Document:

Exhibit 10.1

 

EXECUTION COPY

 

 

 

 

 

 

 

ASSET
PURCHASE AGREEMENT

 

 

among

 

 

Eco3D
Acquisition LLC,

 

 

Eco3D
LLC

 

 

and

 

Ecoark
Holdings, Inc.

 

 

dated
as of

 

 

April
10, 2017

 

 

 

 

 

 

 

 

     

    
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TABLE
OF CONTENTS

 

	Article I Definitions	1
	 	 
	Article II Purchase and Sale	5
	 	 
	Section 2.01 Purchase and Sale of Assets.	5
	 	 
	Section 2.02 Excluded Assets.	6
	 	 
	Section 2.03 Assumed Liabilities.	6
	 	 
	Section 2.04 Excluded Liabilities.	7
	 	 
	Section 2.05 Purchase Price.	8
	 	 
	Section 2.06 Allocation of Purchase Price.	8
	 	 
	Section 2.07 Tax Treatment of the Transaction.	8
	 	 
	Article III Closing	8
	 	 
	Section 3.01 Closing.	8
	 	 
	Section 3.02 Closing Deliverables.	8
	 	 
	Article IV Representations and warranties of seller	9
	 	 
	Section 4.01 Organization and Qualification of Seller.	9
	 	 
	Section 4.02 Authority of Seller and EcoArk.	9
	 	 
	Section 4.03 No Conflicts; Consents.	10
	 	 
	Section 4.04 Financial Statements.	10
	 	 
	Section 4.05 Undisclosed Liabilities.	11
	 	 
	Section 4.06 Absence of Certain Changes, Events and Conditions.	11
	 	 
	Section 4.07 Assigned Contracts.	11
	 	 
	Section 4.08 Title to Purchased Assets.	11
	 	 
	Section 4.09 Condition of Assets.	12
	 	 
	Section 4.10 Intellectual Property.	12
	 	 
	Section 4.11 Insurance.	12
	 	 
	Section 4.12 Legal Proceedings; Governmental Orders.	12
	 	 
	Section 4.13 Compliance With Laws; Permits.	13
	 	 
	Section 4.14 Employee Benefit Matters.	13

 

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	Section 4.15 Employment Matters.	13
	 	 
	Section 4.16 Taxes.	14
	 	 
	Section 4.17 Brokers.	14
	 	 
	Article V Representations and warranties of buyer	14
	 	 
	Section 5.01 Organization of Buyer.	14
	 	 
	Section 5.02 Authority of Buyer.	14
	 	 
	Section 5.03 No Conflicts; Consents.	15
	 	 
	Section 5.04 Brokers.	15
	 	 
	Section 5.05 Legal Proceedings.	15
	 	 
	Article VI Covenants	15
	 	 
	Section 6.01 Conduct of Business Prior to the Closing.	15
	 	 
	Section 6.02 Access to Information.	15
	 	 
	Section 6.03 No Solicitation of Other Bids.	16
	 	 
	Section 6.04 Employees and Employee Benefits.	16
	 	 
	Section 6.05 Non-competition; Non-solicitation.	16
	 	 
	Section 6.06 Governmental Approvals and Consents.	17
	 	 
	Section 6.07 Books and Records.	17
	 	 
	Section 6.08 Closing Conditions.	18
	 	 
	Section 6.09 Public Announcements.	18
	 	 
	Section 6.10 Receivables.	18
	 	 
	Section 6.11 Transfer Taxes.	18
	 	 
	Section 6.12 NetSuite Sublicense.	18
	 	 
	Section 6.13 Further Assurances.	19
	 	 
	Article VII Conditions to closing	19
	 	 
	Section 7.01 Conditions to Obligations of All Parties.	19
	 	 
	Section 7.02 Conditions to Obligations of Buyer.	19
	 	 
	Section 7.03 Conditions to Obligations of Seller.	20
	 	 
	Article
    VIII Indemnification	21
	 	 
	Section 8.01 Survival.	21

 

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	Section 8.02 Indemnification By Seller.	22
	 	 
	Section 8.03 Indemnification By Buyer.	22
	 	 
	Section 8.04 Certain Limitations.	23
	 	 
	Section 8.05 Indemnification Procedures.	23
	 	 
	Section 8.06 Payments.	25
	 	 
	Section 8.07 Tax Treatment of Indemnification Payments.	25
	 	 
	Section 8.08 Exclusive Remedies.	25
	 	 
	Article IX Termination	26
	 	 
	Section 9.01 Termination.	26
	 	 
	Section 9.02 Effect of Termination.	26
	 	 
	Article X Miscellaneous	26
	 	 
	Section 10.01 Expenses.	26
	 	 
	Section 10.02 Notices.	27
	 	 
	Section 10.03 Headings.	27
	 	 
	Section 10.04 Severability.	27
	 	 
	Section 10.05 Entire Agreement.	28
	 	 
	Section 10.06 Successors and Assigns.	28
	 	 
	Section 10.07 No Third-party Beneficiaries.	28
	 	 
	Section 10.08 Amendment and Modification; Waiver.	28
	 	 
	Section 10.09 Governing Law.	28
	 	 
	Section 10.10 Counterparts.	28
	 	 
	Section 10.11 Seller Name Change.	28

 

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ASSET
PURCHASE AGREEMENT
  

This
Asset Purchase Agreement (this “Agreement"), dated as of April 10, 2017 is entered into by and among Eco3d Acquisition
LLC, a Delaware limited liability company ("Buyer"), EcoArk Holdings, Inc., a Nevada corporation ("EcoArk"),
and Eco3d LLC, an Arkansas limited liability company and an indirect wholly-owned subsidiary of Ecoark ("Seller").
  

RECITALS
  

WHEREAS,
Seller is engaged in the 3d laser scanning and building information modeling industry (the “Business"); and
  

WHEREAS,
Seller wishes to sell and assign to Buyer, and Buyer wishes to purchase and assume from Seller, substantially all the assets,
and certain specified liabilities, of the Seller and the Business, subject to the terms and conditions set forth herein;
  

NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
  

Article
I

Definitions
  

The
following terms have the meanings specified or referred to in this Article I:
  

"Accounts
Receivable" has the meaning set forth in Section 2.01(a).
  

"Acquisition
Proposal" has the meaning set forth in Section 6.03.
  

"Action" means
any claim, action, cause of action, demand, lawsuit, arbitration, inquiry, audit, notice of violation, proceeding, litigation,
citation, summons, subpoena or investigation of any nature, civil, criminal, administrative, regulatory or otherwise, whether
at law or in equity.
  

"Affiliate" of
a Person means any other Person that directly or indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term “control” (including the terms “controlled by” and “under
common control with”) means the possession, directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise.
  

"Agreement” has
the meaning set forth in the preamble.
  

“Allocation
Schedule” has the meaning set forth in Section 2.06.
  

“Annual
Financial Statements” has the meaning set forth in Section 4.04
  

“Assigned
Contracts” has the meaning set forth in Section 4.07.
  

“Assignment
and Assumption Agreement” has the meaning set forth in Section 3.02(a)(ii).
  

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“Assignment
and Assumption of Lease” has the meaning set forth in Section 3.02(a)(iii).
  

“Assumed
Liabilities” has the meaning set forth in Section 2.03.
  

“Balance
Sheet” has the meaning set forth in Section 4.04.
  

“Balance
Sheet Date” has the meaning set forth in Section 4.04.
  

“Basket” has
the meaning set forth in Section 8.04(a).
  

“Benefit
Plan” has the meaning set forth in Section 4.14(a).
  

“Bill
of Sale” has the meaning set forth in Section 3.02(a)(i).
  

“Books
and Records” has the meaning set forth in Section 2.01(l).
  

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

“Business
Day” means any day except Saturday, Sunday or any other day on which commercial banks located in Phoenix, Arizona
are authorized or required by Law to be closed for business.
  

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

“Buyer
Closing Certificate” has the meaning set forth in Section 7.03(e).
  

“Buyer
Indemnitees” has the meaning set forth in Section 8.02.
  

“Cap” has
the meaning set forth in Section 8.04(a).
  

“Closing” has
the meaning set forth in Section 3.01.
  

“Closing
Date” has the meaning set forth in Section 3.01.
  

“Code” means
the Internal Revenue Code of 1986, as amended.
  

“Contracts” means
all contracts, leases, deeds, mortgages, licenses, instruments, notes, commitments, undertakings, indentures, joint ventures and
all other agreements, commitments and legally binding arrangements, whether written or oral.
  

“Direct
Claim” has the meaning set forth in Section 8.05(c).
  

“Disclosure
Schedules” means the Disclosure Schedules delivered by Seller and Buyer concurrently with the execution and delivery
of this Agreement.
  

“Encumbrance” means
any charge, claim, community property interest, pledge, condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first refusal, or restriction of any kind, including any restriction
on use, voting, transfer, receipt of income or exercise of any other attribute of ownership.
  

“ERISA” means
the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.
  

“ERISA
Affiliate” means all employers (whether or not incorporated) that would be treated together with the Seller or any
of its Affiliates as a “single employer” within the meaning of Section 414 of the Code.
  

“Excluded
Assets” has the meaning set forth in Section 2.02.
  

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“Excluded
Liabilities” has the meaning set forth in Section 2.04.
  

“Financial
Statements” has the meaning set forth in Section 4.04.
  

“Financing” has
the meaning set forth in Section 6.12.
  

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

“Governmental
Authority” means any federal, state, local or foreign government or political subdivision thereof, or any agency
or instrumentality of such government or political subdivision, or any self-regulated organization or other non-governmental regulatory
authority or quasi-governmental authority (to the extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent jurisdiction.
  

“Governmental
Order” means any order, writ, judgment, injunction, decree, stipulation, determination or award entered by or with
any Governmental Authority.
  

“Indemnified
Party” has the meaning set forth in Section 8.05.
  

“Indemnifying
Party” has the meaning set forth in Section 8.05.
  

“Insurance
Policies” has the meaning set forth in Section 4.11.
  

“Intellectual
Property” means any and all of the following in any jurisdiction throughout the world: (i) trademarks and service
marks, including all applications and registrations and the goodwill connected with the use of and symbolized by the foregoing;
(ii) copyrights, including all applications and registrations related to the foregoing; (iii) trade secrets and confidential know-how;
(iv) patents and patent applications; (v) websites and internet domain name registrations; and (vi) other intellectual property
and related proprietary rights, interests and protections (including all rights to sue and recover and retain damages, costs and
attorneys’ fees for past, present and future infringement and any other rights relating to any of the foregoing).
  

“Interim
Balance Sheet” has the meaning set forth in Section 4.04.
  

“Interim
Balance Sheet Date” has the meaning set forth in Section 4.04.
  

“Interim
Financial Statements” has the meaning set forth in Section 4.04.
  

“Knowledge
of Ecoark or Ecoark’s Knowledge” or any other similar knowledge qualification, means the actual or constructive
knowledge of any manager or officer of Ecoark, after due inquiry.
  

“Knowledge
of Seller or Seller’s Knowledge” or any other similar knowledge qualification, means the actual or constructive
knowledge of any manager or officer of Seller, after due inquiry.
  

“Law” means
any statute, law, ordinance, regulation, rule, code, order, constitution, treaty, common law, judgment, decree, other requirement
or rule of law of any Governmental Authority.
  

“Leased
Real Property” means the premises located at 5013 E. Washington Street, Suite #270, Phoenix, Arizona 85034.
  

“Lease” has
the meaning set forth in Section 3.02(a)(iii).
  

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“Liabilities” means
liabilities, obligations or commitments of any nature whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise.
  

“Losses” means
losses, damages, liabilities, deficiencies, Actions, judgments, interest, awards, penalties, fines, costs or expenses of whatever
kind, including reasonable attorneys’ fees and the cost of enforcing any right to indemnification hereunder and the cost of pursuing
any insurance providers; provided, however, that “Losses” shall not include punitive damages, except in the case
of fraud or to the extent actually awarded to a Governmental Authority or other third party.
  

“Material
Adverse Effect” means any event, occurrence, fact, condition or change that is, or could reasonably be expected
to become, individually or in the aggregate, materially adverse to (a) the business, results of operations, condition (financial
or otherwise) or assets of the Business, (b) the value of the Purchased Assets, or (c) the ability of Seller to consummate the
transactions contemplated hereby on a timely basis.
  

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

“Permitted
Encumbrances” has the meaning set forth in Section 4.08(a).
  

“Person” means
an individual, corporation, partnership, joint venture, limited liability company, Governmental Authority, unincorporated organization,
trust, association or other entity.
  

“Post-Closing
Tax Period” means any taxable period beginning after the Closing Date and, with respect to any taxable period beginning
before and ending after the Closing Date, the portion of such taxable period beginning after the Closing Date.
  

“Pre-Closing
Tax Period” means any taxable period ending on or before the Closing Date and, with respect to any taxable period
beginning before and ending after the Closing Date, the portion of such taxable period ending on and including the Closing Date.
  

“Purchase
Price” has the meaning set forth in Section 2.05.
  

“Purchased
Assets” has the meaning set forth in Section 2.01.
  

“Representative” means,
with respect to any Person, any and all directors, officers, employees, consultants, financial advisors, counsel, accountants
and other agents of such Person.
  

“Restricted
Business” means engaging in the 3d laser scanning and building information modeling industry.
  

“Restricted
Period” has the meaning set forth in Section 6.05(a).
  

"Seller" has
the meaning set forth in the preamble.
  

"Seller
Closing Certificate" has the meaning set forth in Section 7.02(k).
  

"Seller
Indemnitees" has the meaning set forth in Section 8.03.
  

"Tangible
Personal Property" has the meaning set forth in Section 2.01(e).
  

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"Taxes" means
all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, documentary,
franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, estimated,
excise, severance, environmental, stamp, occupation, premium, property (real or personal), real property gains, windfall profits,
customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or
penalties with respect thereto and any interest in respect of such additions or penalties.
  

"Tax
Return" means any return, declaration, report, claim for refund, information return or statement or other document
relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.
  

"Territory" means
the United States.
  

"Third
Party Claim" has the meaning set forth in Section 8.05(a).
  

"Transaction
Documents" means this Agreement, the Bill of Sale, the Assignment and Assumption Agreement, the Assignment and Assumption
of Lease for the Phoenix location, and the other agreements, instruments and documents required to be delivered at the Closing.
  

Article
II

Purchase and Sale
  

Section
2.01 Purchase and Sale of Assets. Subject to the terms and conditions set forth herein, at the Closing,
Seller shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall purchase from Seller, free and clear of any
Encumbrances other than Permitted Encumbrances, all of Seller's right, title and interest in, to and under all of the assets,
properties and rights of every kind and nature, whether real, personal or mixed, tangible or intangible (including goodwill),
wherever located and whether now existing or hereafter acquired (other than the Excluded Assets), which relate to, or are used
or held for use in connection with, the Business (collectively, the "Purchased Assets"),
including, without limitation, the following:
  

(a)
all accounts and unbilled receivables held by Seller, and any security, claim, remedy or other right related to any of the foregoing
to the extent not contributed as set forth on the Allocation Schedule ("Accounts Receivable");
  

(b)
all finished products related to any services provided by Seller, work in progress, deferred cost of services, supplies, parts
and other inventories ("Inventory");
  

(c)
all Assigned Contracts set forth on Section 4.07 of the Disclosure Schedules;
  

(d)
the Purchased IP listed on Section 4.10 of the Disclosure Schedules;
  

(e)
all furniture, fixtures, equipment, scanners, machinery, tools, vehicles, office equipment, printers, supplies, computers,
telephones and other tangible personal property (the "Tangible Personal Property") including those items set
forth on Schedule 2.01(e); 
  

(f)
the Leased Real Property;
  

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(g)
all Permits which are held by Seller and required for the conduct of the Business as currently conducted or for the ownership
and use of the Purchased Assets to the extent such Permits are transferable, including, without limitation, those listed on Section
4.13(b) of the Disclosure Schedules;
  

(h)
all rights to any Actions of any nature available to or being pursued by Seller to the extent related to the Business, the Purchased
Assets or the Assumed Liabilities, whether arising by way of counterclaim or otherwise;
  

(i)
all prepaid expenses, un-deposited funds, credits, advance payments, claims, security, refunds, security deposits, rights of recovery,
rights of set-off, rights of recoupment, deposits, charges, sums and fees (including any such item relating to the payment of
Taxes);
  

(j)
all of Seller's rights under warranties, indemnities and all similar rights against third parties to the extent related to any
Purchased Assets;
  

(k)
all insurance benefits, for policies held by Seller, including rights and proceeds, arising from or relating to the Business,
the Purchased Assets or the Assumed Liabilities;
  

(l)
originals, or where not available, copies, of all books and records other than information maintained by EcoArk on NetSuite Software,
including, but not limited to, books of account, ledgers and general, financial and accounting records, machinery and equipment
maintenance files, customer lists, customer purchasing histories, price lists, distribution lists, supplier lists, production
data, quality control records and procedures, customer complaints and inquiry files, research and development files, records and
data (including all correspondence with any Governmental Authority), sales material and records (including pricing history, total
sales, terms and conditions of sale, sales and pricing policies and practices), strategic plans, internal financial statements,
marketing and promotional surveys, material and research and files relating to the Intellectual Property Assets and the Intellectual
Property Agreements ("Books and Records"); and
  

(m)
all goodwill and the going concern value of the Business.
  

Section
2.02   Excluded Assets. Notwithstanding the foregoing, the Purchased Assets shall not include the following
assets (collectively, the "Excluded Assets"):
  

(a)
Cash and cash equivalents;
  

(b)
the organizational documents, minute books, Tax Returns, books of account or other records having to do with the company organization
of Seller;
  

(c)
all Benefit Plans and assets attributable thereto;
  

(d)
any attorney client privileged materials and correspondence between Seller and it accountants and professional advisors concerning
this Agreement, the Transaction Documents or the transactions contemplated thereby; and
  

(e)
the rights which accrue or will accrue to Seller under the Transaction Documents.
  

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Section
2.03   Assumed Liabilities. Subject to the terms and conditions set forth herein, Buyer shall assume
and agree to pay, perform and discharge all Liabilities of Seller with respect to those liabilities (i) set forth on Schedule
2.03 attached hereto, and (ii) the Assigned Contracts but only to the extent that such Liabilities thereunder are required
to be performed after the Closing Date, were incurred in the ordinary course of business and do not relate to any failure to perform,
improper performance, warranty (except as set forth below) or other breach, default or violation by Seller on or prior to the
Closing (the "Assumed Liabilities"). Buyer is only assuming these Assumed Liabilities
of Seller, and no other Liabilities. 
  

Section
2.04   Excluded Liabilities. Notwithstanding the provisions of Section 2.03 or any other provision
in this Agreement to the contrary, Buyer shall not assume and shall not be responsible to pay, perform or discharge any Liabilities
of Seller or any of its Affiliates of any kind or nature whatsoever other than the Assumed Liabilities (the "Excluded
Liabilities"). Seller shall, and shall cause each of its Affiliates to, pay and satisfy in due course all Excluded
Liabilities which they are obligated to pay and satisfy. Without limiting the generality of the foregoing, the Excluded Liabilities
shall include, but not be limited to, the following:
  

(a)
any Liabilities of Seller arising or incurred in connection with the negotiation, preparation, investigation and performance of
this Agreement, the other Transaction Documents and the transactions contemplated hereby and thereby, including, without limitation,
fees and expenses of counsel, accountants, consultants, advisers and others;
  

(b)
any Liability for (i) Taxes of Seller (or any member or Affiliate of Seller) or relating to the Business, the Purchased Assets
or the Assumed Liabilities for any Pre-Closing Tax Period; (ii) Taxes that arise out of the consummation of the transactions contemplated
hereby or that are the responsibility of Seller pursuant to Section 6.11; or (iii) other Taxes of Seller (or any member
or Affiliate of Seller) of any kind or description (including any Liability for Taxes of Seller (or any member or Affiliate of
Seller) that becomes a Liability of Buyer under any common law doctrine of de facto merger or transferee or successor liability
or otherwise by operation of contract or Law);
  

(c)
any Liabilities relating to or arising out of the Excluded Assets;
  

(d)
any Liabilities in respect of any pending or threatened Action arising out of, relating to or otherwise in respect of the operation
of the Business or the Purchased Assets to the extent such Action relates to such operation on or prior to the Closing Date;
  

(e)
any Liabilities of Seller arising under or in connection with any Benefit Plans providing benefits to any present or former employees
of Seller to the extent such liability relates to operations on or prior to the Closing Date; 
  

(f)
any liabilities of Seller for any present or former employees, officers, directors, retirees, independent contractors or consultants
of Seller, including, without limitation, any Liabilities associated with any claims for wages or other benefits, bonuses, accrued
vacation, workers' compensation, severance, retention, termination or other payments to the extent such liability relates to operations
on or prior to the Closing Date; and
  

(g)
any Liabilities associated with debt, loans or credit facilities of Seller and/or the Business owing to financial institutions.

  

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Section
2.05   Purchase Price. The aggregate purchase price for the Purchased Assets shall be Five Million One
Hundred Thousand Dollars ($5,100,000) (the "Purchase Price"), plus the assumption
of the Assumed Liabilities. The Purchase Price shall be paid as follows:
  

(a)
An amount equal to One Million Nine Hundred Thousand Dollars ($1,900,000) (the "Closing Date Payment") shall
be paid by wire transfer of immediately available funds to an account designated in writing by Seller to Buyer within two days
of the Closing Date; 
  

(b)
An amount equal to Two Hundred Thousand Dollars ($200,000) which is due to EcoArk shall be included in the Assumed Liabilities;
and 
  

(c)
Buyer shall transfer and assign to Seller at Closing a total of 560,000 shares of common stock in EcoArk (the "Shares")
held by Buyer. The agreed upon value of the Shares is $3,000,000 for purposes of calculating the Purchase Price. 
  

Section
2.06   Allocation of Purchase Price. Seller and Buyer agree that the Purchase Price and the Assumed
Liabilities (plus other relevant items) shall be allocated among the Purchased Assets for all purposes (including Tax and financial
accounting) as shown on Schedule 2.06 (the "Allocation Schedule"). 
  

Section
2.07   Tax Treatment of the Transaction. The parties shall treat the transactions set forth herein as
an asset purchase for tax purposes. 
  

Article
III

Closing
  

Section
3.01   Closing. Subject to the terms and conditions of this Agreement, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place electronically
(i) on or before April 14, 2017, or (ii) at such other time, date or place as Seller and Buyer may mutually agree upon in writing.
The date on which the Closing is to occur is herein referred to as the "Closing Date".
The Closing shall be effective as of 5:00 pm PST on the Closing Date.
  

Section
3.02   Closing Deliverables.
  

(a)
At the Closing, Seller shall deliver (or cause its Affiliates to deliver) to Buyer the following:
  

(i)
a bill of sale in the form of Exhibit A hereto in form and substance satisfactory to Buyer (the "Bill of Sale")
and duly executed by Seller, transferring the tangible personal property included in the Purchased Assets to Buyer;
  

(ii)
an assignment and assumption agreement in the form of Exhibit B hereto in form and substance satisfactory to Buyer (the
"Assignment and Assumption Agreement") and duly executed by Seller, effecting the assignment to and assumption
by Buyer of the Purchased Assets and the Assumed Liabilities;
  

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(iii)
with respect to the lease agreement between Seller and Stockyards Investments, LLC (the "Lease") for the Leased
Real Property, an Assignment and Assumption of Lease in form and substance satisfactory to Buyer and with respect to the Lease
(collectively, the "Assignment and Assumption of Lease") and duly executed by Seller;
  

(iv)
the Seller Closing Certificate; and
  

(v)
the certificates of the Manager of Seller required by Section 7.02(l); and
  

(vi)
such other customary instruments of transfer, assumption, filings or documents, in form and substance reasonably satisfactory
to Buyer, as may be required to give effect to this Agreement.
  

(b)
At the Closing, Buyer shall deliver to Seller the following:
  

(i)
The Closing Date Payment by wire transfer of immediately available funds;
  

(ii)
the Assignment and Assumption Agreement duly executed by Buyer;
  

(iii)
the Assignments and Assumption of Lease duly executed by Buyer;
  

(iv)
the Buyer Closing Certificate; 
  

(v)
the certificates of the Manager of Buyer required by Section 7.03(f); and
  

(vi)
the Shares along with Stock Power(s) transferring the Shares to Seller. 
  

Article
IV

Representations and warranties of seller
  

Except
as set forth in the correspondingly numbered Section of the Disclosure Schedules, Seller and EcoArk hereby, jointly and severally
represent and warrant to Buyer that the statements contained in this Article IV are true and correct as of the date hereof
and as of the Closing Date. The representations in Sections 4.05, 4.06, 4.07, 4.08. 4.09 and 4.10 made by Ecoark have been made
to Ecoark's Knowledge.
  

Section
4.01   Organization and Qualification of Seller. Seller is a limited liability company duly organized,
validly existing and in good standing under the Laws of the state of Arkansas and has full company power and authority to own,
operate or lease the properties and assets now owned, operated or leased by it and to carry on the Business as currently conducted.
Section 4.01 of the Disclosure Schedules sets forth each jurisdiction in which Seller is licensed or qualified to do business,
and Seller is duly licensed or qualified to do business and is in good standing in each jurisdiction in which the ownership of
the Purchased Assets or the operation of the Business as currently conducted makes such licensing or qualification necessary.
  

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Section
4.02   Authority of Seller and EcoArk. Seller and EcoArk have full power and authority to enter into
this Agreement and the other Transaction Documents to which they are a party, to carry out their obligations hereunder and thereunder
and to consummate the transactions contemplated hereby and thereby. The execution and delivery by Seller and EcoArk of this Agreement
and any other Transaction Document to which Seller or EcoArk are a party, the performance by Seller and EcoArk of their obligations
hereunder and thereunder and the consummation by Seller and EcoArk of the transactions contemplated hereby and thereby have been
duly authorized by all requisite company or corporate action on the part of Seller and EcoArk. This Agreement has been duly executed
and delivered by Seller and EcoArk, and (assuming due authorization, execution and delivery by Buyer) this Agreement constitutes
a legal, valid and binding obligation of Seller and EcoArk enforceable against Seller and EcoArk in accordance with its terms.
When each other Transaction Document to which Seller is or will be a party has been duly executed and delivered by Seller (assuming
due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a legal and
binding obligation of Seller enforceable against it in accordance with its terms.
  

Section
4.03   No Conflicts; Consents. The execution, delivery and performance by Seller and EcoArk of this
Agreement and the other Transaction Documents to which they are a party, and the consummation of the transactions contemplated
hereby and thereby, do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision
of the certificate of incorporation, by-laws or other organizational documents of Seller or EcoArk; (b) conflict with or result
in a violation or breach of any provision of any Law or Governmental Order applicable to Seller, EcoArk, the Business or the Purchased
Assets; (c) except as set forth in Section 4.03 of the Disclosure Schedules, require the consent, notice or other action
by any Person under, conflict with, result in a violation or breach of, constitute a default or an event that, with or without
notice or lapse of time or both, would constitute a default under, result in the acceleration of or create in any party the right
to accelerate, terminate, modify or cancel any Contract or Permit to which Seller is a party or by which Seller or the Business
is bound or to which any of the Purchased Assets are subject (including any Assigned Contract); or (d) result in the creation
or imposition of any Encumbrance other than Permitted Encumbrances on the Purchased Assets. No consent, approval, Permit, Governmental
Order, declaration or filing with, or notice to, any Governmental Authority is required by or with respect to Seller or EcoArk
in connection with the execution and delivery of this Agreement or any of the other Transaction Documents and the consummation
of the transactions contemplated hereby and thereby.
  

Section
4.04   Financial Statements. Complete copies of the unaudited internally prepared financial statements
consisting of the balance sheet of the Business as at December 31st in each of the years 2016 and 2015 and the related
statements of income and retained earnings, owner’s equity and cash flow for the years then ended (the "Annual Financial
Statements"), and unaudited financial statements consisting of the balance sheet of the Business as of March 31,
2017 and the related statements of income and cash flow for the period then ended (the "Interim
Financial Statements" and together with the Annual Financial Statements, the "Financial
Statements") have been delivered to Buyer. The Financial Statements have been prepared in accordance with GAAP
applied on a consistent basis throughout the period involved, subject, in the case of the Interim Financial Statements, to normal
and recurring year-end adjustments (the effect of which will not be materially adverse) and the absence of notes (that, if presented,
would not differ materially from those presented in the Reviewed Financial Statements). The Financial Statements are based on
the books and records of the Business, and fairly present in all material respects the financial condition of the Business as
of the respective dates they were prepared and the results of the operations of the Business for the periods indicated. The balance
sheet of the Business as of December 31, 2016 is referred to herein as the "Balance Sheet"
and the date thereof as the "Balance Sheet Date" and the balance sheet of the
Business as of March 31, 2017 is referred to herein as the "Interim Balance Sheet"
and the date thereof as the "Interim Balance Sheet Date". Seller maintains
a standard system of accounting for the Business established and administered in accordance with GAAP.
  

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Section
4.05   Undisclosed Liabilities. Seller has no Liabilities with respect to the Business, except (a) those
which are adequately reflected or reserved against in the Balance Sheet as of the Balance Sheet Date, and (b) those which have
been incurred in the ordinary course of business consistent with past practice since the Balance Sheet Date and which are not,
individually or in the aggregate, material in amount.
  

Section
4.06   Absence of Certain Changes, Events and Conditions. Since the Interim Balance Sheet Date, and
other than in the ordinary course of business consistent with past practice, there has not been any:
  

(a)
event, occurrence or development that has had, or could reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect to Seller’s Knowledge;
  

(b)
incurrence, assumption or guarantee of any indebtedness for borrowed money in connection with the Business except unsecured current
obligations and Liabilities incurred in the ordinary course of business consistent with past practice;
  

(c)
transfer, assignment, sale or other disposition of any of the Purchased Assets shown or reflected in the Balance Sheet, except
for the sale of Inventory in the ordinary course of business;
  

(d)
cancellation of any debts or claims or amendment, termination or waiver of any rights constituting Purchased Assets;
  

(e)
material capital expenditures which would constitute an Assumed Liability;
  

(f)
imposition of any Encumbrance upon any of the Purchased Assets;
  

(g)
any Contract to do any of the foregoing, or any action or omission that would result in any of the foregoing.
  

Section
4.07   Assigned Contracts. Section 4.07 of the Disclosure Schedules includes each contract included
in the Purchased Assets and being assigned to and assumed by Buyer (the "Assigned Contracts"). Each Assigned
Contract is valid and binding on Seller in accordance with its terms and is in full force and effect. None of Seller or, to Seller's
Knowledge, any other party thereto is in breach of or default under (or is alleged to be in breach of or default under), or has
provided or received any notice of any intention to terminate, any Assigned Contract. No event or circumstance has occurred that,
with or without notice or lapse of time or both, would constitute an event of default under any Assigned Contract or result in
a termination thereof or would cause or permit the acceleration or other changes of any right or obligation or the loss of benefit
thereunder. There are no disputes pending or threatened under any Assigned Contract.
  

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Section
4.08   Title to Purchased Assets. Seller has good and valid title to, or a valid leasehold interest
in, all of the Purchased Assets. All such Purchased Assets (including leasehold interests) are free and clear of Encumbrances
except for the following (collectively referred to as "Permitted Encumbrances"):
  

(a)
those items set forth in Section 4.08 of the Disclosure Schedules;
  

(b)
liens for Taxes not yet due and payable;
  

(c)
mechanics', carriers', workmen's, repairmen's or other like liens arising or incurred in the ordinary course of business consistent
with past practice or amounts that are not delinquent and which are not, individually or in the aggregate, material to the Business
or the Purchased Assets;
  

(d)
liens arising under original purchase price conditional sales contracts and equipment leases with third parties entered into in
the ordinary course of business consistent with past practice which are not, individually or in the aggregate, material to the
Business or the Purchased Assets.
  

Section
4.09   Condition of Assets. The Tangible Personal Property included in the Purchased Assets is in good
condition and is adequate for the uses to which it is being put, and none of such tangible personal property is in need of maintenance
or repairs except for ordinary, routine maintenance and repairs that are not material in nature or cost.
  

Section
4.10   Intellectual Property. Section 4.10 of the Disclosure Schedules lists all Intellectual Property
included in the Purchased Assets ("Purchased IP"). Seller owns or has adequate, valid and enforceable rights
to use all the Purchased IP, free and clear of all Encumbrances. Seller is not bound by any outstanding judgment, injunction,
order or decree restricting the use of the Purchased IP, or restricting the licensing thereof to any person or entity. 
  

Section
4.11   Insurance. Section 4.11 of the Disclosure Schedules sets forth (a) a true and complete
list of all current policies or binders of fire, liability, product liability, umbrella liability, real and personal property,
workers' compensation, vehicular, fiduciary liability and other casualty and property insurance maintained by Seller or its Affiliates
and relating to the Business, the Purchased Assets or the Assumed Liabilities (collectively, the "Insurance Policies");
and (b) with respect to the Business, the Purchased Assets or the Assumed Liabilities, a list of all pending claims and the claims
history for Seller since January 1, 2014. Except as set forth on Section 4.11 of the Disclosure Schedules, there are no
claims related to the Business, the Purchased Assets or the Assumed Liabilities pending under any such Insurance Policies as to
which coverage has been questioned, denied or disputed or in respect of which there is an outstanding reservation of rights. Neither
Seller nor any of its Affiliates has received any written notice of cancellation of, premium increase with respect to, or alteration
of coverage under, any of such Insurance Policies. All premiums due on such Insurance Policies have either been paid or, if not
yet due, accrued. All such Insurance Policies are in full force and effect and enforceable in accordance with their terms; and
(b) have not been subject to any lapse in coverage.
  

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Section
4.12   Legal Proceedings; Governmental Orders. 
  

(a)
Except as set forth in Section 4.12(a) of the Disclosure Schedules, there are no Actions pending or, to Ecoark’s
Knowledge and Seller's Knowledge, threatened against or by Seller (a) relating to or affecting the Business, the Purchased Assets
or the Assumed Liabilities; or (b) that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated
by this Agreement. No event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such Action.
  

(b)
Except as set forth in Section 4.12(b) of the Disclosure Schedules, there are no outstanding Governmental Orders and no
unsatisfied judgments, penalties or awards against, relating to or affecting Seller or the Business.
  

Section
4.13   Compliance With Laws; Permits. 
  

(a)
Except as set forth in Section 4.13(a) of the Disclosure Schedules, Seller has complied, and is now complying, with all
Laws applicable to the conduct of the Business as currently conducted or the ownership and use of the Purchased Assets.
  

(b)
All Permits required for Seller to conduct the Business as currently conducted or for the ownership and use of the Purchased Assets
have been obtained by Seller and are valid and in full force and effect. Section 4.13(b) of the Disclosure Schedules lists
all current Permits issued to Seller which are related to the conduct of the Business as currently conducted or the ownership
and use of the Purchased Assets which, if not held by the Seller would result in a Materially Adverse Effect. To Ecoark’s
Knowledge and Seller’s Knowledge, no event has occurred that, with or without notice or lapse of time or both, would reasonably
be expected to result in the revocation, suspension, lapse or limitation of any Permit set forth in Section 4.13(b) of
the Disclosure Schedules.
  

Section
4.14   Employee Benefit Matters. 
  

(a)
 Section 4.14(a) of the Disclosure Schedules contains a true and complete list of each pension, benefit, retirement, compensation,
employment, consulting, profit-sharing, deferred compensation, incentive, bonus, performance award, phantom equity, stock or stock-based,
change in control, retention, severance, vacation, paid time off, welfare, fringe-benefit and other similar agreement, plan, policy,
program or arrangement (and any amendments thereto), in each case whether or not reduced to writing and whether funded or unfunded,
including each "employee benefit plan" within the meaning of Section 3(3) of ERISA, whether or not tax-qualified and
whether or not subject to ERISA, which is or has been maintained, sponsored, contributed to, or required to be contributed to
by Seller for the benefit of any current or former employee, officer, director, retiree, independent contractor or consultant
of the Business or any spouse or dependent of such individual, or under which Seller or any of its ERISA Affiliates has or may
have any Liability, or with respect to which Buyer or any of its Affiliates would reasonably be expected to have any Liability,
contingent or otherwise (as listed on Section 4.14(a) of the Disclosure Schedules, each, a "Benefit Plan").
  

(b)
No Benefit Plan is a Multimployer Plan as defined in Section 3(37)(A) of ERISA or is otherwise subject to Title IV of ERISA.
  

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Section
4.15   Employment Matters. To the best of Ecoark’s Knowledge Seller’s Knowledge, Seller
is and has been in compliance in all material respects with all applicable Laws pertaining to employment and employment practices
to the extent they relate to employees of the Business, including all Laws relating to labor relations, equal employment opportunities,
fair employment practices, employment discrimination, harassment, retaliation, reasonable accommodation, disability rights or
benefits, immigration, wages, hours, overtime compensation, child labor, hiring, promotion and termination of employees, working
conditions, meal and break periods, privacy, health and safety, workers' compensation, leaves of absence and unemployment insurance.
  

Section
4.16   Taxes. Except as set forth in Section 4.16 of the Disclosure Schedules:
  

(a)
All Tax Returns with respect to the Seller or the Business required to be filed by Seller for any Pre-Closing Tax Period have
been, or will be, timely filed. Such Tax Returns are, or will be, true, complete and correct in all respects. All Taxes due and
owing by Seller (whether or not shown on any Tax Return) have been, or will be, timely paid.
  

(b)
Seller has withheld and paid each Tax required to have been withheld and paid in connection with amounts paid or owing to any
Employee, independent contractor, creditor, customer, shareholder or other party, and complied with all information reporting
and backup withholding provisions of applicable Law.
  

(c)
No extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes of Seller.
  

(d)
All deficiencies asserted, or assessments made, against Seller as a result of any examinations by any taxing authority have been
fully paid.
  

(e)
Seller is not a party to any Action by any taxing authority. There are no pending or threatened Actions by any taxing authority.
  

(f)
There are no Encumbrances for Taxes upon any of the Purchased Assets nor, to Ecoark’s Knowledge and Seller's Knowledge,
is any taxing authority in the process of imposing any Encumbrances for Taxes on any of the Purchased Assets (other than for current
Taxes not yet due and payable).
  

Section
4.17   Brokers. No broker, finder or investment banker is entitled to any brokerage, finder's or other
fee or commission in connection with the transactions contemplated by this Agreement or any other Transaction Document based upon
arrangements made by or on behalf of Seller.
  

Article
V

Representations and warranties of buyer
  

Buyer
represents and warrants to Seller that the statements contained in this Article V are true and correct as of the date hereof.
  

Section
5.01   Organization of Buyer. Buyer is a limited liability company duly organized, validly existing
and in good standing under the Laws of the State of Delaware.
  

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Section
5.02   Authority of Buyer. Buyer has full company power and authority to enter into this Agreement and
the other Transaction Documents to which Buyer is a party, to carry out its obligations hereunder and thereunder and to consummate
the transactions contemplated hereby and thereby. The execution and delivery by Buyer of this Agreement and any other Transaction
Document to which Buyer is a party, the performance by Buyer of its obligations hereunder and thereunder and the consummation
by Buyer of the transactions contemplated hereby and thereby have been duly authorized by all requisite company action on the
part of Buyer. This Agreement has been duly executed and delivered by Buyer, and (assuming due authorization, execution and delivery
by Seller) this Agreement constitutes a legal, valid and binding obligation of Buyer enforceable against Buyer in accordance with
its terms. When each other Transaction Document to which Buyer is or will be a party has been duly executed and delivered by Buyer
(assuming due authorization, execution and delivery by each other party thereto), such Transaction Document will constitute a
legal and binding obligation of Buyer enforceable against it in accordance with its terms.
  

Section
5.03   No Conflicts; Consents. The execution, delivery and performance by Buyer of this Agreement and
the other Transaction Documents to which it is a party, and the consummation of the transactions contemplated hereby and thereby,
do not and will not: (a) conflict with or result in a violation or breach of, or default under, any provision of the certificate
of incorporation, by-laws or other organizational documents of Buyer; (b) conflict with or result in a violation or breach of
any provision of any Law or Governmental Order applicable to Buyer; or (c) require the consent, notice or other action by any
Person under any Contract to which Buyer is a party. No consent, approval, Permit, Governmental Order, declaration or filing with,
or notice to, any Governmental Authority is required by or with respect to Buyer in connection with the execution and delivery
of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby.
  

Section
5.04   Brokers. Except for JDB Capital Partners, LLC, no broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement or any
other Transaction Document based upon arrangements made by or on behalf of Buyer.
  

Section
5.05   Legal Proceedings. There are no Actions pending or, to Buyer's knowledge, threatened against
or by Buyer or any Affiliate of Buyer that challenge or seek to prevent, enjoin or otherwise delay the transactions contemplated
by this Agreement. No event has occurred or circumstances exist that may give rise or serve as a basis for any such Action.
  

Article
VI

Covenants
  

Section
6.01   Conduct of Business Prior to the Closing. From the date hereof until the Closing, except as otherwise
provided in this Agreement or consented to in writing by Buyer (which consent shall not be unreasonably withheld or delayed),
Seller shall (x) conduct the Business in the ordinary course of business consistent with past practice; and (y) use reasonable
best efforts to maintain and preserve intact its current Business organization, operations and franchise and to preserve the rights,
franchises, goodwill and relationships of its employees, customers, lenders, suppliers, regulators and others having relationships
with the Business. 
  

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Section
6.02   Access to Information. From the date hereof until the Closing, Seller shall (a) afford Buyer
and its Representatives full and free access to and the right to inspect all of the Leased Real Property, properties, assets,
premises, Books and Records, Contracts and other documents and data related to the Business; (b) furnish Buyer and its Representatives
with such financial, operating and other data and information related to the Business as Buyer or any of its Representatives may
reasonably request; and (c) instruct the Representatives of Seller to cooperate with Buyer in its investigation of the Business.
Any investigation pursuant to this Section 6.02 shall be conducted in such manner as not to interfere unreasonably with
the conduct of the Business or any other businesses of Seller. No investigation by Buyer or other information received by Buyer
shall operate as a waiver or otherwise affect any representation, warranty or agreement given or made by Seller in this Agreement.
  

Section
6.03   No Solicitation of Other Bids. Seller shall not, and shall not authorize or permit any of its
Affiliates or any of its or their Representatives to, directly or indirectly, (i) encourage, solicit, initiate, facilitate or
continue inquiries regarding an Acquisition Proposal; (ii) enter into discussions or negotiations with, or provide any information
to, any Person concerning a possible Acquisition Proposal; or (iii) enter into any agreements or other instruments (whether or
not binding) regarding an Acquisition Proposal. Seller shall immediately cease and cause to be terminated, and shall cause its
Affiliates and all of its and their Representatives to immediately cease and cause to be terminated, all existing discussions
or negotiations with any Persons conducted heretofore with respect to, or that could lead to, an Acquisition Proposal. For purposes
hereof, "Acquisition Proposal" means any inquiry, proposal or offer from any
Person (other than Buyer or any of its Affiliates) relating to the direct or indirect disposition, whether by sale, merger or
otherwise, of all or any portion of the Business or the Purchased Assets.
  

Section
6.04   Employees and Employee Benefits. 
  

(a)
Commencing on the Closing Date, Seller shall terminate all employees of the Business who are actively at work on the Closing Date,
and, Buyer shall offer employment, on an "at will" basis, to all of such employees. 
  

(b)
Seller shall be solely responsible, and Buyer shall have no obligations whatsoever for, any compensation or other amounts payable
to any current or former employee, officer, director, independent contractor or consultant of the Business, including, without
limitation, hourly pay, commission, bonus, salary, accrued vacation, fringe, pension or profit sharing benefits or severance pay
for any period relating to the service with Seller at any time on or prior to the Closing Date and Seller shall pay all such amounts
to all entitled persons on or prior to the Closing Date.
  

Section
6.05   Non-competition; Non-solicitation. 
  

(a)
For a period of five (5) years commencing on the Closing Date (the "Restricted Period"), Seller and EcoArk shall
not, and shall not permit any of their Affiliates to, directly or indirectly, (i) engage in or assist others in engaging in the
Restricted Business in the Territory; (ii) have an interest in any Person that engages directly or indirectly in the Restricted
Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or
consultant; or (iii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the
Business (including any existing or former client or customer of Seller and any Person that becomes a client or customer of the
Business after the Closing), or any other Person who has a material business relationship with the Business, to terminate or modify
any such actual or prospective relationship.
  

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(b)
During the Restricted Period, Seller and EcoArk shall not, and shall not permit any of their Affiliates to, directly or indirectly,
hire or solicit any person who is offered employment by Buyer pursuant to Section 6.04(a) or is or was employed in the
Business during the Restricted Period, or encourage any such employee to leave such employment or hire any such employee who has
left such employment, except pursuant to a general solicitation which is not directed specifically to any such employees; provided,
that nothing in this Section 6.05(b) shall prevent Seller, EcoArk, or any of their Affiliates from hiring (i) any employee
whose employment has been terminated by Buyer or (ii) after 180 days from the date of termination of employment, any employee
whose employment has been terminated by the employee.
  

(c)
Seller and EcoArk acknowledge that a breach or threatened breach of this Section 6.05 would give rise to irreparable harm
to Buyer, for which monetary damages would not be an adequate remedy, and hereby agree that in the event of a breach or a threatened
breach by Seller or EcoArk of any such obligations, Buyer shall, in addition to any and all other rights and remedies that may
be available to it in respect of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction,
specific performance and any other relief that may be available from a court of competent jurisdiction (without any requirement
to post bond).
  

(d)
Seller and EcoArk acknowledge that the restrictions contained in this Section 6.05 are reasonable and necessary to protect
the legitimate interests of Buyer and constitute a material inducement to Buyer to enter into this Agreement and consummate the
transactions contemplated by this Agreement. In the event that any covenant contained in this Section 6.05 should ever
be adjudicated to exceed the time, geographic, product or service or other limitations permitted by applicable Law in any jurisdiction,
then any court is expressly empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction
to the maximum time, geographic, product or service or other limitations permitted by applicable Law. The covenants contained
in this Section 6.05 and each provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability
of any such covenant or provision as written shall not invalidate or render unenforceable the remaining covenants or provisions
hereof, and any such invalidity or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant
or provision in any other jurisdiction.
  

Section
6.06   Approvals and Consents. Seller and Buyer shall use reasonable best efforts to give all notices
to, and obtain all consents from, all third parties that are described in Section 4.03 of the Disclosure Schedules. 
  

Section
6.07   Books and Records. 
  

(a)
In order to facilitate the resolution of any claims made against or incurred by Seller prior to the Closing, or for any other
reasonable purpose, for a period of three years after the Closing, Buyer shall:
  

(i)
allow Seller to keep copies of books and records;
  

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(ii)
retain the Books and Records (including personnel files) relating to periods prior to the Closing in a manner reasonably consistent
with the prior practices of Seller; and
  

(iii)
upon reasonable notice, afford the Seller's Representatives reasonable access (including the right to make, at Seller's expense,
photocopies), during normal business hours, to such Books and Records.
  

(b)
In order to facilitate the resolution of any claims made by or against or incurred by Buyer after the Closing, or for any other
reasonable purpose, for a period of three years following the Closing, Seller shall:
  

(i)
retain the books and records (including personnel files) of Seller which relate to the Business and its operations for periods
prior to the Closing; and
  

(ii)
upon reasonable notice, afford the Buyer's Representatives reasonable access (including the right to make, at Buyer's expense,
photocopies), during normal business hours, to such books and records.
  

(c)
Neither Buyer nor Seller shall be obligated to provide the other party with access to any books or records (including personnel
files) pursuant to this Section 6.07 where such access would violate any Law.
  

Section
6.08   Closing Conditions. From the date hereof until the Closing, each party hereto shall use reasonable
best efforts to take such actions as are necessary to expeditiously satisfy the closing conditions set forth in Article VII
hereof.
  

Section
6.09   Public Announcements. Unless otherwise required by applicable Law (based upon the reasonable
advice of counsel), no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions
contemplated hereby or otherwise communicate with any news media without the prior written consent of the other party (which consent
shall not be unreasonably withheld or delayed), and the parties shall cooperate as to the timing and contents of any such announcement;
provided, however., the Buyer recognizes that Ecoark must report material events to the Securities and Exchange Commission within
four Business Days of the event’s occurrence.
  

Section
6.10   Receivables. From and after the Closing, if Seller or any of its Affiliates receives or collects
any funds relating to any Accounts Receivable or any other Purchased Asset, Seller or its Affiliate shall remit such funds to
Buyer within five Business Days after its receipt thereof. From and after the Closing, if Buyer or its Affiliate receives or collects
any funds relating to any Excluded Asset, Buyer or its Affiliate shall remit any such funds to Seller within five Business Days
after its receipt thereof.
  

Section
6.11   Transfer Taxes. All transfer, documentary, sales, use, stamp, registration, value added and other
such Taxes and fees (including any penalties and interest) incurred in connection with this Agreement and the other Transaction
Documents (including any real property transfer Tax and any other similar Tax) shall be borne and paid by Seller when due. Seller
shall, at its own expense, timely file any Tax Return or other document with respect to such Taxes or fees (and Buyer shall cooperate
with respect thereto as necessary).
  

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Section
6.12   NetSuite Sublicense. Seller is a party to a License Agreement pursuant to which Seller licenses
NetSuite Software. Seller agrees to sublicense to Buyer the NetSuite Software commencing on the Closing Date and ending on December
31, 2017 for $3,333 per month pursuant to the terms of a Sublicense Agreement entered into at Closing, the terms of which shall
be agreed to by Seller and Buyer. 
  

Section
6.13   Further Assurances. Following the Closing, each of the parties hereto shall, and shall cause
their respective Affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take
such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated
by this Agreement and the other Transaction Documents.
  

Article
VII

Conditions to closing
  

Section
7.01   Conditions to Obligations of All Parties. The obligations of each party to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment, at or prior to the Closing, of each of the following conditions:
  

(a)
No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any Governmental Order which is in effect
and has the effect of making the transactions contemplated by this Agreement illegal, otherwise restraining or prohibiting consummation
of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof.
  

(b)
Seller shall have received all consents, authorizations, orders and approvals referred to in Section 4.03 and Buyer shall
have received all consents, authorizations, orders and approvals referred to in Section 5.03, in each case, in form and
substance reasonably satisfactory to Buyer and Seller, and no such consent, authorization, order and approval shall have been
revoked.
  

Section
7.02   Conditions to Obligations of Buyer. The obligations of Buyer to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment or Buyer's waiver, at or prior to the Closing, of each of the following
conditions:
  

(a)
Other than the representations and warranties of Seller contained in Section 4.01, Section 4.02 and Section 4.17,
the representations and warranties of Seller contained in this Agreement, the other Transaction Documents and any certificate
or other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty
qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty
not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the
same effect as though made at and as of such date (except those representations and warranties that address matters only as of
a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and
warranties of Seller contained in Section 4.01, Section 4.02 and Section 4.17 shall be true and correct in
all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such
date.
  

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(b)
Seller shall have duly performed and complied in all material respects with all agreements, covenants and conditions required
by this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing
Date; provided, that, with respect to agreements, covenants and conditions that are qualified by materiality, Seller shall
have performed such agreements, covenants and conditions, as so qualified, in all respects.
  

(c)
Buyer shall have completed its due diligence of the Business to the reasonable satisfaction of Buyer; 
  

(d)
Buyer shall have completed its quality of earnings review of the Reviewed Financial Statements. 
  

(e)
No Action shall have been commenced against Buyer or Seller, which would prevent the Closing. No injunction or restraining order
shall have been issued by any Governmental Authority, and be in effect, which restrains or prohibits any transaction contemplated
hereby.
  

(f)
All approvals, consents and waivers that are listed on Section 4.03 of the Disclosure Schedules shall have been received,
and executed counterparts thereof shall have been delivered to Buyer at or prior to the Closing.
  

(g)
From the date of this Agreement, there shall not have occurred any Material Adverse Effect, nor shall any event or events have
occurred that, individually or in the aggregate, with or without the lapse of time, could reasonably be expected to result in
a Material Adverse Effect.
  

(h)
Seller shall have delivered to Buyer duly executed counterparts to the Transaction Documents and such other documents and deliveries
set forth in Section 3.02(a).
  

(i)
Buyer shall have received all Permits that are necessary for it to conduct the Business as conducted by Seller as of the Closing
Date.
  

(j)
All Encumbrances relating to the Purchased Assets shall have been released in full, other than Permitted Encumbrances, and Seller
shall have delivered to Buyer written evidence, in form satisfactory to Buyer in its sole discretion, of the release of such Encumbrances.
  

(k)
Buyer shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Seller, that each of
the conditions set forth in Section 7.02(a) and Section 7.02(b) have been satisfied (the "Seller Closing
Certificate").
  

(l)
Buyer shall have received a certificate of the Manager (or equivalent officer) of Seller certifying that attached thereto are
true and complete copies of all resolutions adopted by the board of managers of Seller authorizing the execution, delivery and
performance of this Agreement and the other Transaction Documents and the consummation of the transactions contemplated hereby
and thereby, and that all such resolutions are in full force and effect and are all the resolutions adopted in connection with
the transactions contemplated hereby and thereby.
  

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(m)
Seller shall have delivered to Buyer such other documents or instruments as Buyer reasonably requests and are reasonably necessary
to consummate the transactions contemplated by this Agreement.
  

Section
7.03   Conditions to Obligations of Seller. The obligations of Seller to consummate the transactions
contemplated by this Agreement shall be subject to the fulfillment or Seller's waiver, at or prior to the Closing, of each of
the following conditions:
  

(a)
Other than the representations and warranties of Buyer contained in Section 5.01, Section 5.02 and Section 5.04,
the representations and warranties of Buyer contained in this Agreement, the other Transaction Documents and any certificate or
other writing delivered pursuant hereto shall be true and correct in all respects (in the case of any representation or warranty
qualified by materiality or Material Adverse Effect) or in all material respects (in the case of any representation or warranty
not qualified by materiality or Material Adverse Effect) on and as of the date hereof and on and as of the Closing Date with the
same effect as though made at and as of such date (except those representations and warranties that address matters only as of
a specified date, the accuracy of which shall be determined as of that specified date in all respects). The representations and
warranties of Buyer contained in Section 5.01, Section 5.02 and Section 5.04 shall be true and correct in
all respects on and as of the date hereof and on and as of the Closing Date with the same effect as though made at and as of such
date.
  

(b)
Buyer shall have duly performed and complied in all material respects with all agreements, covenants and conditions required by
this Agreement and each of the other Transaction Documents to be performed or complied with by it prior to or on the Closing Date;
provided, that, with respect to agreements, covenants and conditions that are qualified by materiality, Buyer shall have
performed such agreements, covenants and conditions, as so qualified, in all respects. 
  

(c)
No injunction or restraining order shall have been issued by any Governmental Authority, and be in effect, which restrains or
prohibits any material transaction contemplated hereby.
  

(d)
Buyer shall have delivered to Seller duly executed counterparts to the Transaction Documents and such other documents and deliveries
set forth in Section 3.02(b).
  

(e)
Seller shall have received a certificate, dated the Closing Date and signed by a duly authorized officer of Buyer, that each of
the conditions set forth in Section 7.03(a) and Section 7.03(b) have been satisfied (the "Buyer Closing
Certificate").
  

(f)
Seller shall have received a certificate of the Manager of Buyer certifying that attached thereto are true and complete copies
of all resolutions adopted by the board of managers of Buyer authorizing the execution, delivery and performance of this Agreement
and the other Transaction Documents and the consummation of the transactions contemplated hereby and thereby, and that all such
resolutions are in full force and effect and are all the resolutions adopted in connection with the transactions contemplated
hereby and thereby.
  

(g)
Buyer shall have delivered to Seller the Shares along with duly executed Stock Power(s) transferring the Shares to Seller.
  

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(h)
Buyer shall have delivered to Seller such other documents or instruments as Seller reasonably requests and are reasonably necessary
to consummate the transactions contemplated by this Agreement.
  

Article
VIII

Indemnification
  

Section
8.01   Survival. Subject to the limitations and other provisions of this Agreement, the representations
and warranties contained herein shall survive the Closing and shall remain in full force and effect until the date that is eighteen
(18) months from the Closing Date; provided, that the representations and warranties in (i) Section 4.01, Section
4.02, Section 4.08, Section 4.17, Section 5.01, Section 5.02 and Section 5.04 shall survive
indefinitely, and (ii) Section 4.14 and Section 4.16 shall survive for the full period of all applicable statutes
of limitations (giving effect to any waiver, mitigation or extension thereof) plus 60 days. All covenants and agreements of the
parties contained herein shall survive the Closing indefinitely or for the period explicitly specified therein. Notwithstanding
the foregoing, any claims asserted in good faith with reasonable specificity (to the extent known at such time) and in writing
by notice from the non-breaching party to the breaching party prior to the expiration date of the applicable survival period shall
not thereafter be barred by the expiration of the relevant representation or warranty and such claims shall survive until finally
resolved.
  

Section
8.02   Indemnification By Seller. Subject to the other terms and conditions of this Article VIII,
Seller and EcoArk, jointly and severally, shall indemnify and defend each of Buyer and its Affiliates and their respective Representatives
(collectively, the "Buyer Indemnitees") against, and shall hold each of them
harmless from and against, and shall pay and reimburse each of them for, any and all Losses incurred or sustained by, or imposed
upon, the Buyer Indemnitees based upon, arising out of, with respect to or by reason of:
  

(a)
any inaccuracy in or breach of any of the representations or warranties of Seller contained in this Agreement, the other Transaction
Documents or in any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement, as of the date such
representation or warranty was made or as if such representation or warranty was made on and as of the Closing Date (except for
representations and warranties that expressly relate to a specified date, the inaccuracy in or breach of which will be determined
with reference to such specified date);
  

(b)
any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Seller pursuant to this Agreement, the
other Transaction Documents or any certificate or instrument delivered by or on behalf of Seller pursuant to this Agreement;
  

(c)
any Excluded Asset or any Excluded Liability; or
  

(d)
any Third Party Claim based upon, resulting from or arising out of the business, operations, properties, assets or obligations
of Seller or any of its Affiliates (other than the Purchased Assets or Assumed Liabilities) conducted, existing or arising on
or prior to the Closing Date.
  

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Section
8.03   Indemnification By Buyer. Subject to the other terms and conditions of this Article VIII,
Buyer shall indemnify and defend each of Seller and its Affiliates and their respective Representatives (collectively, the "Seller
Indemnitees") against, and shall hold each of them harmless from and against, and shall pay and reimburse each
of them for, any and all Losses incurred or sustained by, or imposed upon, the Seller Indemnitees based upon, arising out of,
with respect to or by reason of:
  

(a)
any inaccuracy in or breach of any of the representations or warranties of Buyer contained in this Agreement or in any certificate
or instrument delivered by or on behalf of Buyer pursuant to this Agreement, as of the date such representation or warranty was
made or as if such representation or warranty was made on and as of the Closing Date (except for representations and warranties
that expressly relate to a specified date, the inaccuracy in or breach of which will be determined with reference to such specified
date);
  

(b)
any breach or non-fulfillment of any covenant, agreement or obligation to be performed by Buyer pursuant to this Agreement; or
  

(c)
any Assumed Liability.
  

Section
8.04   Certain Limitations. The indemnification provided for in Section 8.02 and Section 8.03
shall be subject to the following limitations:
  

(a)
Seller and EcoArk shall not be liable to the Buyer Indemnitees for indemnification under Section 8.02(a) until the aggregate
amount of all Losses in respect of indemnification under Section 8.02(a) exceeds $50,000 (the "Basket"),
in which event Seller and EcoArk shall be required to pay or be liable for all such Losses from the first dollar. The aggregate
amount of all Losses for which Seller and EcoArk shall be liable pursuant to Section 8.02(a) shall not exceed $500,000
(the "Cap").
  

(b)
Seller and EcoArk shall not be liable to the Buyer Indemnitees for indemnification under Section 8.02 where the Losses
are the result of (i) acts, actions or inaction of Kenneth Smerz and/or Ted Mort prior to the Closing Date that constitute negligence
or misconduct by either of them in the performance of their duties for Seller, or (ii) a breach of a representation or warranty
of Seller contained in this Agreement, the other Transaction Documents or in any certificate or instrument delivered by or on
behalf of Seller pursuant to this Agreement and Kenneth Smerz and/or Ted Mort had actual knowledge of facts and circumstances
giving rise to such breach but failed to disclose such facts and circumstances to Seller prior to the Closing Date. 
  

(c)
Buyer shall not be liable to the Seller Indemnitees for indemnification under Section 8.03(a) until the aggregate amount
of all Losses in respect of indemnification under Section 8.03(a) exceeds the Basket, in which event Buyer shall be required
to pay or be liable for all such Losses from the first dollar. The aggregate amount of all Losses for which Buyer shall be liable
pursuant to Section 8.03(a) shall not exceed the Cap.
  

Notwithstanding
the foregoing, the limitations set forth in Section 8.04(a) and Section 8.04(c) shall not apply to Losses based
upon, arising out of, with respect to or by reason of any inaccuracy in or breach of any representation or warranty in Section
4.01, Section 4.02, Section 4.08, Section 4.14, Section 4.16, Section 4.17, Section
5.01, Section 5.02 and Section 5.04.
  

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(d)
For purposes of this Article VIII, any inaccuracy in or breach of any representation or warranty shall be determined without
regard to any materiality, Material Adverse Effect or other similar qualification contained in or otherwise applicable to such
representation or warranty.
  

Section
8.05   Indemnification Procedures. The party making a claim under this Article VIII is referred
to as the "Indemnified Party", and the party against whom such claims are asserted
under this Article VIII is referred to as the "Indemnifying Party".

  

(a)
Third Party Claims. If any Indemnified Party receives notice of the assertion or commencement of any Action made or brought
by any Person who is not a party to this Agreement or an Affiliate of a party to this Agreement or a Representative of the foregoing
(a "Third Party Claim") against such Indemnified Party with respect to which the Indemnifying Party is obligated
to provide indemnification under this Agreement, the Indemnified Party shall give the Indemnifying Party reasonably prompt written
notice thereof, but in any event not later than 30 calendar days after receipt of such notice of such Third Party Claim. The failure
to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except
and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified
Party shall describe the Third Party Claim in reasonable detail, shall include copies of all material written evidence thereof
and shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified
Party. The Indemnifying Party shall have the right to participate in, or by giving written notice to the Indemnified Party, to
assume the defense of any Third Party Claim at the Indemnifying Party's expense and by the Indemnifying Party's own counsel, and
the Indemnified Party shall cooperate in good faith in such defense; In the event that the Indemnifying Party assumes the defense
of any Third Party Claim, subject to Section 8.05(b), it shall have the right to take such action as it deems necessary
to avoid, dispute, defend, appeal or make counterclaims pertaining to any such Third Party Claim in the name and on behalf of
the Indemnified Party. The Indemnified Party shall have the right to participate in the defense of any Third Party Claim with
counsel selected by it subject to the Indemnifying Party's right to control the defense thereof. The fees and disbursements of
such counsel shall be at the expense of the Indemnified Party, provided, that if in the reasonable opinion of counsel to
the Indemnified Party, (A) there are legal defenses available to an Indemnified Party that are different from or additional to
those available to the Indemnifying Party; or (B) there exists a conflict of interest between the Indemnifying Party and the Indemnified
Party that cannot be waived, the Indemnifying Party shall be liable for the reasonable fees and expenses of counsel to the Indemnified
Party in each jurisdiction for which the Indemnified Party determines counsel is required. If the Indemnifying Party elects not
to compromise or defend such Third Party Claim, fails to promptly notify the Indemnified Party in writing of its election to defend
as provided in this Agreement, or fails to diligently prosecute the defense of such Third Party Claim, the Indemnified Party may,
subject to Section 8.05(b), pay, compromise, defend such Third Party Claim and seek indemnification for any and all Losses
based upon, arising from or relating to such Third Party Claim. Seller and Buyer shall cooperate with each other in all reasonable
respects in connection with the defense of any Third Party Claim, including making available records relating to such Third Party
Claim and furnishing, without expense (other than reimbursement of actual out-of-pocket expenses) to the defending party, management
employees of the non-defending party as may be reasonably necessary for the preparation of the defense of such Third Party Claim.
  

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(b)
Settlement of Third Party Claims. Notwithstanding any other provision of this Agreement, the Indemnifying Party shall not
enter into settlement of any Third Party Claim without the prior written consent of the Indemnified Party, except as provided
in this Section 8.05(b). If a firm offer is made to settle a Third Party Claim without leading to liability or the creation
of a financial or other obligation on the part of the Indemnified Party and provides, in customary form, for the unconditional
release of each Indemnified Party from all liabilities and obligations in connection with such Third Party Claim and the Indemnifying
Party desires to accept and agree to such offer, the Indemnifying Party shall give written notice to that effect to the Indemnified
Party. If the Indemnified Party fails to consent to such firm offer within 10 days after its receipt of such notice, the Indemnified
Party may continue to contest or defend such Third Party Claim and in such event, the maximum liability of the Indemnifying Party
as to such Third Party Claim shall not exceed the amount of such settlement offer. If the Indemnified Party fails to consent to
such firm offer and also fails to assume defense of such Third Party Claim, the Indemnifying Party may settle the Third Party
Claim upon the terms set forth in such firm offer to settle such Third Party Claim. If the Indemnified Party has assumed the defense
pursuant to Section 8.05(a), it shall not agree to any settlement without the written consent of the Indemnifying Party
(which consent shall not be unreasonably withheld or delayed).
  

(c)
Direct Claims. Any Action by an Indemnified Party on account of a Loss which does not result from a Third Party Claim (a
"Direct Claim") shall be asserted by the Indemnified Party giving the Indemnifying Party reasonably prompt written
notice thereof, but in any event not later than 30 days after the Indemnified Party becomes aware of such Direct Claim. The failure
to give such prompt written notice shall not, however, relieve the Indemnifying Party of its indemnification obligations, except
and only to the extent that the Indemnifying Party forfeits rights or defenses by reason of such failure. Such notice by the Indemnified
Party shall describe the Direct Claim in reasonable detail, shall include copies of all material written evidence thereof and
shall indicate the estimated amount, if reasonably practicable, of the Loss that has been or may be sustained by the Indemnified
Party. The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim.
The Indemnified Party shall allow the Indemnifying Party and its professional advisors to investigate the matter or circumstance
alleged to give rise to the Direct Claim, and whether and to what extent any amount is payable in respect of the Direct Claim
and the Indemnified Party shall assist the Indemnifying Party's investigation by giving such information and assistance (including
access to the Indemnified Party's premises and personnel and the right to examine and copy any accounts, documents or records)
as the Indemnifying Party or any of its professional advisors may reasonably request. If the Indemnifying Party does not so respond
within such 30-day period, the Indemnifying Party shall be deemed to have rejected such claim, in which case the Indemnified Party
shall be free to pursue such remedies as may be available to the Indemnified Party on the terms and subject to the provisions
of this Agreement.
  

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Section
8.06   Payments. Once a Loss is agreed to by the Indemnifying Party or finally adjudicated to be payable
pursuant to this Article VIII, the Indemnifying Party shall satisfy its obligations within 15 Business Days of such final,
non-appealable adjudication by wire transfer of immediately available funds. The parties hereto agree that should an Indemnifying
Party not make full payment of any such obligations within such 15 Business Day period, any amount payable shall accrue interest
from and including the date of agreement of the Indemnifying Party or final, non-appealable adjudication to the date such payment
has been made at a rate per annum equal to eight percent (8%). Such interest shall be calculated daily on the basis of a 365-day
year and the actual number of days elapsed.
  

Section
8.07   Tax Treatment of Indemnification Payments. All indemnification payments made under this Agreement
shall be treated by the parties as an adjustment to the Purchase Price for Tax purposes, unless otherwise required by Law.
  

Section
8.08   Exclusive Remedies. Subject to and excepting Section 6.03, and Section 6.05, the
parties acknowledge and agree that their sole and exclusive remedy with respect to any and all claims (other than claims arising
from fraud, criminal activity or willful misconduct on the part of a party hereto in connection with the transactions contemplated
by this Agreement) for any breach of any representation, warranty, covenant, agreement or obligation set forth herein or otherwise
relating to the subject matter of this Agreement, shall be pursuant to the indemnification provisions set forth in this Article
VIII. In furtherance of the foregoing, each party hereby waives, to the fullest extent permitted under Law, any and all rights,
claims and causes of action for any breach of any representation, warranty, covenant, agreement or obligation set forth herein
or otherwise relating to the subject matter of this Agreement it may have against the other parties hereto and their Affiliates
and each of their respective Representatives arising under or based upon any Law, except pursuant to the indemnification provisions
set forth in this Article VIII. Nothing in this Section 8.08 shall limit any Person's right to seek and obtain any
equitable relief to which any Person shall be entitled or to seek any remedy on account of any party's fraudulent, criminal or
intentional misconduct.
  

Article
IX

Termination
  

Section
9.01   Termination. This Agreement may be terminated at any time prior to the Closing:
  

(a)
by the mutual written consent of Seller and Buyer;
  

(b)
by Buyer by written notice to Seller if Buyer is not then in material breach of any provision of this Agreement and there has
been a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Seller pursuant
to this Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach,
inaccuracy or failure has not been cured by Seller within ten days of Seller's receipt of written notice of such breach from Buyer;
or
  

(c)    by
Seller by written notice to Buyer if Seller is not then in material breach of any provision of this Agreement and there has been
a breach, inaccuracy in or failure to perform any representation, warranty, covenant or agreement made by Buyer pursuant to this
Agreement that would give rise to the failure of any of the conditions specified in Article VII and such breach, inaccuracy
or failure has not been cured by Buyer within ten days of Buyer's receipt of written notice of such breach from Seller.
  

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Section
9.02   Effect of Termination. In the event of the termination of this Agreement in accordance with this
Article, this Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except:
  

(a)
as set forth in this Article IX and Article X hereof; and
  

(b)
that nothing herein shall relieve any party hereto from liability for any willful breach of any provision hereof.
  

Article
X

Miscellaneous
  

Section
10.01 Expenses. Except as otherwise expressly provided herein, all costs and expenses, including, without limitation, loan
application fee, fees and disbursements of counsel, financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses, whether or not the Closing
shall have occurred. Seller shall be reimbursed by Buyer for the loan application fee paid prior to the Closing by Seller for
Buyer.
  

Section
10.02 Notices. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing
and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by
the addressee if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or e-mail
of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next Business
Day if sent after normal business hours of the recipient or (d) on the third day after the date mailed, by certified or registered
mail, return receipt requested, postage prepaid. Such communications must be sent to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a notice given in accordance with this Section 10.02):
  

	If
    to Seller:	Eco3d,
    LLC

    5013 E. Washington Street

    Suite #270 

    Phoenix, Arizona 850345 

    E-mail: ken@eco3dusa.com

    Attn: Kenneth J. Smerz 
	 	 
	If
to EcoArk:
	EcoArk
Holdings, Inc.

3333 Pinnacle Hills Pkwy, Suite 220

        Rogers,
AR 7275

E-mail: jpuchir@ecoarkusa.com

        Attn:
J.P. Puchir

 

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	If
    to Buyer:	Eco3d
    Acquisition LLC

    20645 N. Pima Road

    Suite #110

    Scottsdale, Arizona

    E-mail: ldalbey@jdbcapital.com

    Attn: Lena Dalbey

 

Section
10.03 Headings. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.
  

Section
10.04 Severability. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such
invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render
unenforceable such term or provision in any other jurisdiction. Except as provided in Section 6.05(d), upon such determination
that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order
that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.
  

Section
10.05 Entire Agreement. This Agreement and the other Transaction Documents constitute the sole and entire agreement of the
parties to this Agreement with respect to the subject matter contained herein and therein, and supersede all prior and contemporaneous
understandings and agreements, both written and oral, with respect to such subject matter.
  

Section
10.06 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and
their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior
written consent of the other party, which consent shall not be unreasonably withheld or delayed. No assignment shall relieve the
assigning party of any of its obligations hereunder.
  

Section
10.07 No Third-party Beneficiaries. Except as provided in Article VIII, this Agreement is for the sole benefit of the
parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or
shall confer upon any other Person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or
by reason of this Agreement.
  

Section
10.08 Amendment and Modification; Waiver. This Agreement may only be amended, modified or supplemented by an agreement in
writing signed by each party hereto. No waiver by any party of any of the provisions hereof shall be effective unless explicitly
set forth in writing and signed by the party so waiving. No failure to exercise, or delay in exercising, any right, remedy, power
or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise
of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other
right, remedy, power or privilege.
  

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Section
10.09 Governing Law. This Agreement shall be governed by and construed in accordance with the internal laws of the State of
Delaware without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any other
jurisdiction).
  

Section
10.10 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of
which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail
or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy
of this Agreement.
  

Section
10.11 Seller Name Change. In order to accommodate the Buyer’s plans post-Closing, Seller does hereby covenant and
agree to change its name at or around the Closing Date and allow the Buyer to use the name “Eco3d” in its
business going forward and to qualify to do business with the name “Eco3d” in all states in which Seller is
currently qualified to do business. Seller and EcoArk agrees to promptly execute and deliver any documents and consents as
are required by a relevant governmental authority or reasonably requested by Buyer in connection with this covenant. 
  

 

[SIGNATURE
PAGE FOLLOWS]

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective
officers thereunto duly authorized.

 

	 	SELLER:
	 	 
	 	ECO3D,
    LLC, an Arkansas limited liability company by Ecoark, Inc. Sole Member
	 	 
	 	By:	/s/ Randy
    May
	 	Name:	Randy
    May
	 	Title:	President 
	 	 	 
	 	ECOARK:
	 	 
	 	ECOARK
    HOLDINGS, INC., a Nevada corporation
	 	 
	 	By:	/s/
    Jay Puchir
	 	Name:	Jay
    Puchir
	 	Title:	Chief
    Executive Officer

 

	 	BUYER:
	 	 
	 	ECO3D ACQUISTION LLC, a Delaware

                                                                                limited liability company

	 	 
	 	By:	/s/ Kenneth
    J. Smerz  
	 	Name:	Kenneth
    J. Smerz  
	 	Title:	Manager

 

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EXHIBIT
A
  

BILL
OF SALE

 

THIS
BILL OF SALE is made as of April 14, 2017, by and between ECO3D ACQUISITION LLC, a Delaware limited liability company (“Buyer”)
and ECO3D LLC, an Arkansas limited liability company (“Seller”). For purposes of this Bill of Sale,
Buyer and Seller may be individually referred to as a “Party” or collectively as the “Parties.”

 

WITNESSETH

 

WHEREAS,
Buyer, Seller and EcoArk Holdings, Inc., have entered into an Asset Purchase Agreement, dated April 10, 2017 (the “Purchase
Agreement”) and capitalized terms not defined herein have the meanings set forth in the Purchase Agreement; and

 

WHEREAS,
pursuant to the Purchase Agreement, the Seller has agreed to sell, assign, transfer, convey and deliver to Buyer, and Buyer will
purchase from Seller, all right, title and interest in and to certain Tangible Personal Property, free and clear of all Encumbrances
(other than Permitted Encumbrances).

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of the mutual promises contained in this Bill of Sale, the consideration set forth in the Purchase
Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
hereto agree as follows:

 

1. Bill
of Sale. The Seller hereby grants, conveys, sells, assigns, transfers and delivers to Buyer and its successors and
assigns, and Buyer hereby accepts, the Tangible Personal Property. The Seller authorizes Buyer to take any appropriate or
reasonable action to protect the right, title and interest hereby conveyed in connection with the Tangible Personal Property
hereby conveyed to Buyer against each and every person or persons whomsoever claiming or asserting any claim against any or
all of the same.

 

2. Further
Assurances. Each Party hereto agrees to execute or cause to be executed and to deliver or cause to be delivered to the
other Party hereto any and all instruments, agreements, affidavits, certificates, and other documentation, which may be
reasonably requested or required in order to complete, evidence, perfect, or record the transactions contemplated by this
Bill of Sale and further agrees to cooperate in effecting the intent of this Bill of Sale and the Purchase
Agreement.

 

3. Binding
Effect. This Bill of Sale shall be for the benefit of and be binding upon the Parties hereto and their successors and
assigns.

 

4. No
Third Party Beneficiaries. This Bill of Sale is intended for the benefit only of the Parties hereto and no rights are
intended to be conferred by this Bill of Sale to any other third parties.

 

5. Effect
on Agreements. Except as expressly provided herein, should a provision of this Bill of Sale be inconsistent with a
provision of the Purchase Agreement, the provision of the Purchase Agreement shall govern and take precedence over the
provision of this Bill of Sale. The Parties hereto agree that this Bill of Sale complies with the terms and intent of the
Purchase Agreement. The respective representations and warranties and related indemnities contained in the Purchase Agreement
expressly survive this Bill of Sale as and to the extent provided in the Purchase Agreement.

 

6. Governing
Law. This Bill of Sale shall be governed by and construed in accordance with the laws of the State of
Delaware.

 

7. Counterparts.
This Bill of Sale may be executed in two or more counterparts, all of which shall be considered one and the same
agreement.

 

[Signature
page follows]

 

     

    EXECUTION COPY

    

 

IN
WITNESS WHEREOF, the Parties hereto have executed this Bill of Sale as of the date first above written.

 

	 	SELLER:
	 	 	 
	 	ECO3D LLC, an Arkansas limited liability company
	 	 	 
	 	By:	Ecoark,
Inc., Sole Member
	 	 	 
	 	By:	/s/ Randy
    May
	 	Name:	Randy
    May
	 	Title:	President
	 	 	 
	 	BUYER:
	 	 	 
	 	ECO3D ACQUISITION LLC, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Kenneth
J. Smerz
	 	Name: 	Kenneth
J. Smerz
	 	Title:	Manager

 

     

    EXECUTION COPY

    

 

EXHIBIT
B
  

Assignment
and Assumption Agreement

 

1. Assignment
and Assumption. For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
and as contemplated by that certain Asset Purchase Agreement dated April 10, 2017 (the “Purchase Agreement”),
by and among Eco3d Acquisition LLC, a Delaware limited liability company (“Buyer”), Eco3d LLC, an Arkansas
limited liability company (“Seller”), and EcoArk Holdings, Inc., Seller hereby assigns, sells, transfers and
sets over (collectively, the “Assignment”) to Buyer, effective as of the Closing Date, all of Seller’s
right, title, benefit, privileges and interest in and to the Purchased Assets and all of Seller’s burdens, obligations and
liabilities in connection with, each of the Assumed Liabilities. Buyer hereby accepts the Assignment and assumes and agrees to
observe and perform in the ordinary course of business all of the Assumed Liabilities. Seller assigns no Excluded Assets and Buyer
assumes no Excluded Liabilities, and the Parties agree that all the Excluded Assets will remain the exclusive property of, and
the Excluded Liabilities shall remain the sole responsibility of, Seller. All capitalized terms not defined herein have the meanings
set forth in the Purchase Agreement.

 

2. Further
Actions. Each of the parties hereto covenants and agrees, at its own expense, to execute and deliver, at the request
of the other party, such further instruments of transfer and assignment and to take such other action as such other party may
reasonably request to more effectively consummate the assignments and assumptions contemplated by this Assignment and Assumption
Agreement.

 

3. Successors
and Assigns. Subject to the Purchase Agreement, this Assignment and Assumption Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted assigns, and no other Person shall have any right,
obligation or benefit hereunder.

 

4. Governing
Law. This Assignment and Assumption Agreement and any disputes arising under or related hereto (whether for breach of contract,
tortious conduct or otherwise) shall be governed and construed in accordance with the Laws of the State of Delaware without regard
to the conflict of law principles thereof.

 

5. Terms
of the Purchase Agreement. Each of Seller and Buyer acknowledges and agrees that the representations, warranties, covenants,
agreements and indemnities of each of Seller and Buyer contained in the Purchase Agreement shall not be superseded hereby but
shall remain in full force and effect to the full extent provided therein. In the event of any conflict or inconsistency between
the terms of the Purchase Agreement and the terms hereof, the terms of the Purchase Agreement shall govern.

 

6. Counterparts;
Facsimile Execution. This Assignment and Assumption Agreement may be executed in two or more counterparts, each of which shall
be deemed to be an original, but all of which shall be one and the same document. Signatures of the Buyer and Seller transmitted
by facsimile, PDF or other electronic file shall be deemed to be their original signatures for all purposes and the exchange of
copies of this Assignment and Assumption Agreement and of signature pages by facsimile transmission, PDF or other electronic file
shall constitute effective execution and delivery of this Agreement as to the Parties and may be used in lieu of the original
Assignment and Assumption Agreement for all purposes. At the request of any party hereto, all parties hereto agree to execute
an original of this Assignment and Assumption Agreement in addition to any facsimile, telecopy, PDF or other reproduction hereof.

 

     

    EXECUTION COPY

    

 

In
Witness Whereof, the Parties have executed this
Assignment and Assumption Agreement as of April 14, 2017.

 

	 	SELLER:
	 	 	 
	 	ECO3D LLC, an Arkansas limited liability company
	 	 	 
	 	By:	Ecoark,
Inc., Sole Member
	 	 	 
	 	By:	/s/ Randy
    May
	 	Name: 	Randy
    May
	 	Title:	President
	 	 	 
	 	BUYER:
	 	 	 
	 	ECO3D ACQUISITION LLC, a Delaware limited liability company
	 	 	 
	 	By:	/s/ Kenneth
J. Smerz
	 	Name:	Kenneth
J. Smerz
	 	Title:	Manager

 

 

Assignment and Assumption AgreementBlueprint

  EXHIBIT
4.1

 

NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE 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 HOLDER),
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 ACCOUNT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.

 

	
Principal
Amount: $82,931.27 

	

 Issue
Date: MARCH 30, 2017

 

8% CONVERTIBLE NOTE

 

WHEREAS, J. P. Carey Enterprises, Inc.,
a Florida company controlled by Joseph C. Canouse, and Friendable,
Inc. a Nevada Corporation (“Borrower” or
“Company”), entered into a Consulting Agreement, dated
April 1, 2014 (the “Consulting
Agreement”);

 

WHEREAS, J. P. Carey Enterprises, Inc.
was due to be paid $10,000 per month in the form of a convertible
debenture;

 

WHEREAS, the Consulting Agreement had a
term of seven months and J. P. Carey Enterprises, Inc. believed the
Company owed it compensation of $70,000;

 

WHEREAS, the Company believed it had
cancelled the Consulting Agreement in April 2014;

 

WHEREAS, as of March 29, 2016, the
Company disputed it owed any money to J. P. Carey Enterprises,
Inc.;

 

WHEREAS, on March 29, 2016, Joseph C.
Canouse, the natural person that controls J. P. Carey Enterprises,
Inc., commenced litigation against the Company to collect $70,000
plus interest;

 

WHEREAS, the Company and Mr. Canouse
entered into settlement talks regarding this litigation on July 19,
2016;

 

WHEREAS, the Company acknowledges that,
as of July 19, 2016, it owed $70,000 plus interest to J. P. Carey
Enterprises, Inc.;

 

 

1

 

 

WHEREAS, the Company and J. P. Carey
Enterprises, Inc. did not successfully conclude a settlement until
after judgment in the sum of $82,931.27 was entered against the
Company in the case styled Joseph C. Canouse v. Friendable, Civil
Action No. 16EV001265H, State Court of Fulton County, Georgia on
December 7, 2016; and

 

WHEREAS, this Note is being
issued in lieu of the convertible promissory note that the parties
agree the Company should have issued on July 19, 2016 in the
principal amount of $82,931.27.  The Holder (as defined below)
shall be entitled to tack back to July 19, 2016 for purposes of
Rule 144 promulgated
under the Securities Act of 1933, as
amended (the “Securities Act”).

 

NOW THEREFORE, FOR VALUE RECEIVED, the
“Borrower” hereby promises to pay to the order of
J. P. CAREY ENTERPRISES,
INC., a Florida company, or its assigns (the
“Holder”), on SEPTEMBER 30, 2017, (subject to extension
as set forth below, the “Maturity Date”), the sum of
$82,931.27 as set forth herein, together with interest on the
unpaid principal balance hereof at the rate of eight (8%) per annum
(the “Interest Rate”) from the date of issuance hereof
until this Note plus any and all amounts due hereunder are paid in
full, and any additional amounts set forth herein, including
without limitation any Additional Principal (as defined herein).
Interest shall be computed on the basis of a 365-day year and the
actual number of days elapsed. Any amount of principal or interest
on this Note which is not paid when due shall bear interest at the
rate of twenty-four (24%) per annum from the due date thereof until
the same is paid (“Default Interest”). All payments due
hereunder shall be made in lawful money of the United States of
America. All payments shall be made at such address as the Holder
shall hereafter give to the Borrower by written notice made in
accordance with the provisions of this Note. Whenever any amount
expressed to be due by the terms of this Note is due on any day
which is not a business day, the same shall instead be due on the
next succeeding day which is a business day and, in the case of any
interest payment date which is not the date on which this Note is
paid in full, the extension of the due date thereof shall not be
taken into account for purposes of determining the amount of
interest due on such date. As used in this Note, the term
“business day” shall mean any day other than a
Saturday, Sunday or a day on which commercial banks in the city of
Georgia, Georgia are authorized or required by law or executive
order to remain closed. Each capitalized term used herein, and not
otherwise defined, shall have the meaning ascribed thereto in that
certain Settlement Agreement entered into by and between the
Company and Holder dated on or about the date hereof, pursuant to
which this Note was originally issued (the “Settlement
Agreement”). The Holder may, by written notice to the
Borrower at least five (5) days before the Maturity Date (as may
have been previously extended), extend the Maturity Date to up to
one (1) year following the date of the original Maturity Date
hereunder.

 

 

 

 

 

 

2

 

 

This
Note is 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 Borrower and
will not impose personal liability upon the holder
thereof.

 

The
following terms shall apply to this Note:

 

ARTICLE
I. CONVERSION RIGHTS

 

1.1. Conversion
Right. The Holder shall have the right, in its sole and
absolute discretion, at any time from time to time, to convert all
or any part of the outstanding amount due under this Note into
fully paid and non-assessable shares of Common Stock, as such
Common Stock exists on the Issue Date, or any shares of capital
stock or other securities of the Borrower into which such Common
Stock shall hereafter be changed or reclassified at the conversion
price (the “Conversion Price”) determined as provided
herein (a “Conversion”); provided, however, that in no event shall
the Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the
sum of (1) the number of shares of Common Stock beneficially owned
by the Holder and its affiliates (other than shares of Common Stock
which may be deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the unexercised or unconverted
portion of any other security of the Borrower subject to a
limitation on conversion or exercise analogous to the limitations
contained herein) and (2) the number of shares of Common Stock
issuable upon the conversion of the portion of this Note with
respect to which the determination of this proviso is being made,
would result in beneficial ownership by the Holder and its
affiliates of more than 4.9% of the outstanding shares of Common
Stock. For purposes of the proviso to the immediately preceding
sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and Regulation 13D-G
thereunder, except as otherwise provided in clause (1) of such
proviso, provided,
further,
however, that the
limitations on conversion may be waived by the Holder upon, at the
election of the Holder, not less than 61 days’ prior notice
to the Borrower, and the provisions of the conversion limitation
shall continue to apply until such 61st day (or such later date, as
determined by the Holder, as may be specified in such notice of
waiver). The number of shares of Common Stock to be issued upon
each Conversion of this Note (“Conversion Shares”)
shall be determined by dividing the Conversion Amount (as defined
below) by the applicable Conversion Price then in effect on the
date specified in the notice of conversion, in the form attached
hereto as Exhibit A (the “Notice of Conversion”),
delivered to the Borrower by the Holder in accordance with Section
1.4 below; provided that the Notice of Conversion is submitted by
facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower before 11:59 p.m.,
Atlanta, Georgia time on such conversion date (the
“Conversion Date”). The term “Conversion
Amount” means, with respect to any Conversion of this Note,
the sum of (1) the principal amount of this Note to be converted in
such Conversion, plus (2) accrued and unpaid
interest, if any, on such principal amount being converted at the
interest rates provided in this Note to the Conversion Date,
plus (3) at the
Holder’s option, Default Interest, if any, on the amounts
referred to in the immediately preceding clauses (1) and/or (2),
plus (4) any
Additional Principal for such Conversion, plus (5) at the Holder’s
option, any amounts owed to the Holder pursuant to Sections 1.2(c)
and 1.4(g) hereof.

 

 

 

3

 

 

1.2.    
Conversion
Price.

 

a) Calculation of Conversion
Price. The conversion price hereunder (the “Conversion
Price”) shall equal the lower of: (i) the closing sale price
of the Common Stock on the Principal Market on the Trading Day
immediately preceding the Closing Date, and (ii) 50% of either the
lowest sale price for the Common Stock on the Principal Market
during the twenty five (25) consecutive
Trading Days immediately preceding the Conversion Date or the
closing bid price, whichever is lower, provided, however, if the
Company’s share price at any time loses the bid (ex: 0.0001
on the ask with zero market makers on the bid on level 2), then the
Conversion Price may, in the Holder’s sole and absolute
discretion, be reduced to a fixed conversion price of 0.00001 (if
lower than the conversion price otherwise), and provided, that if on the date of
delivery of the Conversion Shares to the Holder, or any date
thereafter while Conversion Shares are held by the Holder, the
closing bid price per share of Common Stock on the Principal Market
on the Trading Day on which the Common Shares are traded is less
than the sale price per share of Common Stock on the Principal
Market on the Trading Day used to calculate the Conversion Price
hereunder, then such Conversion Price shall be automatically
reduced such that the Conversion Price shall be recalculated using
the new low closing bid price (“Adjusted Conversion
Price”) and shall replace the Conversion Price above, and
Holder shall be issued a number of additional shares such that the
aggregate number of shares Holder receives is based upon the
Adjusted Conversion Price, and provided, further, that the Conversion
Price shall be subject to Section 1.2(b) below. For the purpose of
clarity, any shares required to be issued as a result of an
Adjusted Conversion Price shall be deemed to be “Conversion
Shares” under this Note. If an Event of Default under Section
3.9 of the Note has occurred, Holder, in its sole discretion, may
elect to use a Conversion Price which shall equal the lower of: (i)
the closing sale price of the Common Stock on the Principal Market
on the Trading Day immediately preceding the Closing Date; (ii) 50%
of either the lowest sale price or the closing bid price, whichever
is lower for the Common Stock on the Principal Market during any
Trading Day in which the Event of Default has not been cured. If
such Common Stock is not traded on the OTCBB, OTCQB, OTC Pink,
NASDAQ or NYSE, then such sale price shall be the sale price of
such security on the principal securities exchange or trading
market where such security is listed or traded or, if no sale price
of such security is available in any of the foregoing manners, the
average of the closing bid prices of any market makers for such
security that are listed in the “pink sheets” by the
National Quotation Bureau, Inc. If such sale price cannot be
calculated for such security on such date in the manner provided
above, such price shall be the fair market value as mutually
determined by the Borrower and the Holder. If the Borrower’s
Common stock is chilled for deposit at DTC, becomes chilled at any
point while this Note remains outstanding or deposit or other
additional fees are payable due to a Yield Sign, Stop Sign or other
trading restrictions, or if the closing sale price at any time
falls below $0.0009 (as appropriately and equitably adjusted for
stock splits, stock dividends, stock contributions and similar
events), then such 50% figure specified in clause 1.2(a)(ii) above
shall be reduced to 35%. In the event that the shares of the
Borrower’s Common Stock are not deliverable via DWAC
following the conversion of any amount hereunder, an additional 5%
discount will be attributed to the Conversion Price. “Trading
Day” shall mean any day on which the Common Stock is tradable
for any period on the OTC Pink, or on the principal securities
exchange or other securities market on which the Common Stock is
then being traded. Additionally, if the Company ceases to be a
reporting company pursuant to the Exchange Act or if the Note
cannot be converted into free trading shares after 181 days from
the date deemed appropriate by the counsel to Holder issuing the
Rule 144 opinion, an additional 15% discount will be attributed to
the Conversion Price for any and all Conversions submitted
thereafter.

 

 

4

 

 

b) If at any time the
Conversion Price as determined hereunder for any Conversion would
be less than the par value of the Common Stock, then the Conversion
Price hereunder shall equal such par value for such Conversion and
the Conversion Amount for such Conversion shall be increased to
include Additional Principal, where “Additional
Principal” means such additional amount to be added to the
Conversion Amount to the extent necessary to cause the number of
Conversion Shares issuable upon such Conversion to equal the same
number of Conversion Shares as would have been issued had the
Conversion Price not been subject to the minimum price set forth in
this Section 1.2(b).

 

c) Without in any way
limiting the Holder’s right to pursue other remedies,
including actual damages and/or equitable relief, the parties agree
that if delivery of the Common Stock issuable upon conversion of
this Note is not delivered by the Deadline (as defined below) the
Borrower shall pay to the Holder $1,000.00 per day in cash, for
each day beyond the Deadline that the Borrower fails to deliver
such Common Stock. Such cash amount shall be paid to Holder by the
fifth day of the month following the month in which it has accrued
or, at the option of the Holder, shall be added to the principal
amount of this Note, in which event interest shall accrue thereon
in accordance with the terms of this Note and such additional
principal amount shall be convertible into Common Stock in
accordance with the terms of this Note. The Borrower agrees that
the right to convert this Note is a valuable right to the Holder.
The damages resulting from a failure, attempt to frustrate, or
interference with such conversion right are difficult if not
impossible to quantify. Accordingly the parties acknowledge that
the liquidated damages provision contained in this Section are
justified.

 

1.3. Authorized
Shares. The Borrower covenants that the Borrower will at all
times while this Note is outstanding reserve from its authorized
and unissued Common Stock a sufficient number of shares, free from
preemptive rights, to provide for the issuance of Common Stock upon
the full conversion or adjustment of this Note. The Borrower is
required at all times to have authorized and reserved two (2) times
the number of shares that is actually issuable upon full conversion
or adjustment of this Note (based on the Conversion Price of the
Notes in effect from time to time) (the “Reserved
Amount”). Initially, the Company will instruct the Transfer
Agent to reserve four hundred eighty-seven million, five hundred
thousand (487,500,000) shares of common stock in the name of the
Holder for issuance upon conversion hereof. The Borrower represents
that upon issuance, such shares will be duly and validly issued,
fully paid and non-assessable. In addition, if the Borrower shall
issue any securities or make any change to its capital structure
which would change the number of shares of Common Stock into which
this Note shall be convertible at the then current Conversion
Price, the Borrower shall at the same time make proper provision so
that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights,
for conversion of this Note in full. The Borrower (i) acknowledges
that it has irrevocably instructed its transfer agent to issue
certificates for the Common Stock issuable upon conversion of this
Note, and (ii) agrees that its issuance of this Note shall
constitute full authority to its officers and agents who are
charged with the duty of executing stock certificates to execute
and issue the necessary certificates for shares of Common Stock in
accordance with the terms and conditions of this Note.

 

If, at any time the
Borrower does not maintain the Reserved Amount it will be
considered an Event of Default under Section 3.2 of the
Note.

 

1.4.     
Method of
Conversion.

 

 

5

 

 

a) Mechanics of Conversion.
Subject to Section 1.1, this Note may be converted by the Holder in
whole or in part at any time and from time to time after the Issue
Date, by submitting to the Borrower a Notice of Conversion (by
facsimile, e-mail or other reasonable means of communication
dispatched on the Conversion Date prior to 11:59 p.m., Atlanta,
Georgia time).

 

b) Book Entry upon Conversion.
Notwithstanding anything to the contrary set forth herein, upon
conversion of this Note in accordance with the terms hereof, the
Holder shall not be required to physically surrender this Note to
the Borrower unless the entire unpaid principal amount of this Note
is so converted. The Holder and the Borrower shall maintain records
showing the principal amount so converted and the dates of such
conversions or shall use such other method, reasonably satisfactory
to the Holder and the Borrower, so as not to require physical
surrender of this Note upon each such conversion. In the event of
any dispute or discrepancy, such records of the Borrower shall,
prima facie, be controlling
and determinative in the absence of manifest error. Notwithstanding
the foregoing, if any portion of this Note is converted as
aforesaid, the Holder may not transfer this Note unless the Holder
first physically surrenders this Note to the Borrower, whereupon
the Borrower will forthwith issue and deliver upon the order of the
Holder a new Note of like tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may
request, representing in the aggregate the remaining unpaid
principal amount of this Note. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree that, by reason of
the provisions of this paragraph, following conversion of a portion
of this Note, the unpaid and unconverted principal amount of this
Note represented by this Note may be less than the amount stated on
the face hereof.

 

c) Payment of Taxes. The Borrower
shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of
shares of Common Stock or other securities or property on
conversion of this Note in a name other than that of the Holder (or
in street name), and the Borrower shall not be required to issue or
deliver any such shares or other securities or property unless and
until the person or persons (other than the Holder or the custodian
in whose street name such shares are to be held for the
Holder’s account) requesting the issuance thereof shall have
paid to the Borrower the amount of any such tax or shall have
established to the satisfaction of the Borrower that such tax has
been paid.

 

d) Delivery of Common Stock upon
Conversion. Upon receipt by the Borrower from the Holder of
a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements
for conversion as provided in this Section 1.4 or upon an event
triggering the calculation of an Adjusted Conversion Price, the
Borrower shall issue and deliver or cause to be issued and
delivered to or upon the order of the Holder certificates for the
Common Stock issuable upon such conversion within three (3)
business days after such receipt or such an event (the
“Deadline”) (and, solely in the case of conversion
of the entire unpaid
principal amount hereof, surrender of this Note) in accordance with
the terms hereof.

 

 

6

 

 

e) Obligation of Borrower to Deliver
Common Stock. Upon receipt by the Borrower of a duly and
properly executed Notice of Conversion or upon an event triggering
the calculation of an Adjusted Conversion Price, the Holder shall
be deemed to be the holder of record of the Common Stock issuable
upon such conversion or as a result of an Adjusted Conversion
Price, the outstanding principal amount and the amount of accrued
and unpaid interest on this Note shall be reduced to reflect such
conversion or adjustment, and, unless the Borrower defaults on its
obligations under this Article I, all rights with respect to the
portion of this Note being so converted shall forthwith terminate
except the right to receive the Common Stock or other securities,
cash or other assets, as herein provided, on such conversion. If
the Holder shall have given a Notice of Conversion as provided
herein or upon an event triggering the calculation of an Adjusted
Conversion Price, the Borrower’s obligation to issue and
deliver the certificates for Common Stock shall be absolute and
unconditional, irrespective of the absence of any action by the
Holder to enforce the same, any waiver or consent with respect to
any provision thereof, the recovery of any judgment against any
person or any action to enforce the same, any failure or delay in
the enforcement of any other obligation of the Borrower to the
holder of record, or any setoff, counterclaim, recoupment,
limitation or termination, or any breach or alleged breach by the
Holder of any obligation to the Borrower, and irrespective of any
other circumstance which might otherwise limit such obligation of
the Borrower to the Holder in connection with such conversion. The
Conversion Date specified in the Notice of Conversion shall be the
Conversion Date so long as the Notice of Conversion is received by
the Borrower before 11:59 p.m., Georgia, Georgia time, on such
date.

 

f)  
Delivery of Common Stock by Electronic
Transfer. In lieu of delivering physical certificates
representing the Common Stock issuable upon conversion, provided
the Borrower is participating in the Depository Trust Company
(“DTC”) Fast Automated Securities Transfer
(“FAST”) program, upon request of the Holder and its
compliance with the provisions contained in Section 1.1 and in this
Section 1.4, the Borrower shall use its best efforts to cause its
transfer agent to electronically transmit the Common Stock issuable
upon conversion or upon an event triggering the calculation of an
Adjusted Conversion Price to the Holder by crediting the account of
Holder’s Prime Broker with DTC through its Deposit Withdrawal
Agent Commission (“DWAC”) system.

 

g) Failure to Deliver Common Stock Prior
to Deadline. Without in any way limiting the Holder’s
right to pursue other remedies, including actual damages and/or
equitable relief, the parties agree that if delivery of the Common
Stock issuable upon conversion or adjustment of this Note is not
delivered by the Deadline, the Borrower shall pay to the
Holder $1,000.00 per day
in cash, for each day beyond the Deadline that the Borrower fails
to deliver such Common Stock to the Holder. Such cash amount shall
be paid to Holder by the fifth day of the month following the month
in which it has accrued or, at the option of the Holder, shall be
added to the principal amount of this Note, in which event interest
shall accrue thereon in accordance with the terms of this Note and
such additional principal amount shall be convertible into Common
Stock in accordance with the terms of this Note. The Borrower
agrees that the right to convert and/or receive shares in the event
of an adjustment is a valuable right to the Holder. The damages
resulting from a failure, attempt to frustrate, or interference
with such conversion or adjustment right are difficult if not
impossible to qualify. Accordingly the parties acknowledge that the
liquidated damages provision contained in this Section 1.4(g) are
justified.

 

h) Reserved.

 

 

7

 

 

i) Charges and Expenses. Issuance
of Common Stock to Holder, or any of its assignees, upon the
conversion of this Note shall be made without charge to the Holder
for any issuance fee, transfer tax, legal opinion and related
charges, postage/mailing charge or any other expense with respect
to the issuance of such Common Stock. Company shall pay all
Transfer Agent fees incurred from the issuance of the Common Stock
to Holder, as well as any and all other fees and charges required
by the Transfer Agent as a condition to effectuate such issuance.
Any such fees or charges as noted in this Section that are paid by
the Holder (whether from the Company’s delays, outright
refusal to pay, or otherwise), will be automatically added to the
Principal Amount of the Note and tack back, for purposes of Rule
144, to the date deemed appropriate by the counsel to Holder
issuing the Rule 144 opinion.

 

1.1
    Restricted
Securities. The shares of Common Stock issuable upon
conversion or adjustment of this Note may not be sold or
transferred unless (i) such shares are sold pursuant to an
effective registration statement under the Securities Act or (ii)
the Borrower or its transfer agent shall have been furnished with
an opinion of counsel (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable
transactions) to the effect that the shares to be sold or
transferred may be sold or transferred pursuant to an exemption
from such registration including, but not limited to, pursuant to
Rule 144 which opinion (solely in the case of a Rule 144 opinion)
will be issued at the Company’s expense and the conversion
dollar amount will be reduced (solely in the case of a Rule 144
opinion ) by $750.00 to cover the cost of such legal opinion
(solely in the case of a Rule 144 opinion) or (iii) such shares are
transferred to an “affiliate” (as defined in Rule 144)
of the Borrower who agrees to sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an
“accredited investor” (as defined in Rule 501(a) of the
Securities Act). Any legend set forth on any stock certificate
evidencing any Conversion Shares shall be removed and the Borrower
shall issue to the Holder a new certificate therefore free of any
transfer legend if (i) the Borrower or its transfer agent shall
have received an opinion of counsel form, substance and scope
customary for opinions of counsel in comparable transactions, to
the effect that a public sale or transfer of such Common Stock may
be made without registration under the Securities Act, which
opinion shall be reasonably acceptable to the Company, or (ii) in
the case of the Common Stock issued or issuable upon conversion of
this Note, such security is registered for sale by the Holder under
an effective registration statement filed under the Securities Act
or otherwise 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.

 

1.1.   
Effect of Certain
Events.

 

a) Effect of Merger, Consolidation,
Etc. At the option of the Holder, the sale, conveyance or
disposition of all or substantially all of the

 

b)   
assets
of the Borrower, the effectuation by the Borrower of a transaction
or series of related transactions in which more than 50% of the
voting power of the Borrower is disposed of, or the consolidation,
merger or other business combination of the Borrower with or into
any other Person (as defined below) or Persons when the Borrower is
not the survivor shall either: (i) be deemed to be an Event of
Default (as defined in Article III) pursuant to which the Borrower
shall be required to pay to the Holder upon the consummation of and
as a condition to such transaction an amount equal to the Default
Amount (as defined in Article III) or (ii) be treated pursuant to
Section 1.6(b) hereof. “Person” shall mean any
individual, corporation, limited liability company, partnership,
association, trust or other entity or organization.

 

 

8

 

 

c) Adjustment Due to Merger,
Consolidation, Etc. If, at any time when this Note is issued
and outstanding and prior to conversion of all of the Notes, there
shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a
result of which shares of Common Stock of the Borrower shall be
changed into the same or a different number of shares of another
class or classes of stock or securities of the Borrower or another
entity, or in case of any sale or conveyance of all or
substantially all of the assets of the Borrower other than in
connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to
receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of
Common Stock immediately theretofore issuable upon conversion, such
stock, securities or assets which the Holder would have been
entitled to receive in such transaction had this Note been
converted in full immediately prior to such transaction (without
regard to any limitations on conversion set forth herein), and in
any such case appropriate provisions shall be made with respect to
the rights and interests of the Holder of this Note to the end that
the provisions hereof (including, without limitation, provisions
for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be
applicable, as nearly as may be practicable in relation to any
securities or assets thereafter deliverable upon the conversion
hereof. The Borrower shall not affect any transaction described in
this Section 1.6(b) unless (a) it first gives, to the extent
practicable, thirty (30) days prior written notice (but in any
event at least fifteen (15) days prior written notice) of the
record date of the special meeting of shareholders to approve, or
if there is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization
or other similar event or sale of assets (during which time, for
clarification, the Holder shall be entitled to convert this Note)
and (b) the resulting successor or acquiring entity assumes by
written instrument the obligations of this Section 1.6(b). The
above provisions shall similarly apply to successive
consolidations, mergers, sales, transfers or share
exchanges.

 

d) Adjustment Due to Distribution.
If the Borrower shall declare or make any distribution of its
assets (or rights to acquire its assets) to holders of Common Stock
as a dividend, stock repurchase, by way of return of capital or
otherwise (including any dividend or distribution to the
Borrower’s shareholders in cash or shares (or rights to
acquire shares) of capital stock of a subsidiary (i.e., a
spin-off)) (a “Distribution”), then the Holder of this
Note shall be entitled, upon any conversion of this Note after the
date of record for determining shareholders entitled to such
Distribution, to receive the amount of such assets which would have
been payable to the Holder with respect to the shares of Common
Stock issuable upon such conversion had such Holder been the holder
of such shares of Common Stock on the record date for the
determination of shareholders entitled to such Distribution. Such
assets shall be held in escrow by the Company pending any such
conversion

 

e)   Purchase
Rights. If, at any time when any Notes are issued and
outstanding, the Borrower issues any convertible securities or
rights to purchase stock, warrants, securities or other property
(the “Purchase Rights”) pro rata to the record holders
of any class of Common Stock, then the Holder of this Note will be
entitled to acquire, upon the terms applicable to such Purchase
Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without
regard to any limitations on conversion contained herein)
immediately before the date on which a record is taken for the
grant, issuance or sale of such Purchase Rights or, if no such
record is taken, the date as of which the record holders of Common
Stock are to be determined for the grant, issue or sale of such
Purchase Rights.

 

 

9

 

 

f) Stock Dividends and Stock
Splits. If the Company, at any time while this Note is
outstanding: (A) pays a stock dividend or otherwise makes a
distribution or distributions payable in shares of Common Stock on
shares of Common Stock or any securities convertible into or
exercisable for Common Stock; (B) subdivides outstanding shares of
Common Stock into a larger number of shares; (C) combines
(including by way of a reverse stock split) outstanding shares of
Common Stock into a smaller number of shares; or (D) issues, in the
event of a reclassification of shares of the Common Stock, any
shares of capital stock of the Company, then the Conversion Price
(and each sale or bid price used in determining the Conversion
Price) shall be multiplied by a fraction, of which the numerator
shall be the number of shares of Common Stock outstanding
immediately before such event and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after
such event. Any adjustment made pursuant to this Section shall
become effective immediately after the record date for the
determination of stockholders entitled to receive such dividend or
distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

 

g) Notice of Adjustments. Upon the
occurrence of each adjustment or readjustment of the Conversion
Price as a result of the events described in this Section 1.6, the
Borrower, at its expense, shall promptly compute such adjustment or
readjustment and prepare and furnish to the Holder a certificate
setting forth such adjustment or readjustment and showing in detail
the facts upon which such adjustment or readjustment is based. The
Borrower shall, upon the written request at any time of the Holder,
furnish to such Holder a like certificate setting forth (i) such
adjustment or readjustment, (ii) the Conversion Price at the time
in effect and (iii) the number of shares of Common Stock and the
amount, if any, of other securities or property which at the time
would be received upon conversion of the Note.

 

1.2. Revocation.
If any Conversion Shares are not received by the Deadline, the
Holder may revoke the applicable Conversion pursuant to which such
Conversion Shares were issuable. This Note shall remain convertible
after the Maturity Date hereof until this Note is repaid or
converted in full.

 

1.3. Prepayment.
Notwithstanding anything to the contrary contained in this Note,
subject to the terms of this Section, at any time during the period
beginning on the Issue Date and ending on the date which is six (6)
months following the Issue Date (“Prepayment Termination
Date”), Borrower shall have the right, exercisable on not
less than five (5) Trading Days prior written notice to the Holder
of this Note, to prepay the outstanding balance on this Note
(principal and accrued interest), in full, in accordance with this
Section. Any notice of prepayment hereunder (an “Optional
Prepayment Notice”) shall be delivered to the Holder of the
Note at its registered addresses and shall state: (1) that the
Borrower is exercising its right to prepay the Note, and (2) the
date of prepayment which shall be not more than ten (10) Trading
Days from the date of the Optional Prepayment Notice. On the date
fixed for prepayment (the “Optional Prepayment Date”),
the Borrower shall make payment of the Optional Prepayment Amount
(as defined below) to or upon the order of the Holder as specified
by the Holder in writing to the Borrower at least one (1) business
day prior to the Optional Prepayment Date. If the Borrower
exercises its right to prepay the Note, the Borrower shall make
payment to the Holder of an amount in cash (the “Optional
Prepayment Amount”) equal to the Prepayment Factor (as
defined below), multiplied by the sum of: (w) the then
outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the
Optional Prepayment Date plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and (x) plus (z) any amounts owed to
the Holder pursuant to Sections 1.3 and 1.4(g) hereof. If the
Borrower delivers an Optional Prepayment Notice and fails to pay
the Optional Prepayment Amount due to the Holder of the Note within
two (2) business days following the Optional Prepayment Date, the
Borrower shall forever forfeit its right to prepay the Note
pursuant to this Section. After the Prepayment Termination Date,
the Borrower shall have no right to prepay this Note. For purposes
hereof, the “Prepayment Factor” shall equal one hundred
and fifty percent (150%), provided that such Prepayment factor
shall equal one hundred and thirty five percent (135%) if the
Optional Prepayment Date occurs on or before the date which is
ninety (90) days following the Issue Date hereof.

 

 

10

 

 

ARTICLE
II. CERTAIN COVENANTS

 

2.1. Distributions
on Capital Stock. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the
Holder’s written consent (a) pay, declare or set apart for
such payment, any dividend or other distribution (whether in cash,
property or other securities) on shares of capital stock other than
dividends on shares of Common Stock solely in the form of
additional shares of Common Stock or (b) directly or indirectly or
through any subsidiary make any other payment or distribution in
respect of its capital stock except for distributions pursuant to
any shareholders’ rights plan which is approved by a majority
of the Borrower’s disinterested directors.

 

2.2. Restriction
on Stock Repurchases. So long as the Borrower shall have any
obligation under this Note, the Borrower shall not without the
Holder’s written consent redeem, repurchase or otherwise
acquire (whether for cash or in exchange for property or other
securities or otherwise) in any one transaction or series of
related transactions any shares of capital stock of the Borrower or
any warrants, rights or options to purchase or acquire any such
shares.

 

2.3. Reserved.

 

2.4. Reserved.

 

2.5. Reserved.

 

2.6. Charter.
So long as the Borrower shall have any obligations under this Note,
the Borrower shall not amend its charter documents, including
without limitation its certificate of incorporation and bylaws, in
any manner that materially and adversely affects any rights of the
Holder.

 

2.7. Transfer
Agent. The Borrower shall not change its transfer agent
without the prior written consent of the Holder. Any resignation by
the transfer agent without a replacement transfer agent consented
to by the Holder prior to such replacement taking effect shall
constitute an Event of Default hereunder.

 

ARTICLE
III. EVENTS OF DEFAULT

 

Any one
or more of the following events which shall occur and/or be
continuing shall constitute an event of default (each, an
“Event of Default”):

 

3.1. Failure
to Pay Principal or Interest. The Borrower fails to pay the
principal hereof or interest thereon when due on this Note, whether
at maturity, upon acceleration or otherwise.

 

 

11

 

 

3.2. Conversion
and the Shares. The Borrower fails to issue shares of Common
Stock to the Holder (or announces or threatens in writing that it
will not honor its obligation to do so at any time following the
execution hereof or) upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Note,
fails to transfer or cause its transfer agent to transfer (issue)
(electronically or in certificated form) any certificate for shares
of Common Stock issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note,
the Borrower directs its transfer agent not to transfer or delays,
impairs, and/or hinders its transfer agent in transferring (or
issuing) (electronically or in certificated form) any certificate
for shares of Common Stock to be issued to the Holder upon
conversion of or otherwise pursuant to this Note as and when
required by this Note, or fails 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 shares of Common Stock issued to the Holder upon conversion
of or otherwise pursuant to this Note as and when required by this
Note (or makes any written announcement, statement or threat that
it does not intend to honor the obligations described in this
paragraph) and any such failure shall continue uncured (or any
written announcement, statement or threat not to honor its
obligations shall not be rescinded in writing) for five (5)
business days after the Holder shall have delivered a Notice of
Conversion. It is an obligation of the Borrower to remain current
in its obligations to its transfer agent. It shall be an event of
default of this Note, if a conversion of this Note is delayed,
hindered or frustrated due to a balance owed by the Borrower to its
transfer agent. If at the option of the Holder, the Holder advances
any funds to the Borrower’s transfer agent in order to
process a conversion, such advanced funds shall be paid by the
Borrower to the Holder within forty-eight (48) hours of a demand
from the Holder.

 

3.3. Breach
of Covenants. The Borrower breaches any material covenant or
other material term or condition contained in this Note and any
collateral documents and such breach continues for a period of
seven (7) days after written notice thereof to the Borrower from
the Holder.

 

3.4. Breach
of Representations and Warranties. Any representation or
warranty of the Borrower made herein or in any agreement, statement
or certificate given in writing pursuant hereto or in connection
herewith, shall be false or misleading in any material respect when
made and the breach of which has (or with the passage of time will
have) a material adverse effect on the rights of the Holder with
respect to this Note.

 

3.5.    
Receiver or Trustee. The
Borrower or any subsidiary of the Borrower shall make an assignment
for the benefit of creditors, or apply for or consent to the
appointment of a receiver or trustee for it or for a substantial
part of its property or business, or such a receiver or trustee
shall otherwise be appointed.

 

3.6.    
Judgments. Any money judgment,
writ or similar process shall be entered or filed against the
Borrower or any subsidiary of the Borrower or any of its property
or other assets for more than $50,000.00, and shall remain
unvacated, unbonded or unstayed for a period of twenty
(20)
days unless otherwise consented to by the Holder, which consent
will not be unreasonably withheld.

 

3.7.   
Bankruptcy. Bankruptcy,
insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any
bankruptcy law or any law for the relief of debtors shall be
instituted by or against the Borrower or any subsidiary of the
Borrower.

 

 

12

 

 

3.8.   
Delisting of Common Stock. The
Borrower shall fail to maintain the listing of the Common Stock on
at least one of the OTCBB, or OTCQB, OTC Pink or an equivalent
replacement exchange, NASDAQ, the NYSE or AMEX.

 

3.9.   
Failure to Comply with the Exchange
Act. The Borrower shall fail to comply in any material
respect with the reporting requirements of the Exchange Act; and/or
the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.

 

3.10.  
Liquidation. Any dissolution,
liquidation, or winding up of Borrower or any substantial portion
of its business.

 

3.11.   
Cessation of Operations. Any
cessation of operations by Borrower or Borrower admits it is
otherwise generally unable to pay its debts as such debts become
due, provided, however, that any disclosure of the Borrower’s
ability to continue as a “going concern” shall not be
an admission that the Borrower cannot pay its debts as they become
due.

 

3.12.    
Maintenance of Assets. The
failure by Borrower, during the term of this Note, to maintain any
material intellectual property rights, personal, real property or
other assets which are necessary to conduct its business (whether
now or in the future).

 

3.13.    
Financial Statement
Restatement. The restatement of any financial statements
filed by the Borrower with the SEC for any date or period from two
years prior to the Issue Date of this Note and until this Note is
no longer outstanding, if the result of such restatement would, by
comparison to the unrestated financial statement, have constituted
a material adverse effect on the rights of the Holder with respect
to this Note.

 

3.14.   
Reverse Splits. The Borrower
effectuates a reverse split of its Common Stock without twenty (20)
days prior written notice to the Holder.

 

3.15.    
Replacement of Transfer Agent.
In the event that the Borrower proposes to replace its transfer
agent, the Borrower fails to provide, prior to the effective date
of such replacement, a fully executed Irrevocable Transfer Agent
Instructions in a form as initially delivered on the Issue Date
signed by the successor transfer agent to Borrower and the
Borrower.

 

3.16.    
Cross-Default.

 

 

13

 

 

Upon
the occurrence and during the continuation of any Event of Default
specified in Section 3.1 (solely with respect to failure to pay the
principal hereof or interest thereon when due at the Maturity
Date), the Note shall become immediately due and payable and the
Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the Default Sum (as
defined herein). UPON THE OCCURRENCE AND DURING THE CONTINUATION OF
ANY EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL
BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO
THE HOLDER, IN FULL SATISFACTION OF ITS OBLIGATIONS HEREUNDER, AN
AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED HEREIN);
MULTIPLIED BY (Z) TWO (2). Upon the
occurrence and during the continuation of any Event of Default
specified in Sections 3.1 (solely with
respect to failure to pay the principal hereof or interest thereon
when due on this Note upon a Trading Market Prepayment Event
pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8,
3.9, 3.11, 3.12, 3.13, 3.14, 3.17, 3.18 and/or 3. 15 exercisable
through the delivery of written notice to the Borrower by such
Holders (the “Default Notice”), and upon the occurrence
of an Event of Default specified in the remaining sections of
Articles III (other than failure to pay the principal hereof or
interest thereon at the Maturity Date specified in Section 3,1
hereof), the Note shall become immediately due and payable and the
Borrower shall pay to the Holder, in full satisfaction of its
obligations hereunder, an amount equal to the greater of (i) 150%
times the
sum of
(w) the
then outstanding principal amount of this Note plus (x) accrued and unpaid
interest on the unpaid principal amount of this Note to the date of
payment (the “Mandatory Prepayment Date”) plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and/or (x)
plus (z) any
amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g)
hereof (the then outstanding principal amount of this Note to the
date of payment plus the amounts referred to in
clauses (x), (y) and (z) shall collectively be known as the
“Default Sum”) or (ii) the “parity value”
of the Default Sum to be prepaid, where parity value means (a) the
highest number of shares of Common Stock issuable upon conversion
of or otherwise pursuant to such Default Sum in accordance with
Article I, treating the Trading Day immediately preceding the
Mandatory Prepayment Date as the “Conversion Date” for
purposes of determining the lowest applicable Conversion Price,
unless the Default Event arises as a result of a breach in respect
of a specific Conversion Date in which case such Conversion Date
shall be the Conversion Date), multiplied by (b) the highest
Closing Price for the Common Stock during the period beginning on
the date of first occurrence of the Event of Default and ending one
day prior to the Mandatory Prepayment Date (the “Default
Amount”) and all other amounts payable hereunder shall
immediately become due and payable, all without demand, presentment
or notice, all of which hereby are expressly waived, together with
all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all
other rights and remedies available at law or in
equity.

 

If the
Borrower fails to pay the Default Amount within five (5) business
days of written notice that such amount is due and payable, then
the Holder shall have the right at any time, so long as the
Borrower remains in default (and so long and to the extent that
there are sufficient authorized shares), to require the Borrower,
upon written notice, to immediately issue, in lieu of the Default
Amount, the number of shares of Common Stock of the Borrower equal
to the Default Amount divided by the Conversion Price then in
effect. The Holder may still convert any amounts due hereunder,
including without limitation the Default Sum, until such time as
this Note has been repaid in full.

 

3.17.    
Inside Information.
The Borrower or its officers, directors, and/or affiliates attempt
to transmit, convey, disclose, or any actual transmittal,
conveyance, or disclosure by the Borrower or its officers,
directors, and/or affiliates of, material non-public information
concerning the Borrower, to the Holder or its successors and
assigns, which is not immediately cured by Borrower’s filing
of a Form 8-K pursuant to Regulation FD on that same
date.

 

3.18      
Bid Price. The
Borrower shall lose the “bid” price for its Common
Stock ($0.0001 on the “Ask” with zero market makers on
the “Bid” per Level 2) and/or a market (including the
OTC Pink, OTCQB or an equivalent replacement
exchange).

 

ARTICLE
IV. MISCELLANEOUS

 

4.1.   
Failure or Indulgence Not
Waiver. No failure or delay on the part of the Holder in the
exercise of any power, right or privilege hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privileges. All
rights and remedies existing hereunder are cumulative to, and not
exclusive of, any rights or remedies otherwise
available.

 

 

14

 

 

4.2.    
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 requested,
postage prepaid, (iii) delivered by reputable air courier service
with charges prepaid, or (iv) transmitted by
hand delivery, telegram, email 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 or email,
with accurate confirmation generated by the transmitting facsimile
machine or computer, at the address, email or number given by each
party to the other (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.

 

4.3. Amendments.
This Note and any provision hereof may only be amended by an
instrument in writing signed by the Borrower and the Holder. The
term “Note” and all reference thereto, as used
throughout this instrument, shall mean this instrument as
originally executed, or if later amended or supplemented, then as
so amended or supplemented.

 

4.4. Assignability.
This Note shall be binding upon the Borrower and its successors and
assigns, and shall inure to be the benefit of the Holder and its
successors and assigns. Each transferee of this Note must be an
“accredited investor” (as defined in Rule 501(a) of the
Securities Act). Notwithstanding anything in this Note to the
contrary, this Note may be pledged as collateral in connection with
a bona fide margin account or other lending
arrangement.

 

4.5. Cost
of Collection. If default is made in the payment of this
Note, the Borrower shall pay the Holder hereof costs of collection,
including reasonable attorneys’ fees.

 

4.6. Governing
Law. This Note shall be governed by and construed in
accordance with the laws of the State of Georgia without regard to
conflicts of laws principles that would result in the application
of the substantive laws of another jurisdiction. Any action brought
by either party against the other concerning the transactions
contemplated by this Agreement must be brought only in the civil or
state courts of Georgia or in the federal courts located in the
State of Georgia and county Fulton County, Georgia. Both parties
and the individual signing this Agreement on behalf of the Borrower
agree to submit to the jurisdiction of such courts. 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 Note 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 unenforceability of
any other provision of this Note. Nothing contained herein
shall be deemed or operate to
preclude the Holder from bringing suit or taking other legal action
against the Borrower in any other jurisdiction to collect on the
Borrower’s obligations to Holder, to realize on any
collateral or any other security for such obligations, or to
enforce a judgment or other decision in favor of the Holder. This
Note shall be deemed an unconditional obligation of Borrower for
the payment of money and, without limitation to any other remedies
of Holder, may be enforced against Borrower by summary proceeding
pursuant to Georgia Civil Procedure Law and Rules Section 3213 or
any similar rule or statute in the jurisdiction where enforcement
is sought. For purposes of such rule or statute, any other document
or agreement to which Holder and Borrower are parties or which
Borrower delivered to Holder, which may be convenient or necessary
to determine Holder’s rights hereunder or Borrower’s
obligations to Holder are deemed a part of this Note, whether or
not such other document or agreement was delivered together
herewith or was executed apart from this Note.

 

 

15

 

 

4.7. Certain
Amounts. Whenever pursuant to this Note the Borrower is
required to pay an amount in excess of the outstanding principal
amount (or the portion thereof required to be paid at that time)
plus accrued and unpaid interest plus Default Interest on such
interest, the Borrower and the Holder agree that the actual damages
to the Holder from the receipt of cash payment on this Note may be
difficult to determine and the amount to be so paid by the Borrower
represents stipulated damages and not a penalty and is intended to
compensate the Holder in part for loss of the opportunity to
convert this Note and to earn a return from the sale of shares of
Common Stock acquired upon conversion of this Note at a price in
excess of the price paid for such shares pursuant to this Note. The
Borrower and the Holder hereby agree that such amount of stipulated
damages is not plainly disproportionate to the possible loss to the
Holder from the receipt of a cash payment without the opportunity
to convert this Note into shares of Common Stock.

 

4.8. Disclosure.
Upon receipt or delivery by the Company of any notice in accordance
with the terms of this Note, unless the Company has in good faith
determined that the matters relating to such notice do not
constitute material, non-public information relating to the Company
or any of its Subsidiaries, the Company shall within one (1)
Trading Day after any such receipt or delivery, publicly disclose
such material, non-public information on a Current Report on Form
8-K or otherwise. In the event that the Company believes that a
notice contains material, non- public information relating to the
Company or any of its Subsidiaries, the Company so shall indicate
to such Holder contemporaneously with delivery of such notice, and
in the absence of any such indication, the Holder shall be allowed
to presume that all matters relating to such notice do not
constitute material, non-public information relating to the Company
or its Subsidiaries.

 

4.9. Notice
of Corporate Events. Except as otherwise provided below, the
Holder of this Note shall have no rights as a Holder of Common
Stock unless and only to the extent that it converts this Note into
Common Stock. The Borrower shall provide the Holder with prior
notification of any meeting of the Borrower’s shareholders
(and copies of proxy materials and other information sent to
shareholders). In the event of any taking by the Borrower of a
record of its shareholders for the purpose of determining
shareholders who are entitled to receive payment of any dividend or
other distribution, any right to subscribe for, purchase or
otherwise acquire (including by way of merger, consolidation,
reclassification or recapitalization) any share of any class or any
other securities or property, or to receive any other right, or for
the purpose of determining shareholders who are entitled to vote in
connection with any proposed sale, lease or conveyance of all or
substantially all of the assets of the Borrower or any proposed
liquidation, dissolution or winding up of the Borrower, the
Borrower shall mail a notice to the Holder, at least twenty (20)
days prior to the record date specified therein (or thirty (30)
days prior to the consummation of the transaction or event,
whichever is earlier), of the date on which any such record is to
be taken for the purpose of such dividend, distribution, right or
other event, and a brief statement regarding the amount and
character of such dividend, distribution, right or other event to
the extent known at such time. The Borrower shall make a public
announcement of any event requiring notification to the Holder
hereunder substantially simultaneously with the notification to the
Holder in accordance with the terms of this Section
4.9.

 

 

16

 

 

4.10.  
Remedies. The Borrower
acknowledges that a breach by it of its obligations hereunder will
cause irreparable harm to the Holder, by vitiating the intent and
purpose of the transaction contemplated hereby. Accordingly, the
Borrower acknowledges that the remedy at law for a breach of its
obligations under this Note will be inadequate and agrees, in the
event of a breach or threatened breach by the Borrower of the
provisions of this Note, that the Holder shall be entitled, in
addition to all other available remedies 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
Note and to enforce specifically the terms and provisions thereof,
without the necessity of showing economic loss and without any bond
or other security being required.

 

4.11. Usury.
This Note shall be subject to the anti-usury limitations of Georgia
state law.

 

 

 

 

 

(Remainder of Page
intentionally left blank)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

17

 

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its
name by its duly authorized officer as of the Issue Date first set
forth above.

 

 

 

	
FRIENDABLE,
INC.

	

 

	

 

	

 

	

 

	
By:  

	
/s/  Robert A Rositano,
Jr.

	

 

	

 

	
Name: Robert A
Rositano, Jr. Title: CEO

	

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

18

 

 

EXHIBIT
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the 8%
Convertible Note of FRIENDABLE, INC., a Nevada corporation (the
Company”),
into shares of common stock (the “Common Stock”), of the
Company according to the conditions hereof, as of the date written
below. If shares of Common Stock are to be issued in the name of a
person other than the undersigned, the undersigned will pay all
transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by
the Company in accordance therewith. No fee will be charged to the
holder for any conversion, except for such transfer taxes, if
any.

 

By the
delivery of this Notice of Conversion the undersigned represents
and warrants to the Company that its ownership of the Common Stock
does not exceed the amounts specified under Section 1.1 of this
Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery
requirements under the applicable securities laws in connection
with any transfer of the aforesaid shares of Common Stock pursuant
to any prospectus.

 

	

Conversion calculations:

	

Issue Date of Note: _______________

	
 

	

Date to Effect Conversion: _________

	
 

	
 

	
 

	

Conversion Price:
____________________________________________________________

	
 

	
 

	
 

	

Principal Amount of Note to be Converted:
________________________________________

	
 

	
 

	
 

	

Interest Accrued on Account

	
 

	

of Conversion at Issue:
________________________________________________________

	
 

	
 

	
 

	

Additional Principal on Account of Conversion

	
 

	

Pursuant to Section 1.2(b) of the Note:
____________________________________________

	
 

	
 

	
 

	

Number of shares of Common Stock to be issued:
___________________________________

	
 

	
___________________________________________________________________________

	
 

	

Remaining Balance of Note*:
___________________________________________________

	
 

	

Signature:
___________________________________________________________________

	
 

	
 

	
 

	

Name:
______________________________________________________________________

	
 

	
 

	
 

	

Address for Delivery of Common Stock Certificates:
_________________________________

	
 

	
____________________________________________________________________________

	
 

	
____________________________________________________________________________

	
 

	
 

	
 

	

Or

	
 

	
 

	
 

	

DWAC Instructions:

	
 

	

Broker No: ______________________

	
 

	

Account No: _____________________

*Sum
provided does not include accrued interest and/or additional
fees

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