Document:

Epcylon Technologies Inc.: Exhibit 10.1 - Filed by newsfilecorp.com

THIS AGREEMENT made the 7th day
of February 2014 

BETWEEN: 

Epcylon Technologies Inc.

(hereinafter called the "Corporation") 

OF THE FIRST PART 

- and - 

CFO Advantage Inc., 
a
corporation incorporated under the laws of the Province of Ontario

(hereinafter called the "CAI") 

OF THE SECOND PART 

WHEREAS the Corporation is desirous of engaging the consulting
services of CAI and CAI has agreed to serve the Company as an independent
contractor upon the terms and conditions herewith set forth; 

AND WHEREAS the CFO shall be responsible for all matters
typical of those for an executive officer, in the position of Chief Financial
Officer (the “CFO”). As Chief Financial Officer CFO shall report to the Chief
executive Officer and to the Board of Directors of the Corporation. 

NOW THIS AGREEMENT WITNESSETH that, in the parties hereto agree
as follows: 

	1. 	
      Commencing February 7, 2014, the Corporation hereby
      retains the CFO. The CFO shall carry out all financial and accounting
      functions including but not limited to the management of the finance
      administration, financial reporting, ,liaising with external professionals
      such as the auditors, lawyers and bankers, ensure regulatory compliance,
      attend board and audit committee meetings.

	 	 
	2. 	
      The CFO will be based in Toronto, Canada. The CFO will
      perform the Services at various locations and at the Corporation’s
      premises as necessary and decided upon by the CFO.

	 	 
	3. 	
      The CFO is not required to devote its full time and
      attention in connection with providing the services as described
      herein.

	 	 
	4. 	
      If the CFO is requested by the Corporation to provide any
      special or additional services (“Special Services”) beyond the Services
      outlined above, the Special Services must be agreed to by the parties
      prior to CFO undertaking to provide such Special Services.

	 	 
	5. 	
      The CFO will be covered by comprehensive director’s and
      officer’s insurance and errors and omissions liability insurance, which
      will be maintained by the Corporation.

	 	 
	6. 	
      The CFO shall, in providing services, comply with all
      laws, rules and regulations of governments or governing bodies applicable
      to the services being provided.

	 	 
	7. 	
      The CFO agrees that all knowledge of the Corporation's
      affairs shall be held in the strictest of confidence. No information
      concerning the operations of the Corporation shall be disclosed to any
      person without the written consent of the Corporation.

	 	 
	8. 	
      The Corporation agrees to pay the CFO based on a monthly
      fee of $2,000 plus HST, to be paid in a combination of cash and shares.
      These amounts shall be invoiced monthly, in arrears and payable by the
      Corporation not later than the 15th day of the month immediately following
      the month. This fee will be reviewed periodically based on time required
      by the CFO.

	9. 	
      The CFO shall be reimbursed for all reasonable expenses
      upon presentation of receipts to the Corporation.

	 	 
	10. 	
      The Consultant shall be eligible to participate in the
      Stock Option Plan (“Plan”) of the Corporation, and shall be granted
      options at the discretion of the board and CEO.

	 	 
	11. 	
      The Corporation shall give CFO 3 months notice of
      termination of the agreement.

	 	 
	12. 	
      In no event shall either party to This Agreement be
      liable to any person who is not a party to This Agreement for any claims,
      demands or expenses alleged to have been caused by any act or omission of
      the other party to This Agreement.

	 	 
	13. 	
      The CFO shall exercise a standard of care and have a
      limitation of liability to the Company as follows;

CFO will exercise reasonable care and
diligence and act in good faith in the provision of the services pursuant to
this Agreement. That notwithstanding, CFO assumes no responsibility and shall
not be held responsible or liable for any loss, damage, expense or cost suffered
or incurred by the Company, including any loss, damage, expense or cost arising
out of or occasioned by the Company's use, reliance upon or publication of any
work product prepared by CFO and delivered to the Company by CFO, unless any
such loss, damage, expense or cost is caused by and is the direct result of the
willful default, gross negligence or fraudulent conduct of CFO in connection
with the Agreement. Regardless of the nature and extent of any loss, damage,
expense or cost suffered or incurred by the Company, under no circumstances will
any liability of CFO exceed the aggregate amount of fees, net of GST, paid by
the Company to CFO, for services performed by CFO during the preceding twelve
(12) months of such claim. 

	14. 	
      This Agreement contains the entire agreement between the
      parties with respect to the subject matter hereof and supersedes all prior
      agreements, negotiations, representations and proposals written or oral,
      relating to its subject matter.

	 	 
	15. 	
      Any notice to be given hereunder shall be valid and
      effective if such notice is sent by first class mail, postage prepaid,
      addressed to or personally delivered to the CFO
at:

614 Rushton Road

Toronto, Ontario 
M6C 2Y7 

	16. 	
      Any term or provision of This Agreement can be modified
      only with the written consent of both parties. The failure of either party
      to exercise any right or to insist on strict compliance with the
      provisions hereof shall not constitute a waiver of the provisions of This
      Agreement with respect to any other or subsequent breach hereof nor a
      waiver of its right to require strict compliance with the provisions of
      This Agreement.

	 	 
	17. 	
      This Agreement shall not be assigned without the written
      consent of the other party, which consent shall not be unreasonably
      withheld. This Agreement shall be binding upon the parties and upon their
      respective successors and permitted assigns.

IN WITNESS WHEREOF the parties hereto have hereunto
respectively set their hands and seals as of the date hereof. 

SIGNED, SEALED AND DELIVERED 

	 	In the presence of: 	CFO Advantage Inc. 	 
	 	 	 	 
	 	  	 “Kyle Appleby” 	 
	 	  	Authorized Signing Officer
    	 
	 	 	 	 
	 	  	Date: February 7, 2014 	 
	 	 	 	 
	 	 	 	 
	 	  	Epcylon Technologies Inc.
    	 
	 	  	Per: 	 
	 	 	 	 
	 	  	 “Cato Kemmler” 	 
	 	  	Authorized Signing Officer
    	 
	 	 	 	 
	 	  	Date: February 7, 2014kl2-2831962v3amended_andrest.htm - Generated by SEC Publisher for SEC Filing

Exhibit 4.12

AMENDED AND RESTATED NOTE SUBSCRIPTION AGREEMENT

 

THESE SECURITIES HAVE NOT
BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR THE SECURITIES
COMMISSION OF ANY STATE UNDER ANY STATE SECURITIES LAW.  THEY ARE BEING OFFERED
PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER REGULATION D (“REGULATION D”)
PROMULGATED UNDER THE ACT.  THE SECURITIES MAY NOT BE OFFERED, SOLD OR
OTHERWISE TRANSFERRED UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT AND
APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND TRANSFERS ARE MADE
PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND THOSE LAWS.

 

THIS NOTE SUBSCRIPTION
AGREEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER
TO BUY, ANY OF THE SECURITIES OFFERED HEREBY BY OR TO ANY PERSON IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL.  INVESTMENT
IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK.  IN MAKING AN INVESTMENT
DECISION, INVESTORS MUST RELY ON THEIR OWN EXAMINATION OF THE COMPANY AND THE
TERMS OF THE OFFERING, INCLUDING THE MERITS AND THE RISKS INVOLVED.  THESE
SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR STATE SECURITIES
COMMISSION OR REGULATORY AUTHORITY.  FURTHERMORE, THE FOREGOING AUTHORITIES
HAVE NOT CONFIRMED OR DETERMINED THE ACCURACY OR ADEQUACY OF THIS DOCUMENT. 
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

            This Amended and
Restated Note Subscription Agreement (this “Agreement”) dated as of
February __, 2014 is executed by the purchasers set forth on the signature
pages hereto (each, a “Purchaser”, and together, the “Purchasers”)
in connection with the subscription by the Purchasers for certain senior
secured convertible promissory notes (each, a “Note”, and together, the
“Notes” (which terms shall be deemed to include any and all senior
secured convertible promissory notes issued pursuant to the “rights offering”
referred to in Section 6.5 below)) of Environmental Solutions Worldwide,
Inc., a Florida corporation (the “Company”).  The terms of the Notes are
set forth in the form of Note attached hereto as Exhibit A.  

 

            WHEREAS, the
Purchasers entered into that certain Note Subscription Agreement dated as of
March 22, 2013 (the “Original Agreement”), pursuant to which the
Purchasers purchased Notes in an aggregate principal amount of $5,000,000
(U.S.).  

 

            WHEREAS, pursuant
to Section 6.5 of the Original Agreement, the Company is conducting a rights
offering (the “Rights Offering”) pursuant to which it is offering
holders of its common stock the right to purchase up to their pro-rata Company
ownership amount of $4,596,929 (U.S.) aggregate principal amount of Company
senior secured convertible promissory notes that are
substantially similar to the Notes sold to the Purchasers pursuant to the
Original Agreement (the “New Notes”). 

 

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2831962.3 

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            WHEREAS, the
Company and the Purchasers wish to provide that the purchasers of the New Notes
shall be deemed to be third party beneficiaries of this Agreement for certain
purposes and, in connection therewith, desire to amend and restate the Original
Agreement in its entirety as follows:  

 

1.         Purchase and
Sale of Notes

 

            (a)       Subject
to the terms and conditions hereof, the Company has authorized the issuance and
sale of the Notes to the Purchasers at the Closings (as defined below).

 

            (b)       At the
initial closing of the transactions contemplated hereby which will occur
simultaneously with the execution of this Agreement (the “Initial Closing”),
subject to the terms and conditions of this Agreement, each Purchaser hereby
purchases, and the Company hereby issues and sells to each Purchaser the Notes
(each an “Initial Note” and collectively the “Initial Notes”) in
the aggregate original principal amount of One Million Four Hundred Thousand
Dollars ($1,400,000 (U.S.)), allocated among the Purchasers in the principal
amounts set forth under the heading “Initial Note Principal Amount” on Schedule
I attached hereto.

 

            (c)       At any
time prior to March 22, 2014, the Company (with the prior approval of the
Company’s board of directors) may elect, upon advance notice of not less than
ten (10) business days to the Purchasers, to have one or more additional
closings (each a “Subsequent Closing” and collectively, the “Subsequent
Closings” and together with the Initial Closings, the “Closings”) at
which each Purchaser shall be required (and hereby acknowledges his or its
obligation) to purchase additional Notes (each a “Subsequent Note”, and
collectively, the “Subsequent Notes” and together with the Initial Notes
which are each included within the “Notes” definition) for up to an aggregate
principal amount (including all the amounts paid at the Initial Closing and all
Subsequent Closings) of Three Million Six Hundred Thousand Dollars ($3,600,000
(U.S.)) allocated among the Purchasers in the principal amounts set forth under
the heading “Total Commitment Amount” on Schedule I attached hereto.

 

            (d)       The
Company’s agreement with each Purchaser in this Agreement is a separate agreement,
and the sale of each Note to each Purchaser is a separate sale.  No Purchaser
shall have any obligation to purchase any Note not purchased by another
Purchaser.

 

2.         Purchasers’
Representations and Covenants; Access to Information Independent  Investigation 

 

            Each Purchaser
represents and warrants to, and covenants with, the Company, solely on his or
its own behalf and on behalf of each person or entity for which such Purchaser
is acting as a fiduciary, as follows:

 

 

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2831962.3 

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            2.1       Exempt
Transaction; Investment Intent.  (a) The Purchaser is an “accredited
investor” as the term is defined in Rule 501(a) under the Act and (b) the
Purchaser is purchasing Notes for his or its own account (or for beneficiaries’
accounts over which the Purchaser has investment discretion) and not with a
view of reselling the Notes in violation of the Securities Act.  

 

            2.2       Independent
Investigation.  The Purchaser, in purchasing his or its Notes hereunder,
has relied upon an independent investigation made by him or it and, to his or
its knowledge has, prior to the date hereof, been given access to and the
opportunity to examine all books and records of the Company, and all material
contracts and documents of the Company; provided, that such
investigation shall not affect the Purchaser’s ability to rely on the accuracy
of the representations and warranties of the Company set forth herein.  The
Purchaser will keep confidential all non-public information regarding the
Company that the Purchaser receives from the Company unless disclosure of such
information is compelled by a court or other administrative body or, in the
opinion of the Purchaser’s counsel, to comply with applicable law.  In making
the investment decision to purchase Notes, the Purchaser is not relying on any
oral or written representations or assurances from the Company or any other
person or any representation of the Company or any other person other than as
set forth in this Agreement, the public filings of the Company or in a document
executed by a duly authorized representative of the Company making reference to
this Agreement.  The Purchaser has such experience in business and financial
matters that it is capable of evaluating the risk of its investment and
determining the suitability of its investment.  The Purchaser is a
sophisticated investor, and an accredited investor as defined in Rule 501 of
Regulation D.  The Purchaser has obtained and reviewed the copies of the
Company’s Form 10-K Annual Report for the most recent year ended December 31,
2011, Form 10-Q for the most recent fiscal quarter, and copies of all Form 8-K
Reports from the beginning of the past fiscal year to the date hereof and is
aware that the Company has continued to sustain losses. 

 

            2.3       Economic
Risk.  The Purchaser understands and acknowledges that an investment in his
or its Notes involves a high degree of risk, including a possible total loss of
investment.  The Purchaser represents that he or it is able to bear the
economic risk of the investment.  In making this statement, the Purchaser hereby
represents and warrants that the Purchaser has adequate means of providing for
the Purchaser’s current needs and contingencies.  The Purchaser further
represents that the Purchaser has such knowledge and experience in financial
and business matters that the Purchaser is capable of evaluating the merits and
risks of the investment in the Notes to be received by the Purchaser.  Further,
the Purchaser represents that it has no present need for liquidity in his or
its Notes.

 

            2.4       No
Government Recommendation or Approval.  The Purchaser understands that no
United States federal or state agency or similar agency of any other country
has passed upon or made any recommendation or endorsement of the Company, this
transaction or the subscription of the Notes.

 

            2.5       No
Registration.  The Purchaser understands that the Notes have not been
registered under the Act and are being offered and sold pursuant to an
exemption from registration contained in the Act based
in part upon the representations of the Purchaser contained herein.  

 

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2831962.3 

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            2.6       No
Public Solicitation.  Without conducting any independent investigation, the
Purchaser knows of no public solicitation or advertisement of an offer in
connection with the proposed issuance and sale of the Notes.

 

            2.7       Authority. 
The Purchaser, (a) if not a natural person, has the full power and authority,
and (b) if a natural person, has the legal capacity, to execute, deliver and
perform this Agreement and to perform its obligations hereunder.  This
Agreement has been duly approved by all necessary action of the Purchaser, as
applicable, has been executed by persons duly authorized by the Purchaser, and
constitutes a valid and legally binding obligation of the Purchaser,
enforceable in accordance with its terms.

 

            2.8       No
Reliance on Tax Advice.  The Purchaser has reviewed with his, her or its
own tax advisors the foreign, federal, state and local tax consequences of this
investment, where applicable, and the transactions contemplated by this
Agreement.  The Purchaser is relying solely on such advisors and not on any
statements or representations of the Company or any of its agents and
understands that the Purchaser (and not the Company) shall be responsible for
the Purchaser own income tax liability that may arise as a result of this investment
or the transactions contemplated by this Agreement.

 

            2.9       Independent
Legal Advice.  The Purchaser and the Company acknowledge that each has had
the opportunity to review this Agreement and the transactions contemplated by
this Agreement and has consulted with its own legal counsel, and other advisors
prior to execution of the within Agreement.

 

            2.10     Acknowledgment. 
The Purchaser understands that the Notes are being offered and sold to it in
reliance of specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgments and
understandings of the Purchaser set forth herein in order to determine the applicability
of such exemptions and the suitability of the Purchaser to acquire the Notes.

 

3.         Resales 

 

            The Purchasers
acknowledge and agree that the Notes may and will only be resold (a) pursuant
to a Registration Statement under the Act; or (b) pursuant to an exemption from
registration under the Act.

 

4.         Legends 

 

            Each Note shall
bear a legend similar to the legend set forth below and any other legend, if
such legend or legends are reasonably required to comply with state, Federal or
foreign law:

 

 

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2831962.3 

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“THIS
UNSECURED PROMISSORY NOTE HAS BEEN ACQUIRED FOR INVESTMENT PURPOSES ONLY AND
HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933 (AS
AMENDED, THE “SECURITIES ACT”) UNDER ANY APPLICABLE STATE SECURITIES
LAWS.  THIS NOTE MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, PELDGED, OR
HYPOTHECATED ABSENT AN EFFECTIVE REGISTRATION UNDER THE SECURITIES ACT OR ANY
APPLICABLE STATE SECURITIES LAWS OR UNLESS THE PROPOSED TRANSFER MAY BE
EFFECTED WITHOUT REGISTRATION OR QUALIFICAITON UNDER THE SECURITIES ACT AND
APPLICABLE STATE SECURITIES LAWS.”

 

5.         Representations,
Warranties and Covenants of Company  

 

            The Company
represents and warrants to, and covenants with, the Purchasers as follows:

 

            5.1       Organization,
Good Standing, and Qualification.  The Company is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Florida and has all requisite corporate power and authority to carry on its
business as now conducted and as proposed to be conducted.  The Company and its
subsidiaries are duly qualified to transact business and are in good standing
as foreign corporations or other entities in each jurisdiction in which the
nature of the business conducted or property owned by them makes such
qualification necessary, except where the failure to so qualify would not,
individually or in the aggregate, have a material adverse effect on the
business, condition (financial or otherwise), earnings, properties, prospects
or results of operations of the Company or any of its subsidiaries (a “Material
Adverse Effect”).   

 

            5.2       Corporate
Condition.  None of the Company’s filings made with the Securities and
Exchange Commission (the “Commission”) (such filings, the “SEC
Reports”), including, but not limited to, those reports referenced in Section
5.5 below, contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading.  There have
been no material adverse changes in the Company’s business, properties, results
of operations, condition (financial or otherwise) or prospects since the date
of those reports which have not been disclosed to the Purchasers in writing. 
Further, all material non-public information (other than the specific
information respecting the sale of the Notes themselves) respecting the
Company, its business and its financial condition, as the same would be
required to be disclosed in an SEC Report or registration statement (or
corresponding prospectus) if the Notes were otherwise being registered for sale
by the Company, has been so publicly reported or disclosed prior to the sale of
the Notes as contemplated herein.

 

            5.3       Authorization. 
The transactions contemplated by this Agreement and the Transaction Documents
(as defined below) have been approved by a majority of disinterested
directors.  The Transaction Documents constitute valid and legally binding
obligations of the Company, enforceable in accordance with their respective
terms. “Transaction Documents” means,
collectively, this Agreement, the Notes, the Security Agreement (the “Security
Agreement”) dated on or about the date hereof among certain subsidiaries of
the Company and Orchard Capital Corp., as the collateral agent for the Purchasers
(in substantially the form attached hereto as Exhibit B), and each of
the other documents entered into or delivered by the parties hereto, if any, in
connection with the transactions contemplated by this Agreement.

 

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2831962.3 

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            5.4       Valid
Issuance of the Notes.  When executed and delivered in accordance with the
terms hereof for the consideration expressed herein, the Notes will have been
issued in compliance with all applicable U.S. federal securities laws.  Upon
issue, each Purchaser will acquire good and marketable title to the Notes, free
and clear of all liens, claims and encumbrances.  Subject in part to the truth
and accuracy of each Purchaser’s representations set forth in this Agreement,
the offer, sale and issuance of the Notes contemplated by this Agreement are
exempt from the registration pursuant to any applicable securities laws, and
neither the Company nor any authorized agent acting on its behalf will take any
action hereafter that would cause the loss of such exemption.

 

            5.5       Current
Public Information.  The Company is a “reporting issuer” and it has a class
of securities registered under Section 12(g) of the Securities Exchange Act of
1934, as amended (the “Exchange Act”), and has filed all the materials
required to be filed as reports pursuant to the Exchange Act for a period of at
least twelve (12) months preceding the date hereof (or for such shorter period
as the Company was required by law to file such material).  All such reports
(including, without limitation, the SEC Reports) complied in all material
respects with all applicable requirements of Federal securities laws and the
rules and regulations promulgated thereunder.  The Purchaser has obtained
copies of the Company’s Form 10-K Annual Report for the most recent year ended
December 31, 2011, Form 10-Q for the most recent fiscal quarter, and copies of
all Form 8-K Reports from the beginning of the Company’s past fiscal year to
the date of execution of the within Agreement.  

 

            5.6       No
Directed Selling Efforts in Regard to this Transaction.  The Company has
not, and, to the best of the Company’s knowledge, neither the Purchasers nor
any distributor, if any, participating in the offering of the Notes nor any
person acting for the Company or any such distributor has conducted any
“directed selling efforts” as that term is defined under the Act.  Such
activity includes, without limitation, the making of printed material available
to investors, the holding of promotional seminars, the placement of
advertisements with radio or television stations which discuss the offering of
the Notes.  

 

            5.7       No
Conflicts.  The execution and delivery of this Agreement and the
consummation of the issuance of the Notes and the transactions contemplated by
this Agreement do not and will not conflict with or result in a breach by the
Company of any of the terms or provisions of, or constitute a default under,
the Certificate of Incorporation or bylaws of the Company, or any indenture,
credit agreement, mortgage, deed of trust or other agreement or instrument to
which the Company or any of its subsidiaries is a party or by which it or any
of its subsidiaries or any of its or any of its subsidiaries’ properties or
assets are bound, or any existing applicable decree, judgment or order of any court, Federal or State regulatory body,
administrative agency or other governmental body having jurisdiction over the
Company or any of its subsidiaries or any of its or any of its subsidiaries’
properties or assets.

 

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2831962.3 

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            5.8       Issuance
of Notes.  The Company will issue each Note in the name of the applicable
Purchaser.  Nothing in this section shall affect in any way each Purchaser’s
obligations and agreement to comply with all applicable securities laws upon
resale of his or its Notes.

 

            5.9       No
Action.  The Company has not taken and will not take any action that will
affect in any way each Purchaser’s ability to resell his or its Notes in
accordance with applicable securities laws.

 

            5.10     Compliance
with Laws.  As of the date hereof, the conduct of the business of the
Company and its subsidiaries complies (and has complied) in all material
respects with all statutes, laws, regulations, ordinances, rules, judgments,
orders or decrees applicable thereto.  The Company and its subsidiaries have
not received notice of any alleged violation of any statute, law, regulations,
ordinance, rule, judgment, order or decree from any governmental authority. 
The Company shall comply with all applicable securities laws with respect to
the sale of the Notes, including, but not limited to, the filing of all reports
required to be filed in connection therewith with the Commission or any other
regulatory authority.  

 

            5.11     Litigation. 
There is no action, suit or proceeding before or by any court or governmental
agency or body, domestic or foreign, now pending or, to the knowledge of the
Company, threatened, against or affecting the Company and its subsidiaries, or
any of the Company or its subsidiaries assets or properties, which could
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect.  The Company and its subsidiaries are not the subject of any
pending or, to their knowledge, threatened investigation or administrative or
legal proceeding by the Internal Revenue Service, the taxing authorities of any
state or local jurisdiction, or the Commission or any state securities
commission which have not been disclosed in the reports referred to in Section
5.5. 

 

            5.12     Disclosures. 
There is no fact known to the Company (other than general economic conditions
known to the public generally) that has not been disclosed in writing to the
Purchasers that (a) could reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect or (b) could reasonably be
expected, individually or in the aggregate, to materially and adversely affect
the ability of the Company to perform its obligations pursuant the Transaction
Documents.

 

            5.13     Capitalization. 

(a)       The
Company, as of the date of the Initial Closing, will have 250,000,000 shares of
Common Stock, par value $0.001 per share (“Shares”) authorized pursuant
to its articles of incorporation and 228,213,143 Shares issued and
outstanding.  All of the issued and outstanding shares of capital stock of the
Company and each of its subsidiaries have been duly
authorized and are validly issued, fully paid and non-assessable.  No personal
liability attaches to the registered holders of the Common Stock by reason of
their being registered holders thereof.

 

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2831962.3 

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(b)       Except
as set forth on Exhibit C, (i) no subscription, warrant, option,
convertible security or other right (contingent or otherwise) to purchase or
acquire any shares of capital stock of the Company or any of its subsidiaries
that is authorized or outstanding, (ii) neither the Company nor any of its
subsidiaries has any obligation (contingent or otherwise) to issue any
subscription, warrant, option, convertible security or other such right or to
issue or distribute to holders of any shares of its capital stock or other
equity securities any evidences of indebtedness or assets of the Company or
such subsidiary, (iii) neither the Company nor any of its subsidiaries has any
obligation (contingent or otherwise) to purchase, redeem or otherwise acquire
any shares of its capital stock (or other equity securities) or any interest therein
or to pay any dividend or make any other distribution in respect thereof, and
(iv) there are no outstanding or authorized stock appreciation, phantom stock
or similar rights with respect to the Company or any of its subsidiaries.

 

                        (c)       All
of the issued and outstanding shares of the Company’s and its subsidiaries’
capital stock (or other equity securities) have been offered, issued and sold
by the Company and such subsidiaries in compliance with applicable Federal and
State securities Laws.

 

            5.13.    Material
Changes.  Except as disclosed in the SEC Reports: (a) the Company and its
subsidiaries have not incurred any material liabilities or obligations,
indirect, or contingent, or entered into any material oral or written agreement
or other transaction which is not in the ordinary course of business or which
could reasonably be expected to result in a material reduction in the future
earnings or prospects of the Company and its subsidiaries; (b) each of the
Company and its subsidiaries have not sustained any material loss or
interference with its businesses or properties from fire, flood, windstorm,
accident or other calamity not covered by insurance; (c) except as described in
the SEC Reports, the Company and its subsidiaries have not paid or declared any
dividends or other distributions with respect to its capital stock and neither
the Company nor any of its subsidiaries is in default in the payment of
principal or interest on any outstanding debt obligations; (d) there has not
been any change in the capital stock of the Company or any of its subsidiaries,
other than shares or options issued pursuant to stock option plans or purchase
plans approved by the Company’s Board of Directors and repurchases of shares or
options pursuant to repurchase plans already approved by the Company’s Board of
Directors, or indebtedness material to the Company or any of its subsidiaries
(other than the sale of Notes hereunder and in the ordinary course of
business); and (e) there has not been any other event or change that would
have, individually or in the aggregate, a Material Adverse Effect.

 

            5.14     Financial
Statements.  The consolidated financial statements of the Company and the
related notes contained in the SEC Reports present fairly, in accordance with
generally accepted accounting principles, the consolidated financial position
of the Company and its subsidiaries as of the dates indicated, and the results
of their operations, cash flows and the changes in
shareholders’ equity for the periods therein specified, subject, in the case of
unaudited financial statements for interim periods, to normal year-end audit
adjustments.  Such consolidated financial statements (including the related
notes) have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods therein
specified, except that unaudited financial statements may not contain all
footnotes required by generally accepted accounting principles.  The Company
and each of its subsidiaries have fully complied with the Sarbanes-Oxley Act of
2002; however auditor attestation of the Company’s compliance is not currently
required.

 

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2831962.3 

8 

 

 

 

            5.15     Stabilization. 
Neither the Company nor any of its subsidiaries has taken, directly or
indirectly, any action which was designed to or which has constituted or which
might reasonably be expected to cause or result in stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of the Notes.

 

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

 

            5.18     Consents. 
Except as to filings which may be required under applicable state securities
regulations, no consent, authorization, approval, order, license, certificate,
or permit of or from, or declaration or filing with, any federal, state, local,
or other governmental authority or of any court or other tribunal is required
by the Company or any of its subsidiaries in connection with the transactions
contemplated hereby.  No consent of any party to any contract, agreement,
instrument, lease, license, arrangement, or understanding to which the Company
or any of its subsidiaries is a party, or by which any of its properties or
assets is bound, is required for the execution, delivery, or performance by the
Company of the transactions contemplated by the Transaction Documents.

 

            5.19     Intellectual
Property.  To the Company’s knowledge, the Company or its subsidiaries own,
or have the right to use, all patents, trademarks, service marks, trade names,
copyrights, licenses, trade secrets or other proprietary rights necessary to
their business as now conducted without conflicting with or infringing upon the
right or claimed right of any person or entity under or with respect to any of
the foregoing.  Except for hardware and software licenses entered into in the
ordinary course of business, the Company and its subsidiaries are not bound by
or a party to any options, licenses or agreements of any kind with respect to
patents, trademarks, service marks, trade names, copyrights, licenses, trade
secrets or other proprietary rights of any other person or entity.  The Company
and its subsidiaries have not received any communications alleging that the
Company or any of its subsidiaries have violated the patents, trademarks,
service marks, trade names, copyrights or trade secrets or other proprietary
rights of any other person or entity.  The Company and its subsidiaries are not
aware of any violation by a third party of any of the Company’s or its
subsidiaries patents, trade marks, service marks, trade names, copyrights,
trade secrets or other proprietary rights.

 

 

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2831962.3 

9 

 

 

            5.20     Foreign
Corrupt Practices Act.  Neither the Company or any of its subsidiaries nor
any director, officer, agent, or other person acting on behalf of the Company
or any of its subsidiaries has, in the course of his or its actions for or on
behalf of the Company or any of its subsidiaries violated any provision of the
United States Foreign Corrupt Practices Act of 1977, as amended, or the
regulations there under.

 

6.         Additional
Covenants of Company

 

            6.1       Corporate
Existence and Taxes.  For as long as any Notes remain outstanding, the
Company and its subsidiaries shall, maintain their corporate existence in good
standing, and shall pay all taxes when due except for taxes which the Company
or its subsidiaries dispute in good faith and for which adequate reserves are
established on the Company’s or its subsidiaries books and records.

 

            6.2       Use
of Proceeds.  The Company and/or its subsidiaries shall use all of the net
proceeds from the sale of all Notes for the funding of working capital, planned
capital investments and other general corporate purposes.

 

            6.3       Publicity. 
Except as may be required by applicable law or regulation, the Company shall
not use, directly or indirectly, the Purchaser’s name or the name of any of its
affiliates in any advertisement, announcement, press release or other similar
communication unless it has received the prior written consent of holders of
Notes representing a majority of the then-outstanding principal balance of the
Notes (the “Majority Noteholders”), for the specific use contemplated or
as otherwise required by applicable law or regulation.

 

            6.4       Reports. 
The Company shall timely file all reports (if any) required to be filed with
the Commission pursuant to the Exchange Act. 

 

            6.5       Rights
Offering.  The Company hereby commits to conduct a customary “rights
offering” to all of its holders of Common Stock, offering all such holders the
right to purchase up to their pro-rata Company ownership amount of Company
senior secured convertible promissory notes that are substantially similar to the
Notes; provided  that the Company shall not be required to commence such
“rights offering” prior to the last Subsequent Closing (or the date the Company
acknowledges that no additional Closing shall occur).

 

7.         Closing
Conditions

 

            The obligation of
each of the Purchasers to purchase Notes at the Initial Closing is, and the
purchase by the Purchasers of any Subsequent Notes will be, subject to the
fulfillment, or the waiver by such Purchasers, of each of the following
conditions on or before the applicable Closing Date:

 

7.1       Accuracy
of Representations and Warranties.  The representations and warranties of
the Company contained in this Agreement shall be true and correct in all material respects as of the date of this Agreement and as
of each Closing Date as if made on and as of each Closing Date.

 

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2831962.3 

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            7.2       Compliance
with Covenants.  The Company shall have performed and complied in all
material respects with all agreements and covenants contained in the
Transaction Documents.

 

8.         Collateral
Agent

 

8.1       Appointment
of the Collateral Agent.  As further
provided in Section 8.4, the
Purchasers hereby appoint Orchard Capital Corp. (as the collateral agent under
the Transaction Documents) (the “Collateral Agent”) (and the Collateral
Agent hereby accepts such appointment) to take any action on their behalf in
connection with the Transaction Documents, including, without limitation, the
registration of any Collateral (as defined in the Security Agreement) in the
name of the Collateral Agent or its nominees prior to or during the continuance
of an Event of Default (as defined in the Notes), the application of any cash
collateral received by the Collateral Agent to the payment of the obligations
under the Notes, the exercise of any remedies given to the Collateral Agent pursuant
to the Transaction Documents and the exercise of any authority pursuant to the
appointment of the Collateral Agent as an attorney-in-fact pursuant to the
Security Agreement that the Collateral Agent deems necessary or proper for the
administration of the Collateral pursuant to the Security Agreements.

8.2       Collateral. 
 

(a)       For
purposes solely of perfection of the security interests granted to the
Collateral Agent, as agent on behalf of the Purchasers, and on its own behalf
under this Agreement, the Collateral Agent hereby acknowledges that any
Collateral held by the Collateral Agent is held for the benefit of the
Purchasers in accordance with this Agreement and the Transaction Documents.  No
reference to the Transaction Documents or any other instrument or document
shall be deemed to incorporate any term or provision thereof into this
Agreement unless expressly so provided.

(b)       The Collateral Agent is to distribute in
accordance with the Transaction Documents any proceeds received from the
Collateral which are distributable to the Purchasers in proportion to their
respective interests in the outstanding obligations under the Notes.

8.3       Action by the
Majority Noteholders. 

(a)       Certain Actions.  Each of the
Purchasers agrees that only the Purchasers representing the Majority Noteholders shall have the right, but
not the obligation, to undertake the following actions (it being expressly
understood that less than the Majority Noteholders hereby expressly waive the
following rights that they may otherwise have under the Transaction Documents): 

(i)        Acceleration.  If an Event of
Default occurs, after the applicable cure period, if any, the Majority
Noteholders may, on behalf of all the Purchasers,
instruct the Collateral Agent to provide to the Company notice to cure such
default and/or declare the unpaid principal amount of the Notes to be due and
payable, together with any and all accrued interest thereon and all costs
payable pursuant to such Notes;

 

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2831962.3 

11 

 

 

(ii)       Enforcement.  Upon the occurrence of
any Event of Default after the applicable cure period, if any, the Majority
Noteholders may instruct the Collateral Agent to proceed to protect, exercise
and enforce, on behalf of all the Purchasers, their rights and remedies under
the Transaction Documents against the Company, and such other rights and
remedies as are provided by law or equity;

(iii)      Waiver of Past Defaults.  The
Majority Noteholders may instruct the Collateral Agent to waive any Event of
Default by written notice to the Company, and the other Purchasers; and

(iv)      Amendment.  Subject to Section 10,
the Majority Noteholders may instruct the Collateral Agent to waive, amend,
supplement or modify any term, condition or  other provision in the Notes
or the Transaction Documents in accordance with the terms of the Notes or
Transaction Documents so long as such waiver, amendment, supplement or
modification is made with respect to all of the Notes and with the same force
and effect with respect to each of the Purchasers.

(b)       Further Actions.  The Majority
Noteholders may instruct the Collateral Agent to take any action that it may
take under this Agreement by instructing the Collateral Agent in writing to
take such action on behalf of all the Purchasers.

8.4       Power of Attorney. 

(a)       To
effectuate the terms and provisions hereof, the Purchasers hereby appoint the
Collateral Agent as their attorney‐in‐fact (and the Collateral
Agent hereby accepts such appointment) for the purpose of carrying out the
provisions of this Agreement including, without limitation, taking any action on
behalf of, or at the instruction of, the Majority Noteholders at the written
direction of the Majority Noteholders and executing any consent authorized
pursuant to this Agreement and taking any action and executing any instrument
that the Collateral Agent may deem necessary or advisable (and lawful) to
accomplish the purposes hereof.

(b)       All acts done under the foregoing
authorization are hereby ratified and approved and neither the Collateral Agent
nor any designee nor agent thereof shall be liable for any acts of commission
or omission, for any error of judgment, for any mistake of fact or law except
for acts of gross negligence or willful misconduct.

(c)       This power of attorney, being coupled with
an interest, is irrevocable while this Agreement remains in effect.

8.5       Expenses of the Collateral Agent. 
The Company shall pay any and all reasonable costs and expenses incurred by the
Collateral Agent, all waivers, releases, discharges, satisfactions,
modifications and amendments of this Agreement, the administration
and holding of the Collateral, insurance expenses, and the enforcement,
protection and adjudication of the parties’ rights hereunder by the Collateral
Agent, including, without limitation, the reasonable disbursements, expenses
and fees of the attorneys the Collateral Agent may retain, if any, each of the
foregoing in proportion to their holdings of the Notes.  The Collateral Agent
shall not be entitled to a separate fee for the services rendered pursuant to
this Agreement.

 

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2831962.3 

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8.6       Reliance on Documents and Experts. 
The Collateral Agent shall be entitled to rely upon any notice, consent,
certificate, affidavit, statement, paper, document, writing or communication
(which may be by facsimile, electronic mail or telephone) reasonably believed
by it to be genuine and to have been signed, sent or made by the proper person
or persons, and upon opinions and advice of its own legal counsel, independent
public accountants and other experts selected by the Collateral Agent.

8.7       Duties of the Collateral Agent; Standard
of Care. 

(a)       The
Collateral Agent’s only duties are those expressly set forth in this Agreement,
and the Collateral Agent hereby is authorized to perform those duties in
accordance with commercially reasonable practices.  The Collateral Agent may
exercise or otherwise enforce any of its rights, powers, privileges, remedies
and interests under this Agreement and applicable law or perform any of its
duties under this Agreement by or through its officers, employees, attorneys,
or agents.

(b)       The Collateral Agent shall act in good faith
and with that degree of care that an ordinarily prudent person in a like
position would use under similar circumstances.

(c)       Any funds held by the Collateral Agent
hereunder need not be segregated from other funds except to the extent required
by law.  The Collateral Agent shall be under no liability for interest on any
funds received by it hereunder.

8.8       Resignation.  The Collateral Agent
may resign and be discharged of its duties hereunder at any time by giving
written notice of such resignation to the other parties hereto, stating the
date such resignation is to take effect.  Within five (5) days of the giving of
such notice, a successor collateral agent shall be appointed by the Majority
Noteholders; provided, however, that if the Purchasers are
unable so to agree upon a successor within such time period, and notify the
Collateral Agent during such period of the identity of the successor collateral
agent, the successor collateral agent may be a person or entity designated by
the Collateral Agent, and any and all fees of such successor collateral agent
shall be the several obligation of the Purchasers.  The Collateral Agent shall continue to serve until
the effective date of the resignation or until its successor accepts the
appointment and receives the Collateral held by the Collateral Agent but shall
not be obligated to take any action hereunder.  

8.9       Exculpation.  The Collateral Agent
and its officers, employees, attorneys and agents, shall not incur any
liability whatsoever for the holding or delivery of documents or the taking of
any other action in accordance with the terms and provisions of this Agreement,
for any mistake or error in judgment, for compliance with any applicable law or any attachment, order or other directive
of any court or other authority (irrespective of any conflicting term or
provision of this Agreement), or for any act or omission of any other person
engaged by the Collateral Agent in connection with the Transaction Documents,
unless occasioned by the exculpated person’s gross negligence or willful
misconduct; and each party hereto hereby waives any and all claims and actions
whatsoever against the Collateral Agent and its officers, employees, attorneys
and agents, arising out of or related directly or indirectly to any or all of
the foregoing acts, omissions and circumstances.

 

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2831962.3 

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8.10     Indemnification.  The Purchasers
hereby agree to indemnify, reimburse and hold harmless the Collateral Agent and
its directors, officers, employees, attorneys and agents, severally, from and
against any and all claims, liabilities, losses and expenses that may be
imposed upon, incurred by, or asserted against any of them, arising out of or
related directly or indirectly to the Transaction Documents or the Collateral,
except such as are occasioned by the indemnified person's own gross negligence
or willful misconduct.

9.         Governing Law

 

            This Agreement
shall be governed by and construed in accordance with the laws of the State of
New York, applicable to agreements made in and wholly to be performed in that
jurisdiction without regard to the choice of law rules of such state, except
for matters arising under the Act or the Exchange Act which matters shall be
construed and interpreted in accordance with such laws.  Any action brought to
enforce, or otherwise arising out of, this Agreement shall be heard and
determined in either a Federal or state court sitting in the County of New
York, State of New York, and the parties consent to jurisdiction in the State
of New York.

 

10.        Entire Agreement; Amendment

 

            Each Transaction
Document delivered pursuant hereto constitute the full and entire understanding
and agreement between the parties hereto with regard to the subject matter
hereof and thereof, and no party hereto shall be able or bound to any other
party hereto in any manner by any warranties, representations or covenants
except as specifically set forth herein or therein.  Except as expressly
provided herein, none of the Transaction Documents may be amended, waived,
discharged or terminated other than by a written instrument signed by the party
or parties hereto against whom enforcement of any such amendment, waiver,
discharge or termination is sought, except that the Majority Noteholders may
agree to amend, waive, discharge or terminate this Agreement and the Notes on
behalf of all Purchasers (so long as all Purchasers are proportionately treated
(based on the relative then-outstanding principal balance of the Notes)). 

 

11.       Notices, Etc.

 

           Any
notice, demand or request required or permitted to be given by either the
Company or any Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered personally, by facsimile,
electronic mail (or similar electronic transmission)
with a hard copy to follow by two day courier addressed to the intended
recipient thereof at the addresses of the parties hereto in the books and
records of the Company or such other address as a party hereto may request by
notifying the other in writing.

 

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2831962.3 

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12.       Indemnification 

 

            12. 1    Company
Indemnification.  In consideration of the Purchasers’ execution and
delivery of the Transaction Documents to which it is a party and acquiring the
Notes hereunder and thereunder and in addition to all of the Company’s other
obligations under the Transaction Documents to which it is a party, the Company
shall defend, protect, indemnify and hold harmless the Purchasers and all of
their affiliates, shareholders, trustees, partners, members, officers,
directors, employees and direct or indirect investors and any of the foregoing
persons’ agents or other representatives (including, without limitation, those
retained in connection with the transactions contemplated by this Agreement)
(collectively, the “Purchaser Indemnitees”) from and against any and all
actions, causes of action, suits, claims, losses, costs, penalties, fees,
liabilities and damages (other than consequential damages), and expenses in
connection therewith (irrespective of whether any such Purchaser Indemnitee is
a party to the action for which indemnification hereunder is sought), and
including reasonable attorneys’ fees and disbursements (the “Purchaser
Indemnified Liabilities”), incurred by any Purchaser Indemnitee as a result
of, or arising out of, or relating to (a) any misrepresentation or breach of
any representation or warranty made by the Company in the Transaction
Documents, (b) any breach of any covenant, agreement or obligation of the
Company contained in the Transaction Documents, or (c) any cause of action,
suit or claim brought or made against such Purchaser Indemnitee by a third
party (including for these purposes a derivative action brought on behalf of
the Company) and arising out of or resulting from (i) other than those arising
from or resulting from a misrepresentation or breach of any representation or
warranty made by such Purchaser Indemnitee contained in the Transaction
Documents to which it is a party, the execution, delivery, performance or
enforcement of the Transaction Documents, (ii) any transaction financed or to
be financed in whole or in part, directly or indirectly, with the proceeds of
the issuance of the Notes, or (iii) the status of the Purchasers as investors
in the Company.

 

            12.2     Contribution;
Mechanics and Procedures.  To the extent that the foregoing undertaking by
the Company may be unenforceable for any reason, the Company shall make the
maximum contribution to the payment and satisfaction of each of the Purchaser
Indemnified Liabilities which is permissible under applicable law. 

 

13.       Expenses 

 

            Any expenses of
each Purchaser reasonably incurred in connection with such Purchaser’s prior,
present and future investments in or otherwise relating to the Company,
including, without limitation, the transactions contemplated under the
Transaction Documents and any future financing of the Company, including,
without limitation, any and all advisory, legal, filing and other fees incurred
in connection therewith, whether incurred prior to or
after the date hereof, shall in each case be paid by the Company.

 

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2831962.3 

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14.       No Strict
Construction  

 

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

 

15.       Third Party
Beneficiaries

 

            This Agreement is
intended for the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any provision
hereof be enforced by, any other person or entity; provided, however,
that purchasers of New Notes in the Rights Offering shall be deemed to be third
party beneficiaries of Section 8 (for the purposes of which such
purchasers shall be treated as “Purchasers” and holders of Notes), and Sections 
9, 10, 12, 16, 17  and 20  of this
Agreement.

 

16.       Survival 

 

            All covenants,
agreements, representations and warranties made by the Company and the
Purchasers herein and in the Transaction Documents shall survive the execution
of this Agreement, the delivery to the Purchasers of the Notes being purchased
and the payment therefor.

 

17.       Successors and Assigns

 

            This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and assigns, including any purchasers of the Notes.  The
Company shall not assign this Agreement or any rights or obligations hereunder
without the prior written consent of the Majority Noteholders, including by
merger or consolidation, except in accordance with the applicable provisions of
the Notes with respect to which the Company is in compliance.  Each Purchaser
may assign, without the consent of the Company, some or all of its rights
hereunder to any person or entity to whom such Purchaser assigns or transfers
Notes, or the right to acquire Notes, in accordance herewith; provided,
that such transferee agrees in writing to be bound with respect to the
transferred Notes to the provisions hereof that apply to the transferring
Purchaser, in which event such assignee shall be deemed to be a Purchaser
hereunder with respect to such assigned rights.

 

18.       Counterparts 

 

            This Agreement
may be executed in two or more identical counterparts, all of which shall be
considered one and the same agreement and shall become effective when
counterparts have been signed by each party hereto and delivered to the other
party hereto; provided, that a facsimile or PDF signature shall be
considered due execution and shall be binding upon the
signatory thereto with the same force and effect as if the signature were an
original, not a facsimile or PDF signature.  

 

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2831962.3 

16 

 

 

 

19.       Headings 

 

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

 

20.       Severability 

 

            If any provision
of this Agreement shall be invalid or unenforceable in any jurisdiction, such
invalidity or unenforceability shall not affect the validity or enforceability
of the remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

 

*   *   *   *   *

 

KL2

2831962.3 

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IN
WITNESS WHEREOF, the undersigned have
duly executed this Agreement as of the date first written above.

 

	
   

  	
  COMPANY: 

   

  ENVIRONMENTAL SOLUTIONS WORLDWIDE, INC.

   

  By:__________________________________

  Name: 

  Title:                                                               

   

  
	
   

  	
   

  PURCHASERS: 

                                                              

  
	
   

  	
  BLACK FAMILY PARTNERS LP

  By: Black Family Partners GP, its general partner

   

  By:__________________________________

       Leon D. Black

       Manager

                                                              

  
	
   

  	
   

  __________________________________

  JOHN J. HANNAN

   

                                                              

  
	
   

  	
  orchard
  investments, llc

  By: Orchard Capital Corp.,
  its manager

   

  By:__________________________________

       Richard S. Ressler

       President

                                                              

  
	
   

  	
   

  __________________________________

  RICHARD S. RESSLER 

                                                  

  
	
   

  	
  COLLATERAL AGENT: 

  orchard
  CAPITAL CORP.

   

  By:__________________________________

       Richard S. Ressler

       President

                                                              

  

[Signature Page to Note

Subscription Agreement]

 

 

Exhibit A

 

Form of Note

 

(see attached)

	

   

  

KL2

2831962.3 

 

 

Exhibit B

 

Security Agreement

 

(see attached)

	

   

  

KL2

2831962.3 

 

 

Exhibit C

 

Capitalization Terms

 

	

   

  

KL2

2831962.3 

 

 

Schedule I

 

 

	
  Purchaser

  	
  Total Commitment

  Amount

  	
  Initial Note Principal Amount

  
	
  Black Family Partners LP

  	
  $2,941,093

  	
  $823,506

  
	
  John J. Hannan

  	
  $98,178

  	
  $27,490

  
	
  Orchard Investments, LLC

  	
  $1,745,093

  	
  $488,626

  
	
  Richard S. Ressler

  	
  $215,636

  	
  $60,378

  
	
   

  	
  $5,000,000

  	
  $1,400,000

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