Document:

ASSET ACQUISITION AGREEMENT

 

Between

 

Health Nutz, LLC dba Yumnuts

 

And

 

Cell-nique Corporation

 

    	 

    	 

    

 

TABLE OF CONTENTS

 

	1.	ACQUISITION OF THE ASSETS	4
	 	1.01.	ACQUISITION OF THE ASSETS FROM THE TRANSFEROR	4
	 	1.02.	ASSUMPTION OF LIABILITIES FROM THE TRANSFEROR	4
	 	1.03.	CONSIDERATION FOR THE ASSETS	5
	 	1.04.	CLOSING	5
	 	1.05.	TAX TREATMENT	5
	 	 	 
	2.	REPRESENTATIONS OF THE TRANSFEROR REGARDING THE ASSETS AND ASSIGNED LIABILITIES	5
	 	 	 
	3.	REPRESENTATIONS OF THE TRANSFEROR REGARDING THE TRANSFEROR	6
	 	3.01.	ORGANIZATION	6
	 	3.02.	THE TRANSFEROR	6
	 	3.03.	AUTHORIZATION	6
	 	3.04.	FINANCIAL STATEMENTS, BANK ACCOUNTS AND ACCESS TO ALL FINANCIAL RECORDS FOR PAST 3 YEARS	7
	 	3.05.	ABSENCE OF UNDISCLOSED LIABILITIES	7
	 	3.06.	LITIGATION	7
	 	3.07.	PERSONAL PROPERTY AND INVENTORY	8
	 	3.08.	INTANGIBLE PROPERTY	8
	 	3.09.	LEASES	9
	 	3.10.	REAL ESTATE	9
	 	3.11.	RESERVED	9
	 	3.12.	TAX MATTERS	9
	 	3.13.	CONTRACTS AND COMMITMENTS	10
	 	3.14.	COMPLIANCE WITH AGREEMENTS AND LAWS	11
	 	3.15.	RESERVED	12
	 	3.16.	EMPLOYEE BENEFIT PLANS	12
	 	3.17.	CUSTOMERS AND SUPPLIERS	12
	 	3.18.	RESERVED	12
	 	3.19.	CONFLICTS OF INTEREST	12
	 	3.20.	INVESTMENT REPRESENTATION	12
	 	3.21.	FULL DISCLOSURE	13
	 	3.22.	RESERVED	13
	 	3.23.	VENDOR, CO-PACKING AND STORAGE AGREEMENT	13
	 	3.24.	LIMITATION ON REPRESENTATIONS AND WARRANTIES	13
	 	 	 
	4.	REPRESENTATIONS OF THE TRANSFEREREE REGARDING THE TRANSFEREREE	13
	 	4.01.	ORGANIZATION AND AUTHORITY	13
	 	4.02.	CAPITALIZATION OF THE TRANSFEREE	14
	 	4.03.	AUTHORIZATION	14
	 	4.04.	REGULATORY APPROVALS	14
	 	4.05.	RESERVED	14
	 	4.06.	LITIGATION	14
	 	4.07.	BROKER'S FEE	15
	 	4.08.	MISCELLANEOUS	15
	 	3.21.	FULL DISCLOSURE	15
	 	 	 	 
	5.	ACCESS TO INFORMATION	15
	 	 	 
	6.	CONDITIONS TO OBLIGATIONS OF THE TRANSFEREE	16
	 	6.01.	CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR; COMPLIANCE WITH COVENANTS AND OBLIGATIONS	16
	 	6.02.	PERFORMANCE BY THE TRANSFEROR	16

 

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	 	6.03.	CORPORATE PROCEEDINGS

	16
	 	6.04.	RESERVED	16
	 	6.05.	ADVERSE PROCEEDINGS	16
	 	6.06.	CLOSING DELIVERIES BY THE TRANSFEROR	16
	 	 	 
	7.	CONDITIONS TO OBLIGATIONS OF THE TRANSFEROR	17
	 	7.01.	CONTINUED TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE; COMPLIANCE WITH COVENANTS AND OBLIGATIONS	17
	 	7.02.	CORPORATE PROCEEDINGS	17
	 	7.03.	RESERVED	17
	 	7.04.	CONSENTS OF LENDERS, VENODRS AND OTHER THIRD PARTIES	17
	 	7.05.	ADVERSE PROCEEDINGS	18
	 	7.06.	CLOSING DELIVERIES	18
	 	 	 	 
	8.	PRE-CLOSING AND POST-CLOSING COVENANTS	18
	 	8.01.	POST-CLOSING COVENANTS	18
	 	10.03.	DRAG ALONG	19
	 	 	 	 
	9.	INDEMNIFICATION	19
	 	9.01.	Generally	19
	 	9.02.	CLAIMS FOR INDEMNIFICATION	20
	 	9.03.	DEFENSE BY THE INDEMNIFYING PARTY	20
	 	9.04.	INDEMNIFICATION CAP	21
	 	9.05.	PAYMENT OF INDEMNIFICATION OBLIGATION	21
	 	9.06.	SURVIVAL OF REPRESENTATIONS; CLAIMS FOR INDEMNIFICATION	22
	 	9.07.	SOLE REMEDY	22
	 	 	 	 
	10.	RESTRICTIVE COVENANTS	22
	 	10.01.	CONFIDENTIALITY	22
	 	10.02.	NON-COMPETE	23
	 	10.03.	ADDITIONAL TERMS	23
	 	 	 	 
	11.	TERMINATION OF AGREEMENT	23
	 	11.01.	TERMINATION BY AGREEMENT OF THE PARTIES	23
	 	11.02.	TERMINATION BY REASON OF BREACH	23
	 	 	 	 
	12.	NOTICES	23
	 	 	 
	13.	SUCCESSORS AND ASSIGNS	24
	 	 	 
	14.	ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS	24
	 	 	 
	15.	SEVERABILITY	25
	 	 	 
	16.	INVESTIGATION OF THE PARTIES	25
	 	 	 
	17.	EXPENSES	25
	 	 	 
	18.	GOVERNING LAW/JURISDICTION	25
	 	 	 
	19.	SECTION HEADINGS	25
	 	 	 
	20.	COUNTERPARTS	26
	 	 	 
	21.	CONSULTATION WITH INDEPENDENT COUNSEL	26

 

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Exhibits

 

	Exhibit A	-	Assets
	Exhibit B	-	Promissory Note
	Exhibit C	-	Tax Allocation Schedule
	Exhibit D	-	Transferee Cap Table
	Exhibit E	-	Transferee Liens
	Exhibit F	-	Bill of Sale and Assignment and Assumption Agreement
	Exhibit G	-	Inventory List
	Exhibit H	-	Disclosure Memo

 

Schedules to be provided by the Transferor

 

	3.02	-	The Transferor
	3.03	-	Third Party Consents
	3.04	-	Financial Statements
	3.06	-	Litigation
	3.07	-	Personal Property
	3.08	-	Intangible Property
	3.13	-	Contracts
	3.17	-	Customers and Suppliers
	3.19	-	Conflicts of Interest
	3.23	-	Vendor, Co-Packing and Storage Agreements

 

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ASSET ACQUISITION AGREEMENT

 

Agreement (the "Agreement") made as
of the 31st day of December, 2011 by and among, Cell-nique Corporation, a Delaware corporation (the "Transferee" or “CN”),
Health Nutz, LLC dba Yumnuts, a Delaware Limited Liability Company (the "Transferor" or “YN”), and only with
respect to Section 8.01(d) Physicians Capital Corporation (the “Major Shareholders”), and only with respect to Section
10.02, Tyler Ricks, Jerome Metivier, Michael Cochrane and Gary Cochrane (collectively, the “Founders”).

 

PRELIMINARY STATEMENT

 

The Transferee desires to acquire, and the Transferor
desires to transfer certain of the Transferor’s assets including without limitation all of its operating intellectual property
assets for the consideration in the transaction contemplated hereunder.

 

NOW, THEREFORE, in consideration of the mutual
promises hereinafter set forth and other good and valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree as follows:

 

1.           ACQUISITION
OF THE ASSETS

 

1.
01.      ACQUISITION OF THE ASSETS FROM THE TRANSFEROR.

 

(a)          Subject
to and upon the terms and conditions of this Agreement, at the closing of the transactions contemplated by this Agreement (the
"Closing"), the Transferor shall sell, transfer, convey, assign and deliver to the Transferee, and the Transferee shall
purchase, acquire, accept and assume from the Transferor, the assets set forth on Exhibit A hereto (the “Purchased
Assets”) and the products held for sale by the transferor which are used in the operation of the Transferor’s business
(the “Inventory”, and together with the Purchased Assets, the “Assets”).

 

(b)          The
Assets shall not include the Transferor’s (i) cash, (ii) accounts receivable, and (iii) accounts payable.

 

1.02.       ASSUMPTION
OF LIABILITIES FROM THE TRANSFEROR.

 

Upon and subject to the terms and conditions of this Agreement,
the Transferee shall assume and become responsible for all liabilities incurred after the Closing under the Assets (the “Assumed
Liabilities”). Schedule 1.02 attached hereto lists all of the Assumed Liabilities and the dollar amount of these liabilities
as agreed to by the Transferor and the Transferee.

 

Except for the Assumed Liabilities, Transferee is not assuming under
this Agreement or any other Transaction Document any liability of Transferor, including any of the following (each, an "Unassumed
Liability"): (i) liabilities arising out of any default by Transferor of any provision of any Contract (as defined in Section
3.13), occurring prior to the Closing Date (as defined in Section 1.04 below); (ii) any product liability or similar claim for
injury to any Person or property, that arises out of or is based upon any express or implied representation, warranty, agreement
or guarantee made by Transferor, or alleged to have been made by Transferor, or that is imposed or asserted to be imposed by operation
of law in connection with any service performed or product sold or leased by or on behalf of Transferor on or prior to the Closing;
(iii) any Federal, state or local income or other Tax payable with respect to the Business of the Transferor, the Assets, or other
properties or operations of Transferor for a period prior to the Closing Date; (iv) any liabilities arising prior to the Closing
Date or as a result of the Closing for severance, bonuses, or any other form of compensation to any employees, agents or independent
contractors of Transferor, (v) any liabilities of Transferor arising or incurred in connection with the negotiation, preparation
and execution of this Agreement and the Transactions; (vi) any liabilities to give credits or take other remedial actions for defective
or out of date goods for the period of 9 months after close; (vii) any liabilities for money borrowed; (viii) any liability of
the Transferor or affiliate thereof based upon an act or omission of such person after the Closing Date; and (ix) any other Liabilities,
regardless of when made or asserted, that are not specifically assumed hereunder.

 

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1.03.       CONSIDERATION
FOR THE ASSETS.

 

In consideration for the sale and transfer of the Assets, and subject
to the terms and conditions of this Agreement, Transferee shall, on the Closing Date (a) issue to Transferor Six Thousand Four
Hundred Forty One (6,441) shares of Series A preferred stock valued at $100 per share, $.00001 par value per share, of Transferee,
(the “Stock Consideration”), plus (b) issue a promissory note, in the form set forth at Exhibit B hereto (the
“Promissory Note”, and together with the Stock Consideration, the “Consideration”), payable to the Transferor
in the principal amount of the value of the Inventory of the Transferor which shall be determined as set forth below and which
Inventory is estimated to be valued at Two Hundred Eleven Thousand Six Hundred Fifty Five Dollars ($211,655) as of the date hereof.
The value of the Inventory shall be mutually determined by the Transferor and the Transferee by way of a physical inventory taken
no more than five (5) days prior to the Closing Date (as defined below), and shall be adjusted based upon purchases and sales made
prior to the Closing.

 

1.04.       CLOSING.

 

The Closing shall take place at the offices of YN, on a date and
at a time to be determined, or at such other place, time or date (including by the exchange of facsimile and/or PDF signatures)
as may be mutually agreed upon in writing by the parties (the "Closing Date"). The transfer of the Assets by the Transferor
to the Transferee by the Transferee shall be deemed, other than for tax purposes, to occur at 12:01 a.m., EST, on December 31,
2011, subject to post closing agreements between the parties.

 

1.05.       TAX
TREATMENT.

 

For purposes of this transaction, the Transferee and the Transferor
have agreed that for tax purposes the transaction contemplated hereunder shall be treated under the Code as if the Transferor sold
and exchanged all of its assets, for new shares of the Transferee's stock and the other Consideration set forth herein. Each of
the parties shall report the federal, state, local and other tax consequences of the purchase and sale contemplated hereby (including
the filing of Internal Revenue Service Form 8594) in a manner consistent with this Section 1.05 and the allocation schedule set
forth at Exhibit C hereto.

 

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2.         REPRESENTATIONS
OF THE TRANSFEROR REGARDING THE ASSETS AND ASSIGNED LIABILITIES

 

The Transferor represents and warrants to the Transferee as follows:

 

(a)        The
Transferor has good and marketable title to the Assets, free and clear of any and all liens, charges, encumbrances or third-party
rights whatsoever. If any such encumbrances exist they shall be released by such secured party. The use of the Assets is not subject
to any Lien, and such use does not encroach on the property or rights of any Person. The Assets constitute all of the assets required
for the continued operation of the Business by Transferee as operated by Transferor during the past 12 months. The Assets, taken
as a whole, constitute all the properties and assets relating to or used or held for use in connection with the Business during
the past 12 months (except for inventory sold, cash disposed of, accounts receivable collected, prepaid expenses realized, Contracts
fully performed, properties or assets replaced by equivalent or superior assets, in each case in the ordinary course of business).
There are no assets or properties used in the operation of the Business that are owned by any Person other than Transferor that
will not be licensed or leased to Transferee under valid, current license arrangements or leases. Transferee agrees to purchase
the assets of the company “as is” with regards to physical condition except for the representations made herein.

 

(b)        The
Transferor has the full right, power and authority to enter into, and execute this Agreement and to transfer, convey and sell to
the Transferee at the Closing the Assets. All corporate action of Transferor necessary for such execution and delivery and the
performance hereof and thereof has been duly taken and, upon consummation of the purchase contemplated hereby, the Transferee will
acquire from the Transferor good and marketable title to the Assets.

 

(c)        The
Transferor is not a party to, subject to or bound by any agreement (other than an agreement requiring certain notices and consents
which have been given or obtained, as applicable) or any judgment, order, writ, prohibition, injunction or decree of any court
or other governmental body which would prevent the execution or delivery of this Agreement by the Transferor or the transfer, conveyance
and sale of the Assets or the assignment of the Assigned Liabilities to the Transferee pursuant to the terms hereof.

 

(d)        No
broker or finder is entitled to any brokerage or finder's fee or other commissions in respect of such transactions based upon agreements,
arrangements or understandings made by or on behalf of the Transferor.

 

3.          REPRESENTATIONS
OF THE TRANSFEROR REGARDING THE TRANSFEROR

 

The Transferor represents and warrants to the Transferee as follows:

 

3.01.     ORGANIZATION.

 

The Transferor is a limited liability company duly organized, validly
existing and in good standing under the laws of the State of Delaware, and has all requisite power and authority to own its properties,
to carry on its business as now being conducted, to execute and deliver this Agreement and the agreements contemplated herein,
and to consummate the transactions contemplated hereby and thereby.

 

3.02.     THE
TRANSFEROR.

 

Schedule 3.02 attached hereto sets forth: (i) the name of
the Transferor; (ii) the jurisdiction of organization of the Transferor; (iii) the names of its managers, members, officers and
directors; and (iv)the jurisdictions in which the Transferor is qualified or holds licenses to do business as a foreign company.

 

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3.03.      AUTHORIZATION.

 

The execution and delivery by the Transferor of this Agreement and
the agreements provided for herein, and the consummation by the Transferor of all transactions contemplated hereunder and thereunder
by the Transferor, have been duly authorized by all requisite company action. This Agreement has been duly executed by the Transferor.
This Agreement and all other agreements and obligations entered into and undertaken in connection with the transactions contemplated
hereby to which the Transferor is a party constitute the valid and legally binding obligations of the Transferor, enforceable against
it in accordance with their respective terms. The execution, delivery and performance by the Transferor of this Agreement and the
agreements provided for herein, and the consummation by the Transferor of the transactions contemplated hereby and thereby, will
not, with or without the giving of notice or the passage of time or both, (a) to the Transferor’s actual knowledge, violate
the provisions of any law, rule or regulation applicable to the Transferor; (b) violate the provisions of the Certificate of Organization
or the Transferor’s Third Amended and Restated Limited Liability Company Agreement, dated as of September 30, 2011; (c) violate
any judgment, decree, order or award of any court, governmental body or arbitrator; or (d) conflict with or result in the breach
or termination of any term or provision of, or constitute a default under, or cause any acceleration under, or cause the creation
of any lien, charge or encumbrance upon the properties or assets of the Transferor pursuant to, any indenture, mortgage, deed of
trust, security agreement or other instrument or agreement to which the Transferor is a party or by which the Transferor or any
of its properties is or may be bound. Schedule 3.03 attached hereto sets forth a true, correct and complete list of all
consents and approvals of third parties (including governmental entities) that are required in connection with the consummation
by the Transferor of the transactions contemplated by this Agreement.

 

3.04.      FINANCIAL
STATEMENTS AND ACCESS TO ALL FINANCIAL RECORDS FOR PAST 3 YEARS.

 

Schedule 3.04 attached hereto contains true, complete and
correct copies of the unaudited, Transferor-prepared balance sheet of the Transferor as of December 31, 2009 and 2010 and the related
statements of income, members’ equity, retained earnings and changes in financial condition of the Transferor for the fiscal
year then ended (collectively, the "Annual Financial Statements"), the unaudited Transferor-prepared balance sheet of
the Transferor as of December 31, 2011 (the "Current Balance Sheet") and the related statements of income, members’
equity, retained earnings and changes in financial condition of the Transferor for the period from January 1, 2011 through December
31, 2011 (collectively, the "Current Financial Statements", and together with the Annual Financial Statements, the “Financial
Statements”). The Current Financial Statements have been prepared in accordance with past practices. The Financial Statements
fairly represent, as of their respective dates, the financial condition, retained earnings, assets, liabilities, and the results
of operations of the business of the Transferor for the periods therein indicated. Transferor will provide Transferee with access
to all financial records from December 31 2009 to December 31 2011 for a period of 12 months after the close.

 

3.05.      ABSENCE
OF UNDISCLOSED LIABILITIES.

 

The Transferor retains any and all liability and/or
obligation, secured or unsecured whether accrued, absolute, contingent, unasserted or otherwise, except as expressly set forth
herein.

 

3.06.      LITIGATION.

 

Except as set forth on Schedule 3.06 attached hereto (a)
there is no action, suit or proceeding to which the Transferor is a party (either as a plaintiff or defendant) pending or to the
Transferor’s actual knowledge, threatened before any court or governmental agency, authority, body or arbitrator and, to
the actual knowledge of the Transferor, there is no basis for any such action, suit or proceeding, (b) neither the Transferor nor,
to the actual knowledge of the Transferor, any officer, director or employee of the Transferor, has been permanently or temporarily
enjoined by any order, judgment or decree of any court or any governmental agency, authority or body from engaging in or continuing
any conduct or practice in connection with the business, assets, or properties of the Transferor, and (c) to the Transferor’s
actual knowledge, there is not in existence on the date hereof any order, judgment or decree of any court, tribunal or agency enjoining
or requiring the Transferor to take any action of any kind with respect to its business, assets or properties.

 

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3.07.      PERSONAL
PROPERTY AND INVENTORY.

 

Schedule 3.07 attached hereto sets forth: (i) a true, correct
and complete, in all material respects, list of all Assets which constitute tangible personal property and Inventory owned by the
Transferor as of the date hereof having either a net book value per unit or historical cost per unit; or not owned by the Transferor
but in the possession of or used or useful in the business of the Transferor (collectively, the "Personal Property");
and (ii) a description of the owner of, and any agreement relating to the use of, each item of Personal Property not owned by the
Transferor and the circumstances under which such Property is used. Except as disclosed in Schedule 3.07:

 

(a)         the
Transferor has good and marketable title to the Personal Property, free and clear of all liens, leases, encumbrances, claims under
bailment and storage agreements, equities, conditional sales contracts, security interests, charges and restrictions, except for
liens, if any, for personal property taxes not due;

 

(b)         no
officer or director, nor, to the actual knowledge of the Transferor, any member or employee of the Transferor, or any spouse, child
or other relative or affiliate thereof, owns directly or indirectly, in whole or in part, any of the Personal Property described
in Schedule 3.07;

 

(c)         to
the actual knowledge of the Transferor, each item of Personal Property not owned by the Transferor is in such condition that upon
the return of such property to its owner in its present condition at the end of the relevant lease term or as otherwise contemplated
by the applicable agreement between the Transferor and the owner or lessor thereof, the obligations of the Transferor to such owner
or lessor will be discharged; and

 

(d)         the
Personal Property is adequate for the conduct of the business of the Transferor as currently conducted and is in materially good
operating condition and repair, normal wear and tear excepted, and is currently used by the Transferor in the ordinary course of
its business.

 

3.08.      INTANGIBLE
PROPERTY.

 

Schedule 3.08 attached hereto sets forth:
(i) a true, correct and complete, in all material respects, list and, where appropriate, a description of, all Assets which constitute
material items of intangible property owned by, or used or useful in connection with the business of, the Transferor, including,
but not limited to, supplier and customer lists and related relationships, product formula and production processes, research and
development and work in progress, trade secrets, know-how, any other confidential information of the Transferor, United States
and foreign patents, trade names, trademarks, trade name and trademark registrations, copyrights and copyright registrations, and
applications for any of the foregoing (the "Intangible Property"); and (ii) a true, correct and complete list of all
material licenses or similar agreements or arrangements to which the Transferor is a party, either as licensee or licensor, with
respect to the Intangible Property. Except as otherwise disclosed in Schedule 3.08 and or Exhibit H:

 

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(a)         the
Transferor is the sole and exclusive owner of all right, title and interest in and to the Intangible Property and all designs,
permits, labels and packages used on or in connection therewith, free and clear of all liens, security interests, charges, encumbrances,
equities or other adverse claims;

 

(b)         the
Transferor has the right and authority to use, and the Transferee shall have the right to continue to use immediately after the
Closing (in a manner consistent with current use), the Intangible Property in connection with the conduct of the Transferor’s
business in the manner presently conducted, and to the actual knowledge of the Transferor, such use or continuing use does not
and will not conflict with, infringe upon or violate any rights of any other person, corporation or entity;

 

(c)         the
Transferor has not received notice of, and does not have actual knowledge of any basis for, a pleading or threatened claim, interference
action or other judicial or adversarial proceeding against the Transferor that any of the operations, activities, products, services
or publications of the Transferor or any of its customers or distributors infringes or will infringe any patent, trademark, trade
name, copyright, trade secret or other property right of a third party, or that it is illegally or otherwise using the trade secrets,
formulae or property rights of others;

 

(d)         there
are no outstanding nor, to the actual knowledge of the Transferor, any threatened disputes or other disagreements with respect
to any research and development in process or licenses or similar agreements or arrangements described in Schedule 3.08
or with respect to infringement by a third party of any of the Intangible Property;

 

(e)         no
officer or director of the Transferor nor, to the actual knowledge of the Transferor, any member or employee of the Transferor,
or any spouse, child or other relative or affiliate thereof, owns directly or indirectly, in whole or in part, any of the Intangible
Property; and

 

(f)         the
Transferor does not have any actual knowledge that any third party is infringing, or has threatened to infringe upon or otherwise
violate, any of the Intangible Property in which the Transferor has ownership rights.

 

3.09.      LEASES.

 

The Transferor does not have any leased property.

 

3.10.      REAL
ESTATE.

 

The Transferor does not own any real property or any interest in
real property.

 

3.11.      SUBSIDIARIES.

Transferor does not own, directly or indirectly,
any interest or investment (whether equity or debt) in any Person (excluding natural persons).

 

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3.12.      TAX
MATTERS.

 

The Transferor has properly filed on a timely basis all Tax Returns
(as defined below) that it was required to file and all such Tax Returns were correct and complete, except for any error or omission
that could not reasonably be expected to have a material adverse effect on the results of operations, condition (financial or otherwise),
assets, properties, business or prospects (a "Material Adverse Effect") of the Transferor, taken as a whole. The Transferor
has paid on a timely basis (including any extensions) all Taxes (as defined below) that were due and payable. All Taxes that Transferor
is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid
to the proper governmental entity. No claim has ever been made by any Governmental Body in a jurisdiction where Transferor does
not file Tax Returns that Transferor is or may be subject to taxation by that jurisdiction. There are no liens for Taxes on any
of the assets of Transferor (except for liens for Taxes not yet due and payable). Except as otherwise disclosed on Exhibit H hereto,
none of Transferor, the managers(and employees responsible for Tax matters) of Transferor, or the managers(and employees responsible
for Tax matters) of the parent of any Affiliate of which Transferor was or is a member has any reason to believe that any Governmental
Body might assess any additional Taxes against Transferor for any period for which Tax Returns have been filed. There is no dispute
or claim concerning any Tax Liability of Transferor either (A) claimed or raised by any Governmental Body in writing or (B) as
to which any directors and officers (and employees responsible for Tax matters) of Transferor has any knowledge. Transferor is
a limited liability company which is treated as a partnership for federal tax purposes. Other than the Transferor’s Third
Amended and Restated Limited Liability Company Agreement, effective as of September 30, 2011, the Transferor is not a party to
any other joint venture, partnership, or other arrangement treated as a partnership for federal income tax purposes.

 

For purposes of this Agreement, "Taxes" means all taxes,
including without limitation income, gross receipts, ad valorem, value-added, excise, real property, personal property, sales,
use, transfer, withholding, employment and franchise taxes imposed by the United States of America or any state, local or foreign
government, or any agency thereof, or other political subdivision of the United States or any such government, and any interest,
penalties, assessments or additions to tax resulting from, attributable to or incurred in connection with any tax or any contest
or dispute thereof. For purposes of this Agreement, "Tax Returns" means all reports, returns, declarations, statements,
forms or other information required to be supplied to a taxing authority in connection with Taxes.

 

3.13.      CONTRACTS
AND COMMITMENTS.

 

(a)          Schedule
3.13 attached hereto contains a true, complete and correct list of the following contracts, agreements, arrangements or other
understandings, whether written or oral (collectively, the "Contracts"):

 

(i)          any
material loan agreements and guaranties to which the Transferor is a party or any of its property is bound;

 

(ii)         all
Contracts to which the Transferor or any of its property is bound which (A) involve payments or receipts by the Transferor of more
than $5,000 in the case of any single contract, agreement, commitment, understanding or arrangement under which full performance
(including payment) has not been rendered by all parties thereto or (B) under which the consequences of a default or termination
would reasonably be expected to have a Material Adverse Effect;

 

(iii)        all
collective bargaining agreements, employment and consulting agreements, executive compensation plans, bonus plans, deferred compensation
agreements, pension plans, retirement plans, employee stock option or stock purchase plans and group life, health and accident
insurance and other employee benefit plans, agreements, arrangements or commitments to which the Transferor is a party or any of
its property is bound;

 

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(iv)        all
material agency, distributor, sales representative, franchise or similar agreements to which the Transferor is a party or by which
the Transferor or any of its property is bound;

 

(v)         all
material leases, whether operating, capital or otherwise, under which the Transferor is a lessor or a lessee;

 

(vi)        all
Contracts imposing a non-competition or non-solicitation obligation on the Transferor; and

 

(vii)       any
other material agreements or contracts entered into by the Transferor, excluding all non-disclosure agreements between Transferor
and Third Parties.

 

(b)          Except
as set forth on Schedule 3.13:

 

(i)           each
Contract is a valid and binding agreement of the Transferor, enforceable against the Transferor in accordance with its terms, and
the Transferor does not have any actual knowledge that any Contract is not a valid and binding agreement of the other parties thereto,
except where the failure to be a valid and binding Agreement would not reasonably be expected to result in a Material Adverse Effect.

 

(ii)          the
Transferor has fulfilled all material obligations required pursuant to the Contracts to have been performed by the Transferor,
on its part prior to the date hereof, and the Transferor, has no reason to believe that the Transferor will not be able to fulfill,
when due, all of its obligations under the Contracts which remain to be performed after the date hereof, except where the failure
to fulfill all material obligations required pursuant the contract would not reasonably be expected to result in a Material Adverse
Effect;

 

(iii)         the
Transferor is not in breach of or default under any Contract, and no event has occurred which with the passage of time or giving
of notice or both would constitute such a default, result in a loss of rights or result in the creation of any lien, charge or
encumbrance, thereunder or pursuant thereto, except for such breach, default or events that would not reasonably be expected to
result in a Material Adverse Effect; and

 

(iv)         to
the actual knowledge of the Transferor, there is no existing breach or default by any other party to any Contract, and no event
has occurred which with the passage of time or giving of notice or both would constitute a default by such other party, result
in a loss of rights or result in the creation of any lien, charge or encumbrance thereunder or pursuant thereto, except for such
breach, default or events that would not reasonably be expected to result in a Material Adverse Effect.

 

3.14.      COMPLIANCE
WITH AGREEMENTS AND LAWS.

 

To its actual knowledge, the Transferor has all requisite licenses,
permits and certificates, including environmental, health and safety permits, from federal, state and local authorities necessary
to conduct its business and own and operate its Assets (collectively, the "Permits") other than as would not be reasonably
be expected to have a Material Adverse Effect. To its actual knowledge, the Transferor is not in violation in any material respect
of any law or regulation relating to its Assets, except with regards to labeling discrepancies as disclosed to Transferee in memo
regarding Yumnuts Disclosures dated December 31, 2011 (Exhibit H). To the Transferor’s actual knowledge, the business of
the Transferor as conducted since the date the business commenced operations has not violated, and on the date hereof does not
violate, in any material respect, any federal, state, local or foreign laws, regulations or orders (including, but not limited
to, any of the foregoing relating to employment discrimination, immigration, occupational safety, environmental protection, hazardous
waste, conservation, or corrupt practices), the enforcement of which would have a Material Adverse Effect.

 

    	11

    	 

    

 

3.15.      RESERVED.

 

3.16.      EMPLOYEE
BENEFIT PLANS.

 

The Transferor does not have, and has never had, any employee benefit
plans.

 

3.17.      CUSTOMERS
AND SUPPLIERS.

 

Schedule 3.17 attached hereto sets forth a true, correct
and complete list of (a) the name of each customer of the Transferor from 2010 and 2011, and (b) the names of suppliers from 2010
and 2011 (by dollar volume) of the Transferor. Except as otherwise set forth on Schedule 3.17, the Transferor has good customer
and supplier relations and none of the customers or suppliers of the Transferor has notified the Transferor that it intends to
discontinue or materially diminish its relationship with the Transferor.

 

3.18.      RESERVED.

 

3.19.      CONFLICTS
OF INTEREST.

 

Except as set forth on Schedule 3.19 attached hereto, no
manager, officer, director nor, to the actual knowledge of the Transferor, any affiliate of any such person, now has or within
the last three (3) years had, either directly or indirectly:

 

(a)          an
equity or debt interest in any corporation, partnership, joint venture, association, organization or other person or entity which
furnishes or sells or during such period furnished or sold services or products to the Transferor or purchases or during such period
purchased from the Transferor any goods or services, or otherwise did business with the Transferor during such period; or

 

(b)          a
beneficial interest in any contract, commitment or agreement to which the Transferor was a party or under which any of them is
or was obligated or bound or to which any of their respective properties may be or may have been subject, other than stock options
and other contracts, commitments or agreements between the Transferor and such persons in their capacities as employees, officers
or directors of the Transferor.

 

3.20.      INVESTMENT
REPRESENTATION.

 

The Transferor is acquiring and shall hold the Stock Consideration
issued by the Transferee hereunder for its own account for investment. The Transferor acknowledges that the shares representing
the Stock Consideration are restricted securities under Rule 144 of the Rules and Regulations promulgated under the Securities
Act of 1933, as amended, and that the shares representing the Stock Consideration shall bear the following legend:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AND HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH,
THE SALE OR DISTRIBUTION THEREOF. NO SUCH TRANSFER MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO;
UNLESS PURSUANT TO THE RULES PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED; OR AN OPINION OF COUNSEL IN A FORM SATISFACTORY
TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.”

 

    	12

    	 

    

 

The Transferor has had the opportunity to request from the Transferee
any information concerning the Transferee which the Transferor has deemed relevant and the Transferee has provided such information.
Transferor understands that the Stock Consideration are not registered under the Securities Act on the grounds that the issuance
of securities hereunder is exempt from registration under the Securities Act pursuant to Section 4(2) or regulations promulgated
thereunder, and that Transferee's reliance on such exemption is predicated on Transferor's representations set forth herein. Transferor
represents that it is an "accredited investor" as such term is defined in Rule 501 (a) promulgated under the Securities
Act and is experienced in evaluating and investing in companies such as Transferee, is familiar with the risks associated with
the business and operations of Transferee, has such knowledge and experience in financial and business matters as to be capable
of evaluating the merits and risks of its investment, and has the ability to bear the economic risks of its investment. Transferor
understands that the Stock Consideration may not be sold, transferred, or otherwise disposed of without registration under the
Securities Act and applicable state securities laws or an exemption therefrom, and that, in the absence of an effective registration
statement covering the Stock Consideration or an available exemption from registration under the Securities Act and applicable
state securities laws, the Stock Consideration must be held indefinitely. Transferor agrees that in no event will it make a transfer
or disposition of any of the Stock Consideration or such other securities, which have a legend substantially in the form set forth
above, unless and until (i) Transferor shall have notified Transferee of the proposed disposition and (ii) if requested by Transferee,
Transferor shall have furnished to Transferee, at the expense of Transferor or its transferee, an opinion of counsel reasonably
satisfactory to Transferee to the effect that such transfer may be made without registration under the Securities Act and applicable
state securities laws, except that no such opinion need be delivered in connection with a transfer or disposition made pursuant
to Rule 144 or Rule 145 promulgated under the Securities Act.

 

3.21.      FULL
DISCLOSURE.

 

There are no materially misleading statements in any of the representations
and warranties made by Transferor in this Agreement, the Exhibits or Schedules to this Agreement, or any certificates or correspondence
including the Yumnuts Disclosures memo dated December 31, 2011 (Exhibit H), delivered by the Transferor pursuant to this Agreement.

 

3.22.      RESERVED.

 

3.23.      VENDOR,
CO-PACKING AND STORAGE AGREEMENT.

 

Schedule 3.23 attached hereto sets forth a list of the Transferor’s
outstanding agreements with vendors, co-packers and storage providers.

 

3.24.      LIMITATION
ON REPRESENTATIONS AND WARRANTIES.

The Transferor's representations and warranties in Sections 3.07,
3.08, and 3.13 shall only apply to the Assets and Assumed Liabilities of the Transferor that are being transferred to or assumed
by the Transferee pursuant to this Agreement.

 

    	13

    	 

    

 

4.          REPRESENTATIONS
OF THE TRANSFEREE REGARDING THE TRANSFEREE

 

The Transferee represents and warrants to the Transferor that:

 

4.01.      ORGANIZATION
AND AUTHORITY.

 

The Transferee is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has all requisite power and authority (corporate and other) to
own its properties and to carry on its business as now being conducted. The Transferee has full power to execute and deliver this
Agreement and the agreements contemplated herein, and to consummate the transactions contemplated hereby and thereby.

 

4.02.      CAPITALIZATION
OF THE TRANSFEREE.

 

Attached hereto as Exhibit D is the Transferee’s
pre and post-closing capitalization table. On the date hereof, the Transferee's authorized capital stock consists of 49,000,000
shares of Common Stock, $.00001 par value, of which 10,030,410 shares are issued and outstanding, and 1,000,000 shares of preferred
stock, $.00001 par value, of which 748,559 shares are blank check preferred stock, none of which are issued and outstanding, and
251,441 shares of which are designated Series A Preferred Stock, 245,000 shares shares of which are issued and outstanding. All
of the outstanding shares of capital stock of the Transferee have been and on the Closing Date will be duly and validly issued
and are, or will be as of the Closing Date, fully paid and non-assessable.

 

4.03.      AUTHORIZATION.

 

The execution and delivery of this Agreement by the Transferee,
and the agreements provided for herein, and the consummation by the Transferee of the transactions contemplated hereby and thereby,
have been duly authorized by all requisite corporate action. This Agreement and all such other agreements and written obligations
entered into and undertaken in connection with the transactions contemplated hereby constitute the valid and legally binding obligations
of the Transferee, enforceable against the Transferee in accordance with their respective terms. The execution, delivery and performance
of this Agreement and the agreements provided for herein, and the consummation by the Transferee of the transactions contemplated
hereby and thereby, will not, with or without the giving of notice or the passage of time or both, (a) violate the provisions of
any law, rule or regulation applicable to the Transferee, (b) violate the provisions of the Transferee's Certificate of Incorporation
or Bylaws, (c) violate any judgment, decree, order or award of any court, governmental body or arbitrator, or (d) conflict with
or result in the breach or termination of any term or provision of, or constitute a default under, or cause any acceleration under,
or cause the creation of any lien, charge or encumbrance upon the properties or assets of the Transferee pursuant to, any indenture,
mortgage, deed of trust or other agreement or instrument to which the Transferee is a party or by which the Transferee is or may
be bound. The Transferee’s Certificate of Incorporation and Bylaws are the sole documents that set forth and govern the rights,
preferences and obligations of the Transferee’s shareholders.

 

4.04.      REGULATORY
APPROVALS.

 

No regulatory approvals are needed for the Transferee to consummate
the transactions contemplated by this Agreement.

 

4.05.      RESERVED.

 

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4.06.      LITIGATION.

 

There is no suit, action or legal administrative, arbitration or
order, proceeding or governmental investigation pending or, to the actual knowledge of the Transferee, threatened, to which the
Transferee is a party which, considered individually or in the aggregate, would reasonably be expected to materially impair the
Transferee's ability to perform its obligations under this Agreement or to cause a Material Adverse Effect for the Transferee.

 

4.07.      BROKER'S
FEE.

 

No broker or finder has acted for the Transferee in connection with
this agreement or the transactions contemplated hereby, and no broker or finder is entitled to any brokerage or finder's fee or
other commissions in respect of such transactions based upon agreements, arrangements or understandings made by or on behalf of
the Transferee.

 

4.08.      MISCELLANEOUS.

 

(a)          The
Transferee has good and marketable title to its real and intangible assets free and clear of all liens, leases, encumbrances, equities,
security interests, charges and restrictions, except for certain liens, security agreements and royalty agreements listed on Exhibit
E hereto.

 

(b)          The
Transferee has not filed its 2010 Tax Returns but intends to file such Tax Returns no later than February 28, 2012. Except as otherwise
set forth in the preceding sentence, the Transferee has filed on a timely basis all prior Tax Returns, which were were correct
and complete, except for any error or omission that could not reasonably be expected to have a Material Adverse Effect on the Transferee.
The Transferee has paid on a timely basis (including any extensions) all Taxes that were due and payable. All Taxes that the Transferee
is or was required by law to withhold or collect have been duly withheld or collected and, to the extent required, have been paid
to the proper governmental entity.

 

(c)          To
its actual knowledge, the Transferee has all requisite licenses, permits and certificates, including environmental, health and
safety permits, from federal, state and local authorities necessary to conduct its business and own and operate its assets. To
its actual knowledge, the Transferee is not in violation in any material respect of any law or regulation relating to its assets.
To the Transferee’s actual knowledge, the business of the Transferee as conducted since December 31, 2011 has not violated,
and on the date hereof does not violate, in any material respect, any federal, state, local or foreign laws, regulations or orders
(including, but not limited to, any of the foregoing relating to employment discrimination, immigration, occupational safety, environmental
protection, hazardous waste, conservation, or corrupt practices), the enforcement of which would have a Material Adverse Effect
on the Transferee. Notwithstanding, the Transferee believes to be exempt from California Proposition 65, which as of this date
is being evaluated.

 

(d)          There
are no materially misleading statements in any of the representations and warranties made by Transferee in this Agreement or the
Exhibits to this Agreement, or any certificates delivered by the Transferee pursuant to this Agreement and the Transferee has not
omitted to state any fact necessary to make statements made herein or therein not materially misleading.

 

    	15

    	 

    

 

5.          ACCESS
TO INFORMATION

 

From the date of this Agreement until the Closing Date, the Transferor
and the Transferee shall afford the officers, attorneys, accountants and other authorized representatives of the other party reasonable
access upon reasonable notice and during normal business hours to all management personnel, offices, properties, books and records,
so that the examining party may have an opportunity to make such investigation as it shall desire to make of the management, business,
properties and affairs of the non-examining party, and the examining party shall be permitted to make abstracts from, or copies
of, all such books and records. The non-examining party shall furnish to the examining party such financial and operating data
and other information as to the business of the non-examining party as the examining party shall reasonably request.

 

6.          CONDITIONS
TO OBLIGATIONS OF THE TRANSFEREE

 

The obligations of the Transferee under this Agreement are subject
to the fulfillment, at the Closing Date, of the following conditions precedent, each of which may be waived in writing in the sole
discretion of the Transferee:

 

6.01.      CONTINUED
TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE TRANSFEROR; COMPLIANCE WITH COVENANTS AND OBLIGATIONS.

 

All representations and warranties of the Transferor shall be true
and correct in all material respects on and as of the Closing Date as though such representations and warranties were made on and
as of such date (except where such representations are made as of a specific date in which case such representations shall be true
and correct as of such date), except for any changes permitted by the terms hereof or consented to in writing by the Transferee.
The Transferor shall have performed and complied with all terms, conditions, covenants, obligations, agreements and restrictions
required by this Agreement to be performed or complied with by it prior to or at the Closing Date.

 

6.02.      PERFORMANCE
BY THE TRANSFEROR.

 

At the Closing, the Transferor shall have delivered to the Transferee
a certificate signed by a duly authorized officer or manager of the Transferor as to the Transferor's compliance with Section 6.01
hereof.

 

6.03.      Corporate
Proceedings. 

 

All consents required to be taken on the part of the Transferor
to authorize or carry out this Agreement shall have been taken and the Transferor shall have delivered to the Transferee a copy
of the resolutions of its Members and Managers, authorizing the execution, delivery and performance of this Agreement and the transactions
contemplated hereby.

 

6.04.      Post
Closing Operations

 

Transferee acknowledges that Transferor has not conducted operations
of its business in the ordinary and usual course of business and consistent with past and current practices since December 31,
2011 at the request of the Transferee.

 

6.05.      ADVERSE
PROCEEDINGS.

 

No action or proceeding by or before any court or other governmental
body shall have been instituted or threatened by any governmental body or person whatsoever which shall seek to restrain, prohibit
or invalidate the transactions contemplated by this Agreement or which might affect the right of the Transferor to transfer the
Assets.

 

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6.06.      CLOSING
DELIVERIES BY THE TRANSFEROR.

 

At the Closing:

 

(a)          the
Transferor shall deliver to the Transferee, or shall otherwise put the Transferee in sole and exclusive control of, all Assets
of a tangible nature and all Assumed Liabilities;

 

 

(b)          the
Transferor shall deliver to the Transferee a certificate of the secretary of the State of Delaware as to the legal existence and
good standing of the Transferor in such state;

 

(c)          the
Transferor shall deliver to the Transferee a certificate of an officer or Manager of the Transferor attesting to the authenticity
and continuing validity of the charter documents delivered pursuant to Subsection 3.02.

 

(d)          the
Transferor shall deliver to the Transferee resolutions approving the terms and transactions contemplated by this Agreement from
the Transferor’s board of managers;

 

(e)          the
Transferor shall deliver to the Transferee a Bill of Sale , in substantially the form attached hereto as Exhibit F, duly
executed by an authorized officer or manager of the Transferor; and

 

(f)          the
Transferor shall deliver to the Transferee a copy of a final Inventory list, determined in accordance with Section 1.03, and attached
hereto as Exhibit G (the “Inventory List”), duly executed by an authorized officer or manager of the Transferor.

 

7.          CONDITIONS
TO OBLIGATIONS OF THE TRANSFEROR

 

The obligations of the Transferor under this Agreement are subject
to the fulfillment, at the Closing Date, of the following conditions precedent, each of which may be waived in writing in the sole
discretion of the Transferor:

 

7.01.      CONTINUED
TRUTH OF REPRESENTATIONS AND WARRANTIES OF THE TRANSFEREE; COMPLIANCE WITH COVENANTS AND OBLIGATIONS.

 

The representations and warranties of the Transferee in this Agreement
shall be true on and as of the Closing Date as though such representations and warranties were made on and as of such date (except
where such representations are made as of a specific date, in which case such representations shall be true and correct as of such
date), except for any changes consented to in writing by the Transferor. The Transferee shall have performed and complied with
all terms, conditions, covenants, obligations, agreements and restrictions required by this Agreement to be performed or complied
with by it prior to or at the Closing Date.

 

7.02.      CORPORATE
PROCEEDINGS.

 

All corporate and other proceedings required to be taken on the
part of the Transferee to authorize or carry out this Agreement shall have been taken.

 

7.03.      RESERVED.

 

    	17

    	 

    

 

7.04.      CONSENTS
OF LENDERS, VENDORS AND OTHER THIRD PARTIES.

 

The Transferee shall have received all requisite consents and approvals
of all lenders, vendors and other third parties whose consent or approval is required in order for the Transferee to consummate
the transactions contemplated by this Agreement.

 

7.05.      ADVERSE
PROCEEDINGS.

 

No action or proceeding by or before any court or other governmental
body shall have been instituted or threatened by any governmental body or person whatsoever which shall seek to restrain, prohibit
or invalidate the transactions contemplated by this Agreement or which might reasonably be expected to adversely affect the obligation
of the Transferee to pay the Consideration to the Transferor.

 

7.06.      CLOSING
DELIVERIES.

 

At the Closing the Transferee shall deliver to the Transferor:

 

(a)         such
certificates of the Transferee's officers and such other documents evidencing satisfaction of the conditions specified in this
Section 7 as the Transferor shall reasonably request;

 

(b)         a
certificate of the Secretary of State of the State of Delaware as to the legal existence and good standing of the Transferee in
such state;

 

(c)         a
certificate of the Secretary of the Transferee attesting to the authenticity of the resolutions authorizing the transactions contemplated
by this Agreement, and the authenticity and continuing validity of the Transferee's charter documents and by-laws;

 

(d)         certificates
representing the Stock Consideration;

 

(e)         the
Inventory List, duly executed by an authorized officer of the Transferee; and

 

(f)          the
Promissory Note, duly executed by an authorized officer of the Transferee.

 

8.          PRE-CLOSING
AND POST-CLOSING COVENANTS

 

8.01.      POST-CLOSING
COVENANTS.

 

(a)          Consents.
Following the Closing, the Transferor shall use its reasonable best efforts to obtain promptly all consents, waivers, approvals,
authorizations or orders (including, without limitation, from vendors), and the Transferee and the Transferor shall cooperate with
each other to promptly make all filings (including, without limitation) required in connection with the authorization, execution
and delivery of this Agreement by the parties hereto and the consummation by them of the transactions contemplated hereby.

 

    	18

    	 

    

 

(b)          Registration
Statement. In the event that the Transferee files a registration statement with the Securities and Exchange Commission (whether
directly, in connection with a “reverse merger”, or otherwise) covering any of its equity after the Closing, the Transferee
shall include all of the Stock Consideration issued to Transferor hereunder (or any securities such stock consideration is convertible
into) in such Registration Statement, provided, that if the underwriter of an underwritten offering determines in good faith that
marketing factors require a limitation on the number of shares to be included in such Registration Statement, the number of shares
that may be included in the underwriting shall be allocated among the holders of
shares being registered in such Registration Statement (including the Transferor), pro rata based on the total number of all shares
being registered by holders in such Registration Statement.

 

(c)          Board
Observer Rights. Following the Closing, the Transferor shall have, for so long as the Transferor (or its affiliates) own(s) any
equity securities of the Transferee, the right to designate a representative from time to time and who shall initially be Tyler
M. Ricks, to attend all meetings of the Transferee’s Board of Directors (including special meetings and committee meetings)
and in connection therewith shall provide such representative copies of all notices, minutes, consents, and other materials that
the Transferee provides to its directors at the same time as provided to its directors. Such representative shall be a nonvoting
observer.

 

(d)          Drag
Along Rights. For so long as the Transferor (or its affiliates) own(s) any equity securities of the Transferee, the Major Shareholders
shall not transfer, and shall not consent to any other shareholder transferring, any equity securities of the Transferee without
first providing the Transferor reasonable prior written notice and a right to participate pro-rata in such transfer.

 

(e)          Information
Rights. Following the Closing, the Transferee shall deliver to the Transferor for so long as the Transferor (or its affiliates)
own(s) any equity securities of the Transferee: (i) as soon as practicable, but in any event within 135 days after the end of each
fiscal year of the Transferee, the [audited] balance sheet as of the end of such fiscal year, and statements of income and cash
flows for such year, prepared in accordance with accounting principles generally accepted in the United States (“GAAP”)
consistently applied and setting forth in each case in comparative form the figures for the previous fiscal year; and (ii) as soon
as practicable, but in any event within 45 days after the end of each of the first three quarters of each fiscal year of the Transferee,
an unaudited income statement for such quarter, statement of cash flows for such quarter and an unaudited balance sheet as of the
end of such quarter, prepared in accordance with GAAP consistently applied and setting forth in each case in comparative form the
figures for the previous fiscal quarter. The information rights set forth in this Section 8.01(e) shall terminate upon the consummation
of the Transferee’s first firm commitment underwritten public offering of its common stock registered under the Securities
Act of 1933, as amended. Notwithstanding the above information may not be disclosed prior to filings with Securities and Exchange
Commission.

 

(f)          Notice.
For so long as the Transferor (or its affiliates) own(s) any equity securities of the Transferee, the Transferee shall not, either
directly or indirectly, by amendment, merger, consolidation or otherwise, do any of the following without providing 15 day prior
written notice of the Transferor or less if parties mutually agree to shorten notice period: (i) create, or authorize the creation
of, or issue or obligate itself to issue (including by reclassification, alteration or amendment of any existing security of the
Transferee) shares of any additional class or series of capital stock, or any other security convertible into or exercisable for
any equity security, having rights, preferences or privileges, including but not limited to, voting, dividend, or distribution
of assets upon liquidation, merger or otherwise, which ranks senior or pari passu with the Series A Preferred Stock; (ii) increase
the authorized number of Series A Preferred Stock; (iii) change the principal business of the Transferee; or (iv) make any assignment
for the benefit of creditors or commence any bankruptcy, dissolution, termination of corporate existence, or any other similar
action.

 

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9.          INDEMNIFICATION

 

9.01.      Generally.

 

(a)          By
the Transferor. The Transferor shall indemnify and hold harmless the Transferee, its directors, officers, employees and agents
(the "Transferee Indemnitees") from and against all actual claims, damages, losses, liabilities, costs and expenses including,
without limitation, settlement costs and any reasonable legal, accounting or other expenses for investigating or defending any
actions or threatened action (but expressly excluding indirect, incidental, exemplary, special, consequential or punitive damages
(including, without limitation, diminution in value, loss of future revenue or income, or loss of business reputation or opportunity))
(collectively, the "Losses") actually incurred by the Transferee Indemnitees in connection with each and all of the following:

 

(i)          any
misrepresentation or breach of any representation or warranty made by the Transferor in this Agreement;

 

(ii)         any
breach of any covenant, agreement or obligation of the Transferor contained in this Agreement or any other agreement, instrument
or document contemplated by this Agreement; and

 

(iii)        any
liability of the Transferor other than the Assumed Liabilities.

 

(b)          By
the Transferee. The Transferee shall indemnify and hold harmless the Transferor, its members, managers, officers, employees and
agents (the "Transferor Indemnitees") from and against all Losses actually incurred by the Transferor Indemnitees in
connection with each and all of the following:

 

(i)          any
misrepresentation or breach of any representation or warranty made by the Transferee in this Agreement;

 

(ii)         any
breach of any covenant, agreement or obligation of the Transferee contained in this Agreement or any other agreement, instrument
or document contemplated by this Agreement; and

 

(iii)        any
Assumed Liabilities.

 

9.02.      CLAIMS
FOR INDEMNIFICATION.

 

Whenever any claim shall arise for indemnification under this Section
9, the party seeking indemnification (the "Indemnified Party"), shall promptly notify the other party (the "Indemnifying
Party") in writing of the claim and, when known, the facts constituting the basis for such claim. In the event of any such
claim for indemnification hereunder resulting from or in connection with any claim or legal proceedings by a third party, the notice
shall specify, if known, the amount or an estimate of the amount of the liability arising therefrom. The Indemnified Party shall
not settle or compromise any claim by a third party for which it is entitled to indemnification hereunder without the prior written
consent, which shall not be unreasonably withheld or delayed, of the Indemnifying Party; provided, however, that if a suit shall
have been instituted against the Indemnified Party and the Indemnifying Party shall not have taken control of such suit after notification
thereof as provided in Section 9.03 of this Agreement, the Indemnified Party shall have the right to settle or compromise such
claim upon giving prior written notice to the Indemnifying Party as provided in Section 9.03.

 

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9.03.      DEFENSE
BY THE INDEMNIFYING PARTY.

 

In connection with any claim which may give rise to indemnity hereunder
resulting from or arising out of any claim or legal proceeding by a person other than the Indemnified Party, the Indemnifying Party,
at its sole cost and expense, may, upon written notice to the Indemnified Party, assume the defense of any such claim or legal
proceeding if the Indemnifying Party acknowledges to the Indemnified Party in writing the obligation of the Indemnifying Party
to indemnify the Indemnified Party with respect to all elements of such claim. If the Indemnifying Party assumes the defense of
any such claim or legal proceeding, the Indemnifying Party shall select counsel reasonably acceptable to the Indemnified Party
to conduct the defense of such claims or legal proceedings and at the sole cost and expense of the Indemnifying Party shall take
all steps necessary in the defense or settlement thereof. The Indemnifying Party shall not consent to a settlement of, or the entry
of any judgment arising from, any such claim or legal proceeding, without the prior written consent of the Indemnified Party (which
consent shall not be unreasonably withheld or delayed) unless the settlement is only for cash and includes a full release of the
Indemnifying Party. Without limitation, it shall not be deemed unreasonable to withhold consent to a settlement if equitable relief
against the Indemnified Party is contemplated, awarded or stipulated, the Indemnified Party is required to make an admission of
civil liability or to the commission of a crime, or money is required to be paid by the Indemnified Party. The Indemnified Party
shall be entitled to participate in (but not control) the defense of any such action, with its own counsel and at its own expense.
If the Indemnifying Party does not assume the defense of any such claim or litigation resulting therefrom within 30 days after
the date such claim is made: (a) the Indemnified Party may defend against such claim or litigation in such manner as it may deem
appropriate, including, but not limited to, settling such claim or litigation, after giving notice of the same to the Indemnifying
Party, on such terms as the Indemnified Party may deem appropriate, and (b) the Indemnifying Party shall be entitled to participate
in (but not control) the defense of such action, with its counsel and at its own expense. If the Indemnifying Party thereafter
seeks to question the manner in which the Indemnified Party defended such third party claim or the amount or nature of any such
settlement, the Indemnifying Party shall have the burden to prove by a preponderance of the evidence that the Indemnified Party
did not defend or settle such third party claim in a reasonably prudent manner.

 

9.04.      INDEMNIFICATION
CAP.

 

Notwithstanding anything to the contrary herein, if the Transferor
is the Indemnifying Party, the aggregate liability of the Indemnifying Party hereunder for Losses under this Section 9 shall be
limited to lower of the aggregate value of the Consideration on (a) the date of the Closing, or (b) the date of the resolution
of the claim as determined in good faith by the Transferor with the cooperation of the Transferee. Except for payments of the Consideration,
the Indemnifying Party shall not be liable under Section 9.02 unless and until the aggregate Losses for which it would otherwise
be liable under Section 9.02 exceeds (i) Ten Thousand Dollars ($10,000) for manufacturer chargebacks from distributors and customers
or (ii) exceeds Twenty Five Thousand Dollars ($25,000) for all other claims inclusive of (i) above, and then (as to both (i) and
(ii) above, only in excess of such amount.

 

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9.05.   
PAYMENT OF INDEMNIFICATION OBLIGATION.

 

If the Indemnifying Party shall be the Transferor, all indemnification
by the Indemnifying Party shall be effected by repayment of the Consideration at the Current Market Price (as defined below) of
such Consideration, reduction of the amounts due under the Promissory Note, or a cash payment, or a combination thereof, at the
sole option of the Transferor. If the Indemnifying Party shall be the Transferee, all indemnification by the Indemnifying Party
shall be effected by payment of cash. The “Current Market Price” means the average Closing Ask Prices (as defined below)
of the Stock Consideration for the three (3) trading days immediately prior to, but not including, the Conversion Date for the
Common Stock on the OTC Pink Sheets, NASD OTC Bulletin Board, NASDAQ SmallCap Market, NASDAQ National Market System, American Stock
Exchange, or New York Stock Exchange, as applicable, or if not then trading on any of the foregoing, the per share valuation of
such Stock Consideration utilized by the Transferor in the exercise of good faith. “Closing Ask Price” means the closing
ask price as reported by the OTC Bulletin Board, NASDAQ or other market or exchange, as applicable. Notwithstanding, Transferee
shall not sell or transfer any Stock Consideration received hereunder prior to the expiration of the one year anniversary of the
Closing Date.

 

9.06.   
SURVIVAL OF REPRESENTATIONS; CLAIMS FOR INDEMNIFICATION.

 

All representations and warranties made by the Transferor and the
Transferee in this Agreement, or in any instrument or document furnished in connection with this Agreement or the transactions
contemplated hereby, shall survive the Closing and the consummation of the transactions contemplated hereby for 12 months. Notwithstanding
the foregoing, (a) the representations and warranties of the Transferor contained in Sections 2, 3.01, 3.02, and 3.03 and of the
Transferee contained in Sections 4.01, 4.02, and 4.03 shall survive the Closing and the consummation of the transactions contemplated
hereby without limitation, and (b) any valid claim that is properly asserted in writing pursuant to Section 9.01 and/or 9.02 prior
to the expiration as provided in this Section 9.06 of the representation or warranty that is the basis for such claim shall survive
until such claim is finally resolved and satisfied. Notwithstanding anything herein to the contrary, the covenants set forth herein
at Section 8.01 hereof shall survive for an indefinite period of time unless otherwise set forth in such section.

 

9.07.   
SOLE REMEDY.

 

Except as otherwise explicitly provided in this Agreement, any Exhibit
or Schedule hereto, the parties agree that the sole and exclusive remedy of any party hereto with respect to this Agreement, the
Exhibits or Schedules hereto and the transactions contemplated hereby or thereby shall be limited to the indemnification provisions
set forth in this Section 9 and, in furtherance of the foregoing, each of the parties, hereby waives and releases the other parties
hereto from, to the fullest extent permitted under any law, any and all rights, claims and causes of action such party may have
against any other party hereto.

 

10.        
RESTRICTIVE COVENANTS

 

10.01.   
CONFIDENTIALITY.

 

The Transferor acknowledges that the Confidential Information (as
defined below) is a valuable and unique asset and covenants that it will not disclose any such Confidential Information after Closing
to any person for any reason whatsoever, unless such information is (a) within the public domain through no wrongful act of the
Transferor, (b) has been rightfully received from a third party without restriction and without breach of this Agreement, (c) is
required by law to be disclosed or is disclosed for purposes of defending claims related to the Transferor in a manner designed
to protect the confidentiality of the Confidential Information, or (d) represents historical information reasonably required by
a prospective purchaser of the Transferor. “Confidential Information” means information relating to the business of
the Transferor that is not in the public domain or readily determinable by reference to publicly available sources and specifically
including, without limitation, information and knowledge pertaining to products and services offered, innovations, ideas, plans,
trade secrets, proprietary information, advertising, sales methods and systems, sales and profit figures, customer and client lists,
and relationships with dealers, customers, clients, suppliers and others who have business dealings with such parties.

 

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10.02.   
NON-COMPETE.

 

The Transferor agrees that for 12 months following the withdrawal
from observational board advisor role if party is an advisor or upon close of this agreement if not an advisor (the “Non-Competition
Period”) the observational advisor shall not, directly or indirectly, either for themselves or for any other person, partnership,
corporation or company, participate in any business with revenues less than $50 million that manufactures flavored nuts products
to any health food stores in the United States of America. If at any time the Transferee requests Transferor to change its board
advisor member, the Transferor will work in good faith to assign a new board advisor.

 

10.03.   
ADDITIONAL TERMS.

 

The Transferor acknowledges that the restrictions contained in this
Section 10 are reasonable and necessary to protect the legitimate interest of the Transferee, and that any violation will result
in irreparable injury to the Transferee. The Transferor agrees that for the first 12 months following the Closing Date, the Transferee
shall be entitled to seek injunctive or other equitable relief to prevent breaches of the provisions of this Section 10 and to
enforce specifically the terms of this Section 10. In the event that any of the provisions of this Section 10 are adjudicated to
exceed the time, geographic, product or service, or other limitations permitted by applicable law in any jurisdiction, then such
provision shall be deemed reformed in such jurisdiction to the maximum time, geographic, product or service, or other limitation
permitted by applicable law. The covenants and limitations set forth in this Section 10 shall be binding upon the successors and
assigns of the Transferor and Transferee, including any acquirer of all or substantially all the assets or business of the Transferor
or Transferee.

 

11.        
TERMINATION OF AGREEMENT

 

11.01.   
TERMINATION BY AGREEMENT OF THE PARTIES.

 

This Agreement may be terminated by the mutual written agreement
of the parties hereto prior to the Closing Date. This Agreement shall automatically terminate if the Closing Date shall not occur
on or before January 30, 2012; provided that such date may be extended by the mutual written consent of the Transferor and the
Transferee. In the event of any such termination, the Transferee shall have no further obligation or liability to the Transferor
under this Agreement, and the Transferor shall have no further obligation or liability to the Transferee under this Agreement.

 

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11.02.   
TERMINATION BY REASON OF BREACH.

 

This Agreement may be terminated by the Transferor, if at any time
prior to the Closing there shall occur a material breach of any of the representations, warranties or covenants of the Transferee
or the failure by the Transferee to perform any condition or obligation hereunder, and may be terminated by the Transferee, if
at any time prior to the Closing there shall occur a material breach of any of the representations, warranties or covenants of
the Transferor or the failure of the Transferor to perform any condition or obligation hereunder. Written notice of any such termination
must be delivered by the terminating party to the non-terminating party and non-terminating party shall have 30 days to cure said
breach. If such breach shall remain uncured by the 31st day then this Agreement shall be deemed terminated.

 

12.        
NOTICES 

 

All notices, requests, consents, instructions and other communications
required or permitted to be given hereunder shall be in writing and sent by nationally-recognized, next-day delivery service or
mailed by certified or registered mail, return receipt requested, postage prepaid, addressed as set forth below or by facsimile
transmission confirmed in writing by next-day delivery service or by E-mail; receipt shall be deemed to occur on the date of actual
receipt if delivered by registered or certified mail, if sent by facsimile or E-mail six (6) hours from the time of transmission
(provided such facsimile or E-mail is sent within two hours prior to the end of normal business hours on a business day or, if
not, on the next business day) and confirmed in writing by next-day delivery service, or one (1) business day after it is sent
by nationally-recognized, next-day delivery service.

 

	 	To the Transferee:	Cell-nique Corporation
	 	 	12 Old Stage Coach Rd
	 	 	Weston, CT 06883
	 	 	Attention:  Dan Ratner, President
	 	 	Facsimile: 203.557.3148
	 	 	E-mail: dan@cell-nique.com
	 	 	 
	 	 	With a copy
	 	 	to: Jeff Stein, Esq.
	 	 	1000 Woodbury Rd, Suite 110
	 	 	Woodbury, NY 11797
	 	 	 
	 	To the Transferor:	Health Nutz, LLC dba Yumnuts
	 	 	Attention: Tyler Ricks
	 	 	320 Fleming Lane
	 	 	Fairfield, CT 06824
	 	 	E-mail: ricks.tyler@gmail.com
	 	 	E-mail: metivier3@hotmail.com
	 	 	 
	 	 	With a copy (which shall not constitute notice)
	 	 	to: Robinson & Cole LLP
	 	 	1055 Washington Boulevard
	 	 	Stamford, CT  06901-2249
	 	 	Attn: Eric J. Dale, Esq.
	 	 	Facsimile: (203) 462-7599
	 	 	E-mail: edale@rc.com

 

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13.        
SUCCESSORS AND ASSIGNS 

 

This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns, except that the Transferee, on the one hand, and the Transferor,
on the other hand, may not assign their respective obligations hereunder without the prior written consent of the other party.
Any assignment in contravention of this provision shall be void. No assignment shall release the Transferee or the Transferor from
any obligation or liability under this Agreement.

 

14.        
ENTIRE AGREEMENT; AMENDMENTS; ATTACHMENTS

 

(a)          
This Agreement, all Schedules and Exhibits hereto, and all agreements and instruments to be delivered by the parties pursuant
hereto represent the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and
supersede all prior oral and written and all contemporaneous oral negotiations, commitments and understandings between such parties.
This agreement may only be modified or amended by a written instrument executed by the Transferee and the Transferor.

 

(b)          
If the provisions of any Exhibit to this Agreement are inconsistent with the provisions of this Agreement, the provisions
of the Agreement shall prevail. The Exhibits attached hereto are hereby incorporated as integral parts of this Agreement.

 

15.        
SEVERABILITY 

 

Any provision of this Agreement which is invalid, illegal or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability,
without affecting in any way the remaining provisions hereof in such jurisdiction or rendering that or any other provision of this
Agreement invalid, illegal or unenforceable in any other jurisdiction.

 

16.        
INVESTIGATION OF THE PARTIES 

 

Any representations and warranties contained herein which are made
to the best knowledge of a party shall require that such party make reasonable investigation and inquiry with respect thereto to
ascertain the correctness and validity thereof.

 

17.        
EXPENSES 

 

Except as otherwise expressly provided herein, each party will pay
all their respective fees and expenses (including, without limitation, legal and accounting fees and expenses) incurred by them
in connection with the transactions contemplated hereby. The Transferor shall be responsible for payment of all sales or transfer
taxes arising out of the conveyance of the Assets.

 

18.      
GOVERNING LAW/JURISDICTION

 

This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Subject to Section 10.3, each of the parties hereto (a) submits to the exclusive jurisdiction
of any state or federal court sitting in the State of New York in any action or proceeding arising out of or relating to this Agreement
or the transactions contemplated hereby, (b) agrees that all claims in respect of such action or proceeding may be heard and
determined in any such court, (c) waives any claim of inconvenient forum or other challenge to venue in such court, (d) agrees
not to bring any action or proceeding arising out of or relating to this Agreement or the transactions contemplated hereby in any
other court and (e) waives any right it may have to a trial by jury with respect to any action or proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby. Each party hereto agrees to accept service of any summons,
complaint or other initial pleading made in the manner provided for the giving of notices in Section 12; provided,
however, that nothing in this Section 18 shall affect the right of any party hereto to serve such summons, complaint
or other initial pleading in any other manner permitted by Law.

 

    	25

    	 

    
 

19.      
SECTION HEADINGS 

 

The section headings are for the convenience of the parties and
in no way alter, modify, amend, limit, or restrict the contractual obligations of the parties.

 

20.      
COUNTERPARTS 

 

This Agreement may be executed in one or more counterparts, each
of which shall be deemed to be an original, but all of which shall be one and the same document.

 

21.      
CONSULTATION WITH INDEPENDENT COUNSEL

 

The parties have had
the opportunity to consult with their own legal counsel and other advisors, and are entering into this Agreement voluntarily and
with a full understanding of the meaning and legal effects of each provision contained in this Agreement. In the event of any dispute
regarding the interpretation of any provision of this Agreement, the parties agree that this Agreement and the provisions hereof
shall not be construed against any one party as the drafter of this Agreement.

 

[Signature Page Follows]

 

 

 

    	26

    	 

    

 

IN WITNESS WHEREOF, this Agreement has been
duly executed by the parties hereto as of January 30, 2012.

 

	             TRANSFEREE:	Cell-nique Corporation	 
	 	 	 
	 	By:__________________________	 
	 	                  Name: Dan Ratner	 
	 	                  Title: President	 
	 	 	 
	 	 	 
	             TRANSFEROR:	Health Nutz, LLC dba Yumnuts	 
	 	 	 
	 	By:  ___________________________	 
	 	                  Name: Tyler Ricks	 
	 	                  Title:  Chief Executive Officer	 

 

 

Acknowledged and Agreed only with respect to Section 8.01(d):

 

MAJOR SHAREHOLDERS:

 

 

	 	By:  _______________________________
	 	                    Name:
	 	 
	 	 
	 	By:  _______________________________
	 	                    Name:
	 	 
	 	 
	 	By:  _______________________________
	 	                    Name:

 

Acknowledged and Agreed only with respect to Section 10.02:

 

FOUNDERS:

 

 

	 	By:  _______________________________
	 	                   Name: Tyler Ricks
	 	 
	 	 
	 	By:  _______________________________
	 	                   Name: Jerome Metivier
	 	 
	 	 
	 	By:  _______________________________
	 	                   Name: Michael Cochrane
	 	 
	 	 
	 	By:  _______________________________
	 	                   Name: Gary Cochrane

 

    	27

    	 

    
 

 

THIS NOTE AND THE SECURITIES REPRESENTED HEREBY
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT COVERING SUCH SECURITIES, THE SALE IS
MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES
REASONABLY SATISFACTORY TO THE COMPANY STATING THAT SUCH SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION
AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.

 

Convertible Promissory
Note

For

Services Rendered

By

JMS Law Group,
PLLC

To

Cell-nique Corporation

 

CONVERTIBLE PROMISSORY NOTE 

 

Date of Issuance: January 1, 2012    

 

Cell-nique Corporation, a Delaware corporation
(the “Company”), for value received hereby promises to pay to JMS
Law Group, PLLC, or registered assigns (the “Attorney” or “Holder”),
Fifteen Thousand ($15,000) Dollars (“Principal”) for services rendered by the Attorney to represent the Company
as legal counsel throughout the United States as per that certain retainer agreement dated October 1, 2011 (the “Agreement”).
The Agreement fully describes the services and engagement provided by Attorney on behalf of the Company and its brands.

 

Interest on such outstanding Principal shall
accrue at the rate of eight percent (8%) per annum (computed on the basis of a 360 day year for the actual number of days elapsed),
as set forth below, on the date twenty four months (24) months after the date
of this Note, written above (“Maturity”).  Payment for all amounts due
hereunder shall be made by wire transfer in accordance with the Holder’s instructions.

 

The following is a statement of the rights of the Holder and the
conditions to which this Note is subject, and to which the Holder, by the acceptance of this Note, agrees:

 

1.   Payment of Principal and Interest. 

 

          (a) 
Payment in Full on Maturity.  Unless this Note is sooner prepaid or converted pursuant to Section 3 hereof or sooner
becomes due and payable under Section 2 hereof, all outstanding principal of and accrued but unpaid interest on this Note shall
be paid in full on Maturity.

 

          (b) 
Interest.  Interest shall accrue on the outstanding principal amount of this Note, at the rate of eight percent (8%) per
annum (the “Coupon Rate”) computed on the basis of a 360-day year (twelve thirty-day months), from the date
such principal amount is accrued until the earlier of (i) the payment in full of all outstanding principal of, and accrued
interest on, this Note, or (ii) the conversion of this Note into capital stock of the Company pursuant to Section 3 hereof. 
All payments made under this Note shall be applied first against accrued but unpaid interest and second against the outstanding
principal balance hereof. 

 

    	 

    	 

    

 

         (c) Forced Repayment. In the event the
Company receives financing of at least One Million ($1,000,000) Dollars either at one time or as part of an offering, the Company
agrees to immediately repay all amounts due under this Note, out of such proceeds.

 

2.   Events of Default.  If one or more of
the following events (each an “Event of Default”) shall occur:

 

        (a)  the
Company shall fail to pay in full any principal, accrued interest or other amounts due to Holder under this Note when due;

 

        (b)  the
Company shall default in the performance of or compliance with any covenant, agreement or other obligation of the Company contained
in this Note that is not remedied, waived or cured within fifteen (15) days following such default in performance or noncompliance;

 

        (c)  any representation
or warranty of the Company contained herein shall prove to have been false or incorrect in any material respect as of the date
of this Note;

 

        (d)  the
Company shall default (as principal, guarantor or other surety) in the payment of any principal of, premium (if any) or interest
on any indebtedness for borrowed money to any other party, or shall default in the performance of or compliance with any other
obligation contained in the documentation evidencing or securing any such other indebtedness, and in connection with such default
such indebtedness becomes due and payable prior to the date it would otherwise become due and payable, or the Company shall fail
to pay such indebtedness at its stated maturity;

 

        (e)  other
than on terms approved beforehand by the Holder (which approval may be withheld for any reason whatsoever), the Company shall institute
proceedings to be adjudicated as bankrupt or insolvent, or shall consent to institution of bankruptcy or insolvency proceedings
against it or the filing by it of a petition or answer or consent seeking reorganization or release under Title XI of the United
States Code, or any other applicable federal or state law, or shall consent to the filing of any such petition or the appointment
of a receiver, liquidator, assignee, trustee or other similar official of the Company, or of any substantial part of its property,
or shall make an assignment for the benefit of creditors, or shall take corporate action in furtherance of any such action;

 

        (f)  within
thirty (30) days after the commencement of an action against the Company (and service of process in connection therewith on the
Company) seeking any bankruptcy, insolvency, reorganization, liquidation, dissolution, or similar relief under any present or future
statute, law, or regulation, such action shall not have been resolved in favor of the Company or all orders or proceedings thereunder affecting
the operations or the business of the Company stayed, or the stay of any such order or proceeding shall thereafter be set aside,
or within thirty (30) days after the appointment without the consent or acquiescence of the Company of any trustee, receiver or
liquidator of the Company, such appointment shall not have been vacated;

 

        (g)  entry of
a final judgment in excess of $1,000,000 (including insured portions) against the Company or for which the Company is otherwise
responsible that is not stayed, bonded or discharged within thirty (30) days;

 

    	 

    	 

    

  

        (h)  any plan
of liquidation or dissolution or winding up is adopted by the Company’s board of directors or shareholders or the Company
is involuntarily dissolved or otherwise wound up; or

 

        (i)  there shall
occur, or the Company shall enter into any agreement providing for, a Change of Control (as defined below) of the Company; the
term “Change of Control” shall mean any transaction or series of related transactions (including without limitation
any reorganization, merger, consolidation, sale of assets or sale of stock) that will result in (i) the sale of all or substantially
all of the assets of the Company, (ii) a change in ownership of 60% or more of the Company’s then outstanding capital
stock, in one or a series of transactions occurring within a period of six (6) months, other than any such change of ownership
resulting from the sale by the Company of its securities in connection with one or more financing transactions, or (iii) a
consolidation or merger of the Company with or into any other corporation or corporations (or other corporate reorganization) immediately
after which the shareholders of the Company hold less than fifty percent (50%) of the voting power of the surviving corporation;

 

  then, upon the occurrence of any Event of Default
described in paragraph (a), (d), (e), (h) or (i) above, all outstanding principal of this Note and all accrued but unpaid interest
thereon shall be accelerated automatically, without any further action by any party, and shall become immediately due and payable
(for Subsections (b), (c), (g) after applicable cure period) notwithstanding any other provision of this Note, without presentment,
demand, protest, notice of protest or other notice of dishonor of any kind, all of which are hereby expressly waived by the Company;
upon the occurrence of any Event of Default described in paragraph (f) above, the original principal of this Note shall be reduced
to Fifteen Thousand ($15,000) Dollars and all accrued but unpaid interest thereon shall be accelerated automatically, without any
further action by any party, and shall become immediately due and payable notwithstanding any other provision of this Note, without
presentment, demand, protest, notice of protest or other notice of dishonor of any kind, all of which are hereby expressly waived
by the Company, and the Company agrees that the payment of such principal shall be made simultaneously, and as a condition to,
the closing of any such Change of Control transaction, and upon the occurrence of any other Event of Default described in the other
paragraphs above, Holder may, at Holder’s option, exercisable at any time thereafter, by notice to the Company in writing,
accelerate this Note and declare the entire outstanding principal balance of this Note and all accrued but unpaid interest thereon
immediately due and payable, without presentment, demand, protest, notice of protest or other notice of dishonor of any kind, all
of which are hereby expressly waived by the Company.  At any time following any such acceleration as provided in the preceding
sentence, Holder may at its option convert this Note in whole or in part into shares of Common Stock of the Company at the Default
Conversion Price by written notice to the Company.  Holder may enforce its rights under this Note and otherwise at law or
in equity or both, all remedies available to Holder under this Note or otherwise shall be cumulative, and no course of dealing
between the Company and Holder or any delay or omission in exercising any power or right shall operate as a waiver thereof. 
The Company shall notify the Holder immediately in writing of the occurrence of any Event of Default, which notification shall
include a summary of the material facts relating to such Event of Default and shall specify the date on which such Event of Default
occurred.

 

3.   Conversion.  The outstanding principal
amount of and any accrued but unpaid interest under this Note shall be convertible into capital stock of the Company as follows:

 

       
(a)  Conversion on Change of Control. In the event of a Change in Control the
number of Conversion Shares issuable upon conversion under this paragraph shall be determined by dividing the outstanding principal
balance plus all accrued and unpaid interest hereunder through the Conversion date by the lower of either (i) the same equity valuation
as determined in the Change of Control transaction, (ii) the Conversion Price (as defined below), or (iii) notwithstanding
full payment of the Note and conversion, if Attorney is restricted by the Change of Control, the principal amount of this Note
shall immediately be increased to 125% of the face value of the outstanding balance of the unconverted unpaid Note(s) (the
“Default Conversion Price”).

 

    	 

    	 

    

 

        (b)  Holder Conversion.  The
Holder may elect at any time to convert the outstanding principal amount and accrued interest of this Note, without any further
act of the Company or its shareholders, into Conversion Shares in lieu of repayment of all outstanding principal and accrued
interest under this Note.  Any such conversion shall be deemed to occur on the notice date and Company shall issue the Conversion
Shares within three business days thereafter.  The number of Conversion Shares issuable upon conversion under this paragraph
shall be determined by dividing the principal amount of this Note the Note Holder desires to convert which shall be subtracted
from the Principal hereunder through the Notice date by the (i) the average of the closing market price per share as traded in
the public market for the two lowest out of the five consecutive trading days immediately preceding such notice, or (ii) if the
Common Stock of the Company is not traded on a public market or exchange, then the lowest valuation per share price determined
by a third party in a financing (or other equity transaction), acquisition or merger with the Company (the “Conversion
Price”). 

 

        (c) Registration Rights upon Conversion. 
The Holder shall be made a party, on the same basis as other investors to any registration rights agreement, investors rights agreement,
shareholders agreement, or other agreements setting forth the rights being granted to such investors in future Offering or upon
expiration of 144 restrictions.

 

         (d)  Mechanics of Conversion.

 

        (i) 
Upon conversion of this Note under paragraph 3(a) or 3(b) above, all amounts due and owing under this Note shall be converted automatically,
without any further action by the Holder and whether or not this Note is surrendered to the Company, into fully paid and nonassessable shares
of Common Stock, which shall be deemed issued and outstanding for all purposes from and after the time of such conversion as specified
in paragraph 3(a) or 3(b) above.  Within three days after such conversion, the Company shall issue to the Holder a certificate
representing the number of shares of Common Stock, as applicable, issuable upon such conversion in accordance with the terms of
this Note (the shares actually issuable hereunder being referred to as the “Conversion Shares”) and a cash payment
in lieu of any fractional share otherwise issuable upon such conversion, in accordance with paragraph 3(e) below; provided,
however, that the Company shall not be obligated to issue to the Holder such certificate or check unless and until this Note,
or an appropriate affidavit of loss, is delivered to the Company. 

 

        (ii)
In the event of any conversion of this Note under this Section 3, the person in whose name the certificate for Conversion Shares
is to be issued shall be deemed to have become a holder of record of such Conversion Shares on the date as of which conversion
is deemed to occur as specified in paragraphs 3(a) and 3(b) above, as the case may be. 

 

        (iii)   
Whichever of the Conversion Price or the Default Conversion Price is the conversion price at which this Note is actually converted
under this Section 3 shall be referred to herein as the “Note Conversion Price”.

 

        (e)  Fractional Shares. 
No fractional Conversion Shares or scrip shall be issued upon conversion of this Note.  Instead of any fractional Conversion
Shares that would otherwise be issuable upon conversion of this Note, the Company shall pay a cash adjustment in respect of such
fractional interest in an amount equal to that fractional interest of the price at which the Note was converted, as applicable.

 

    	 

    	 

    

 

        (f)  Stock Dividends,
Splits and Combinations.  If the number of shares of the class of capital stock of the Company issuable upon conversion
of this Note outstanding at any time after the date of issuance of this Note (the “Issue Date”) is increased
by a stock dividend or other distribution payable in shares of such stock or by a subdivision, split-up or reclassification of
outstanding shares of such stock, then immediately after the record date fixed for the determination of stockholders entitled to
receive such stock dividend or the effective date of such subdivision, split-up or reclassification, as the case may be, the Conversion
Price or the Default Conversion Price, as applicable, shall be reduced appropriately so that the Holder shall be entitled to receive
the number of Conversion Shares that it would have owned immediately following such action had this Note been converted immediately
prior thereto.  If the number of shares of the class of capital stock of the Company issuable upon conversion of this Note
outstanding at any time after the Issue Date is decreased by a combination or reclassification of the outstanding Conversion Shares,
then, immediately after the effective date of such combination or reclassification, the Conversion Price or the Default Conversion
Price, as applicable, shall be increased appropriately so that the Holder shall be entitled to receive the number of Conversion
Shares that it would have owned immediately following such action had this Note been converted immediately prior thereto.

 

        (g)  Certain Adjustments. 
The Note Conversion Price shall be adjusted up or down, as the case may be, to take into account any stock split, combination,
stock dividend, recapitalization or similar event after the date hereof with respect to the Company’s common stock or any
other class of capital stock of the Company in order that the number of shares of Common Stock, as applicable, issuable upon conversion
of this Note and the number of shares of the Company’s Common Stock issuable upon conversion of the Common Stock, as applicable,
issuable upon conversion of this Note will not be adversely or positively affected by any such event. 

 

        (h)  Capital Reorganization
or Reclassification.  If the Conversion Shares shall be changed into the same or a different number of shares of any class
or classes of stock or other property, whether by capital reorganization, reclassification or otherwise (other than a subdivision
or combination of shares or stock dividend provided for above), then in each such event the Holder shall have the right thereafter
to convert this Note into the kind and amount of shares of stock and other securities and property that would have been receivable
upon such reorganization, reclassification or other change in respect of the number of Conversion Shares into which this Note could
have been converted immediately prior to such reorganization, reclassification or change, all subject to further adjustment as
provided herein.

 

        (i)  Merger or Consolidation. 
Subject to the terms of Section 2(i) above, if at any time or from time to time there shall be an acquisition of the Company by
another entity by means of merger, consolidation or otherwise, resulting in the exchange of the outstanding Conversion Shares for
securities or consideration issued or caused to be issued by the acquiring entity or any of its affiliates, then, as a part of
such acquisition, provision shall be made so that the Holder shall thereafter be entitled to receive, upon conversion of this Note,
the number of shares of stock or other securities or property of the acquiring corporation resulting from such acquisition to which
the Holder would have been entitled if the Holder had converted this Note immediately prior to such acquisition.  In any such
case appropriate adjustments shall be made in the application of the provisions of this Section 3(i) with respect to the rights
of the Holder after such acquisition to the end that the provisions of this Section 3(i) shall be applicable after that event
in as nearly equivalent a manner as may be practicable.

 

    	 

    	 

    

 

        (j)  Notice to Holder. 
In the event the Company shall propose to take any action of the type described in Sections 3(f), (g), (h), or (i), the Company
shall give notice to the Holder, which notice shall specify the record date, if any, with respect to any such action and the approximate
date on which such action is to take place.  Such notice shall also set forth such facts with respect thereto as shall be
reasonably necessary to indicate the effect of such action (to the extent such effect may be known at the date of such notice)
on the Conversion Price or the Default Conversion Price, as applicable, and the number, kind or class of shares or other securities
or property which shall be deliverable or purchasable upon the occurrence of such action or deliverable upon conversion of this
Note.  In the case of any action that would require the fixing of a record date, such notice shall be given at least fifteen
(15) days prior to the date so fixed, and in case of all other action, such notice shall be given at least twenty (20) days prior
to the taking of such proposed action.  Failure to give such notice, or any defect therein, shall not affect the legality
or validity of any such action.

 

        (k)  Costs. 
The Company shall pay all documentary, stamp, transfer or other transactional taxes attributable to the issuance or delivery of
Conversion Shares upon conversion of this Note; provided, however, that the Company shall not be required to pay any
taxes which may be payable in respect of any transfer involved in the issuance or delivery of any certificate for such shares in
a name other than that of the Holder.

 

        (l)  Reservation of
Shares.  The Company shall take all necessary action to reserve, and shall reserve at all times so long as any principal
amount under this Note remains outstanding, free from statutory or contractual preemptive rights, out of its authorized but unissued
capital stock, solely for the purpose of effecting the conversion of this Note, sufficient shares of Common Stock to provide for
conversion of the Conversion Shares into Company Common Stock.

 

        (m)  No Impairment. 
The Company will not, by amendment of its Amended and Restated Articles of Incorporation or through any reorganization, transfer
of assets, issuance or sale of securities or otherwise, avoid or seek to avoid the observance or performance of any of the terms
of this Section 3 or the other provisions of this Note and will at all times in good faith assist in the carrying out of all provisions
hereof and in the taking of all actions as may be necessary in order to protect the conversion and other rights of the Holder hereunder
against impairment.

 

4.   Assignment.  Subject to the restrictions
on transfer described in Section 6 below, the rights and obligations of the Company and the Holder shall be binding upon and
benefit the successors, assigns, heirs, administrators and transferees of the parties.

 

5.   Waiver and Amendment.  Any provision
of this Note may be amended, waived or modified upon the written consent of the Company and the Holder.  Any amendment, waiver,
modification or consent entered into pursuant to this Section 5 shall be effective only in the specific instance and for the specific
purpose for which it was given.

 

6.   Transfer of this Note.  The Holder understands
that the Company will instruct any transfer agent not to register the transfer of this Note (or the Conversion Shares issued upon
conversion of this Note) unless the conditions specified in the legend set out in all capital letters at the top of this Note are
satisfied.

 

7.   Notices. All notices and other communications
required or permitted hereunder shall be in writing and shall be deemed effectively given upon personal delivery; upon confirmed
transmission by telecopy or telex if sent during normal business hours of the recipient (or if not, on the next business day of
the recipient); three days after deposit with the United States Post Office, by registered or certified mail, postage prepaid;
or otherwise upon delivery by hand or by messenger or one day after deposit with a nationally recognized courier service, addressed
(a) if to Holder, to the Holder’s address as set forth below, or to such other address as such Holder shall have furnished
to the Company in writing, or (b) if to the Company, if to the Company, one copy shall be sent to Cell-nique Corporation,
PO Box 1131 Weston, CT 06883 Attention: Dan Ratner, President, or to such other addresses as the Company shall have furnished to
the Holder.

 

    	 

    	 

    

 

8.   No Rights of a Shareholder.  Nothing
contained in this Note shall be construed as conferring upon the Holder or any other person the right to vote or consent or to
receive notice as a shareholder in respect of meetings of shareholders for the election of directors of the Company or any other
matters or any rights whatsoever as a shareholder of the Company prior to the time that this Note is converted into Conversion
Shares pursuant to Section 3.

 

9.   Governing Law.  The Agreement shall be
governed by, and construed under, the laws of the State of New York.

 

10.  Collection Costs.  The Company shall pay on
demand all reasonable costs and expenses, including without limitation reasonable fees and expenses of counsel, incurred by Holder
in connection with enforcement of its rights under this Note.

 

11.  Lost, Stolen or Mutilated Note.  If this Note
is lost, stolen, mutilated or destroyed, the Company will, on such reasonable terms with respect to indemnity or otherwise as it
may in its discretion impose, issue a new note of like denomination, tenor, and date as this Note.  Any such new note shall
constitute an original contractual obligation of the Company, and the lost, stolen, mutilated or destroyed, as applicable, Note
shall be null and void.

 

12.  Counterparts.  This Note may be executed in
counterparts, each of which shall be enforceable against the party actually executing such counterpart, and which together shall
constitute one instrument.

 

SIGNATURE PAGE TO FOLLOW

 

CONVERTIBLE PROMISSORY NOTE

 

    	 

    	 

    

 

This Note has been executed and delivered as of the date first above
written.

 

	COMPANY: Cell-nique Corporation	 
	 	 	 
	By  	 	 
	 	Dan Ratner, President	 
	 	 	 
	ACCEPTED AND AGREED:	 
	 	 	 
	HOLDER: JMS Law Group, PLLC 	 
	 	 	 
	By 	 	 
	 	Jeffrey M. Stein, Principal	 
	 	 	 
	Address:	 
	 	 	 
	1000 Woodbury Road, Suite 110A	 
	Woodbury, NY 11797exhibit_4-1.htm

Exhibit 4.1

 

B.O.S BETTER ON-LINE SOLUTIONS LTD.

ARTICLES OF ASSOCIATION

IN ACORDANCE WITH THE COMPANIES LAW, 5759-1999

	
1.

	
The Company's Name

	
  

	
The Company's name is "B.O.S Better On-Line Solutions Ltd".

	
2.

	
The Company's Objects

	
  

	
The Company's object is to engage in any legal business.

	
3.

	
Interpretation

	
  

	
3.1

	
Everything mentioned in the singular shall include the plural and vice versa, and everything mentioned in the masculine shall include the feminine and vice versa.

 

	
  

	
3.2

	
Unless these articles include special definitions for certain terms, every word and expression herein shall bear the meaning attributed thereto in the Companies Law, 5759-1999 (hereinafter referred to as “the Companies Law"), unless the context otherwise admits.

 

	
  

	
3.3

	
For the avoidance of doubt, it is expressed that in respect of matters regulated in the Companies Law such that it is possible to qualify the arrangements in respect thereof in articles, and these articles do not include in respect thereof provisions different from those of the Companies Law - the provisions of the Companies Law shall apply in respect thereof.

	
4.

	
The Company's Share Capital and the Rights Attached to Shares

	
  

	
4.1

	
The Company's authorized capital is NIS 200,000,000 divided into 10,000,000 ordinary shares of NIS 20.00 nominal value each. (amended May 2003, May 2006 and December 2009).

 

	
  

	
4.2

	
The ordinary shares shall vest the holders thereof with -

 

	
  

	
 4.2.1

	
an equal right to participate in and vote at the Company's general meetings, whether ordinary or special, and each of the shares in the Company shall entitle its holder, present at the meeting and participating in the vote, himself, by proxy or through a voting instrument, to one vote;

 

	
  

	
 4.2.2

	
an equal right to participate in a distribution of dividends, whether in cash or by way of bonus shares, in a distribution of assets or in any other distribution, pro rata to the nominal value of the shares held by them;

 

	
  

	
 4.2.3

	
an equal right to participate in a distribution of the Company's surplus assets on winding up pro rata to the nominal value of the shares held by them.

 

	
  

	
4.3

	
The board of directors may issue shares and other securities which are convertible or exercisable into shares up to the limit of the Company's authorised share capital. With regard to computing the limit of the authorised capital, securities convertible or exercisable into shares shall be deemed to have been converted or exercised on the date of their issue. The board of directors may delegate such authority as permitted by law. (amended May 2006)

 

  

  

  

 

	
5.

	
Limited Liability

	
  

	
The shareholders' liability for the Company's debts shall be limited to the full amount (nominal value plus premium) they are required to pay the Company for the shares and not yet paid by them.

	
6.

	
Joint Shareholders and Share Certificates

	
  

	
6.1

	
Where two or more persons are listed in the shareholders' register as the joint holders of a share, each of them may give binding receipts for any dividend or other monies in connection with such share.

 

	
  

	
6.2

	
A shareholder who is listed in the shareholders' register may receive from the Company, without payment, within three months of the allotment or registration of the transfer, one share certificate bearing a seal in respect of all the shares registered in his name, which shall specify the number of shares. In the case of a jointly held share, the Company shall issue one share certificate to all the joint shareholders, and the delivery of such a certificate to one of the joint shareholders shall be deemed delivery to all of them.

 

Each share certificate shall bear the signature of at least one director together with the Company's stamp or its printed name.

 

	
  

	
6.3

	
A share certificate which has been defaced, destroyed or lost may be renewed in reliance upon proof and guarantees as required by the Company from time to time.

 

	
7.

	
The Company's Reliefs in relation to Shares Not Paid in Full

	
  

	
7.1

	
If the consideration which the shareholder undertook to pay the Company for his shares or any part thereof is not paid at the time and on the terms prescribed in the shares' allotment terms and/or in the payment call mentioned in paragraph 7.2 below, the Company may, pursuant to the board of directors' resolution, forfeit the shares whose consideration has not been paid in full. The shares shall be forfeited, provided that the Company has sent the shareholder written warning of its intention to forfeit his shares, at least seven days from the date of receiving the warning if the payment is not effected during the period specified in the warning letter.

 

The board of directors may, at any time prior to the date on which a share forfeited is sold, re-allotted or otherwise transferred, cancel the forfeiture on such terms as it deems fit.

 

The shares forfeited shall be held by the Company as dormant shares or shall be sold to another.

 

	
  

	
7.2

	
If pursuant to the issue terms of shares there is no fixed date for payment of any part of the price payable therefor, the board of directors may from time to time make calls for payment on the shareholders in respect of the monies not yet paid for the shares held by them, and every shareholder shall be liable to pay the Company the amount of the call made on him on the date specified as aforesaid, provided that he receives 14 days' notice of the date and place for payment (hereinafter referred to as “call"). The notice shall state that non-payment on the date specified or prior thereto at the place specified might result in the forfeiture of the shares in relation to which the call was made. A call may be cancelled or postponed to another date, as resolved by the board of directors.

 

  

- 2 -

  

 

	
  

	
7.3

	
In the absence of another provision in the shares' allotment terms, a shareholder shall not be entitled to receive dividend or to exercise any right as a shareholder in respect of shares not yet paid up in full.

 

	
  

	
7.4

	
Persons who are joint holders of a share shall be jointly and severally liable for payment of the amounts due to the Company in respect of the share.

 

	
  

	
7.5

	
The provisions of this paragraph are not such as to derogate from any other relief available to the Company vis-a-vis a shareholder who has not paid his debt to the Company in respect of his shares.

	
8.

	
Transfer of Shares

	 	
8.1

	
The Company's shares may be transferred.

 

	 	
8.2

	
A share transfer shall be effected in writing and shall not be registered unless -

 

	
  

	
 8.2.1

	
a due share transfer instrument is furnished to the Company at its registered office together with the certificates relating to the shares to be transferred, if issued. The transfer instrument shall be signed by the transferor and a witness verifying the transferor's signature. In the case of a transfer of shares which are not fully paid up on the date of the transfer, the transfer instrument shall also be signed by the transferee and a witness verifying the transferee's signature; or

 

	
  

	
 8.2.2

	
the Company is given a court order to amend the registration; or

 

	
  

	
 8.2.3

	
it is proved to the Company that the legal conditions for transmission of the right to the share have been fulfilled.

 

	
  

	
8.3

	
A transfer of shares which are not fully paid up requires the approval of the board of directors, which may refuse to grant its approval in its absolute discretion and without giving grounds therefor.

 

	
  

	
8.4

	
The transferee shall be deemed the shareholder in relation to the shares being transferred from the moment his name is listed in the shareholders' register.

	
9.

	
Alteration to Capital

	
  

	
9.1

	
The general meeting may increase the Company's authorized share capital by creating new shares of an existing class or of a new class, as determined in the general meeting's resolution.

 

	
  

	
9.2

	
The general meeting may cancel authorized share capital which has not yet been allotted, provided that the Company has not undertaken, including conditionally, to allot the shares.

 

	
  

	
9.3

	
The general meeting may, subject to the provisions of any law:

 

	
  

	
 9.3.1

	
consolidate and re-divide its share capital, or any part thereof, into shares of a nominal value greater than that of the existing shares;

 

	
  

	
 9.3.2

	
sub-divide its existing shares, or any of them, or its share capital, or any part thereof, into shares of a nominal value smaller than that of the existing shares;

 

	
  

	
 9.3.3

	
reduce its share capital and any capital redemption reserve fund in such manner and on such terms and conditions and with the receipt of such approval as the Companies Law requires.

 

  

- 3 -

  

 

	
10.

	
Alteration of the Rights Attached to Classes of Shares

	
  

	
10.1

	
So long as not otherwise provided in the shares' issue terms and subject to the provisions of any law, the rights attached to a particular class of shares may be altered, after a resolution is passed by the Company and with the approval of a resolution passed at a general meeting of the holders of the shares of such class or the written agreement of all the class holders.

 

The provisions of the Company's articles regarding general meetings shall apply, mutatis mutandis, to a general meeting of the holders of a particular class of shares.

 

	
  

	
10.2

	
The rights vested in the holders of shares of a particular class that were issued with special rights shall not be deemed to have been altered by the creation or issue of further shares ranking equally with them, unless otherwise provided in such shares' issue terms.

	
11.

	
General Meetings

	
  

	
11.1

	
The Company's resolutions on the following matters shall be passed at the general meeting -

 

	
  

	
 11.1.1

	
alterations to the articles;

 

	
  

	
 11.1.2

	
the exercise of the board of directors' powers when the board of directors is unable to function;

 

	
  

	
 11.1.3

	
the appointment and dismissal of the Company's auditor;

 

	
  

	
 11.1.4

	
the appointment of directors, including external directors;

 

	
  

	
 11.1.5

	
the approval of acts and transactions requiring the general meeting's approval pursuant to the provisions of the Companies Law and any other law;

 

	
  

	
 11.1.6

	
increasing and reducing the authorized share capital;

 

	
  

	
 11.1.7

	
a merger as defined in the Companies Law.

	
12.

	
Convening General Meetings

	
  

	
12.1

	
General meetings shall be convened at least once a year at such place and time as determined by the board of directors but no later than 15 months from the last general meeting. Such general meetings shall be called "annual meetings". The Company's other meetings shall be called "special meetings".

 

	
  

	
12.2

	
The annual meeting's agenda shall include a discussion of the board of directors' reports and the financial statements as required at law. The annual meeting shall appoint an auditor, appoint the directors pursuant to these articles and discuss all the other matters which must be discussed at the Company's annual general meeting, pursuant to these articles or the Law, as well as any other matter determined by the board of directors.

 

	
  

	
12.3

	
The board of directors may convene a special meeting pursuant to its resolution and it must convene a general meeting if it receives a written requisition from any one of the following (hereinafter referred to as “requisition"):

 

	 	
12.3.1 

	
   two directors or one quarter of the directors holding office; and/or

 

	
  

	
 12.3.2

	
one or more shareholders holding at least 5% of the issued capital and at least 1% of the voting rights in the Company; and/or

 

	
  

	
 12.3.3

	
one or more shareholders holding at least 5% of the voting rights in the Company.

 

	 	
12.4

	
A requisition must detail the objects for which the meeting must be convened and shall be signed by the persons requisitioning it and sent to the Company's registered office. The requisition may be made up of a number of documents in an identical form of wording, each of which shall be signed by one or more of the persons requisitioning the meeting.

 

  

- 4 -

  

 

	
  

	
12.5

	
Where the board of directors is required to convene a special meeting, it shall do so within 21 days of the requisition being submitted to it, for a date that shall be specified in the invitation pursuant to paragraph 12.6 below and subject to the law.

 

	
  

	
12.6

	
Notice to the Company's members regarding the convening of a general meeting shall be sent to all the shareholders listed in the Company's shareholders' register at least 21 days prior to the meeting and shall be published in other ways insofar as required by the law. The notice shall include the agenda, proposed resolutions and arrangements with regard to a written vote.

 

	
  

	
 The accidental omission to give notice of a meeting to any member, or the non-receipt of notice sent to such member, shall not invalidate the proceedings at such meeting.

	
13.

	
The Discussion at the General Meetings

	
  

	
13.1

	
No discussions may be commenced at the general meeting unless a quorum is present at the time of the discussion's commencement. A quorum is the presence of at least two shareholders holding at least 331⁄3% of the voting rights (including presence through a proxy or a voting instrument), within half an hour of the time fixed for the meeting's commencement. (amended August 2004)

 

	
  

	
13.2

	
If no quorum is present at a general meeting within half an hour of the time fixed for the commencement thereof, the meeting shall be adjourned for one week, to the same day, time and place, or to a later time if stated in the invitation to the meeting or in the notice of the meeting (hereinafter referred to as “the adjourned meeting".)

 

	
  

	
13.3

	
The quorum for the commencement of the adjourned meeting shall be any number of participants.

 

	
  

	
13.4

	
The board of directors' chairman shall serve as the general meeting's chairman. If the board of directors' chairman is not present at the meeting within 15 minutes of the time fixed therefor or if he refuses to chair the meeting, the chairman shall be elected by the general meeting.

 

	
  

	
13.5

	
A general meeting at which a quorum is present may resolve to adjourn the meeting to another place and time determined by it, and in such case notices and invitations in respect of the adjourned meeting shall be given as provided in paragraph 12.6 above.

	
14.

	
Voting at the General Meeting

	
  

	
14.1

	
A shareholder of the Company may vote at the general meetings himself or through a proxy or a voting instrument.

 

The shareholders entitled to participate in and vote at the general meeting are the shareholders on the date specified by the board of directors in the resolution to convene the general meeting, and subject to the law.

 

	
  

	
14.2

	
In every vote each shareholder shall have a number of votes according with the number of shares held by him.

 

	
  

	
14.3

	
A resolution at the general meeting shall be passed by an ordinary majority unless another majority is specified in the Companies Law or these articles.

 

	
  

	
14.4

	
The declaration of the meeting's chairman that a resolution has been passed unanimously or by a particular majority, or that it has been defeated or not passed by a particular majority, shall constitute prima facie proof of that stated therein.

 

  

- 5 -

  

 

	
  

	
14.5

	
If the votes at a meeting are tied, the chairman of the meeting shall not have an additional or deciding vote, and the resolution that was put to the vote shall be defeated.

 

	
  

	
14.6

	
The Company's shareholders may, in respect of any matter on the meeting's agenda, vote at a general meeting (including a class meeting) through a voting instrument, provided that the board of directors does not, subject to any law, rule out the possibility of voting through a proxy instrument on such matter in its resolution to convene the general meeting.

 

If the board of directors prohibits voting through a voting instrument, the fact that the possibility of voting through a voting instrument has been ruled out shall be stated in the notice of the meeting pursuant to paragraph 12.6 above.

 

	
  

	
14.7

	
A shareholder may state the way in which he is voting in the voting instrument and send it to the Company’s registered office at least 48 hours prior to the meeting’s commencement. A voting instrument in which a shareholder states the way in which he is voting, which reaches the Company’s registered office at least 48 hours prior to the meeting (including the adjourned meeting), shall be deemed presence at the meeting for the purpose of constituting the quorum as provided in paragraph 13.1 above. (amended May 2003)

 

	
  

	
14.8

	
A proxy shall be appointed in a written instrument signed by the appointor. A corporation shall vote through its representatives who shall be appointed by a document duly signed by the corporation.

 

	
  

	
14.9

	
Voting in accordance with the terms and conditions of a proxy instrument shall be legal even if prior thereto the appointor dies or becomes legally incapacitated, is wound up, becomes bankrupt, cancels the proxy instrument or transfers the share in relation to which it was given, unless written notice is received at the office prior to the meeting that the shareholder has died, become legally incapacitated, been wound up, become bankrupt, cancelled the appointment instrument or transferred the share as aforesaid.

 

	
  

	
14.10

	
The proxy instrument and the power of attorney or a copy certified by an attorney shall be deposited at the Company's registered office at least 48 hours prior to the time fixed for the meeting or the adjourned meeting at which the person mentioned in the document intends voting pursuant thereto.

 

	
  

	
14.11

	
A shareholder of the Company shall be entitled to vote at meetings of the Company through a number of proxies appointed by him, provided that each proxy is appointed in respect of different parts of the shares held by the shareholder. There shall not be any impediment to any proxy as aforesaid voting differently at meetings of the Company.

 

	
  

	
14.12

	
If a shareholder is legally incapacitated, he may vote by his board of trustees, receiver, natural guardian or other legal guardian, and they may vote themselves or by proxy or through a voting instrument.

 

	
  

	
14.13

	
Where two or more persons are the joint holders of a share, in a vote on any matter the vote of the person whose name appears first in the shareholders' register as the holder of such share shall be accepted, himself or by proxy, and he is entitled to give the Company voting instruments.

	
15.

	
The Board of Directors

The board of directors shall delineate the Company's policy and supervise the performance of the Managing Director's duties and actions. Any power of the Company which has not been vested in another organ pursuant to the Companies Law or the articles may be exercised by the board of directors.

 

  

- 6 -

  

 

	
16.

	
Appointment and Dismissal of Directors

	
  

	
16.1

	
The number of directors in the Company (including external directors) shall be determined from time to time by the annual general meeting, provided that it shall not be less than four nor more than eleven.

 

	
  

	
16.2

	
The Company's directors shall be elected at the annual meeting and/or at a special meeting, and shall hold office until the end of the next annual meeting or until they cease to hold office pursuant to the provisions of the articles. If at a general meeting of the Company new directors in the minimum amount specified pursuant to the articles are not elected, the directors who held office until such time shall continue to hold office, until they are replaced by the Company's general meeting.

 

	
  

	
16.3

	
In addition to the provisions of paragraph 16.2 above, the board of directors may appoint a director instead of a director whose office has been vacated and/or as an additional director, subject to the maximum number of directors on the board of directors as provided in paragraph 16.1 above. The appointment of a director by the board of directors shall be valid until the next annual meeting or until he ceases to hold office pursuant to the provisions of the articles.

 

	
  

	
16.4

	
A director whose term of office has come to an end may be re-elected.

 

	
  

	
16.5

	
The office of a director shall commence on the date of his appointment by the annual meeting and/or the special meeting and/or the board of directors or on a later date if specified in the appointment resolution of the annual meeting and/or special meeting and/or board of directors.

 

	
  

	
16.6

	
The board of directors shall elect a board of directors' chairman from amongst its members. If a chairman is not elected or if the chairman is not present at the end of 15 minutes from the time fixed for the meeting, the directors present shall elect one of their number to chair such meeting, and the person chosen shall conduct the meeting and sign the discussion minutes.

 

	
  

	
 The board of directors' chairman shall not be the Company's MD save on fulfillment of the conditions mentioned in section 121(c) of the Companies Law.

 

	
  

	
16.7

	
The general meeting may remove any director from his office before the end of his term of office, whether the director was appointed by it by virtue of paragraph 16.2 above or by the board of directors by virtue of paragraph 16.3 above, provided that the director is given a reasonable opportunity to state his case before the general meeting.

 

	
  

	
16.8

	
Where the office of a director is vacated, the remaining directors may continue to act so long as their number has not fallen below the minimum specified in the articles. Where the number of directors has fallen below the aforementioned minimum, the remaining directors may only act in order to fill the place of the director which has been vacated as mentioned in paragraph 16.3 above or in order to convene a general meeting of the Company, and until the general meeting is convened as aforesaid they may act to manage the Company's business only in respect of matters that cannot bear delay.

 

	
  

	
16.9

	
Every board of directors’ member may appoint an alternate for himself, provided that such an appointment shall not be for a period exceeding one month, and that someone who was appointed as an alternate for another director and/or who is already serving as a director of the Company may not be appointed as an alternate, except as provided in section 237(d) of the Companies Law.

 

The appointment or termination of the office of an alternate shall be effected in a written document signed by the director who appointed him; however, in any event, the office of an alternate shall terminate if one of the events specified in paragraph 16.10 below befalls the alternate or if the office of the board of directors' member for whom he is acting as alternate is vacated for whatsoever reason.

 

  

- 7 -

  

 

An alternate shall be treated as a director and all the provisions of the law and these articles shall apply to him, save for the provisions regarding the appointment and/or dismissal of a director specified herein. (amended May 2003 and May 2006)

 

	
  

	
16.10

	
The office of a director shall be vacated in any one of the following cases:

 

	
  

	
 16.10.1

	
he resigns from his office by a letter signed him and submitted to the Company which specifies the reasons for his resignation;

 

	
  

	
 16.10.2

	
he is removed from his office by the general meeting;

 

	
  

	
 16.10.3

	
he is convicted of an offence as provided in section 232 of the Companies Law;

 

	
  

	
 16.10.4

	
pursuant to a court decision, as provided in section 233 of the Companies Law;

 

	
  

	
 16.10.5

	
he is declared legally incapacitated;

 

	
  

	
 16.10.6

	
he is declared bankrupt, and in the case of a corporation - it is resolved to wind it up voluntarily or a winding up order is given in respect thereof.

 

	
  

	
16.11

	
The terms of office of the board of directors' members shall be approved by the audit committee, the board of directors and the general meeting, in this chronological order.

	
17.

	
Board of Directors' Meetings (amended December 2011)

	
  

	
17.1

	
The board of directors shall convene in accordance with the Company's requirements and at least once every three months.

 

	
  

	
17.2

	
The board of directors' chairman may convene the board of directors at any time. In addition, the board of directors shall hold a meeting, on a matter that shall be detailed, in the following cases:

 

	
  

	
 17.2.1

	
on the demand of two directors; however, if at such time the board of directors consists of five directors or less - on the demand of one director;

 

	
  

	
 17.2.2

	
on the demand of one director if he states in his demand to convene the board of directors that he has learned of a matter involving the Company in which a prima facie contravention of the Law or an infringement of proper business procedure has been discovered;

 

	
  

	
 17.2.3

	
a notice or report of the managing director obliges action by the board of directors;

 

	
  

	
 17.2.4

	
the auditor has notified the board of directors' chairman of materials deficiencies in the audit of the Company's accounts.

 

	
  

	
17.3

	
Notice of a board of directors' meeting shall be sent to all its members at least three days prior to the date of the meeting. The notice shall be sent to the address of the director which was furnished to the Company in advance, and shall state the date, time and place of the meeting, and reasonable details of all the matters on the agenda.

 

Notwithstanding the aforegoing, in urgent circumstances, the board of directors may convene a meeting without notice, with a majority of the directors' agreement. (amended December 2011)

 

  

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17.4

	
The quorum for the commencement of a board of directors' meeting shall be a majority of the members of the board of directors. If no quorum is present at the board of directors' meeting within half an hour of the time fixed for the meeting's commencement, the meeting shall be adjourned to another date decided upon by the board of directors' chairman, or in his absence by the directors present at the meeting, provided that three days' notice shall be given to all the directors of the date of the adjourned meeting. The quorum for the commencement of an adjourned meeting shall be any number of participants. Notwithstanding the aforegoing, the quorum for discussions and resolutions at the board of directors on the auditor's dismissal or suspension shall be a majority of the board of directors' members.

 

	
  

	
17.5

	
The board of directors may hold meetings using any communications means, provided that all the directors participating may hear each other simultaneously.

 

	
  

	
17.6

	
The board of directors may also pass resolutions without actually convening, provided that all the directors entitled to participate in the discussion and vote on a matter that is brought for resolution agree not to convene for discussion of the matter. In such a case, minutes of the resolutions (including the decision not to convene) shall be signed by the chairman of the board of directors, or alternatively, signatures of the directors shall be attached to the minutes. Instead of a director’s signature, the chairman of the board or the corporate secretary may attach a signed memo regarding the oral vote of a director. Resolutions passed without convening, as aforementioned, shall be passed by an ordinary majority and shall have the same effect as resolutions passed at a duly convened meeting. (amended May 2006)

	
18.

	
Voting at the  Board of Directors

	
  

	
18.1

	
In a vote at the board of directors, each director shall have one vote.

 

	
  

	
18.2

	
The board of directors' resolutions shall be passed on a majority. The board of directors' chairman shall not have an additional or deciding vote and where the votes are tied, the resolution that was put to the vote shall be defeated.

	
19.

	
Board of Directors' Committees

	
  

	
19.1

	
The board of directors may establish committees and appoint members from the board of directors thereto (hereinafter referred to as “board of directors' committee"), and it may from time to time revoke such delegation or alter the composition of such committee. If board of directors' committees are established, the board of directors shall determine in their terms of authority whether certain powers of the board of directors will be delegated to the board of directors' committee such that a resolution of the board of directors' committee shall be deemed a resolution of the board of directors or whether a resolution of the board of directors' committee shall merely amount to a recommendation which is subject to the board of directors' approval, provided that powers to resolve on the matters specified in section 112 of the Companies Law shall not be delegated to a committee. If a committee merely has a recommendation role, the board of directors may also appoint to the committee members who are not directors. (amended May 2006)

 

	
  

	
19.2

	
The meetings and discussions of any board of directors' committee composed of two or more members shall be governed by the provisions of these articles regarding board of directors' meetings and the voting thereat, mutatis mutandis, so far as not superseded by the Companies Law, and subject to the board of directors' resolutions regarding arrangements for the committee's meetings (if any). (amended December 2011)

 

  

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20.

	
Audit Committee

	
  

	
20.1

	
The Company's board of directors shall appoint an audit committee from amongst its members. The number of members on the audit committee shall not be less than three and all the external directors shall be members thereof. The board of directors' chairman and any director employed by the Company or providing services to it on a permanent basis and/or a control owner or his relative shall not be appointed as members of the committee.

 

	
  

	
20.2

	
The duties of the audit committee shall be -

 

	
  

	
 20.2.1

	
to detect deficiencies in the Company's business management, inter alia through consultation with the Company's internal auditor or with the auditor, and to propose to the board of directors ways of rectifying them;

 

	
  

	
 20.2.2

	
to resolve whether to approve acts and transactions requiring the audit committee's approval pursuant to the Companies Law.

	
21.

	
Managing Director

The Company's board of directors shall appoint a managing director and may appoint more than one managing director. The managing director shall be responsible for the routine management of the Company's affairs within the framework of the policy determined by the board of directors and subject to its guidelines.

	
22.

	
Exemption, Insurance and Indemnity (amended May 2006 and December 2011)

 

	
  

	
22.1

	
The Company may exempt an Office Holder therein in advance for his liability, or any part thereof, for damage in consequence of a breach of the duty of care vis-a-vis it, except with respect to Distribution (as defined in the Companies Law).

 

	
  

	
22.2

	
The Company may indemnify an Office Holder retroactively for an obligation or expense as specified in sub-paragraphs 22.2.1 22.2.2 and 22.2.3 below, imposed on him in consequence of an act or omission done in his capacity as an officer in the Company.

 

	 	
22.2.1

	
a monetary obligation imposed on him in favor of another person pursuant to a judgment, including a judgment given in settlement or an arbitrator's award that has been approved by a court;

 

 

	 	
 
22.2.2

	
 
reasonable litigation expenses, including advocates’ professional fees, incurred by the Office Holder pursuant to an investigation or a proceeding commenced against him by a competent authority and that was terminated without an indictment and without having a monetary charge imposed on him in exchange for a criminal procedure (as such terms are defined in the Companies Law), or that was terminated without an indictment but with a monetary charge imposed on him in exchange for a criminal procedure in a crime that does not require proof of criminal intent or in connection with a financial sanction;

 

	 	
 
 
22.2.3

	
 
reasonable litigation expenses, including advocates’ professional fees, incurred by the Office Holder pursuant to an investigation or a proceeding commenced against him by a competent authority and that was terminated without an indictment and without having a monetary charge imposed on him in exchange for a criminal procedure (as such terms are defined in the Companies Law), or that was terminated without an indictment but with a monetary charge imposed on him in exchange for a criminal procedure in a crime that does not require proof of criminal intent or in connection with a financial sanction;

 

  

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 22.2.4

	
expenses, including reasonable litigation expenses and legal fees, incurred by an Office Holder as a result of a proceeding instituted against such Office Holder in relation to (A) infringements that may result in imposition of financial sanction pursuant to the provisions of Chapter H'3 under the Securities Law or (B) administrative infringements pursuant to the provisions of Chapter H'4 under the Securities Law or (C) infringements pursuant to the provisions of Chapter I'1 under the Securities Law; and

 

	
  

	
 22.2.5

	
payments to an injured party of infringement under Section 52ND(a)(1)(a) of the Securities Law.

	
  

	
22.3

	
The Company may give an advance undertaking vis-a-vis an Office Holder to indemnify him in respect of an obligation or expense as specified in paragraph 22.2 above, provided that the undertaking specified in paragraph 22.2.1 is limited to types of events which in the board of directors' opinion may be anticipated, in light of the Company’s activities, at the time of giving the indemnity undertaking, and to an amount or criteria which the board of directors determines is reasonable in the circumstances of the case, both to be specified in the Company’s undertaking.

	
  

	
22.4

	
A company may enter into a contract to insure the liability of an Office Holder therein for an obligation imposed on him in consequence of an act  or omission done in his capacity as an Office Holder therein, in any of the following cases:

	
  

	
 22.4.1

	
a breach of the duty of care vis-a-vis the Company or vis-a-vis another person;

 

	
  

	
 22.4.2

	
a breach of the duty of fidelity vis-a-vis the Company, provided that the Office Holder acted in good faith and had reasonable basis to assume that the act would not harm the Company;

 

	
  

	
 22.4.3

	
a monetary obligation imposed on him in favor of another person.

 

	
  

	
 22.4.4

	
(i) expenses, including reasonable litigation expenses and legal fees, incurred by the Office Holder as a result of a proceeding instituted against such Office Holder in relation to (A) infringements that may result in imposition of financial sanction pursuant to the provisions of Chapter H'3 under the Securities Law or (B) administrative infringements pursuant to the provisions of Chapter H'4 under the Securities Law or (C) infringements pursuant to the provisions of Chapter I'1 under the Securities Law and (ii) payments made to the injured parties of such infringement under Section 52ND(a)(1)(a) of the Securities Law.

	
  

	
22.5

	
Paragraphs 22.1 to 22.4 shall not apply in any of the following cases -

 

	
  

	
 22.5.1

	
a breach of the duty of fidelity, save regarding insurance and indemnity provided that the Office Holder acted in good faith and had reasonable basis to assume that the act would not harm the Company;

 

	
  

	
 22.5.2

	
an intentional or rash breach of the duty of care, except where the breach was negligent only;

 

	
  

	
 22.5.3

	
an act done with the intention of unlawfully producing a personal profit;

 

	
  

	
 22.5.4

	
a fine imposed on an Office Holder.

	
  

	
22.6

	
Resolutions regarding the grant of exemption, insurance, indemnity or the grant of an undertaking to indemnify an Office Holder shall be passed subject to the law.

 

  

- 11 -

  

 

	
  

	
22.7

	
“Office Holder” in this section shall include directors and officers as defined in the Companies Law 1999.

	
23.

	
Internal Auditor

	
  

	
23.1

	
The Company's board of directors shall appoint an internal auditor in accordance with the audit committee's proposal. Interested parties in the Company, officers in the Company, relatives of any of the aforegoing and the auditor or someone on his behalf may not hold office as the Company's internal auditor.

 

	
  

	
23.2

	
The board of directors shall determine what officer shall be the organ to whom the internal auditor is subordinate, and in the absence of such a determination it shall be the board of directors' chairman.

 

	
  

	
23.3

	
The internal audit plan prepared by the auditor shall be submitted for the audit committee's approval; however, the board of directors may determine that the plan shall be submitted for the board of directors' approval.

	
24.

	
Auditor

	
  

	
24.1

	
The annual meeting shall appoint an auditor for the Company. The auditor shall hold office until the end of the following annual meeting, or for a longer term as determined by the annual meeting, provided that his term of office shall not extend beyond the end of the third annual meeting following the one at which he was appointed.

 

	
  

	
24.2

	
The auditor's remuneration for the audit shall be determined by the board of directors. The board of directors shall report to the annual meeting on the auditor's remuneration.

	
25.

	
Signatory Rights

	
  

	
25.1

	
The rights to sign on the Company's behalf shall be determined from time to time by the Company's board of directors.

 

	
  

	
25.2

	
The signatory on the Company's behalf shall sign together with the Company's stamp or its printed name.

	
26.

	
Dividend and Bonus Shares

	
  

	
26.1

	
The Company's board of directors shall be the organ authorized to decide upon the distribution of a dividend and/or the distribution of bonus shares.

 

	
  

	
26.2

	
The shareholders who are entitled to dividend are the shareholders on the date of the resolution on the dividend or on a later date if another date is specified in the resolution on the dividend's distribution.

 

	
  

	
26.3

	
If the board of directors does not otherwise determine, any dividend may be paid by way of a cheque or payment order that shall be sent by mail in accordance with the registered address of the shareholder or person entitled thereto, or in the case of registered joint shareholders to the shareholder whose name appears first in the shareholders' register in relation to the joint shareholding. Every such cheque shall be drawn up to the order of the person to whom it is being sent. The receipt of a person who on the date of the dividend's declaration is listed in the shareholders' register as the holder of any share or, in the case of joint shareholders, of one of the joint shareholders shall serve as confirmation of all the payments made in connection with such share.

 

  

- 12 -

  

 

	
  

	
26.4

	
For the purpose of implementing any resolution pursuant to the provisions of this paragraph, the board of directors may settle, as it deems fit, any difficulty arising in relation to the distribution of the dividend and/or bonus shares, including determine the value for the purpose of the said distribution of certain assets and resolve that payments in cash shall be made to members in reliance upon the value thus determined, determine regulations in relation to fractions of shares or in relation to non-payment of amounts less than NIS 200.

	
27.

	
Redeemable Securities

The Company may, subject to any law, issue redeemable securities on such terms as determined by the board of directors, provided that the general meeting approves the board of directors' recommendation and the terms determined.

	
28.

	
Contributions

The Company may contribute a reasonable sum of money for an worthy object, even if the contribution is not within the scope of business considerations conducive to the Company's profits.

	
29.

	
Accounts

	
  

	
29.1

	
The Company shall keep accounts and draw up financial statements pursuant to the Securities Law and any other law.

 

	
  

	
29.2

	
The books of account shall be kept at the office or at such other place as the directors deem fit, and shall always be open for the directors' inspection.

	
30.

	
Notices

	 	
30.1

	
Subject to any law, notice or any other document which the Company sends and which it may or is required to give pursuant to the provisions of these articles and/or the Companies Law shall be sent by the Company to any person personally, by mail in a letter addressed in accordance with the registered address of such shareholder in the shareholders' register or in accordance with any address which the shareholder specifies in a letter to the Company as the address for the sending of notices or other documents, or by facsimile in accordance with the number specified by the shareholder as the number for sending notices by facsimile. Should the Company publish notice in at least two Israeli daily newspapers, notice shall be deemed to have been given to any member whose address as registered in the Company’s Register is in Israel.

 

	
  

	
30.2

	
Any notices which must be given to the shareholders shall be given, in relation to shares which are jointly held, to the person whose name appears first in the shareholders' register as the holder of such share, and any notice given in this manner shall be adequate notice to the holders of such share.

 

	
  

	
30.3

	
Any notice or other document that is sent shall be deemed to have reached its destination within three business days - if sent by registered mail and/or ordinary mail in Israel, and if delivered by hand or sent by facsimile, it shall be deemed to have reached its destination on the first business day following its receipt. When coming to prove the delivery, it shall be adequate to prove that the letter that was sent by mail containing the notice or document was correctly addressed and delivered to the post office as a stamped letter or as a stamped registered letter, and in respect of a facsimile it is sufficient to furnish the transmission confirmation from the sending instrument.

 

  

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30.4

	
Any entry effected in the ordinary way in the Company's register shall be deemed prima facie proof regarding the dispatch, as entered in such register.

 

	
  

	
30.5

	
Where it is necessary to give prior notice of a particular number of days or notice that is valid for any period, the date of delivery shall be taken into account in reckoning the number of days or the period.

 

- 14 -

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