Document:

exh10-1.htm

Exhibit 10.1

STOCK EXCHANGE AGREEMENT

This STOCK EXCHANGE AGREEMENT (the “Agreement “) dated this 21st day of  October , 2013, by and among Monar International Inc., a Nevada corporation whose principal office is located  at Suite 1408, TakShing House, 20 Des Voeux Road Central, Hong Kong, China (“MONAR”) and John A. McDonald (“SELLER”), as listed on Exhibit A, who is the owner of 100 membership interests  of National Leasing & Brokerage LLC (“NLB”), a Nevada Limited Liability Company whose principal office is located at 7365 Carnelion Street, Suite 119, Rancho Cucamonga, CA 91730-1156.

R E C I T A L S

A.           NLB is engaged in the business of providing driveaway services to vehicle fleet and other commercial operators who need to reposition box trucks, trailers, tractors and automobiles from one location to another.

B.           SELLER owns the number of membership interests of NLB set forth on Exhibit A.

C.           MONAR is a publicly traded company engaged in the business of developing a micro fuel additive designed to improve the efficiency and performance of diesel engines (the “M-fuel project”).  On the Closing Date (as defined herein), MONAR will have authorized capital of 250,000,000 shares of common stock, $0.00001 par value per share.

D.           Prior to and at the Closing Date of the Agreement, MONAR will have 239,000,000 shares of common stock outstanding.

E.           MONAR desires to acquire one hundred percent (100%) of the issued and outstanding ownership units of NLB, in consideration for which MONAR shall issue to SELLER 30,000,000 shares of MONAR Series A preferred stock.

AGREEMENT

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows.

ARTICLE I

ACQUISITION OF NLB COMMON STOCK BY MONAR

1.1          Acquisition of NLB. In the manner and subject to the terms and conditions set forth herein, MONAR shall acquire from SELLER, one hundred percent (100%) of the issued and outstanding  membership interests of NLB (the “ NLB membership interests”).

1.2          Effective Date. If all of the conditions precedent to the obligations of each of the parties hereto as hereinafter set forth shall have been satisfied or shall have been waived, the transactions set

  

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forth herein (the “Exchange”) shall become effective on the Closing Date as defined herein.

1.3          Consideration.

(a)           In connection with the acquisition of the NLB membership interests , MONAR will issue to SELLER 30, 000,000 shares of MONAR Series A preferred stock (the “MONAR Preferred Shares”) on the basis of 300, 000 (three hundred thousand) shares of MONAR Series A preferred stock for each membership interest of  NLB.  Each share of Series A preferred stock will have one vote and will vote with the common shares upon each matter submitted to the shareholders of MONAR.  The Series A preferred will not be entitled to any dividends and each share of Series A preferred stock may be converted, at the election of MONAR, into one share of common stock, subject to their being sufficient authorized shares of MONAR common stock to permit such conversion.

(b)           No fractional shares of MONAR Series A Preferred Stock shall be issued in connection with this Agreement, and no certificates or scrip for any such fractional shares shall be issued.

	
  

	
1.4

	
Effect of Stock Exchange. As of the Closing Date, all of the following shall occur:

(a)           The Articles of Incorporation of NLB and MONAR, as in effect on the Effective Date, shall continue in effect without change or amendment.

(b)           The Bylaws of NLB and MONAR, as in effect on the Closing Date, shall continue in effect without change or amendment.

(c)           Upon the Closing Date, John A. McDonald shall be appointed President of MONAR, and Nina McDonald shall be appointed as Corporate Secretary of MONAR, and Roberto Roman, Jr. shall continue as Chief Financial Officer of MONAR; and John A. McDonald and Nina McDonald will be appointed to the Board of Directors of MONAR, in accordance with the notice provisions of Rule 14f-1 of the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”) if applicable. Also upon the Closing Date, Robert Clarke will resign from the Board of Directors and resign as President and Chief Executive Officer.

 

1.5          Disclosure Schedules. Simultaneously with the execution of this Agreement: (a) MONAR shall deliver a schedule relating to MONAR which, along with the reports of MONAR filed with the Securities and Exchange Commission, shall be referred to as the “MONAR Disclosure Schedule”, and (b) SELLER and NLB shall deliver a schedule relating to SELLER and NLB (the “NLB Disclosure Schedule” and collectively with the MONAR Disclosure Schedule, the “Disclosure Schedules”) setting forth the matters required to be set forth in the Disclosure Schedules as described elsewhere in this Agreement. The Disclosure Schedules shall be deemed to be part of this Agreement. MONAR’S Disclosure Schedule shall include, but is not limited to, all publicly filed documents of MONAR.

1.6          Further Action. From time to time after the Closing, without further consideration, the parties shall execute and deliver such instruments of conveyance and transfer and shall take such other action as any party reasonably may request to more effectively transfer the NLB membership interests

  

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and MONAR Preferred Shares.

ARTICLE II

CONDUCT OF BUSINESS PENDING CLOSING; STOCKHOLDER APPROVAL

MONAR, SELLER and NLB covenant that between the date hereof and the Closing Date (as hereinafter defined):

2.1          Access by SELLER and NLB. MONAR shall afford to SELLER, NLB, and their legal counsel, accountants and other representatives, throughout the period prior to the Closing Date, full access, during normal business hours, to (a) all of the books, contracts and records of MONAR, and shall furnish SELLER and NLB, during such period, with all information concerning MONAR that SELLER or NLB may reasonably request and (b) the properties of MONAR in order to conduct inspections at SELLER and NLB’s expense to determine that MONAR is operating in material compliance with all applicable federal, state and local and foreign statutes, rules and regulations, and that MONAR’s assets are substantially in the condition and of the capacities represented and warranted in this Agreement. Any such investigation or inspection by SELLER or NLB shall not be deemed a waiver of, or otherwise limit, the representations, warranties and covenants contained herein. SELLER and NLB shall grant identical access to MONAR and its agents.

2.2          Conduct of Business. During the period from the date hereof to the Closing Date, the business of MONAR and NLB shall be operated by the respective entities in the usual and ordinary course of such business and in material compliance with the terms of this Agreement. Without limiting the generality of the foregoing:

(a)           MONAR and NLB, respectively, shall each use their reasonable efforts to (i) keep available the services of the present agents of MONAR and NLB; (ii) complete or maintain all existing material arrangements; (iii) maintain the integrity of all confidential information of MONAR and NLB; and (iv) comply in all material respects with all applicable laws; and

(b)           Except as contemplated by this Agreement, MONAR and NLB shall not (i) sell, lease, assign, transfer or otherwise dispose of any of their material assets or property including cash; (ii) agree to assume, guarantee, endorse or in any way become responsible or liable for, directly or indirectly, any material contingent obligation; make any material capital expenditures; (iii) enter into any transaction concerning a merger or consolidation other than with the other party hereto or liquidate or dissolve itself (or suffer any liquidation or dissolution) or convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of related transactions, all or a substantial part of its property, business, or assets, or stock or securities convertible into stock of any subsidiary, or make any material change in the present method of conducting business; (iv) declare or pay any dividends or make any other distribution (whether in cash or property) on any shares of its capital stock or purchase, redeem, retire or otherwise acquire for value any shares of its capital stock or warrants or options whether now or hereafter outstanding; (v) make or suffer to exist any advances or loans to, or investments in any person, firm, corporation or other business entity not a party to this Agreement; (vi) enter into any new material agreement or be or become liable under any new material agreement, for the lease, hire or use

  

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of any real or personal property; (vii) create, incur, assume or suffer to exist, any mortgage, pledge, lien, charge, security interest or encumbrance of any kind upon any of its property or assets, income or profits, whether now owned or hereafter acquired; or (viii) agree to do any of the foregoing.

2.3          Exclusivity to SELLER and NLB. MONAR and its officers, directors, representatives and agents, from the date hereof, until the Closing Date (unless this Agreement shall be earlier terminated as hereinafter provided), shall not hold discussions with any person or entity, other than SELLER and NLB or their respective agents concerning the Exchange, nor solicit, negotiate or entertain any inquiries, proposals or offers to purchase the business of MONAR, nor the shares of capital stock of MONAR from any person other than SELLER and NLB, nor, except in connection with the normal operation of MONAR’s respective business, or as required by law, or as authorized in writing by SELLER, disclose any confidential information concerning MONAR to any person other than SELLER, NLB and SELLER and NLB’s representatives or agents. SELLER and NLB shall from the date hereof, and until the Closing Date, owe the identical obligations of confidentiality and exclusivity to MONAR concerning the Exchange as stated in this Section.

2.4          Board and Shareholder Approval. The Board of Directors of MONAR has determined that the Exchange is fair to and in the best interests of its stockholders and has approved and adopted this Agreement and the terms of the Exchange.  Shareholders of MONAR will not vote or approve of the transaction contemplated by this agreement.  This Agreement constitutes, and all other agreements contemplated hereby will constitute, when executed and delivered by MONAR, the valid and binding obligation of MONAR, enforceable in accordance with their respective terms.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF MONAR

Except as set forth in the MONAR Disclosure Schedule (which incorporates all the reports of MONAR filed with the United States Securities and Exchange Commission) MONAR represents and warrants to SELLER and NLB as follows:

3.1          Organization and Standing. MONAR is a corporation duly organized, validly existing and in good standing under the laws of the State of Nevada. MONAR has all requisite corporate power to carry on its business as it is now being conducted and is duly qualified to do business as a foreign corporation and is in good standing in each jurisdiction where such qualification is necessary under applicable law except where the failure to qualify (individually or in the aggregate) will not have any material adverse effect on the business or prospects of MONAR. The copies of the Articles of Incorporation and Bylaws of MONAR, as amended to date, which have been delivered to SELLER and NLB, are true and complete copies of these documents as now in effect.

	
  

	
3.2

	
Capitalization.

(a)           Prior to and at the Closing Date of the Agreement, MONAR will have 239,000,000 shares of common stock outstanding All of such shares of capital stock that are issued and outstanding are duly authorized, validly issued and outstanding, fully paid and nonassessable, and were not issued in violation of the preemptive rights of any person. Other than as set forth in the MONAR

  

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Disclosure Schedule there are no subscriptions, warrants, rights or calls or other commitments or agreements to which MONAR is a party or by which it is bound, pursuant to which MONAR is or may be required to issue or deliver securities of any  kind to anyone. Other than as set forth in the MONAR Disclosure Schedule there are no outstanding securities convertible or exchangeable, actually or contingently, into common stock or any other securities of MONAR.

(b)           To MONAR’S knowledge, all outstanding shares of MONAR capital stock have been issued and granted in compliance with all applicable securities laws and other applicable legal requirements.

3.3          Subsidiaries. MONAR owns one subsidiary corporation, Monar Hong Kong Limited (“Monar HK”), a Hong Kong corporation which MONAR will divest itself of, prior to Closing, and change its name to eliminate reference to the word “Monar”.

3.4          Authority. MONAR’s Board of Directors has determined that the Exchange is fair to and in the best interests of MONAR’s stockholders. The execution, delivery and performance by MONAR of this Agreement (including the contemplated issuance of 30,000,000 MONAR Series A Preference Shares in accordance with this Agreement) has been duly authorized by all necessary action on the part of MONAR. MONAR has the absolute and unrestricted right, power and authority to perform its obligations under this Agreement. This Agreement constitutes, and all other agreements contemplated hereby will constitute, when executed and delivered by MONAR in accordance herewith, the valid and binding obligations of MONAR, enforceable in accordance with their respective terms.

3.5          Assets. Except as set forth in the MONAR Disclosure Schedule, MONAR has no assets.

3.6          Contracts and Other Commitments. Except as set forth in the MONAR Disclosure Schedule, MONAR is not a party to any contracts or agreements.

3.7          Litigation. There is no claim, action, proceeding, or investigation pending or, to its knowledge, threatened against or affecting MONAR before or by any court, arbitrator or governmental agency or authority which, in its reasonable judgment, could have a material adverse effect on the operations or prospects of MONAR. There are no decrees, injunctions or orders of any court, governmental department, agency or arbitration outstanding against MONAR or asserted against MONAR that has not been paid.

3.8          Taxes. For purposes of this Agreement, (A) “Tax” (and, with correlative meaning, “Taxes”) shall mean any federal, state, local or foreign income, alternative or add-on minimum, business, employment, franchise, occupancy, payroll, property, sales, transfer, use, value added, withholding or other tax, levy, impost, fee, imposition, assessment or similar charge together with any related addition to tax, interest, penalty or fine thereon; and (B) “Returns” shall mean all returns (including, without limitation, information returns and other material information), reports and forms relating to Taxes.

	
(a)           

	
MONAR has duly filed all required Returns and paid all Taxes.

  

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(b)           

	
MONAR is not a party to any pending action or proceeding by any governmental authority for the assessment of any Tax, and, to the knowledge of MONAR, no claim for assessment or collection of any Tax related to MONAR has been asserted against MONAR that has not been paid. There are no Tax liens upon the assets of MONAR. There is no valid basis, to MONAR ‘s knowledge, for any assessment, deficiency, notice, 30-day letter or similar intention to assess any Tax to be issued to MONAR by any governmental authority.

3.9          Compliance with Laws and Regulations. MONAR has complied and is presently complying, in all material respects, with all laws, rules, regulations, orders and requirements (federal, state and local and foreign) applicable to it in all jurisdictions where the business of MONAR is conducted or to which MONAR is subject, including all requisite filings with the SEC. MONAR has not made any misrepresentation nor has omitted any material facts which are necessary to make the statements made, not misleading, in any of its SEC filings to date.

3.10        Hazardous Materials. To the knowledge of MONAR, MONAR has not violated, or received any written notice from any governmental authority with respect to the violation of any law, rule, regulation or ordinance pertaining to the use, maintenance, storage, transportation or disposal of “Hazardous Materials.” As used herein, the term “Hazardous Materials” means any substance now or hereafter designated pursuant to Section 307(a) and 311 (b)(2)(A) of the Federal Clean Water Act, 33 USC §§ 1317(a), 1321(b)(2)(A), Section 112 of the Federal Clean Air Act, 42 USC § 3412, Section 3001 of the Federal Resource Conservation and Recovery Act, 42 USC § 6921, Section 7 of the Federal Toxic Substances Control Act, 15 USC § 2606, or Section 101(14) and Section 102 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 USC §§ 9601(14), 9602.

3.11        No Breaches. The making and performance of this Agreement will not (i) conflict with or violate the Articles of Incorporation or the Bylaws of MONAR, or any amendments thereto; (ii) violate any laws, ordinances, rules, or regulations, or any order, writ, injunction or decree to which MONAR is a party or by which MONAR or any of its businesses, or operations may be bound or affected; or, (iii) result in any breach or termination of, or constitute a default under, or constitute an event which, with notice or lapse of time, or both, would become a default under, or result in the creation of any encumbrance upon any material asset of MONAR under, or create any rights of termination, cancellation or acceleration in any person under, any contract.

3.12        Employees. MONAR has no employees that are represented by any labor union or collective bargaining unit, nor does MONAR have any employment agreements or compensation plans which are in effect with anyone.

3.13        Financial Statements. Year-end audited financial statements and unaudited quarterly stub financial statements are available online at www.sec.gov (collectively the “Financial Statements”). The Financial Statements present fairly, in all material respects, the financial position on the dates thereof and results of operations of MONAR for the periods indicated, prepared in accordance with generally accepted accounting principles (“GAAP”), consistently applied. There are no assets of MONAR the value of which is materially misstated in said balance sheets.

3.14        Absence of Certain Changes or Events. Except as set forth in the MONAR Disclosure

  

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Schedule, since April 30, 2013 (the “Balance Sheet Dates”), there has not been

(a)           any material adverse change in the financial condition, properties, assets, liabilities or business of MONAR;

(b)           any material damage, destruction or loss of any material properties of MONAR, whether or not covered by insurance;

(c)           any material adverse change in the manner in which the business of MONAR and has been conducted;

(d)           any material adverse change in the treatment and protection of trade secrets or other confidential information of MONAR; and,

(e)           any occurrence not included in paragraphs (a) through (d) of this Section 3.14 which has resulted, or which MONAR has reason to believe, might be expected to result in, a material adverse change in the business or prospects of MONAR.

3.15        Government Licenses, Permits, Authorizations. MONAR has all governmental licenses, permits, authorizations and approvals necessary for the conduct of its business as currently conducted (“Licenses and Permits”). All such Licenses and Permits are in full force and effect, and no proceedings for the suspension or cancellation of any thereof is pending or, to the knowledge of MONAR, threatened.

3.16        Employee Benefit Plans.

(a)           MONAR has no bonus, material deferred compensation, material incentive compensation, stock purchase, stock option, severance pay, termination pay, hospitalization, medical, insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plan.

(b)           MONAR has not maintained, sponsored or contributed to, any employee pension benefit plan (as defined in Section 3(2) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”)) or any similar pension benefit plan under the laws of any foreign jurisdiction.

(c)           Except as set forth in the MONAR Disclosure Schedule, neither the execution, delivery or performance of this Agreement, nor the consummation of the Exchange or any of the other transactions contemplated by this Agreement, will result in any bonus, golden parachute, severance or other payment or obligation to any current or former employee or director of any of MONAR, or result in any acceleration of the time of payment, provision or vesting of any such benefits.

3.17        Business Locations. Other than as set forth in the MONAR Disclosure Schedule, MONAR does not own or lease any real or personal property in any state or country.

3.18        Intellectual Property. MONAR owns no intellectual property of any kind. MONAR is not currently in receipt of any notice of any violation or infringements of, and is not knowingly violating or infringing, or to the best of its knowledge has not violated or infringed the rights of others

  

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in any trademark, trade name, service mark, copyright, patent, trade secret, know-how or other intangible asset.

3.19        Governmental Approvals. Except as set forth in the MONAR Disclosure Schedule, no authorization, license, permit, franchise, approval, order or consent of, and no registration, declaration or filing by MONAR with, any governmental authority, domestic or foreign, federal, state or local, is required in connection with MONAR’s execution, delivery and performance of this Agreement. Except as set forth in the MONAR Disclosure Schedule, no consents of any other parties are required to be received by or on the part of MONAR to enable MONAR to enter into and carry out this Agreement.

3.20        Transactions with Affiliates. Except as set forth in the MONAR Disclosure Schedule, MONAR is not indebted for money borrowed, either directly or indirectly, from any of its officers, directors, or any Affiliate (as defined below), in any amount whatsoever; nor are any of its officers, directors, or Affiliates indebted for money borrowed from MONAR; nor are there any transactions of a continuing nature between MONAR and any of its officers, directors, or Affiliates not subject to cancellation which will continue beyond the Closing Date, including, without limitation, use of the assets of MONAR for personal benefit with or without adequate compensation. For purposes of this Agreement, the term (i)”Affiliate” shall mean any person that, directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. As used in the foregoing definition, the term (ii) “control” shall mean the power through the ownership of voting securities, contract or otherwise to direct the affairs of another person and (iii) “person” shall mean an individual, firm, trust, association, corporation, partnership, government (whether federal, state, local or other political subdivision, or any agency or bureau of any of them) or other entity.

3.21        No Distributions. MONAR has not made nor has any intention of making any distribution or payment to any of its shareholders with respect to any of its shares prior to the Closing Date.

3.22        Liabilities. MONAR has no  direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility, fixed or unfixed, choate or inchoate, liquidated or unliquidated, secured or unsecured, accrued, absolute, contingent or otherwise (“Liabilities”), whether or not of a kind required by generally accepted accounting principles to be set forth on a financial statement, other than (i) Liabilities fully and adequately reflected or reserved against on the MONAR Balance Sheet, (ii) Liabilities incurred since the Balance Sheet Date in the ordinary course of the business of MONAR, or (iii) Liabilities otherwise disclosed in this Agreement, including the exhibits hereto and MONAR Disclosure Schedule.

 

3.23        Accounts Receivable. MONAR has no accounts receivable.

3.24        Insurance. MONAR has no insurance policies in effect.

3.25        Principal MONAR Shareholder Representations and Warranties. THE PRINCIPAL MONAR SHAREHOLDER, Robert G. Clarke, represents and warrants that he has the absolute and unrestricted right, power, authority, and capacity to execute and deliver this Agreement and the other Closing Documents to which he is a party, and to perform his obligations under this Agreement and the other Closing Documents to which he is a party, and he has good and marketable

  

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title to all of the MONAR Shares registered to his name, free and clear of all liens, claims and encumbrances of any third persons.

3.26        No Omissions or Untrue Statements. No representation or warranty made by MONAR or the PRINCIPAL MONAR SHARHOLDER (with respect to Section 3.25 only) to SELLER and NLB in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained herein not misleading as of the date hereof and as of the Closing Date.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

Except as set forth in the NLB Disclosure Schedule, SELLER represents and warrants to MONAR as follows as of the date hereof and as of the Closing Date:

4.1          Organization and Standing of NLB. NLB is a corporation duly organized, validly existing and in good standing under the laws of Nevada, and has the corporate power to carry on its business as now conducted and to own its assets and is duly qualified to transact business as a foreign corporation in each state where such qualification is necessary except where the failure to qualify will not have a material adverse effect on the business or prospects of NLB. The copies of the Articles of Incorporation and Bylaws of NLB, as amended to date, and made available to MONAR, are true and complete copies of those documents as now in effect.

 

4.2          Authority. The Board of Directors of NLB has approved of this agreement.

4.3          No Conflict. The making and performance of this Agreement will not (i) conflict with the Articles of Incorporation or the Bylaws, as amended, of NLB: (ii) violate any laws, ordinances, rules, or regulations, or any order, writ, injunction or decree to which NLB is a party or by which NLB or any of their material assets, business, or operations may be bound or affected: or, (iii) result in any breach or termination of, or constitute a default under, or constitute an event which, with notice or lapse of time, or both, would become a default under, or result in the creation of any encumbrance upon any material asset of NLB, or create any rights of termination, cancellation, or acceleration in any person under any material agreement, arrangement, or commitment.

4.4          Properties. Except as set forth in the NLB Disclosure Schedule, SELLER has good and marketable title to all of the properties of NLB and NLB membership interests, free and clear of all liens, claims and encumbrances of third persons whatsoever, and NLB has good and marketable title to all of the assets and properties which it purports to own as reflected on the balance sheet included in the NLB Financial Statements (as hereinafter defined), or thereafter acquired.

4.5          Capitalization of NLB. The capital of NLB consists of 100 membership interests are issued and outstanding and are owned by SELLER.  There are no other classes of securities authorized for issuance by NLB.   Such outstanding membership interests are duly authorized, validly issued, fully paid, and non-assessable. As of the date hereof, there were no outstanding options, warrants or rights of conversion or other rights, agreements, arrangements or commitments relating to the

  

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securities of NLB or obligating NLB to issue or sell any membership interests or any other securities of NLB. All outstanding membership interests of NLB have been issued and granted in compliance with all applicable legal requirements.

4.6          Governmental Approval; Consents. No authorization, license, permit, franchise, approval, order or consent of, and no registration, declaration or filing by SELLER or NLB with any governmental authority, domestic or foreign, federal, state or local, is required in connection with SELLER’s or NLB’s execution, delivery and performance of this Agreement. Except as set forth in the NLB Disclosure Schedule, no consents of any other parties are required to be received by or on the part of SELLER or NLB to enable SELLER and NLB to enter into and carry out this Agreement.

4.7          Adverse Developments. Since June 30, 2013, there have been no material adverse changes in the assets, liabilities, properties, operations or financial condition of NLB, and no event has occurred other than in the ordinary and usual course of business or as set forth in the NLB Financial Statements which could be reasonably expected to have a materially adverse effect upon NLB.

4.8          Taxes. NLB has duly filed all returns required to be filed. All such returns were, when filed, and to SELLER’S knowledge are, accurate and complete in all material respects and were prepared in conformity with applicable laws and regulations. NLB has paid in full all taxes through the Closing Date. NLB is not a party to any pending action or proceeding by any governmental authority for the assessment of any tax, and, to the knowledge of NLB, no claim for assessment or collection of any tax has been asserted against NLB that have not been paid. There are no tax liens upon the assets of NLB. There is no valid basis, to NLB ‘s knowledge, for any assessment, deficiency, notice, 30-day letter or similar intention to assess any tax to be issued to NLB by any governmental authority.

4.9          Litigation. Except as set forth on the NLB Disclosure Schedule, there is no material claim, action, proceeding, or investigation pending or, to their knowledge, threatened against or affecting SELLER or NLB before or by any court, arbitrator or governmental agency or authority. There are no material decrees, injunctions or orders of any court, governmental department, agency or arbitration outstanding against SELLER or NLB.

4.10        Compliance with Laws and Regulations. NLB has complied and is presently complying, in all material respects, with all laws, rules, regulations, orders and requirements applicable to it in all jurisdictions in which its operations are currently conducted or to which it is currently subject.

4.11        Governmental Licenses, Permits and Authorizations. NLB has all governmental licenses, permits, authorizations and approvals necessary for the conduct of its business as currently conducted. All such licenses, permits, authorizations and approvals are in full force and effect, and no proceedings for the suspension or cancellation of any thereof is pending or threatened.

4.12        Liabilities. NLB has no material direct or indirect liabilities, as that term is defined in Section 3.22 (“NLB Liabilities”), whether or not of a kind required by generally accepted accounting principles to be set forth on a financial statement, other than (i) NLB Liabilities fully and adequately reflected or reserved against on the NLB Balance Sheet; (ii) NLB Liabilities incurred in the ordinary course of the business of NLB; and, (iii) NLB Liabilities otherwise disclosed in this Agreement, including the Exhibits hereto.

  

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4.13        SELLER’s Representations Regarding MONAR Shares.

(a)           SELLER acknowledges that MONAR has limited assets and business and that the MONAR Shares are speculative and involve a high degree of risk, including among many other risks that the MONAR Shares will be restricted as elsewhere described in this Agreement and will not be transferable unless first registered under the Securities Act of 1933, as amended (“Act”), or pursuant to an exemption from the Act’s registration requirements.

(b)           SELLER has access to all of Monar’s periodic reports as filed with the SEC (copies are available for printing at www.sec.gov) and acknowledges and agrees that he has  been furnished with copies of all  reports of MONAR filed with the United States Securities and Exchange Commission including those on Forms 10-K, 10-Q, and 8-K since MONAR’s inception. SELLER has had an opportunity to ask questions of and receive answers from MONAR regarding its business, assets, results of operations, financial condition and plan of operation and the terms and conditions of the issuance of the MONAR Shares.

(c)           SELLER is an accredited investor as that term is defined in Regulation 501 of the Securities Act of 1933, as amended and are each acquiring the MONAR Shares for his own account, and not for the account of any other person other than for the benefit of SELLER, and SELLER has no current intent to make any resale, pledge, hypothecation, distribution or public offering of the MONAR Shares except as permitted by applicable law.

(d)           SELLER, acting with the assistance of counsel and other professional advisers, possess such knowledge and experience in financial, tax and business matters as to enable them to utilize the information made available by MONAR, to evaluate the merits and risks of acquiring the MONAR Shares and to make an informed investment decision with respect thereto.

(e)           SELLER was not solicited by MONAR or anyone on MONAR’s behalf to enter into any transaction whatsoever, by any form of general solicitation or general advertising, as those terms are defined in the Securities Act of 1933, as amended..

4.14        Contracts and Other Commitments. Schedule 4.14 of the NLB Disclosure Schedule consists of a true and complete list of all material contracts, agreements, commitments and other instruments (whether oral or written) to which NLB is a party. NLB has made or will make available to MONAR a copy of each such contract. All such contracts are valid and binding upon NLB and are in full force and effect and are enforceable in accordance with their respective terms. No such contracts are in breach, and no event has occurred which, with the lapse of time or action by a third party, could result in a material default under the terms thereof. To NLB’s knowledge, no stockholder of NLB has received any payment from any contracting party in connection with or as an inducement for causing NLB to enter into any such contract.

4.15        Absence of Certain Changes or Events. Except as set forth in the NLB Disclosure Schedule, since June 30, 2013 (the “Balance Sheet Date”), there has not been:

(a)           any material adverse change in the financial condition, properties, assets, liabilities or business of NLB;

  

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(b)           any material damage, destruction or loss of any material properties of NLB, whether or not covered by insurance;

(c)           any material adverse change in the manner in which the business of NLB and has been conducted;

(d)           any material adverse change in the treatment and protection of trade secrets or other confidential information of NLB; and

(e)           any occurrence not included in paragraphs (a) through (d) of this Section 4.15 which has resulted, or which NLB has reason to believe, might be expected to result in a material adverse change in the business or prospects of NLB.

4.16        Financial Statements. At or prior to the Closing NBL will provide audited financial statements for the fiscal years ending December 31, 2012 and December 31, 2011, which contain an unqualified audited opinion by a PCAOB registered auditing firm and unaudited financial statements for the period ended  September 30th, 2013.  The NLB Financial Statements present fairly, in all material respects, the financial position on the dates thereof and results of operations of NLB for the periods indicated, prepared in accordance with GAAP, consistently applied. There are no assets of NLB the value of which will be materially overstated in said balance sheets.

4.17        NLB Intellectual Property. Schedule 4.17 of the NLB Disclosure Schedule sets forth a complete and correct list and summary description of all intellectual property, including computer software, trademarks, trade names, service marks, service names, brand names, copyrights and patents, registrations thereof and applications therefore, applicable to or used in the business of NLB, together with a complete list of all licenses granted by or to NLB with respect to any of the above. Except as otherwise set forth in Schedule 4.17 all such trademarks, trade names, service marks, service names, brand names, copyrights and patents are owned by NLB, free and clear of all liens, claims, security interests and encumbrances of any nature whatsoever. NLB is not currently in receipt of any notice of any violation or infringements of, and is not knowingly violating or infringing, the rights of others in any trademark, trade name, service mark, copyright, patent, trade secret, know-how or other intangible asset. NLB has not (i) licensed any of the material proprietary assets to any person or entity on an exclusive basis, or (ii) entered into any covenant not to compete or agreement limiting its ability to exploit fully any proprietary asset or to transact business in any market or geographical area or with any person or entity.

4.18        Subsidiaries. Except as set forth in Schedule 4.18 of the NLB Disclosure Schedule, NLB owns no subsidiaries nor does it own or have an interest in any other corporation, partnership, joint venture or other entity.

4.19        Hazardous Materials. To the knowledge of NLB, NLB has not violated, or received any written notice from any governmental authority with respect to the violation of any law, rule, regulation or ordinance pertaining to the use, maintenance, storage, transportation or disposal of “Hazardous Materials.” As used herein, the term “Hazardous Materials” means any substance now or hereafter designated which is found to be toxic or harmful to humans or the environment when present in certain amounts or quantities.

  

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4.20        Employees. NLB has no employees that are represented by any labor union or collective bargaining unit.

4.21        Employee Benefit Plans. The NLB Disclosure Schedule identifies each salary, bonus, material deferred compensation, material incentive compensation, stock purchase, stock option, severance pay, termination pay, hospitalization, medical, insurance, supplemental unemployment benefits, profit-sharing, pension or retirement plan, program or material agreement.

4.22        Business Locations. Other than as set forth in the NLB Disclosure Schedule, NLB does not own or lease any real or personal property in any state or country.

4.23        Insurance. Except as set forth in Schedule 4.23 of the NLB Disclosure Schedule, NLB has no insurance policies in effect.

4.24        No Omission or Untrue Statement. No representation or warranty made by SELLER to MONAR in this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained herein not misleading as of the date hereof and as of the Closing Date.

ARTICLE V

CLOSING

5.1          Closing. The Exchange shall be completed on the first business day after the day on which the last of the conditions contained in this Article V is fulfilled or waived (the “Closing Date”); provided, however, that in no event shall the Closing occur later than December 20 2013, unless otherwise agreed to by the parties in writing. The Closing shall take place as the parties may agree. At the Closing, MONAR and SELLER shall make the deliveries contemplated by this Agreement, and in accordance with the terms of this Agreement.

5.2          MONAR’s Closing Deliveries. At the Closing, in addition to documents referred elsewhere, MONAR shall cause to be delivered to SELLER:

(a)           a certificate, dated as of the Closing Date, executed by the President or Chief Executive Officer of MONAR, to the effect that the representations and warranties contained in this Agreement are true and correct in all material respects at and as of the Closing Date and that MONAR has complied with or performed in all material respects all terms, covenants and conditions to be complied with or performed by MONAR on or prior to the Closing Date;

(b)           certificates representing the MONAR  preferred shares issuable upon consummation of the Exchange;

(c)           Certified resolution of the Board of Directors authorizing and approving the transactions set forth herein;

  

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(d)           The MONAR Disclosure Schedules;

(e)           such other documents as SELLER or his counsel may reasonably require.

5.3          NLB’s Closing Deliveries. At the Closing, in addition to documents referred to elsewhere, SELLER shall deliver to MONAR:

(a)           a certificate of SELLER dated as of the Closing Date that the representations and warranties of SELLER contained in this Agreement are true and correct in all material respects and that SELLER has complied with or performed in all material respects all terms, covenants, and conditions to be complied with or performed by SELLER on or prior to the Closing Date;

(b)           certificates representing NLB membership interests owned by SELLER, duly endorsed for transfer and accompanied by a properly executed stock power;

(c)           the NLB Disclosure Schedules;

(d)           such other documents as MONAR or its counsel may reasonably require.

ARTICLE VI

CONDITIONS TO OBLIGATIONS OF MONAR

The obligation of MONAR to consummate the Closing is subject to the following conditions, any of which may be waived by it in its sole discretion.

6.1          Compliance by SELLER. SELLER shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with in all material respects by SELLER prior to or on the Closing Date;

6.2          Accuracy of SELLER’S Representations. SELLER’S representations and warranties contained in this Agreement (including the Disclosure Schedule) or any schedule, certificate, or other instrument delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall be true and correct in all material respects at and as of the Closing Date (except for such changes permitted by this Agreement) and shall be deemed to be made again as of the Closing Date.

6.3          Documents. All documents and instruments required hereunder to be delivered by SELLER to MONAR at the Closing shall be delivered in form and substance reasonably satisfactory to MONAR and its counsel.

6.4          Litigation. No litigation seeking to enjoin the transactions contemplated by this Agreement or to obtain damages on account hereof shall be pending or, to MONAR’s knowledge, be threatened.

6.5          Material Adverse Change. Except for operations in the ordinary course of business, no

  

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material adverse change shall have occurred subsequent to April 30, 2013 in the financial position, results of operations, assets, or liabilities of NLB, nor shall any event or circumstance have occurred which would result in a material adverse change in the financial position, results of operations, assets, or liabilities of NLB.

6.6          Approval by Board of Directors. The Board of Directors of MONAR shall have approved this Agreement and the transactions contemplated hereby.  Approval by the shareholders of Monar is not required as a matter of law.

6.7          Satisfaction with Due Diligence. MONAR shall have been satisfied with its due diligence review of NLB, and its operations.

6.8          Regulatory Compliance. MONAR shall have received any and all regulatory approvals and consents required to complete the transactions contemplated hereby.

6.9          Purchase of Robert Clarke’s Shares of Common Stock.  Prior to Closing, SELLER will have purchased from Robert Clarke 180,000,000 shares of common stock owned by Robert Clarke and will have paid Robert Clarke the sum of $140,000.  As well, payables of MONAR as at May 31, 2013 as identified in Schedule 6.9 will have been paid or a payment program agreed with the relevant creditor.

ARTICLE VII

CONDITIONS TO SELLER’S OBLIGATIONS

The obligation of SELLER to consummate the Closing is subject to the following conditions, any of which may be waived by SELLER in his discretion.

7.1          Compliance by MONAR.  MONAR shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by them prior to or on the Closing Date.

7.2          Accuracy of Representations of MONAR. The representations and warranties of MONAR contained in this Agreement (including the exhibits hereto and the MONAR Disclosure Schedule) or any schedule, certificate, or other instrument delivered pursuant to the provisions hereof or in connection with the transactions contemplated hereby shall be true and correct in all material respects at and as of the Closing Date (except for changes permitted by this Agreement) and shall be deemed to be made again as of the Closing Date.

7.3          Continuation as Publicly Traded Company. MONAR will continue to remain reporting with the SEC for a minimum of ten years from the date of Closing and cause its shares to continue to be listed for trading on the Bulletin Board operated by the Financial Industry Regulatory Authority (FINRA) for ten years from the date of Closing or in lieu of the Bulletin Board, on an SEC registered stock exchanges or on NASDAQ.

7.4          Litigation. No litigation seeking to enjoin the transactions contemplated by this

  

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Agreement or to obtain damages on account hereof shall be pending or to SELLER’S knowledge, be threatened.

7.5          Documents. All documents and instruments required hereunder to be delivered by MONAR at the Closing shall be delivered in form and substance reasonably satisfactory to SELLER and his counsel.

7.6          Balance Sheet. Except as set forth in Section 7.6 of the MONAR Disclosure Schedule, MONAR shall have no liabilities, as reflected on MONAR’s most recent balance sheet, or as otherwise approved by SELLER.

7.7          Approval by Board of Directors.   NLB and each NLB shareholder shall have executed this agreement.

7.8          Satisfaction with Due Diligence. SELLER shall have been satisfied with his due diligence review of MONAR and satisfied himself that MONAR continues to trade its shares on the Bulletin Board.

7.9          Regulatory Compliance. NLB shall have received any and all regulatory approvals and consents required to complete the transactions contemplated hereby.

7.10        Outstanding Shares. MONAR remains a publicly traded corporation and MONAR shall have 239,000,000 shares of MONAR common stock issued and outstanding prior to the Closing

ARTICLE VIII

TERMINATION

 8.1          Termination Prior to Closing.

  (a)    If the Closing has not occurred by November 30, 2013, any party may terminate this Agreement at any time thereafter by giving written notice of termination to the other, provided, however, that no party may terminate this Agreement if such party has breached any material terms or conditions of this Agreement and such breach has prevented the timely closing of the Exchange. Notwithstanding the above, such deadline may be extended one or more times, only by mutual written consent of SELLER and MONAR.

(b)           Prior to November 30, 2013, any party may terminate this Agreement following the insolvency or bankruptcy of the other party hereto, or if any one or more of the conditions to Closing set forth in Article VI or Article VII shall become incapable of fulfillment or there shall have occurred a material breach of this Agreement and either such condition of breach shall not have been waived by the party for whose benefit the condition was established, then MONAR (in the case of a condition in Article VI) or SELLER (in the case of a condition specified in Article VII) may terminate this Agreement. In addition, either MONAR or SELLER may terminate this Agreement upon written notice to the other if it shall reasonably determine that the Exchange has become inadvisable by reason of the institution or threat by any federal, state or municipal governmental authorities of a formal

  

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investigation or of any action, suit or proceeding of any kind against either or both parties.

8.2          Consequences of Termination. Upon termination of this Agreement pursuant to this Article VIII or any other express right of termination provided elsewhere in this Agreement, the parties shall be relieved of any further obligation under this Agreement except for the obligations in Section 11.4; provided, however, that no termination of this Agreement, pursuant to this Article VIII hereof or under any other express right of termination provided elsewhere in this Agreement shall operate to release any party from any liability to any other party incurred otherwise than under this Agreement before the date of such termination, or from any liability resulting from any willful misrepresentation of a material fact made in connection with this Agreement or willful breach of any material provision hereof.

ARTICLE IX

ADDITIONAL COVENANTS

9.1          Mutual Cooperation. The parties hereto will cooperate with each other, and will use all reasonable efforts to cause the fulfillment of the conditions to the parties’ obligations hereunder and to obtain as promptly as possible all consents, authorizations, orders or approvals from each and every third party, whether private or governmental, required in connection with the transactions contemplated by this Agreement.

9.2          Changes in Representations and Warranties of a Party. Between the date of this Agreement and the Closing Date, no party shall directly or indirectly, enter into any transaction, take any action, or by inaction permit an otherwise preventable event to occur, which would result in any of the representations and warranties of such party herein contained not being true and correct at and as of the Closing Date. Each party shall promptly give written notice to the other parties upon becoming aware of (a) any fact which, if known on the date hereof, would have been required to be set forth or disclosed pursuant to this Agreement, and (b) any impending or threatened breach in any material respect of any of the party’s representations and warranties contained in this Agreement and with respect to the latter shall use all reasonable efforts to remedy same.

9.3          SEC Filings. The parties agree that the following filings shall be made with the Securities and Exchange Commission (“Commission”): (a) a schedule  prepared pursuant to the requirements of Rule 14f-1 under the Exchange Act, if required by law, shall be filed with the Commission; (b) a report on Form 8-K will be filed with the Commission disclosing the consummation of the Exchange which shall include, but not be limited to, completion of Items 2.01 and 5.06 thereof; and, (c) any and all other filings necessary to comply with the Exchange Act.

9.4          Conduct of Business. During the period from the date of this Agreement until the earlier of the Closing Date or the termination of this Agreement in accordance with its terms, NLB shall continue to conduct its businesses and maintain its business relationships in the ordinary and usual course consistent with past practice and will not, without limitation, without the prior written consent of MONAR:

(a)           Sell, lease, assign transfer or otherwise dispose of any of its material assets, including cash;

  

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(b)           Agree to, or assume guarantee, endorse or otherwise in any way be or become responsible or liable for, directly or indirectly, any material contingent obligation;

(c)           Make any material capital expenditures;

(d)           Enter into any transaction concerning a merger or consolidation other than with the other party hereto or liquidate or dissolve itself (or suffer any liquidation or dissolution) or convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of related transactions, all or a substantial part of its property, business, or assets, or stock or securities convertible into stock of any subsidiary, or make any material change in the present method of conducting business;

(e)           Declare or pay any dividends or make any other distribution (whether in cash or property) on any shares of its capital stock or purchase, redeem, retire or otherwise acquire for value any shares of its capital stock or warrants or options whether now or hereafter outstanding;

(f)           Make any advances or loans to, or investments in any person, firm, corporation or other business entity not a party to this Agreement;

(g)           Enter into any new material agreement or be or become liable under any new material agreement, for the lease, hire or use of any real or personal property; or

(h)           Create, incur, assume or suffer to exist, any mortgage, pledge, lien, charge, security interest or encumbrance of any kind upon any of its property or assets, income or profits, whether now owned or hereafter acquired.

ARTICLE X

SECURITIES & INDEMNIFICATION

10.1        MONAR Shares Not Registered. SELLER has been advised that the MONAR preferred shares to be issued to SELLER have not been registered with the SEC  and will not be registered under the Securities Act of 1933, as amended, the securities laws of any state of the United States or the securities laws of any foreign  country and that in issuing and selling the MONAR Shares to SELLER pursuant hereto, MONAR is relying upon the the exemption from registration contained in Regulation 506 of Regulation D of the Securities Act of 1933, as amended. Resales of the MONAR Shares may only be made pursuant to an effective registration statement or the availability of an exemption from registration. All certificates evidencing the MONAR Shares shall, unless and until removed in accordance with law, bear a restrictive legend substantially in the following form:

The securities evidenced hereby have not been registered under the Securities Act of 1933, as amended, nor any other applicable securities act (the “Acts”), and may not be sold, transferred, assigned, pledged or otherwise distributed, unless there is an effective registration statement under such Acts covering such securities or the Company receives an opinion of counsel for the holder of these securities (concurred on by counsel for the Company) stating that such sale, transfer, assignment, pledge or distribution is exempt from or in compliance with the

  

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registration and prospectus delivery requirements of such Acts.

10.2        Indemnification by MONAR. MONAR shall indemnify SELLER in respect of, and hold SELLER harmless against, any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), monetary damages, fines fees, penalties, interest obligations, deficiencies, losses and expenses (including without limitation attorneys fees and litigation costs) incurred or suffered by SELLER:

(a)           resulting from any misrepresentation, breach of warranty or failure to perform any covenant or agreement of MONAR contained in this Agreement; and

(b)           resulting from any liability of MONAR incurred or resulting from activities that took place prior to the Closing not disclosed on the MONAR Financial Statements.

10.3        Indemnification by SELLER. SELLER shall jointly and severally indemnify MONAR in respect of, and hold MONAR harmless against, any and all debts, obligations and other liabilities (whether absolute, accrued, contingent, fixed or otherwise, or whether known or unknown, or due or to become due or otherwise), monetary damages, fines fees, penalties, interest obligations, deficiencies, losses and expenses (including without limitation attorneys fees and litigation costs) incurred or suffered by MONAR:

(a)           resulting from any misrepresentation, breach of warranty or failure to perform any covenant or agreement of SELLER contained in this Agreement; and,

(b)           resulting from any liability of SELLER incurred or resulting from activities that took place prior to the Closing not disclosed on the NLB Financial Statements.

ARTICLE XI

MISCELLANEOUS

11.1        Expenses. Each party shall each pay its own expenses incident to the negotiation, preparation, and carrying out of this Agreement, including but not limited to legal,  accounting and audit fees.

11.2        Survival of Representations, Warranties and Covenants. All statements contained in this Agreement or in any certificate delivered by or on behalf of MONAR or SELLER pursuant hereto, or in connection with the actions contemplated hereby shall be deemed representations, warranties and covenants by SELLER and MONAR as the case may be, hereunder. All representations, warranties, and covenants made by MONAR or SELLER in this Agreement, or pursuant hereto, shall survive the Closing in a period of two (2) years.

11.3        Publicity. SELLER and MONAR shall not issue any press release or make any other public statement, in each case, relating to, in connection with or arising out of this Agreement or the transactions contemplated hereby, without obtaining the prior approval of the other, which shall not be

  

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unreasonably withheld or delayed, except that prior approval shall not be required if, in the reasonable judgment of MONAR prior approval by the SELLER would prevent the timely dissemination of such release or statement in violation of applicable federal securities laws, rules or regulations or policies of the Securities and Exchange Commission.

11.4        Non-Disclosure. A disclosing party will not at any time after the date of this Agreement, without the recipient’s consent, except in the ordinary operation of its business or as required by law, divulge, furnish to or make accessible to anyone any knowledge or information with respect to confidential or secret processes, inventions, discoveries, improvements, formulae, plans, material, devices or ideas or know-how, whether patentable or not, with respect to any confidential or secret aspects of such party (including, without limitation, customer lists, supplier lists and pricing arrangements with customers or suppliers) (“Confidential Information”). The parties will not at any time after the date of this Agreement and prior to the Exchange use, divulge, furnish to or make accessible to anyone any Confidential Information (other than to its representatives as part of its due diligence or corporate investigation). Any information, which (i)  at or prior to the time of disclosure by the disclosing party was generally available to the public through no breach of this covenant, (ii) was available to the public on a non-confidential basis prior to its disclosure by the disclosing party, or (iii) was made available to the public from a third party provided that such third party did not obtain or disseminate such information in breach of any legal obligation of the disclosing party, shall not be deemed Confidential Information for purposes hereof, and the undertakings in this covenant with respect to Confidential Information shall not apply thereto. The undertakings of the parties set forth above in this Section 11.4 shall terminate upon consummation of the Closing. If this Agreement is terminated pursuant to the provisions of Article VIII or any other express right of termination set forth in this Agreement, the recipient shall return to the disclosing party all copies of all Confidential Information previously furnished to it by the disclosing party.

11.5        Succession and Assignments and Third Party Beneficiaries. This Agreement may not be assigned (either voluntarily or involuntarily) by any party hereto without the express written consent of the other parties. Any attempted assignment in violation of this Section shall be void and ineffective for all purposes. In the event of an assignment permitted by this Section, this Agreement shall be binding upon the heirs, successors and assigns of the parties hereto. There shall be no third party beneficiaries of this Agreement except as expressly set forth herein to the contrary.

11.6        Notices. All notices, requests, demands, or other communications with respect to this Agreement shall be in writing and shall be (i) sent by facsimile transmission, (ii) sent by the United States Postal Service, registered or certified mail, return receipt requested, or (iii) personally delivered by a nationally recognized express overnight courier service, charges prepaid, to the following addresses (or such other addresses as the parties may specify from time to time in accordance with this Section)

	
(a)           

	
To SELLER:

John A. McDonald

P.O. Box 3779

Rancho Cucamonga CA. 91729

Fax: 1-909-483-3002

  

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(b)           

	
To MONAR:

Monar International Inc.

Suite 1408, TakShing House

20 Des Voeux Road Central

Hong Kong

Fax:  +852-3721-3808

Any such notice shall, when sent in accordance with the preceding sentence, be deemed to have been given and received on the earliest of (i) the day delivered to such address or sent by facsimile transmission, (ii) the tenth business day following the date deposited with the United States Postal or (iii) 72 hours after shipment by such courier service.

11.7        Construction. This Agreement shall be construed and enforced in accordance with the internal laws of the State of Nevada without giving effect to the principles of conflicts of law thereof. All parties hereby irrevocably submit to the exclusive jurisdiction of any state or federal court sitting in the state of Nevada for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waive, and agree not to assert in any suit, action or proceeding, any claim that he is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper.

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

11.9        No Implied Waiver; Remedies. No failure or delay on the part of the parties hereto to exercise any right, power, or privilege hereunder or under any instrument executed pursuant hereto shall operate as a waiver nor shall any single or partial exercise of any right, power, or privilege preclude any other or further exercise thereof or the exercise of any other right, power, or privilege. All rights, powers, and privileges granted herein shall be in addition to other rights and remedies to which the parties may be entitled at law or in equity.

11.10      Entire Agreement. This Agreement, including the Exhibits and Disclosure Schedules attached hereto, sets forth the entire understandings of the parties with respect to the subject matter hereof, and it incorporates and merges any and all previous communications, understandings, oral or written as to the subject matter hereof, and cannot be amended or changed except in writing, signed by the parties.

11.11      Headings. The headings of the Sections of this Agreement, where employed, are

for the convenience of reference only and do not form a part hereof and in no way modify, interpret or construe the meanings of the parties.

11.12      Severability. To the extent that any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted hereof and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect.

  

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11.13      Attorneys Fees. In the event any legal action is brought to interpret or enforce this Agreement, the party prevailing in such action shall be entitled to recover its attorney’s fees and costs in addition to any other relief that it is entitled.

11.14      Consultants. Each party represents to the others that there is no broker or finder entitled to a fee or other compensation for bringing the parties together to effect the Exchange.

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

	
MONAR:

	
Monar International Inc.,

	  
	  	
a Nevada Corporation

	
 

	  
	  	
by: ROBERT CLARKE

	  	
Robert Clarke, President

	
 

	  
	
 

	  
	
 

	  
	  	
ROBERT CLARKE

	
ROBERT CLARKE

	
Robert Clarke, individually

	
 

	  
	
 

	  
	
 

	  
	
NLB:

	
National Leasing & Brokerage LLC

	  
	  	
a Nevada Limited Liability Company

	
 

	  
	  	
by: JOHN MCDONALD

	  	
John McDonald, Managing Member,

	
 

	  
	
 

	  
	
 

	  
	  	
JOHN MCDONALD

	
SELLER:

	
John A. McDonald, individually

  

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EXHIBIT A

National Leasing & Brokerage LLC

Membership List

	
Members

	
Number of Membership

Interests

	
 

	  
	
 

	  
	
 

	  
	
 

	  
	
John A. McDonald

8714 E. 9th Street

Rancho Cucamonga CA 91730

	
100  membership interests

  

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MONAR Disclosure Schedule

Schedule No.

1.5                      MONAR’s filings with the Securities and Exchange Commission are attached to this schedule as Exhibit I

3.2 (a)                 There are no subscriptions, warrants, rights or calls or other commitments or agreements by which MONAR is or may be required to issue or deliver securities of any Series nor are there any outstanding securities convertible or exchangeable, actually or contingently, into common stock or any other securities of MONAR.

3.5                      MONAR has no material assets.

3.6                      MONAR is not a party to any contracts or agreements.

3.14                    Since April 30, 2013 MONAR has not suffered any material or adverse changes in its financial condition, material properties, business operations, trade secrets or other confidential information.

3.16                    There are no conditions or events which may occur which will result in any bonus, golden parachute, severance or other payment or obligation to any current or former employee or director of any of MONAR, or result in any acceleration of the time of payment, provision or vesting of any such benefits.

3.17                    MONAR’s business location is Suite 1408, Tak Shing House, 20 Des Voeux Road Central, Hong Kong and otherwise MONAR does not own or lease any real or personal property in any state or country.

3.19                    MONAR requires no authorization, license, permit, franchise, approval, order or consent of, and no registration, declaration or filing with, any governmental authority, domestic or foreign, federal, state or local, to execute, deliver and perform under this Agreement andno consents of any other parties are required to be received by or on the part of MONAR to enable MONAR to enter into and carry out this Agreement.

3.20                    MONAR is not indebted for money borrowed, either directly or indirectly, from any of its officers, directors, or any Affiliate, in any amount whatsoever; nor are any of its officers, directors, or Affiliates indebted for money borrowed from MONAR; nor are there any transactions of a continuing nature between MONAR and any of its officers, directors, or Affiliates not subject to cancellation which will continue beyond the Closing Date.

3.22                    MONAR has no material direct or indirect indebtedness, liability, claim, loss, damage, deficiency, obligation or responsibility other than those disclosed on the MONAR Balance Sheet dated April 30, 2013 or liabilities incurred since that date in the ordinary course of the business.

  

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NLB Disclosure Schedule

	
4.1

	
NLB’s Articles of Incorporation and Bylaws, as amended, are attached as Exhibit II.

4.4                      The SELLER has good and marketable title to all of the NLB membership interests, free and clear of all liens, claims and encumbrances of third persons whatsoever, and NLB has good and marketable title to all of the assets and properties which it purports to own as reflected on the balance sheet included in the NLB Financial Statements.

4.5                      The number of NLB membership interests, which are issued and outstanding, are 100.  There are no other authorized, issued, or outstanding membership interests other than the 100 owned by John McDonald.

4.14                    NLB’s material contracts, commitments and other obligations are:

4.15                    Since April 30, 2013 NLB has not suffered any material or adverse changes in its financial condition, material properties, business operations, trade secrets or other confidential information.

4.17                    NLB owns no Intellectual Property nor has a license to use Intellectual Property.

4.18                    NLB has no subsidiaries.

4.21                    NLB’s employees’ bonuses, options and any other rights are as follows:

 There are no bonuses, options or any other rights for employees, consultants, and members of the board or stakeholders

4.22                    NLB’s office and depot locations are:

	
Chicago:

	  	
Phoenix:

	
625 E. 170th St., Unit 1 NE

	  	
2121 W. University Dr. #118

	
South Holland. IL 60473

	  	
Tempe, AZ 85281

	  	  	  
	
Lodi:

	  	
Seattle:

	
409 Vineyard Dr.

	  	
738 Marion Lane SE

	
Lodi, CA  95240

	  	
Puyallup, WA 98372

	  	  	  
	
Massachusetts:

	  	
Southern California:

	
1 South End Bridge Circle

	  	
7365 Carnelian St., #119

	
Agwan, MA 01001

	  	
Rancho Cucamonga, CA 91730

	  	  	  
	
Nashville:

	  	  
	
599 F Waldron Road

	  	  
	
La Vergne, TN  37086

	  	  

  

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4.23                    NLB has the following insurance policies:

a.  Liability insurance – general and automotive

b.  Business automobile coverage

c.  Commercial general liability insurance (including Terrorism – certified acts)

6.9                      Creditors to be paid:

	
Charlie Rodriguez

	
$

	
2,500

	
Albeck Financial

	  	
21,500 (exact amount to be confirmed with Albeck)

  

-26-Exhibit 10.1

 

THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
AND ARE PROPOSED TO BE ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT PROVIDED
BY REGULATION S PROMULGATED UNDER THE SECURITIES ACT. UPON ANY SALE, SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE OR RESOLD OR
OTHERWISE TRANSFERRED IN THE UNITED STATES OR TO U.S. PERSONS EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT
TO AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT. HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

 

SECURITIES
PURCHASE AGREEMENT

 

This
Securities Purchase Agreement (this "Agreement"), dated as of October 15, 2013, is entered into by and among
Gray Fox Petroleum Corp., a Nevada corporation (the "Company"), and Rooftop Investments Ltd. a(n) company organized
under the laws of Marshall Islands (the "Purchaser").

 

WHEREAS,
the Company proposes to issue and sell to Purchaser for cash, an aggregate 100,000 shares of common stock, $0.001 par value,
of the Company ("Common Stock"), on the terms and conditions set forth below.

 

NOW
THEREFORE, in consideration of the above recitals and the mutual covenants set forth herein, the parties hereto agree as follows:

 

ARTICLE
I

DEFINITIONS

 

1.01
The terms defined in this Section 1.01 shall have for all purposes of this Agreement the respective meanings
specified below.

 

"Agreement"
shall mean this Securities Purchase Agreement as it may be amended from time to time.

 

"Board"
shall mean the Board of Directors of the Company, as constituted from time to time.

 

"Business
Day" shall mean any day, other than a Saturday or Sunday, on which commercial banks are open for business with the public
in Reno, Nevada.

 

"Closing"
shall mean the consummation of the purchase and sale of the Shares.

 

"Closing
Date" shall mean October 15, 2013, or such later date on which the conditions set forth in Articles VI and VII hereof
have been satisfied or waived.

 

    	1

    	 

    

 

"Closing
Documents" shall mean this Agreement, the stock certificates representing the Shares, and any other document required
by this Agreement as a condition to the obligations of Purchaser under this Agreement or executed or delivered by the Company
at the Closing.

 

"Common
Stock" shall mean the common stock, $0.001 par value, of the Company.

 

"Company"
shall mean Gray Fox Petroleum Corp., a Nevada corporation, and its successors and assigns.

 

"Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

"Material
Adverse Change" shall mean a material and adverse change in the business, assets, financial condition, results of operations,
affairs or prospects of the Company and its subsidiaries, taken as a whole, including, without limitation, any such material adverse
change exceeding $10,000 in value.

 

"Section"
shall mean a section or subsection of this Agreement.

 

"Securities Act" shall have the meaning set forth in the
recitals hereto.

 

"Shares"
shall mean the aggregate 100,000 shares of Common Stock to be issued and sold by the Company to Purchaser at the Closing in the
manner prescribed by this Agreement.

 

ARTICLE
II

PURCHASE
AND SALE OF COMMON STOCK

 

2.01 The Shares. The Company has authorized the issuance and sale to Purchaser of an aggregate 100,000 shares of Common Stock,
which shall be purchased by Purchaser, upon the terms and subject to the conditions described in this Agreement.

 

2.02
Closing of Purchase and Sale of Shares. At the Closing, the Company agrees to issue and sell to the Purchaser, and the
Purchaser agree to purchase, the Shares for a total purchase price equal to One Hundred Thousand and No/100 Dollars ($100,000.00).
The purchase and sale of the Shares shall take place by facsimile delivery exchange of signature pages followed by express delivery
exchange of the complete Closing Documents on the Closing Date, with the Closing - to be held at the offices of Hallett &
Perrin, P.C., 1445 Ross Avenue, Suite 2400, Dallas, Texas 75202. At the Closing, the Company shall deliver to Purchaser
certificates representing the Shares against payment of the foregoing purchase price, and the Company and Purchaser shall deliver
such other agreements, documents and certificates as specified in this Agreement or as may be reasonably requested by each party.
The purchase price shall be paid by wire transfer to an account designated by the Company.

 

    	2

    	 

    

 

 

2.03 Further
Assurances. The Company and Purchaser shall execute and deliver such additional documents and take such
additional actions as any party reasonably may deem to be practical and necessary in order to consummate the transactions
contemplated by this Agreement and to vest more fully Purchaser's ownership of the Shares.

 

ARTICLE
III

REPRESENTATIONS
AND WARRANTIES OF PURCHASER

 

Purchaser represents, warrants and covenants, to the Company as follows:

 

3.01
Authorization. Purchaser is duly organized, validly existing and in good standing under the laws of its jurisdiction, as
set forth in the preamble to this Agreement. Purchaser has the necessary power and authority to execute and deliver this Agreement
and to perform its obligations hereunder. The execution and delivery of, and the performance under, this Agreement by Purchaser
will not conflict with any rule, regulation, law, order, judgment, obligation or agreement applicable to Purchaser.

 

3.02
Investment Purpose. Purchaser was not formed for the purpose of acquiring the Shares. Purchaser is purchasing the Shares
for investment purposes and not with a present view to, or for sale in connection with, a distribution thereof within the meaning
of the Securities Act or reselling or otherwise disposing of all or any portion of the Shares. Purchaser does not intend any sale
of the Shares either currently or after the passage of a fixed or determinable period of time or upon the occurrence or non-occurrence
of any predetermined event or circumstance. Purchaser does not have any present or contemplated contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant pmticipations to such person or to any third person, with respect to
any of the Shares. Purchaser understands that it may not be able to sell or otherwise dispose of the Shares, and that as a result
it might need to bear the economic risk of this investment in the Shares indefinitely.

 

3.03
Reliance On Exemptions. Purchaser understands that the Shares have not been registered under the Securities Act or any
state securities laws and are being offered and sold in reliance upon specific exemptions from the registration requirements of
federal and state securities laws, and that the Company is relying upon the truth and accuracy of the representations and warranties
of Purchaser set forth herein in order to determine the availability of such exemptions and the eligibility of Purchaser to acquire
the Shares. Purchaser agrees to timely make all filings required to be made by it under the Exchange Act or the Securities Act,
including without limitation any filings under Section 13 of the Exchange Act, as a result of the transactions described in this
Agreement, and such filings shall be true and correct in all material respects and contain no material omissions or misstatements.

 

3.04 Information.
Purchaser has read, reviewed and relied solely on the publicly available information concerning the Company and any
independent investigation made by it and its representatives, if any, and has been furnished all documents relating to the
business, finances and operations of the Company that Purchaser requested from the Company and has evaluated the risks
and merits associated with an investment in the Shares to its satisfaction. Purchaser has been afforded the opportunity to
ask questions of the Company's representatives concerning the Company in making the decision to purchase and acquire the
Shares, and such questions have been answered to its satisfaction. Purchaser acknowledges that no person has been authorized
to give any information or to make any representation concerning the Company or the Shares, other than as contained in this
Agreement, and if given or made, any such other information or representation has not been relied upon as having been
authorized by the Company.

 

    	3

    	 

    

 

 

3.05
Governmental Review. Purchaser understands that no federal or state agency or any other government or governmental agency
has passed upon or made any recommendation or endorsement of the Shares.

 

3.06
Purchaser's Qualifications. Purchaser is an "accredited investor" as defined in Rule 501 under Regulation D of
the Securities Act. Purchaser is capable of evaluating the merits and risks of an investment in the Shares. Purchaser understands
and acknowledges that an investment in the Shares involves a high degree of risk. Purchaser acknowledges that it has the ability
to bear the economic risk of its investment in the Shares. Purchaser acknowledges that it is possible that Purchaser may incur
a total loss of its investment. Purchaser has adequate means of providing for Purchaser's current needs and possible contingencies
and does not have a need for liquidity of this investment.

 

3.07
RegulationS Representations. Purchaser (a) is not a "U.S. Person," as defined by Regulation S of the Securities
Act, and is not acquiring the Shares for the account or benefit of a U.S. Person, (b) was not in the United States at the time
the offer to purchase the Shares was received, and (c) understands that the Shares are "restricted securities" within
the meaning of the Securities Act and will be issued to the Purchaser in accordance with Regulation S of the Securities Act. Purchaser
agrees not to engage in hedging transactions with regard to the Shares, unless in compliance with the Securities Act. Purchaser
acknowledges that the Company will refuse to register any transfer of the Shares not made in accordance with the provisions of
Regulation S of the Securities Act, pursuant to registration under the Securities Act, nor pursuant to an available exemption
from registration under the Securities Act. Purchaser agrees to resell the Shares only in accordance with the provisions of Regulation
S of the Securities Act, pursuant to registration under the Securities Act, or pursuant to an available exemption from registration
under the Securities Act.

 

3.08
Restrictions on Transfer. Purchaser covenants and agrees that it shall not transfer any of the Shares in a transaction
that is not registered under the Securities Act and any applicable state securities laws, unless (a) unless an exemption from
registration and qualification requirements is available for such transaction under the Securities Act and applicable state securities
Jaws, and (b) the Company has received an opinion of counsel satisfactory to it stating that such registration and qualification
is not required. Purchaser understands that certificates representing the Shares shall bear the following, or a substantially
similar, legend until such time as they have been registered under the Securities Act or otherwise may be sold without volume
or other limitations under Rule 144 promulgated under the Securities Act:

 

    	4

    	 

    

 

"THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT PROVIDED BY REGULATION S PROMULGATED UNDER THE SECURITIES ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR SALE
OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO AN EFFECTIVE
REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT.
HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES
ACT."

 

3.09
Trading Activities. Purchaser's trading activities with respect to the Common Stock have been and shall continue to be
in compliance with all applicable federal and state securities laws, rules and regulations and the rules and regulations of any
Principal Market on which the Common Stock is listed or traded. Neither Purchaser nor its affiliates has an open short position
in the Common Stock of the Company, and Purchaser shall not and will cause its affiliates not to engage in any "short sale,"
as defined in any applicable SEC or FINRA rules on any hedging transactions with respect to the Common Stock.

 

3.10
Brokers. No broker or finder has acted for Purchaser in connection with this Agreement or the transactions contemplated
thereby, and no broker or finder is entitled to any brokerage or finder's fees or other commission in respect of such transactions
based in any way on agreements, arrangements or understandings made by or on behalf of Purchaser.

 

3.11
Residence. Purchaser is domiciled within the jurisdiction set forth under its name on the signature pages hereto.

 

3.12
Separate Counsel. Purchaser has relied completely on the advice of, or has consulted with, its own tax, investment, legal
or other advisors and has not relied on the Company, or any of its officers, directors, attorneys, accountants, representatives,
agents, advisors for any advice. Purchaser has satisfied itself as to the full observance of the laws of its jurisdiction in connection
with any invitation to subscribe for the Shares or any use of this Agreement, including: (a) the legal requirements within its
jurisdiction for the purchase of the Shares; (b) any foreign exchange restrictions applicable to such purchase; (c) any governmental
or other consents that may need to be obtained; (d) the income tax and other tax consequences, if any, that may be relevant to
an investment in the Shares; and (e) any restrictions on transfer applicable to any disposition of the Shares imposed by the jurisdiction
in which Purchaser is resident.

 

3.13 No
Solicitation. None of the Shares were offered to Purchaser through, and Purchaser is not aware of, any form of
general solicitation or general advertising with respect to this Agreement and the transactions contemplated hereby,
including, without limitation (a) any advertisement, article, notice or other communication published in any newspaper,
magazine or similar media or broadcast over television, radio or via the Internet, and (b) any seminar or meeting whose
attendees have been invited by any general solicitation or general advertising. Purchaser further understands that the
Company is relying in part on this representation to ensure compliance with the Securities Act.

 

    	5

    	 

    

 

ARTICLE
IV

REPRESENTATIONS
AND WARRANTIES OF THE COMPANY

 

The Company represents and warrants to Purchaser as follows:

 

4.01
Organization and Good Standing. The Company is a corporation duly organized, validly existing and in good standing under
the laws of the State of Nevada, and has all necessary corporate power and authority to own or lease its assets and to carry on
its business as now being conducted and presently proposed to be conducted. The Company is duly qualified to do business as a
foreign corporation and is in good standing in each jurisdiction in which its ownership or leasing of assets, or the conduct of
its business, makes such qualification necessary, except where the failure to be so qualified would not result in a Material Adverse
Change. There has been no amendment of the Company's Articles of Incorporation or Bylaws, as each is currently in effect (the
"Constituent Documents"), that is not reflected in the Company's filings with the Securities and Exchange Commission
("SEC"). The Company has no subsidiaries and no equity interests in any corporation, partnership, joint venture
or other entity, other than those reflected in the SEC Documents (as defined below).

 

4.02
Subsidiaries. Each subsidiary of the Company is validly existing and in good standing under the laws of the state or other
jurisdiction of its incorporation and has the requisite corporate power to own, lease and operate its properties and assets and
to conduct its business as it is now being conducted.

 

4.03
Requisite Power and Authorization. The Company has all necessary corporate power and authority to execute and deliver the
Closing Documents and to perform its obligations under each of the Closing Documents, including without limitation the issuance
of the Shares hereunder. All corporate action of the Company required for the execution and delivery of the Closing Documents
and the issuance and delivery of the Shares has been duly and effectively taken, and no further actions, authorizations or consents,
including, without limitation, any consents of the stockholders of the Company, are required. Each of the Closing Documents constitutes
the valid and binding obligation of the Company, enforceable against the Company in accordance with its terms, except:

 

(i)
as limited by applicable bankruptcy, insolvency, reorganization, moratorium or other laws of general application affecting enforcement
of creditor's rights, and

 

(ii) as limited by general principles of equity that restrict the availability of equitable remedies.

 

The
Shares, when issued at the Closing in compliance with the provisions of this Agreement, will be validly issued, fully paid and
non-assessable, free and clear of any and all liens, charges, claims or encumbrances.

 

    	6

    	 

    

 

 

4.04
SEC Documents. The Company has filed with the SEC all reports, statements, schedules and other documents (collectively,
the "SEC Documents") required to be filed by it pursuant to the Securities Act and the Exchange Act. Since January
1, 2012, all SEC Documents required to be filed were timely filed. As of their respective dates, the SEC Documents complied in
all material respects with the requirements of the Securities Act or the Exchange Act, as the case may be, and the rules and regulations
of the SEC promulgated thereunder, and none of the SEC Documents, at the time they were filed with the SEC, contained any untrue
statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made, not misleading. As of their respective dates, the
financial statements included in the SEC Documents (the "Financial Statements") complied as to form in all material
respects with applicable accounting requirements and the published rules and regulations of the SEC with respect thereto. Except
(i) as may be indicated in the notes to the Financial Statements or (ii) in the case of the unaudited interim statements, as permitted
by Form 10-Q under the Exchange Act, the Financial Statements have been prepared in accordance with generally accepted accounting
principles consistently applied and fairly present in all material respects the consolidated and consolidating financial position
of the Company and its subsidiaries as of the dates thereof and the results of its operations and cash flows for the periods then
ended (subject, in the case of unaudited statements, to normal recurring year-end adjustments and footnotes). Except as set forth
in the Financial Statements filed with the SEC prior to the date hereof, neither the Company nor any of its subsidiaries has any
liabilities, whether absolute, contingent or otherwise, other than (i) liabilities incurred in the ordinary course of business
subsequent to the date of such Financial Statements, (ii) obligations under contracts and commitments incurred in the ordinary
course of business and not required under generally accepted accounting principles to be reflected in such Financial Statements,
which liabilities and obligations referred to in clauses (i) and (ii), individually or in the aggregate, are not material to the
financial condition or operating results of the Company or any of its subsidiaries and (iii) liabilities and obligations incurred
in connection with the Closing Documents and the transactions contemplated thereby.

 

4.05
Capitalization. The capitalization ofthe Company (on a fully diluted basis) is as disclosed in the SEC Documents, except
for the Shares to be issued at the Closing. All outstanding shares of capital stock have been duly authorized and validly issued,
are fully paid and non-assessable, and were issued in compliance in all material respects with applicable federal and state laws
governing the issuance of securities. Except as disclosed in the SEC Documents, the Company has (i) no outstanding securities
convertible into or exchangeable for any shares of capital stock of the Company, (ii) no rights, options, warrants, calls or other
agreements or commitments of any nature whatsoever relating to the purchase or other acquisition of any shares of its capital
stock or securities convertible into or exchangeable for any shares of its capital stock, (iii) no shares of its capital stock
reserved for issuance, and (iv) no agreements or other commitments of any nature whatsoever relating to preferential rights or
voting rights of any shares of its capital stock or securities convertible into or exchangeable for any shares of its capital
stock.

 

    	7

    	 

    

 

 

4.06 No
Conflicts. Neither the execution, delivery and performance by the Company of this Agreement, the other Closing
Documents, and all instruments and documents to be delivered by the Company, nor the consummation of the transactions
contemplated by any of the foregoing (i) has constituted or resulted in, or will constitute or result in, a default under or
breach or violation of any term or provision of the Constituent Documents or material contracts or instruments to which the
Company or any of its subsidiaries is a party or federal, state or local laws, rules or regulations, writs, orders, judgments
or decrees which are applicable to the Company, any of its subsidiaries or their assets, (ii) will result in the acceleration
or termination of any rights under any contract or instrument to which the Company or any of its subsidiaries is a party or
(iii) will result in the creation or imposition of any liens, charges or encumbrances upon any assets of the Company or any
of its subsidiaries.

 

4.07
Consents. Other than those that will be obtained before the Closing, no approval, consent, order, authorization or other
action by, or notice to or filing with, any governmental authority or regulatory agency or any other person or entity, and no
lapse of a waiting period, is required in connection with the execution, delivery or performance by the Company of this Agreement,
any other Closing Document, the issuance and delivery of any of the Shares or any other transactions contemplated by any of the
Closing Documents except for (i) filings required under applicable state "blue sky" laws (which shall be duly filed
and effective prior to the Closing if so required under such laws), and (ii) an optional current report on Form 8-K to be filed
with the SEC.

 

4.08
No Material Adverse Change. Since the date of the most recent SEC Documents, the business of the Company and each subsidiary
has been operated in the ordinary course and substantially consistent with past practice, and there has not been any Material
Adverse Change.

 

4.09
Litigation. There is no claim, action, suit, proceeding or investigation pending or, to the Company's knowledge, currently
threatened against the Company or any of its subsidiaries, or any of their respective directors or officers, in their capacities
as such, (i) that questions the validity of this Agreement or any other Closing Document or the issuance of the Shares, or the
right of the Company to enter into this Agreement or any other Closing Document or to consummate the transactions contemplated
by any Closing Document or (ii) that might result, either individually or in the aggregate, in any Material Adverse Change or
in any change in the current equity ownership of the Company or of any subsidiary.

 

4.10
No Brokers or Finders. No person or entity has or will have, as a result of any engagement or contractual obligation incurred
by the Company, any right, interest or valid claim against Purchaser or the Company for any commission, fee or other compensation
as a finder or broker, or in any similar capacity, in connection with the transactions contemplated by this Agreement.

 

ARTICLE
V

COVENANTS OF THE COMPANY

 

The
Company hereby covenants and agrees to file in a timely manner all reports and other documents required to be filed by it
under the Exchange Act, and such filings shall be true and correct in all material respects and contain no material omissions
or misstatements. For so long as Purchaser owns the Shares, the Company shall not terminate its status as an issuer required
to file reports under the Exchange Act, even if the Exchange Act or the rules and regulations promulgated thereunder would
permit such termination.

 

    	8

    	 

    

 

ARTICLE
VI

CONDITIONS
TO OBLIGATIONS OF PURCHASER AT THE CLOSING

 

The
obligation of Purchaser to purchase the Shares at the Closing shall be subject to the fulfillment on or prior to the Closing Date
of the following conditions, any one or more of which may be waived by Purchaser:

 

6.01
Closing Documents. The Company shall have delivered to Purchaser this Agreement, the certificates representing the Shares,
and all other documentation required by this Agreement relating to the transactions contemplated hereby, all duly executed by
the Company.

 

6.02
Representations and Warranties; Performance of Obligations. The representations and warranties made by the Company in this
Agreement and in any other Closing Document shall be true and correct when made, and shall be true and correct in all material
respects on the Closing Date with the same force and effect as if they had been made on and as of said date, except for representations
and warranties made as of a specific date which shall be true and correct as of such date. The Company shall have performed, satisfied
and complied with all obligations and conditions required to be performed or observed by it under this Agreement or any other
Closing Document on or prior to the Closing Date.

 

6.03
Consents and Waivers. The Company shall have made all filings and obtained any and all consents (including, without limitation,
all governmental or regulatory consents), approvals or authorizations, permits and waivers necessary or appropriate for consummation
of the transactions contemplated by this Agreement and any other Closing Document.

 

6.04
No Litigation or Legislation. No federal, state or local statute, rule, regulation, decree, ruling or injunction shall have been
enacted or entered, and no litigation, proceeding, government inquiry or investigation shall be pending, which challenges, prohibits
or restricts, or seeks to prohibit or restrict, the consummation of the transactions contemplated by this Agreement or any other
Closing Document, or restricts or impairs the ability of Purchaser to own an equity interest in the Company.

 

ARTICLE
VII

CONDITIONS
TO OBLIGATION OF THE COMPANY AT THE CLOSING

 

The
obligation of the Company to sell and issue the Shares to Purchaser at the Closing shall be subject to the fulfillment on or prior
to the Closing Date of the following conditions, any one or more of which may be waived by the Company:

 

7.01
Purchase Price; Closing Documents. Purchaser shall have delivered the purchase price for the Shares to be purchased by
Purchaser hereunder. Purchaser shall have delivered to the Company this Agreement and all related documentation required by this
Agreement or the transactions contemplated hereby, all duly executed by Purchaser.

 

    	9

    	 

    

 

 

7.02
Representations and Warrantie ; Performance of Obligations. The representations and warranties made by Purchaser in this
Agreement shall be true and correct when made, and shall be true and correct in all material respects on the Closing Date with
the same force and effect as if they had been made on and as of said date. Purchaser shall have performed, satisfied and complied
with all obligations and conditions required to be performed or observed by it under this Agreement or any other Closing Document
on or prior to the Closing Date.

 

7.03
No Litigation or Legislation. No federal, state or local statute, rule, regulation, decree, ruling or injunction shall
have been enacted or entered, and no litigation, proceeding, government inquiry or investigation shall be pending, which challenges,
prohibits or restricts, or seeks to prohibit or restrict, the consummation of the transactions contemplated by this Agreement
or any other Closing Document, or restricts or impairs the ability of Purchaser to own an equity interest in the Company.

 

ARTICLE
VIII

MISCELLANEOUS

 

8.01
Waiver. No course of dealing between Purchaser and any other party hereto or any failure or delay on the part of Purchaser
in exercising any rights or remedies under this Agreement or any of the Closing Documents shall operate as a waiver of any rights
or remedies of Purchaser. No single or partial exercise of any rights or remedies under this Agreement or any of the Closing Documents
shall operate as a waiver or preclude the exercise of any other rights or remedies hereunder or thereunder.

 

8.02 Survival
of Covenants; Successors and Assigns. All representations and warranties of the Company contained in this Agreement, in
the Schedules, or in any exhibit, certificate, document or instrument delivered pursuant to this Agreement shall survive
the Closing and shall continue in full force and effect for three years after the Closing Date. The parties hereto understand
and agree that this Agreement contains obligations, agreements and covenants that are intended to and shall continue after
the Closing and except as otherwise provided herein, all covenants, agreements and obligations made herein, in the other
Closing Documents and in certificates delivered in connection herewith or on behalf of the Company, shall survive the
execution and delivery of this Agreement and shall bind and inure to the benefit of the Company and its successors and
assigns and the holders of the Shares from time to time.

 

8.03 Notices.
Any notice or communication to be given under this Agreement must be in writing and given by (a) deposit in the United States
mail, addressed to the party to be notified, postage prepaid and registered or certified with return receipt requested, (b)
delivery in person or by courier service providing evidence of delivery, or (c) transmission by telecopy. Each notice or
communication that is mailed, delivered, or transmitted in the manner described above shall be deemed sufficiently given,
served, sent, and received, in the case of mailed notices, on the third business day following the date on which it is mailed
and, in the case of notices delivered by hand, courier service, or telecopy, at such time as it is delivered to the addressee
(with the delivery receipt or the affidavit of messenger) or at such time as delivery is refused by the addressee upon
presentation. Any notice or communication under this Agreement must be addressed as set forth on the signature pages to this
Agreement. Any party may change its address for notice by written notice to the other parties hereto. Any notices delivered
to a Purchaser under this Agreement must also be delivered to such parties whose address may be set forth under Purchaser's
name on the signature pages to this Agreement.

 

    	10

    	 

    

 

8.04
Descriptive Headings. The descriptive headings of this Agreement have been inserted for convenience only and shall not
be deemed to limit or otherwise affect the construction of any provisions hereof.

 

8.05
GOVERNING LAW. THIS AGREEMENT, THE OTHER CLOSING DOCUMENTS AND THE OTHER INSTRUMENTS EXECUTED HEREUNDER, ARE PERFORMABLE
IN DALLAS, TEXAS, AND SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, UNDER AND GOVERNED BY, THE LAWS OF THE STATE OF TEXAS
WITHOUT REGARD TO ITS CONFLICTS OF LAWS PROVISIONS. The parties irrevocably submit to the exclusive jurisdiction of the state
and federal courts located in Dallas County, Texas for the purpose of any suit, action or other proceeding arising out of or based
on this Agreement, the other closing documents and the other instruments executed under this Agreement, or their respective subject
matter. Each party, to the extent applicable law permits, waives, and will not assert by way of motion, as a defense or otherwise,
in any suit, action or proceeding brought in the above-named courts, any claim that (a) it is not subject personally to the jurisdiction
of those courts, (b) the suit, action or proceeding is brought in an inconvenient forum, (c) the venue of the suit, action or
proceeding is improper, or (d) any of these agreements and instruments, or their respective subject matter, may not be enforced
in or by these courts.

 

8.06
Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed
an original and all of which shall constitute the same instrument, but only one of which need be produced.

 

8.07
Expenses. All expenses, including (without limitation) attorneys' and accountants' fees incurred or to be paid by the Company
or Purchaser in connection with the transactions contemplated by this Agreement shall be paid by whichever of them incurred such
expenses, as the case may be.

 

8.08
Binding Effect. This Agreement shall be binding upon the parties hereto, together with their respective executors, administrators,
successors, personal representatives, heirs and assigns.

 

8.09 Severability.
If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective
during the term hereof, such provision shall be fully severable and this Agreement shall be construed and enforced as if such
illegal, invalid or unenforceable provision never comprised a part hereof; and the remaining provisions hereof shall remain
in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its
severance herefrom. Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid or unenforceable
provision as may be possible and be legal, valid and enforceable.

 

    	11

    	 

    

 

8.10
Changes, Modifications or Waivers. No change or modification of this Agreement shall be valid or binding upon the parties
hereto, nor shall any waiver of any term or condition in the future be so binding, unless such change or modification or waiver
shall be in writing and signed by the Company and Purchaser.

 

8.11
Miscellaneous. No failure or delay on the part of any party in exercising any right, power or remedy hereunder shall operate
as a waiver thereof. The waiver by any party of a breach of any provision of this Agreement shall not operate or be construed
as a waiver of any subsequent breach. No modification, amendment or termination under this Agreement shall be valid unless evidenced
by a writing signed by Purchaser. This Agreement and the other Closing Documents constitute the entire agreement between the parties
with respect to the subject matter hereof and supersede all proposals and agreements, whether written or oral, and all other communications
between the parties relating to the subject matter of this Agreement or the Shares. In the event that the terms set forth in this
Agreement and in the other Closing Documents conflict, this Agreement shall control. The invalidity, illegality or unenforceability
of any provision of this Agreement or the other Closing Documents shall in no way affect the validity, legality or enforceability
of any other provision. This Agreement and the other Closing Documents shall be binding upon and inure to the benefit of the Company
and Purchaser and their respective successors and assigns.

 

8.12
Termination. This Agreement may be terminated and the transactions contemplated hereby abandoned at any time prior to the
Closing Date (a) by mutual written consent of the Company and Purchaser; or (b) by either the Company or Purchaser if the transactions
contemplated hereby shall not have been consummated on or before the close of business on October 20, 2013. In the event of termination
of this Agreement as provided above, this Agreement shall forthwith become of no further effect and there shall be no liability
or obligation on the part of any party.

 

 

[signatures
appear on following page]

 

 

    	12

    	 

    

 

IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed as an instrument under seal and as of the date first above
written.

 

 

	 	THE COMPANY:
	 	 
	 	GRAY FOX PETROLEUM CORP.,
	 	a Nevada corporation
	 	 	 
	 	By:	/s/ Lawrence Pemble
	 	Name:	Lawrence Pemble
	 	Title:	President
	 	Address:	3333 Lee Parkway, Suite 600
	 	 	Dallas, Texas 75219

 

 

	 	PURCHASER:
	 	 
	 	Rooftop Investments Ltd.
	 	a Marshall Islands Company
	 	 	 
	 	By:	/s/ Rene Berlinger
	 	Name:	BERLINGER Rene
	 	Title:	Director
	 	Address:	Trust Company Comples, Ajeltake Road
	 	 	Ajeltake Island, Majuro

MH96960 Marshall Islands

 

 

	 	 
	 	Copy to - Correspondence address
	 	 	 
	 		ACM Services GmbH
	 		Zimikerweg 14
	 		CH-8604 Volketswil
	 		Switzerland

 

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