person for brokerage commissions,
transaction fees or similar payments
relating to this Agreement or the transactions contemplated hereby.

 

r.
 Permits; Compliance. 
The Company and
each of its
Subsidiaries is in possession
of all franchises,
grants, authorizations,
licenses, permits, easements,
variances,
exemptions,
consents, certificates,
approvals and orders necessary
to own, lease and operate its properties and to
carry on its business
as it is now being conducted (collectively,
the "Company
Perm its"), and
there is no action pending or,
to the knowledge of
the Company, threatened
regarding suspension or cancellation of any of the Company Permits. Neither the
Company nor any of its Subsidiaries is
in conflict with, or
in default or violation of, any of the Company
Permits, except
for any such
conflicts, defaults or violations which, individually
or in the aggregate,
would not reasonably be expected to
have a Material Adverse Effect. Since June
30, 2014,
neither the Company nor any
of its Subsidiaries
has received any notification with
respect to possible conflicts,
defaults or violations of applicable laws,
except for
notices relating to possible conflicts, defaults
or violations, which conflicts,
defaults or violations would not have
a Material Adverse
Effect.

 

s.                 
Environmental Matters.

 

(i)                    
There are,
to the
Company 's
knowledge,
with respect
to the Company
or any of
its Subsidiaries or any predecessor
of the Company,
no past or present violations
of Environmental Laws (as defined below),
releases of any
material into the environment, actions,
activities, circumstances, conditions, events,
incidents, or contractual obligations which
may give rise to any common law environmental liability or any liability
under the Comprehensive Environmental Response, Compensation and Liability Act of
1980 or similar federal,
state, local or foreign laws and
neither the Company nor any of its Subsidiaries has
received any notice with respect
to any of the foregoing, nor is any action
pending or, to the Company's knowledge, threatened
in connection with any of the foregoing. The
term "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.

    	10

    	 

    

 

 

(ii)                  
Other than
those that are
or were stored,
used or disposed of
in compliance with
applicable law, no
Hazardous Materials are
contained on or
about any real property currently
owned, leased
or used by the Company or any of its Subsidiaries, and no Hazardous Materials were released on or about any real property previously
owned, leased
or used by the Company or
any of its Subsidiaries
during the period the property
was owned,
leased or used
by the Company or any
of its Subsidiaries, except in
the normal course of the
Company 's
or any of its
Subsidiaries' business.

 

(iii)                
There are
no underground storage tanks
on or under
any real property owned,
leased or used
by the Company
or any of
its Subsidiaries that
are not in compliance with applicable law.

 

t.                  
Title  to
 Property.  The
Company  and  its 
Subsidiaries  have  good and
marketable  title  in 
fee  simple to 
all  real  property and 
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 are described in Schedule 3(t) or such as would
not have a Material Adverse Effect. Any real property and facilities held under
lease by the Company and its Subsidiaries are held by them under valid,
subsisting and enforceable
leases with such exceptions as would not have a
Material Adverse Effect.

 

u.                
Insurance.
The Company and
each of its
Subsidiaries are 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
businesses in which the Company and its Subsidiaries are engaged. Neither the Company nor any such
Subsidiary has any reason to believe that it will
not be able 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. Upon written request the Company will provide to the
Buyer true and correct copies of all policies relating to directors' and officers'
liability coverage, errors and omissions
coverage, and commercial general liability coverage.

 

    	11

    	 

    

 

v.                
Internal 
Accounting  Controls.  The 
Company  and  each 
of  its Subsidiaries maintain
a system of
internal accounting controls
sufficient, in the judgment of the
Company's board of directors, to provide reasonable assurance
that (i) transactions are executed in accordance
with management's general or  specific authorizations, (ii) transactions are recorded
as necessary to permit preparation of
financial statements in conformity with generally accepted accounting principles
and to maintain  asset accountability,  (iii)
access to assets is permitted only in accordance
with management's general or specific
authorization and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences.

 

w.              
Foreign 
Corrupt  Practices.  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 Subsidiary
has, in the course of his actions for, or on behalf of, the Company, used any corporate
funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; made any direct or indirect
unlawful payment to any foreign or domestic government official or employee from corporate
funds; violated or is in violation of any provision  of the
U.S. Foreign Corrupt Practices Act of
1977, as amended, or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful payment
to any foreign or domestic government official or employee.

 

x.                
Solvency.
The Company (after
giving effect to
the transactions contemplated by
this Agreement) is
solvent (i.e.,
its assets have
a fair market
value in excess of the amount required to pay its probable
liabilities on its existing debts as they become absolute and matured)
and currently the Company has no information
that would lead it to reasonably conclude that the
Company would not, after giving effect
to the transaction contemplated by this
Agreement, have the ability to, nor does
it intend to take any action
that would impair its ability to, pay its
debts from time to time incurred in
connection therewith as such debts mature.
The Company did not receive a qualified opinion
from its auditors with respect to its most
recent fiscal year end and, after giving
effect to the transactions contemplated
by this Agreement, does not anticipate or know of any basis upon which its auditors
might issue a qualified opinion in respect of its
current fiscal year.

 

y.                
No  Investment
 Company.  The 
Company  is  not, 
and  upon  the
issuance and sale
of the Securities
as contemplated by
this Agreement will not
be an "investment company'' required to
be registered under the Investment Company
Act of 1940 (an "Investment
Company"). 
The Company is not controlled by an Investment
Company.

 

    	12

    	 

    

 

z.                
Breach  of
Representations  and Warranties 
by the Company. 
If the Company
breaches any of
the representations  or
warranties  set forth in this
Section 3, and
in addition to any other remedies available
to the Buyer pursuant to this Agreement,
it will be considered an Event of default under
Section 3.4 of the Note.

 

		4.	COVENANTS.

 

a.                
Best Efforts.
The parties shall
use their best
efforts to  satisfy
timely each
of the conditions
described in Section 6
and 7 of this Agreement.

 

b.               
Form D;
Blue Sky Laws.
The Company agrees
to file a
Form D with respect
to the Securities as
required under Regulation D and to
provide a copy thereof to the Buyer promptly after
such filing. The Company
shall,
on or before the Closing Date,
take such
action as the Company
shall reasonably
determine is necessary to qualify the Securities for
sale to the Buyer at the
applicable 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 Buyer on or prior to the Closing Date.

c.
Use of Proceeds. 
The Company shall
use the proceeds
for general working capital
purposes .

 

d.         
Right  of
First  Refusal.  Unless 
it shall have
first delivered to 
the Buyer,
at least
seventy two (72) hours prior to the closing
of such Future Offering (as defined herein),
written notice describing the
proposed Future Offering ("ROFR
Notice"), including the terms and conditions
 thereof,
identity of the proposed purchaser
 and proposed definitive documentation to be entered 
into in connection therewith, and providing the Buyer an option during the seventy
two (72) hour period following delivery 
of
such notice to purchase
the securities being offered in
the Future Offering on the same terms as contemplated by such Future Offering (the
limitations referred to in this sentence and
the preceding sentence are collectively
referred to as the "Right of First
Refusal ")
(and subject to the exceptions
described below),
the Company
will not conduct any equity (or debt with
an equity component) financing in an amount less than $53,000 ("Future
Offering(s)") during the period beginning on the Closing Date and ending six (6)
months following the Closing Date.
Notwithstanding anything
contained herein to the contrary, the Company
shall not consummate any Future Offering
with an investor,
or an affiliate  of
such investor (collectively "Prospective
 Investor"), identified on
an ROFR Notice whereby the Buyer
exercised its Right of First Refusal for a period of
forty (45) days following such exercise; and any subsequent offer by
a Prospective Investor is subject to this
Section 4(d) and the Right of First Refusal. In
the event the terms
and conditions of a proposed Future
Offering are amended in any respect after delivery of the notice to the Buyer
concerning the proposed Future Offering,
the Company shall deliver a new notice to the Buyer
describing the amended terms and conditions
of the proposed Future Offering and the Buyer
thereafter shall have an option during the
seventy two (72) hour period following delivery of such new notice to purchase its
pro rata share of the securities being offered on the same terms as contemplated by
such proposed Future Offering,
as amended.
The foregoing sentence shall
apply to successive amendments to the
terms and conditions of any proposed Future
Offering. The Right of First Refusal shall not apply to any transaction involving (i)
issuances of securities in a
firm commitment underwritten public offering (excluding
a continuous offering pursuant to Rule 415 under the 1933 Act) or (ii) issuances of securities as consideration for a merger,
consolidation or purchase of assets, or in
connection with any strategic partnership or joint
venture (the primary purpose of which is
not to raise equity capital), or in connection
with the disposition or acquisition of a business,
product or license by the Company. The Right of First
Refusal also shall not apply to the issuance
of securities upon exercise or conversion
of the Company's options,
warrants or other convertible securities
outstanding as of the date hereof or to the grant
of additional options or warrants, or the issuance of
additional securities, under any Company
stock option or restricted stock
plan approved by the shareholders of the Company.

 

    	13

    	 

    

 

e.          
Expenses.
At the Closing,
the Company shall
reimburse Buyer for expenses
incurred by them
in connection with
the negotiation, preparation, execution, delivery and performance of this Agreement
and the other agreements to be executed in connection herewith ("Documents"),
including,
without limitation ,
reasonable attorneys'
and consultants'
fees and expenses,
transfer agent fees, fees
for stock quotation services,
fees relating to any amendments or
modifications of the Documents or
any consents or waivers of provisions
in the Documents,
fees for the
preparation of opinions of counsel, escrow
fees, and costs of
restructuring the transactions contemplated by the Documents. When possible,
the Company must pay these fees directly, otherwise the
Company must make immediate payment for reimbursement to the Buyer for all
fees and expenses immediately upon written
notice by the Buyer or the submission
of an invoice by the Buyer.
The Company's obligation
with respect to this transaction is to reimburse Buyer' expenses shall
be $2,500.

 

f.          
Financial
Information.  Upon written
request the Company
agrees to send or
make available the
following reports to
the Buyer until
the Buyer transfers, assigns,
or sells all
of the Securities: (i) within ten (10) days after the filing with the SEC,
a copy of its Annual Report on Form
10-K its Quarterly Reports on Form 10-Q and
any Current Reports on Form 8-K;
(ii) within one (1) day after
release, copies of all press releases issued
by the Company or any of its Subsidiaries;
and (iii) contemporaneously with the making available
or giving to the shareholders
of the Company,
copies of any
notices or other information
the Company makes available or gives
to such shareholders.

 

		g.	[INTENTIONALLY  DELETED]

 

h.          
Listing.
The Company shall promptly
secure the listing of
the Conversion Shares upon
each national securities
exchange or automated
quotation system,
if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance)
and, so
long as the Buyer owns any of the Securities,
shall maintain,
so long as any other shares of
Common Stock shall be so listed,
such listing
of all Conversion Shares from time to time issuable upon
conversion of the Note. The Company will obtain
and, so long
as the Buyer owns any of the Securities,
maintain the listing and trading of its Common Stock on the OTCBB or any equivalent replacement exchange or
electronic quotation system (including
but not limited to the Pink Sheets electronic quotation system) and will comply
in all respects with the Company's
reporting, filing
and other obligations under the bylaws or
ru les of the Financial Industry
Regulatory Authority ("FINRA") and such exchanges,
as applicable. The Company shall promptly
provide to the Buyer copies of any
notices it receives from the OTCBB and any other exchanges
or electronic quotation systems on which the Common Stock is then traded regarding
the continued eligibility of the Common Stock
for listing on such exchanges and
quotation systems.

 

    	14

    	 

    

 

i.
 Corporate Existence. 
So long as
the Buyer beneficially
owns any Note,
the Company
shall maintain its corporate existence
and shall not sell all or substantially all
of the Company's assets,
except in the event of a merger or consolidation
or sale of all or substantially all of the Company 's
assets, where the surviving or successor
entity in such transaction (i) assumes the Company's
obligations hereunder and under the agreements
and instruments entered into in connection
herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading
on the Pink Sheets, OTCQX,
OTCBB,
Nasdaq , Nasdaq SmallCap,
NYSE or AMEX.

 

j.
 No Integration. 
The Company
shall not make
any offers or
sales of any
security (other
than the Securities) under circumstances
that would require registration of the Securities
being offered or sold hereunder under the
1933 Act or cause the offering of the
Securities to be integrated
with any other offering of
securities by the Company for the purpose of
any stockholder approval provision
applicable to the Company or
its securities.

 

k.          
Breach  of
 Covenants.
 If
the  Company  breaches 
any  of  the
covenants set forth
in this Section
4,
and in addition
to any other remedies available to
the Buyer pursuant to this Agreement, it
will be considered an event of default under Section 3.4 of the
Note.

 

I.           
Failure  to
 Comply  with 
the  1934  Act. 
So  long  as
the  Buyer beneficially 
owns the Note,
the Company shall comply with the
reporting requirements of the 1934 Act;
and the Company shall continue to be subject to the reporting
requirements of the 1934 Act.

 

m.
Trading Activities. Neither
the Buyer nor
its affiliates has
an open short position in
the common stock
of the Company
and the Buyer agree that it
shall not, and
that it will
cause its affiliates not to, engage
in any short sales of or hedging transactions
with respect to the common stock of the
Company.

    	15

    	 

    

 

 

5.                
Transfer  Agent 
Instructions.The  Company  shall
 issue  irrevocable instructions
to its transfer
agent to issue
certificates, registered in
the name of the Buyer or its nominee,
for the Conversion Shares in such amounts
as specified from time to time by the Buyer
to the Company  upon  conversion 
of the Note in  accordance with the terms thereof 
(the "Irrevocable Transfer
Agent Instructions").  In the event that the
Borrower proposes to replace its transfer agent, the Borrower shall provide,
prior to the effective date of such replacement,
a fully executed Irrevocable Transfer Agent Instructions in a form as
initially delivered pursuant to the Purchase
Agreement (including but not limited to the provision to irrevocably reserve
shares of Common Stock in the Reserved Amount) signed
by the successor transfer agent to
Borrower and the Borrower. Prior to registration
of the Conversion Shares under the
1933 Act or the date on which the Conversion Shares may be sold pursuant
to Rule 144 without any restriction as to the number 
of Securities as of a
particular date that  can then 
be immediately sold, all such certificates shall bear
the restrictive legend specified  in
Section 2(g) of this Agreement.  The Company warrants that: (i) no
instruction other than the
Irrevocable Transfer Agent
Instructions referred to in this Section 5,
and stop transfer instructions to
give effect to Section 2(t) hereof (in the case
of the Conversion Shares, prior to registration
of the Conversion
Shares under the 1933 Act or the
date on which the Conversion Shares may be
sold pursuant to Rule 144 without any restriction as to the number of
Securities as of a particular  date
that can then be immediately sold), will
be given by the Company to its transfer agent and
that the Securities shall otherwise be freely transferable on the books and
records of the Company as and to the extent provided in this Agreement 
and the Note; (ii) it will
not direct its transfer agent not to transfer
or delay, impair, and/or hinder its transfer agent
in transferring (or issuing)(electronically or
in certificated form) any certificate for Conversion Shares to be issued to
the Buyer upon conversion of or otherwise pursuant
to the Note as
and when required by the Note and this Agreement;
and (iii) it will not fail to remove
 (or directs its transfer 
agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing)
any restrictive legend (or
to withdraw any stop transfer instructions in respect
thereof) on any certificate for any
Conversion Shares issued to the Buyer upon conversion of or otherwise pursuant
to the Note as and when required by
the Note and this Agreement. Nothing  in this Section shall 
affect in  any way the Buyer's obligations and agreement set forth 
in  Section 2(g) hereof to comply
with all applicable prospectus delivery requirements,  if any,
upon re-sale of the Securities. If
the Buyer provides the Company, at the cost of the Buyer, with (i) an
opinion of counsel in form, substance and
scope customary for opinions in comparable transactions, to the effect that a
public sale or transfer of such Securities may be made without registration under
the 1933 Act and such sale or transfer
is effected or (ii) the Buyer provides
reasonable assurances that the Securities
can be sold pursuant to Rule 144,
the Company  shall permit the
transfer,  and,  in the
case of the Conversion Shares, promptly instruct its transfer
agent to issue one or more certificates,
free from restrictive legend, in such name and in
such denominations as
specified by the Buyer. The Company
acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Buyer, by vitiating the intent and  purpose 
of the transactions  contemplated hereby. Accordingly, the Company acknowledges
that the remedy at law for a breach of its obligations
under this Section 5 may be inadequate and
agrees, in the event of a breach or threatened breach by the Company
of the provisions of this Section, that the Buyer shall be
entitled, in addition to all
other  available remedies,
to an injunction restraining any breach
and requiring immediate transfer, without the necessity
of showing economic loss and without any bond or
other security being required.

 

    	16

    	 

    

 

6.                
Conditions  to 
the  Company's  Obligation 
to  Sell.  The
obligation  of  the
Company hereunder to 
issue and sell the Note to the Buyer
at the Closing is subject to the satisfaction, at or before the Closing Date of each of the following conditions thereto, 
provided that these conditions are for the Company's sole
benefit and may be waived by the Company
at any time in its sole
discretion: same to the Company.

 

a.                  
The Buyer
shall have executed
this Agreement and
delivered the
same to the Company. 

b.                 
The Buyer
shall have delivered
the Purchase Price
in accordance with Section
1(b)
above.

 

c.                  
The representations
and warranties of
the Buyer shall
be true and correct
in all material
respects as of the date
when made and as of the Closing Date as though made at that time (except
for representations and warranties that
speak as of a specific date), and the Buyer shall have
performed, satisfied and complied in all material
respects with the covenants, agreements and
conditions required by this Agreement
to be performed, satisfied or complied with
by the Buyer at or prior to the Closing Date.

 

c.                
No litigation,
statute, rule, regulation,
executive order, decree, ruling
or injunction shall
have been enacted,
entered, promulgated or
endorsed by or
in any court or
governmental authority of competent jurisdiction or
any self-regulatory organization having authority over the matters contemplated
hereby which prohibits the
consummation of any of the transactions
contemplated by this Agreement.

 

7.                
Conditions to
The Buyer's  Obligation 
to Purchase.  The
obligation of the
Buyer hereunder to
purchase the Note
at the Closing is subject to the
satisfaction, at or before the Closing
Date of each of the following conditions,  provided 
that these conditions are for the Buyer's
sole benefit and may be waived by the Buyer
at any time in its sole discretion:

a.                  
The Company
shall have executed
this Agreement  and
delivered the
same to the
Buyer.

b.                
The Company
shall have delivered
to the Buyer
the duly executed Note
(in such
denominations as
the Buyer shall
request) in accordance
with Section l (b) above.

 

c.                 
The Irrevocable
Transfer Agent Instructions,
in form and
substance satisfactory to a majority-in-interest
of the Buyer,
shall have been
delivered to and
acknowledged in writing by the Company's
Transfer Agent.

 

    	17

    	 

    

 

d.                
The representations
and warranties of
the Company shall
be true and correct
in all material
respects as of
the date when
made and as of
the Closing Date
as though made at such time (except for representations and warranties
that speak as of a specific date) and the
Company shall have performed ,
satisfied and complied
in all material respects with the covenants, agreements and conditions required by
this Agreement to be performed, satisfied or
complied with by the Company at or prior to the Closing Date. The Buyer shall
have received a certificate or certificates, executed by the chief executive officer
of the Company,
dated as of the Closing Date, to
the foregoing effect and as to such other
matters as may be reasonably requested by the
Buyer including, but not limited
to certificates with respect to the Company's Certificate of Incorporation,
By-laws and Board of Directors' resolutions
relating to the transactions contemplated
hereby.

 

e.                
No litigation,
statute, rule, regulation,
executive order, decree,
ruling or
injunction shall have
been enacted, entered,
promulgated or endorsed by or in any court or governmental authority
of competent jurisdiction or any self-regulatory organization having authority
over the matters contemplated hereby which prohibits the consummation of any
of the transactions contemplated by this
Agreement.

 

f.                 
No event
shall have occurred
which could reasonably
be expected to have
a Material Adverse
Effect on the
Company including but
not limited to
a change in the 1934 Act reporting
status of the Company or the
failure of the Company to be timely
in its 1934 Act reporting obligations.

 

g.                 
The Conversion
Shares shall have
been authorized for
quotation on the OTCBB
and trading in
the Common Stock
on the OTCBB
shall not have been suspended
by the SEC or the OTCBB.

 

h.                
The Buyer
shall have received
an officer's certificate
described in Section 3(c)
above, dated as
of the Closing Date.

 

    	18

    	 

    

 

		8.	Governing Law;
Miscellaneous.

 

a.                
Governing
Law. This Agreement
shall be governed
by and construed in
accordance with
the laws
of the State
of New York without regard
to principles of conflicts of laws. Any
action brought by either party against the other
concerning the transactions contemplated by this Agreement shall
be brought only in the state courts of
New York or in the federal courts located in the state and county of
Nassau. The parties to this Agreement hereby irrevocably waive any objection
to jurisdiction and venue of any action instituted
hereunder and shall not assert any
defense based on lack of jurisdiction or venue
or based upon forum non conveniens. The Company and Buyer waive trial by jury. The prevailing party shall be entitled
to recover from the other party its reasonable
attorney's fees and costs.
In the event that any provision
of this Agreement or any other agreement delivered
in connection herewith
is invalid or unenforceable under any applicable statute
or rule of law,
then such provision
shall be deemed inoperative to the extent
that it may conflict
therewith and shall be deemed modified
to conform with such statute or
rule of law. Any such provision which
may prove invalid or unenforceable under
any law
shall not affect the validity or enforceability of any other
provision of any agreement. Each party hereby irrevocably waives personal service
of process and consents to process being served in any suit,
action or proceeding in
connection with this Agreement
or any other Transaction Document
by mailing a copy thereof
via registered or certified mail or overnight delivery
(with evidence of delivery) to such
party at the address
in effect for 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 other
manner permitted by law.

 

b.                
Counterparts.
This Agreement
may be executed
in one or
more counterparts, each of
which shall be
deemed an original but all of which
shall constitute one and the same agreement and shall become effective
when counterparts have been signed by each
party and delivered to the other party.

 

 

c.                 
Headings.
The headings
of this Agreement
are for convenience
of reference only
and shall not
form part of,
or affect the
interpretation of, this Agreement.

 

d.                
Severability. In
the event that
any provision of
this Agreement is invalid
or unenforceable under
any applicable statute
or rule of law, then
such provision shall be deemed inoperative
to the extent that it may
conflict therewith and shall be deemed
modified to conform with such statute or rule of law.
Any provision hereof which
may prove invalid or unenforceable under
any law shall
not affect the validity or enforceability of any other provision
hereof.

    	19

    	 

    

 

e.                 
Entire  Agreement; 
Amendments.  This  Agreement 
and  the instruments
referenced herein contain
the entire understanding
of the parties with respect
to the matters covered herein and
therein and, except
as specifically set forth herein or therein,
neither the Company
nor the Buyer
makes any representation ,
warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be waived
or amended other than by
an instrument in writing signed by
the majority in interest of the Buyer.

 

f.                 
Notices.
All notices,
demands,
requests,
consents,
approvals,
and other
communications required or
permitted hereunder shall be
in writing and,
unless otherwise
specified herein,
shall be (i)
personally served,
(ii) deposited
in the mail,
registered or
certified , return
receipt req uested, postage prepaid ,
(iii) delivered by
reputable air courier
service with charges
prepaid,
or (iv) transmitted by hand delivery,
telegram, or facsimile,
addressed as
set forth below or to such
other address as such party shall
have specified most recently by written notice.
Any notice or other
communication required or permitted to
be given hereunder shall be deemed effective
(a) upon hand delivery or delivery by facsimile,
with accurate confirmation generated
by the transmitting facsimile machine, at the address
or number designated below (if delivered on a business day
during normal business hours where
such notice is to be
received), or the first business day following such delivery (if delivered other
than on a business day
during normal business hours where such notice
is to be received) or
(b) on the second business day following the date
of mailing by express courier service,
fully prepaid, addressed  to such
address, or upon actual receipt
of such mailing, whichever shall first occur. The addresses for such communications
shall be:

 

If
to the Company,
to:

 

ALKAME
HOLDINGS,
INC.

3651
Lindell Road -
Suite D #356 Las
Vegas, NV 89013

Attn:
ROBERT EAKLE, Chief
Executive Officer facsimile: [enter
fax num ber]

With
a copy by fax only
to (which copy
shall not constitute
notice): [enter name of
law firm]

Attn:
[attorney name]

[enter
address l ine
1] [enter city,
state, zip]

facsimile:
[enter fax num ber]

 

If
to the
Buyer:

 

KBM
WORLDWIDE, INC.

80
Cuttermill Road -
Suite 410

Great
Neck, NY11021
Attn: Seth Kramer,
President e-mail: info@kwbmlaw.com

With
a copy by fax
only to (which
copy shall not
constitute notice): Naidich Wurman
Birnbaum & Maday
LLP

Att:
Judah A. Eisner,
Esq.

Attn:
Bernard S. Feldman,
Esq. facsimile: 516-466-3555

e-mail:
dyork@nwbmlaw.com

 

Each
party shall provide
notice to the
other party of
any change in
address.

    	20

    	 

    

 

g.                 
Successors  and 
Assigns.  This Agreement 
shall  be binding 
upon and inure
to the benefit
of the parties
and their successors and assigns. Neither the Company nor
the Buyer shall assign this Agreement
or any rights or obligations hereunder without the prior
written consent of the other. Notwithstanding the
foregoing, subject
to Section 2(f), the Buyer may assign its rights
hereunder to any person that purchases Securities in a private transaction from the Buyer
or to any of its "affiliates,"
as that term
is defined under the 1934 Act, without the
consent of the Company.

 

h.                
Third  Party 
Beneficiaries.  This  Agreement
 is  intended 
for  the benefit
of the parties
hereto and their
respective permitted successors
and assigns, and
is not for the benefit
of, nor may any
provision hereof be enforced by,
any other person.

 

i.            
Survival. The
representations and warranties
of the Company
and the agreements and
covenants set forth
in this Agreement
shall survive the closing hereunder
notwithstanding any due diligence investigation conducted by or
on behalf of the Buyer. The
Company agrees to indemnify and hold harmless the Buyer and all their officers,
directors, employees and
agents for loss or damage arising as a result of
or related to any breach or alleged breach
by the Company of any of its
representations, warranties and covenants set
forth in this Agreement or any of its covenants
and obligations under this
Agreement, including advancement
of expenses as they are incurred.

 

j.            
Publicity. The
Company, and the
Buyer shall have
the right to review
a reasonable period
of time before issuance
of any press releases,
SEC, OTCBB
or FINRA filings, or
any other public
statements with respect to the transactions
contemplated hereby; provided , however,
that the Company shall be entitled, without the
prior approval of the Buyer,
to make any press release
or SEC, OTCBB (or other applicable
trading market) or FINRA filings with respect to such transactions as is required by
applicable law and regulations (although the
Buyer shall be consulted by the
Company in connection with
any such press release prior to its release and shall be provided with
a copy thereof and be given an
opportunity to comment thereon).

 

k.               
Further Assurances.
Each party shall
do and perform
, or
cause to be done
and performed ,
all such
further acts and things, and
shall execute and deliver all such
other agreements, certificates, instruments and documents, as the other party may reasonably request
in order
to carry out the intent and
accomplish the purposes of this
Agreement and the consummation of the transactions
contemplated hereby.

 

I.           
No Strict
Construction. The language
used in this
Agreement will be deemed
to be the
language chosen by
the parties to
express their mutual intent, and
no rules of strict construction will
be applied against any
party.

 

m.
Remedies. The Company
acknowledges that a
breach by it
of its obligations hereunder
will cause irreparable
harm to the Buyer by vitiating the intent
and purpose of the transaction contemplated
hereby. Accordingly, the Company
acknowledges that the remedy at law for a breach of its obligations under
this Agreement will be inadequate
and agrees, in the event of a breach or
threatened breach by the Company of the provisions of this Agreement, that the Buyer
shall be entitled, in addition
to all other available remed ies
at law or in equity, and in addition to the penalties
assessable herein, to an injunction or injunctions restraining, preventing or
curing any breach of this Agreement and to
enforce specifically the terms and provisions
hereof, without the necessity of showing economic
loss and without any bond or other security being required.

 

    	21

    	 

    

 

IN
WITNESS  WHEREOF, the
undersigned  Buyer and
the Company have
caused this Agreement to
be duly executed
as of the
date first above written.

 

ALKAME HOLDINGS, INC.

 

By: /s/ Robert Eakle

Robert Eakle

Chief Executive Officer

 

 

KBM
WORLDWIDE, INC.

 

By: /s/ Seth
Kramer

Name:
Seth Kramer

Title:
 President

80
Cuttermill Road -
Suite 4 I
0 Great Neck, NY
11021

 

 

	
        AGGREGATE
        SUBSCRIPTION AMOUNT:

         

        Aggregate
        Principal Amount of
        Note:
	$42,500.00
	Aggregate Purchase Price:	$42,500.00
	
        Tranche
        #2 -
        K-1298 (ALKM)

        September
        4, 2014
	

 

    	22

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