Document:

ex10-1

 

Exhibit 10.1

 

AMENDMENT NO. 1

TO

SECURED PROMISSORY NOTE

AND SECURITY AGREEMENT

 

 

This AMENDMENT NO. 1 TO SECURED PROMISSORY NOTE AND SECURITY AGREEMENT (this
“Amendment”),
dated August, 27, 2020, is made by and between Charlie’s
Holdings, Inc., a Nevada corporation (“Holdings”), Charlie’s Chalk
Dust, LLC, a Delaware limited liability company
(“Chalk Dust”),
and Don Polly LLC, a Nevada limited liability company
(“Don Polly”,
and together with Holdings and Chalk Dust, individually and
collectively, “Company”), on the one hand, and
Red Beard Holdings, LLC, a Delaware limited liability company
(“Red Beard”)
on the other. Company and Red Beard are sometimes collectively
referred to herein as the “Parties” and each individually as
a “Party”.

 

RECITALS

 

WHEREAS, the Parties executed that
certain Secured Promissory Note on April 8, 2020, in favor of Red
Beard in the original principal amount of Seven Hundred Fifty
Thousand and 00/100 Dollars ($750,000.00), a copy of which is
attached hereto as Exhibit
A and by this reference incorporated herein (the
“Note”);

 

WHEREAS, to secure repayment of the
Note, the Company executed and delivered to Red Beard that certain
Security Agreement also dated April 8, 2020, a copy of which is
attached hereto as Exhibit
B and by this reference incorporated herein (the
“Security
Agreement”); and

 

WHEREAS, Company has requested, and Red
Beard has agreed, to increase the amount that can be borrowed under
the Note.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the
foregoing and other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the Parties hereto
agree as follows:

 

1. Increase in Principal. The
Principal Amount of the Note shall be increased from Seven Hundred
Fifty Thousand and 00/100 Dollars ($750,000.00) to One Million Four
Hundred Thousand and 00/100 Dollars ($1,400,000.00).

 

2. Increase in Guaranteed Minimum
Interest. The Guaranteed Minimum Interest shall be increased
from Seventy Five Thousand and 00/100 Dollars ($75,000.00) to One
Hundred Thousand and 00/100 Dollars ($100,000.00).

 

3. Amendment to Security
Agreement. The Security Agreement is hereby amended so that
any reference to the “Note” in the Security Agreement
shall mean the Note as amended by this Amendment.

 

4. Event of Conflict. The
provisions of the Note, as modified in this Amendment, shall remain
in full force and effect in accordance with their terms and are
hereby ratified and confirmed. In the event of any conflict between
the terms and conditions of this Amendment and the terms and
conditions set forth in the Note, the terms and conditions set
forth herein shall control. This Amendment shall be governed by and
construed in accordance with the laws of the State of
California.

 

5. Counterparts; Electronic
Execution. This Amendment may be executed in any number of
counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall
constitute but one and the same Agreement. Delivery of an executed
counterpart of this Amendment by telefacsimile or other electronic
method of transmission (including without limitation a PDF
attachment) shall be equally as effective as delivery of an
original executed counterpart of this Amendment.

 

 

 

-1-

 

 

 

IN
WITNESS WHEREOF, this Amendment was duly executed on the date first
written above.

 

	
“COMPANY”

 

CHARLIE’S
HOLDINGS, INC.,

a
Nevada corporation

	

 

 

	

“RED
BEARD”

 

RED
BEARD HOLDINGS, LLC

a
Delaware limited liability company

 

	
By: /s/ Brandon
Stump 

Mr. Brandon
Stump

Chief
Executive Officer

	

 

 

	

By:
/s/ Vinny
Smith 

Vinny
Smith

General
Partner

 

 

	

CHARLIE’S
CHALK DUST, LLC

a
Delaware limited liability company

 

 

	
 

	
 

	

By:
/s/ Brandon
Stump 

Mr.
Brandon Stump

Chief
Executive Officer

 

 

	
 

	
 

	

DON
POLLY LLC

a
Nevada limited liability company

 

	
 

	
 

	

By:
/s/ Brandon
Stump 

Mr.
Brandon Stump

Chief
Executive Officer

 

 

	
 

	
 

 

 

-2-

 

 

 

EXHIBIT A

SECURED PROMISSORY NOTE

 

 

$750,000.00                                                                                                                      

April 8,
2020

 

THIS
SECURED PROMISSORY NOTE (this "Note") is a duly authorized and
validly issued joint and several promissory note of Charlie's
Holdings, Inc., a Nevada corporation ("Holdings"), Charlie's Chalk
Dust, LLC, a Delaware limited liability company ("Chalk Dust"), and Don Polly
LLC, a Nevada limited liability company ("Don Polly" and together with
Holdings and Chalk Dust, individually and collectively, the
“Company”), each of which
have a principal place of business located at 1007 Brioso Drive,
Costa Mesa CA 92627.

 

FOR
VALUE RECEIVED, the Company hereby promises to pay to the order of
Red Beard Holdings, LLC, a Delaware limited liability company
("Red Beard"), or
its successors and assigns (together with Red Beard, the
“Holder”), the principal
sum of Seven Hundred Fifty Thousand Dollars ($750,000.00) (the
“Principal
Amount”), together with interest thereon and other
amounts payable hereunder at the times and on the dates set forth
herein and in any event no later than the Maturity
Date.

 

Capitalized terms
used herein without definition have the meanings set forth on
Exhibit A hereto, which is incorporated herein by this reference as
though set forth herein in full. This Note is subject to the
following additional provisions:

 

Section
1.                        Advance
of Funds: Conditions to Advance.

 

(a) On or substantially
concurrently with the Effective Date, the Holder shall advance to
the Company by wire of immediately available funds the Principal
Amount less any
amounts that may be deducted therefrom by agreement between the
Holder and the Company or otherwise pursuant to the terms of this
Note. The entire Principal Amount shall be deemed to have been
advanced on the Effective Date.

 

(b) Prior to the Holder
having the obligation of making the foregoing advance, the
following shall have occurred to the satisfaction of the Holder in
its sole discretion (such date being the "Effective Date"): (i) this
Note shall have been duly executed and delivered by the Company to
the Holder; (ii) the Security Agreement shall have been duly
executed and delivered by the Company to the Holder; and
(iii) if requested by the Holder, the Company shall have
delivered to the Holder true and correct copies of the
Company’s organizational documents, resolutions approving the
transactions contemplated hereby and under the other Transaction
Documents, and current good standing certificates from each
jurisdiction requested by the Holder.

 

Section
2.                        Payment
of Principal and Interest; Security.

 

(a) Payment of Principal. The
Principal Amount shall be due and payable in full by the Company to
the Holder on the Maturity Date or, if earlier, upon acceleration
of this Note in accordance with the terms hereof. Any amount of
principal repaid hereunder may not be reborrowed.

 

(b) Payment of Interest. From the
Effective Date until paid in full, interest on the aggregate
outstanding Principal Amount shall be equal to at least $75,000
(the "Guaranteed Minimum
Interest"), which amount shall be the minimum amount due and
owing regardless of the duration of the loan evidenced by this
Note. The Guaranteed Minimum Interest shall accrue and be fully
earned upon the advance by Holder of the loan evidenced by this
Note on or substantially concurrently with the Effective Date. The
Guaranteed Minimum Interest and any additional accrued interest
shall be due and payable by the Company to the Holder on the
Maturity Date or, if earlier, upon acceleration of this Note in
accordance with the terms hereof. Upon and after the occurrence of
an Event of Default (as defined below), then, in addition to the
Guaranteed Minimum Interest, the principal and unpaid interest and
unpaid other amounts under this Note shall, at the election of the
Holder in its sole and absolute discretion, bear interest at the
lesser of a rate equal to 20% per annum or the Maximum Rate (as
defined below) (the "Default Rate"). Such interest
shall accrue daily commencing on occurrence of such Event of
Default until payment in full of the Principal Amount, together
with all accrued and unpaid interest and other amounts which may
become due hereunder, has been made.

 

	
 

	
	
 

	
 

	
 

	
 

 

-3-

 

(c) Prepayment. The Company may
prepay all or any portion of the Principal Amount, together with
the Guaranteed Minimum Interest.

 

(d) Payments. Notwithstanding
anything to the contrary contained herein or in any other
Transaction Document, all payments made by the Company shall be
applied to principal, interest, fees and other charges due the
Holder hereunder in such order of priority as the Holder shall
elect.

 

(e) Security. The obligations of
the Company under this Note are secured by the collateral
identified in the Security Agreement.

 

(f) Use of Proceeds. The proceeds
of this Note shall be used by the Company for working capital and
for general corporate purposes. Notwithstanding the foregoing, the
proceeds of this Note shall not in any event be used to make or pay
any dividend or distribution or to redeem any equity of the Company
or securities convertible, exercisable or exchangeable into equity
of the Company, to settle any outstanding litigation or to make any
payment or prepayment on any existing indebtedness for borrowed
money.

 

Section
3.                        Representations
and Warranties. The Company hereby represents and warrants
to the Holder as follows:

 

(a) The Company has
been duly formed, is validly existing and is in good standing under
the laws of its jurisdiction of formation, is in good standing or
duly qualified as a foreign corporation in all jurisdictions where
the conduct of its business so requires and where the failure to so
qualify could reasonably be expected to have a Material Adverse
Effect, and has all requisite power and authority to execute,
deliver and perform its obligations under this Note and all other
Transaction Documents to which it is a party. Each of this Note and
all other Transaction Documents have been duly authorized, executed
and delivered by the Company and constitute its legal, valid and
binding obligation, enforceable against it in accordance with the
terms hereof and thereof except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent
conveyance, or other laws of general application relating to or
affecting the enforcement of creditors’ rights generally. The
execution, delivery and performance by the Company of this Note and
all other Transaction Documents to which it is a party, and the
incurrence by it of obligations hereunder and thereunder, do not
(i) contravene or conflict with the Company’s certificate of
formation, operating agreement or similar governing documents or
any law applicable to the Company or other instrument binding on or
otherwise affecting the Company, or (ii) give rise to any lien,
security interest or other charge or encumbrance (other than in
favor of the Holder) upon any of the Company’s properties. No
consent or approval of or notice to or filing with any governmental
authority or other third party is or will be required on the part
of the Company as a condition to the validity or enforceability of
this Note or the other Transaction Documents, other than such
consents which have been obtained and are in full force and effect,
true and complete copies of which have been previously provided to
the Holder.

 

(b) The Company is in
compliance in all material respects with all laws and regulatory
requirements to which it or its properties are subject. There is no
litigation pending or, to the knowledge of the Company, threatened
against the Company. The Company’s principal place of
business is at the address set forth at the beginning of this Note.
The Company has paid all federal, foreign, state and local taxes
required to be paid by it on or prior to the date they were due.
All documents, instruments and other written material heretofore or
hereafter furnished to the Holder pursuant to the terms of any
Transaction Document contain no misstatements of a material fact
and do not fail to disclose any material fact and the Company has
not failed to disclose to the Holder any material
information.

 

	
 

	
	
 

	
 

	
 

	
 

 

-4-

 

(c) All financial
statements of the Company delivered to Holder, if any, fairly
present in all material respects the financial position of the
Company as of and for the dates thereof and the results of
operations and cash flows for the periods then ended, subject, in
the case of unaudited statements, to normal, immaterial, year-end
audit adjustments. None of such financial reports, as of their
date, contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary
in order to make the statements therein, in the light of the
circumstances under which they were made, not
misleading.

 

Section
4.                        Covenants.
As long as any portion of this Note remains outstanding, the
Company agrees as follows:

 

(a) the Company shall
not enter into, create, incur, assume or suffer to exist any Lien
on or with respect to any of its assets now owned or hereafter
acquired or any interest therein or any income or profits
therefrom;

 

(b) the Company shall
not amend its constitutional documents, including without
limitation, its certificate of formation, operating agreement or
similar governing documents, in any manner that adversely affects
any rights of the Holder;

 

(c) the Company shall
not enter into, create, incur, assume or suffer to exist any
Indebtedness, other than Indebtedness existing on the date hereof
in the amount in effect on the date hereof that has been previously
disclosed to Holder in writing;

 

(d) the Company shall
comply with its obligations under this Note and the other
Transaction Documents;

 

(e) the Company shall
comply with all applicable laws and duly observe and conform in all
material respects to all valid requirements of governmental
authorities relating to the conduct of its business or to its
properties or assets;

 

(f) the Company shall
not engage in any transactions with any officer, director,
employee, stockholder or any affiliate of the Company, including
any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or
personal property to or from, or otherwise requiring payments to or
from any officer, director or such employee, stockholder or, to the
knowledge of the Company, any entity in which any officer,
director, or any such employee has a substantial interest or is an
officer, director, stockholder, trustee or partner, other than any
transactions in which the terms of such transaction are, in all
material respects, no less favorable to the Company than would
likely apply if such transaction was negotiated on an arms’
length basis between unrelated parties;

 

(g) the Company shall
not declare or pay any dividends or make any distributions to any
holder(s) of equity interests or other equity security of the
Company, or purchase or otherwise acquire for value, directly or
indirectly, any equity interests or other equity security of the
Company; except that Holdings may pay the one-time dividend equal
to the eight percent (8%) Dividend Amount (as defined in the Series
A Certificate) as contemplated by Section 3 of the Series A
Certificate so long as (a) Holdings shall have used its best
efforts to satisfy the Equity Conditions (as defined in the Series
A Certificate), (b) if the Equity Conditions have been satisfied,
such dividend payment shall be paid in shares of common stock of
Holdings and (c) in the event that Holdings has failed to satisfy
the Equity Conditions and such dividend is required the be paid in
cash, the aggregate amount of all such cash distributions shall not
exceed $1,650,000.

 

	
 

	
	
 

	
 

	
 

	
 

 

-5-

 

(h) the Company shall
not (i) merge or consolidate with any other Person (regardless
of which Person is the surviving entity); (ii) sell or dispose of
any of its assets other than immaterial dispositions in the
ordinary course of business and for fair equivalent value or
(iii) in any way or manner alter its organizational structure
or effect a change of entity;

 

(i) the Company shall
promptly pay and discharge, or cause to be paid and discharged,
when due and payable, all lawful taxes, assessments and
governmental charges or levies imposed upon the income, profits,
property or business of the Company; provided, however, that any
such tax, assessment, charge or levy need not be paid if the
validity thereof shall currently be contested in good faith by
appropriate proceedings and if the Company shall have set aside on
its books adequate reserves with respect thereto, and provided,
further, that the Company will pay all such taxes, assessments,
charges or levies forthwith upon the commencement of proceedings to
foreclose any Lien which may have attached as security
therefor;

 

(j) the Company shall
maintain in full force and effect its corporate existence, rights
and franchises and all licenses and other rights to use property
owned or possessed by it and reasonably deemed to be necessary to
the conduct of its business;

 

(k) the Company shall
keep its properties in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time make all
necessary and proper repairs, renewals, replacements, additions and
improvements thereto; and the Company shall at all times comply
with each provision of all leases to which it is a party or under
which it occupies property;

 

(l) the Company shall
not make any payment on any indebtedness owed to officers,
directors or affiliates except with the prior written consent of
the Holder;

 

(m) the Company shall
maintain with financially sound and reputable insurance companies
not affiliates of the Company, insurance with respect to its
properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are
customarily carried under similar circumstances by such other
Persons and providing for not less than 30 days’ prior notice
to the Holder of termination, lapse or cancellation of such
insurance;

 

(n) If, notwithstanding
any prohibitions in this Note on the incurrence of Indebtedness,
(i) any Indebtedness shall be incurred by any Company or any of its
subsidiaries or (ii) any equity interests shall be issued by any
Company or any of its subsidiaries, then, in each case, unless
Holder otherwise provides its prior written consent, Company shall
immediately prepay the obligations owing with respect to this Note
in an amount equal to the net cash proceeds received from such
incurrence or issuance.

 

(o) the Company shall
deliver to the Holder or provide access to the Holder, (i) promptly
upon the Holder’s request, such books, records, financial
statements, tax returns, investment statements, lists of property
and accounts, budgets, forecasts or reports as to the Company as
the Holder may request; and (ii) immediately upon knowledge of
the same, notice of the occurrence of any Event of
Default.

 

Section
5.                        Events
of Default.

 

(a) “Event of Default” means,
wherever used herein, any of the following events (whatever the
reason for such event and whether such event shall be voluntary or
involuntary or effected by operation of law or pursuant to any
judgment, decree or order of any court, or any order, rule or
regulation of any administrative or governmental
body):

 

 

	
 

	
	
 

	
 

	
 

	
 

 

-6-

 

i. any default in the
payment of (A) the principal amount of this Note or
(B) interest or other amounts owing to the Holder on this
Note, as and when the same shall become due and payable (whether on
the Maturity Date or by acceleration or otherwise);

 

ii. the Company shall
fail to observe or perform any other covenant or agreement
contained in this Note or any other Transaction
Document;

 

iii. a
default or event of default shall occur under any of the
Transaction Documents, or the failure or invalidity of any of the
Transaction Documents;

 

iv. any representation
or warranty made in this Note, any other Transaction Documents, any
written statement pursuant hereto or thereto or any other report,
financial statement or certificate made or delivered to the Holder
shall be untrue or incorrect in any respect as of the date when
made or deemed made;

 

v. the Company shall
be subject to a Bankruptcy Event;

 

vi. the Company shall
default on any other obligations under any promissory note,
mortgage, credit agreement or other facility, indenture agreement,
factoring agreement or other instrument under which there may be
issued, or by which there may be secured or evidenced, any
indebtedness for borrowed money or money due under any long term
leasing or factoring arrangement, whether such indebtedness now
exists or shall hereafter be created;

 

vii. any
monetary judgment, writ or similar final process in excess of
$100,000 shall be entered or filed against the Company or its
property or other assets, and such judgment, writ or similar final
process shall remain unvacated, unbonded or unstayed for a period
of 10 calendar days; or

 

viii. a
Material Adverse Effect occurs.

 

(b) Remedies Upon Event of Default.
If any Event of Default occurs, the entire unpaid principal amount
of this Note plus all accrued interest and other amounts owing
under this Note through the date of acceleration, shall become, at
the Holder’s election in its sole and absolute discretion,
immediately due and payable upon written notice to the Company,
except that, with respect to a default under Section 5(a)(v)
above, no such notice shall be required and such acceleration shall
be automatic and immediate. In connection with such acceleration
described herein, the Holder need not provide, and the Company
hereby waives, any presentment, demand or protest of any kind, and
the Holder may immediately and without expiration of any grace
period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law and the
Transaction Documents. Such acceleration may be rescinded and
annulled by the Holder at any time prior to payment hereunder and
the Holder shall have all rights as the holder of the Note until
such time, if any, as the Holder receives full payment pursuant to
this Section 5(b). No such rescission or annulment shall
affect any subsequent Event of Default or impair any right
consequent thereon.

 

Section
6.                        Miscellaneous.

 

(a) Notices. Any and all notices or
other communications or deliveries to be provided by the Holder to
the Company hereunder shall be delivered to the address of the
Company set forth in the first paragraph of this Note. Notices to
the Holder shall be delivered to its address at 2525 Main Street,
Suite 400, Irvine CA 92614 or such other address as may be
designated by the Holder from time to time.

 

	
 

	
	
 

	
 

	
 

	
 

 

-7-

 

(b) Absolute Obligation. No
provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal
of, and accrued interest, as applicable, on this Note at the time,
place, and rate, and in the coin or currency, herein prescribed.
This Note is a direct, unconditional and secured debt obligation of
the Company. All payments to be made by the Company hereunder and
under the other Transaction Documents shall be made, in lawful
money of the United States of America, and without condition or
deduction for any counterclaim, defense, recoupment or
setoff.

 

(c) Lost or Mutilated Note. If this
Note shall be mutilated, lost, stolen or destroyed, then the
Company shall execute and deliver, in exchange and substitution for
and upon cancellation of a mutilated Note, or in lieu of or in
substitution for a lost, stolen or destroyed Note, a new Note for
the principal amount of this Note so mutilated, lost, stolen or
destroyed.

 

(d) Governing Law. All questions
concerning the construction, validity, enforcement and
interpretation of this Note or any other Transaction Document shall
be governed by and construed and enforced in accordance with the
internal laws of the State of California, without regard to the
principles of conflict of laws thereof. The Company hereby agrees
that it will commence any and all legal proceedings under, with
respect to or related to any of the Transaction Documents (whether
brought against a party hereto or its respective affiliates,
directors, officers, members, employees or agents) only in the
state and federal courts sitting in the County of Orange, State of
California (the “California Courts”). The
Company hereby irrevocably submits to the nonexclusive jurisdiction
of the California Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby
irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the
jurisdiction of any such California Court, or that such California
Court is an improper or inconvenient venue for such proceeding.
Each party hereby irrevocably waives personal service of process
and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Note
and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in
any manner permitted by law. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS NOTE, THE OTHER TRANSACTION DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. If either party shall
commence an action or proceeding to enforce any provisions of this
Note, then the prevailing party in such action or proceeding shall
be reimbursed by the other party for its reasonable
attorneys’ fees and other reasonable costs and expenses
incurred with the investigation, preparation and prosecution of
such action or proceeding. Nothing in this Note or any other
Transaction Document shall affect any right that the Holder may
otherwise have to bring any action or proceeding relating to this
Note or any other Transaction Document against the Company or its
properties in the courts of any jurisdiction.

 

(e) Costs and Expenses. The Company
agrees to pay all costs and expenses, including the fees and
expenses of any attorneys, accountants and other experts retained
by the Holder, which are expended or incurred by the Holder in
connection with (i) the preparation, negotiation, modification
and/or enforcement of this Note or any other Transaction Document,
or the collection of any sums due hereunder or thereunder, whether
or not suit is commenced; (ii) any actions for declaratory relief
in any way related to this Note or any other Transaction Document;
(iii) the protection or preservation of any rights of the
Holder under this Note or any other Transaction Document; (iv) any
actions taken by the Holder in negotiating any amendment, waiver,
consent or release of or under this Note or any other Transaction
Document; (v) any actions taken in reviewing the Holder’s
financial affairs if an Event of Default has occurred or the Holder
has determined in good faith that an Event of Default may likely
occur; (vi) the Holder’s participation in any refinancing,
restructuring, bankruptcy or insolvency proceeding involving the
Company; (vii) verifying, maintaining, or perfecting any security
interest or other lien granted to the Holder in any collateral;
(viii) any effort by the Holder to protect, assemble, complete,
collect, sell, liquidate or otherwise dispose of any collateral,
including in connection with any action or proceeding; or (ix) any
refinancing or restructuring of this Note, including, without
limitation, any restructuring in the nature of a “work
out” or in any insolvency or bankruptcy proceeding. All sums
due to the Holder pursuant to this clause (f) shall be due and
payable immediately on demand and shall bear interest at the same
rate as then applicable to the Principal Amount.

 

	
 

	
	
 

	
 

	
 

	
 

 

-8-

 

(f) Waiver. Any waiver by the
Holder of a breach of any provision of this Note or any other
Transaction Document shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of
any other provision of this Note or any other Transaction Document.
The failure of the Holder to insist upon strict adherence to any
term of this Note or any other Transaction Document on one or more
occasions shall not be considered a waiver or deprive that party of
the right thereafter to insist upon strict adherence to that term
or any other term of this Note or such Transaction Document, as
applicable. Any waiver by the Holder must be in
writing.

 

(g) Severability. If any provision
of this Note or any other Transaction Document is invalid, illegal
or unenforceable, the balance of this Note or other Transaction
Document, as applicable, shall remain in effect, and if any
provision is inapplicable to any person or circumstance, it shall
nevertheless remain applicable to all other persons and
circumstances.

 

(h) Next Business Day. Whenever any
payment or other obligation hereunder shall be due on a day other
than a Business Day, such payment shall be made on the next
succeeding Business Day.

 

(i) Headings. The headings
contained herein are for convenience only, do not constitute a part
of this Note and shall not be deemed to limit or affect any of the
provisions hereof.

 

(j) Usury.

 

i. To the extent it
may lawfully do so, the Company hereby agrees not to insist upon or
plead or in any manner whatsoever claim, and will resist any and
all efforts to be compelled to take the benefit or advantage of,
usury laws wherever enacted, now or at any time hereafter in force,
in connection with any claim, action or proceeding that may be
brought by the Holder in order to enforce any right or remedy under
any Transaction Document; provided that, notwithstanding any
provision to the contrary contained in any Transaction Document, it
is expressly agreed and provided that the total liability of the
Company under the Transaction Documents for payments in the nature
of interest shall not exceed the maximum lawful rate authorized
under applicable law (taking into account any usury exception or
exemption available to the Holder, the “Maximum Rate”), and,
without limiting the foregoing, in no event shall any rate of
interest or default interest, or both of them, when aggregated with
any other sums in the nature of interest that the Company may be
obligated to pay under the Transaction Documents exceed such
Maximum Rate. It is agreed that if the maximum contract rate of
interest allowed by law and applicable to the Transaction Documents
is increased or decreased by statute or any official governmental
action subsequent to the date hereof, the new maximum contract rate
of interest allowed by law will be the Maximum Rate applicable to
the Transaction Documents from the effective date forward, unless
such application is precluded by applicable law. If under any
circumstances whatsoever, interest in excess of the Maximum Rate is
paid by the Company to the Holder with respect to indebtedness
evidenced by the Transaction Documents, such excess shall be
applied by the Holder to the unpaid principal balance of any such
indebtedness or be refunded to the Company, the manner of handling
such excess to be at the Holder’s election.

 

ii. Without limiting
the generality of; the foregoing, it is the intent of Holder and
Company that the loan evidenced by this Note comply with the usury
exemption set forth in California Corporations Code §
25118(b). In accordance with such Section, Company hereby
represents and warrants to Holder the following:

 

(1)

Holder and Company,
or any of their respective officers, directors, members, managers
or other controlling persons, have a preexisting personal or
business relationship.

 

(2)

Holder and Company,
by reason of their own business and financial experience or that of
their professional advisers, have the capacity to protect their own
interests in connection with the transaction.

 

 

	
 

	
	
 

	
 

	
 

	
 

 

-9-

 

(k) Indemnification. The Company
will indemnify and hold the Holder harmless from any loss,
liability, damages, judgments, and costs of any kind
(“Liabilities”) relating to
or arising directly or indirectly out of (i) this Note or any
other Transaction Document, (ii) any credit extended or
committed by the Holder to the Company hereunder, and
(iii) any litigation or proceeding related to or arising out
of this Note, any such Transaction, Document, or any such credit;
provided, however that the Company shall have no obligation to
indemnify the Holder for any Liabilities that have arisen as a
result of the Holder’s gross negligence or willful misconduct
as determined by a final non-appealable judgment of a court of
competent jurisdiction.. This indemnity includes but is not limited
to attorneys’ fees and expenses. This indemnity extends to
the Holder, its affiliates, partners, directors, officers,
employees, agents, successors, attorneys, and assigns. This
indemnity will survive repayment of the Company’s obligations
to the Holder. All sums due to the Holder hereunder shall be due
and payable immediately without demand and shall bear interest at
the same rate as then applicable to the Principal
Amount.

 

(l) Joint and Several Liability.
Each of Holdings, Chalk Dust and Don Polly acknowledge that each of
the undersigned are parties to this note as the "Company" as joint
and several co-borrowers hereunder. Any references in this Note to
the "Company" shall refer to any of Holdings, Chalk Dust or Don
Polly, or both such Persons as the context may require. Each of
Holdings, Chalk Dust and Don Polly accept joint and several
liability for the payment and performance of all of the obligations
of the Company hereunder, and each of such obligations constitute
the absolute and unconditional full recourse obligations of each
such Person enforceable against each such Person to the full extent
of its properties and assets. Each of Holdings, Chalk Dust and Don
Polly hereby waive, to the fullest extent permitted by law, any and
all defenses or benefits that may be derived from or afforded by
applicable law limiting the liability of or exonerating guarantors
or sureties (including co-borrowers to the extent applicable),
including , including but not limited to any rights and defenses
that are or may become available to any such Person by reason of
Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code.

 

(m) Successors and Assigns; Assignments
and Participations. This Note shall be binding upon and
inure to the benefit of the Company and the Holder and their
respective successors and assigns, except that the Company may not
assign or transfer any of its rights or obligations under this Note
or any other Transaction Document without the express written
consent of the Holder.

 

(n) Counterparts; Electronic
Execution. This Note may be executed in any number of
counterparts and by different parties on separate counterparts,
each of which, when executed and delivered, shall be deemed to be
an original, and all of which, when taken together, shall
constitute but one and the same Note. Delivery of an executed
counterpart of this Note by telefacsimile or other electronic
method of transmission (including without limitation a PDF
attachment) shall be equally as effective as delivery of an
original executed counterpart of this Note. The foregoing shall
apply to each other Transaction Document mutatis mutandis.

 

	
 

	
	
 

	
 

	
 

	
 

 

-10-

 

 

IN
WITNESS WHEREOF, the Company has caused this Note to be duly
executed by its duly authorized officer as of the date first above
indicated.

 

	
 

	

"Company"

 

CHARLIE'S
HOLDINGS, INC.,

a
Nevada corporation

 

 

By:
Brandon Stump
                                                                

Name:
Brandon
Stump
                                                                

Title:
Chief Executive Officer 
                                                                

 

 

CHARLIE'S
CHALK DUST, LLC,

a
Delaware limited liability company

 

 

By:
Brandon Stump
                                                                

Name:
Brandon
Stump
                                                                

Title:
Chief Executive Office

                                                                  

 

DON
POLLY LLC,

a
Nevada limited liability company

 

 

By:
Brandon Stump
                                                                

Name:
Brandon
Stump
                                                                

Title:
Chief Executive Officer

                                                           

 

 

AGREED AND ACKNOWLEDGED:

 

RED
BEARD HOLDINGS, LLC,

a
Delaware limited liability company

 

 

 

By: Vinny Smith

Name: 
Vinny
Smith

Title: General
Partner

 

 

 

 

 

	
 

	

	
 

	
 

	
 

	
 

 

-11-

 

EXHIBIT
A

 

(Certain
Defined Terms)

 

“Bankruptcy Event” means
any of the following events: (a) the Company commences a case
or other proceeding under any Debtor Relief Laws; (b) there is
commenced against the Company any case or proceeding under Debtor
Relief Laws that is not dismissed within 30 calendar days after
commencement; (c) the Company is adjudicated insolvent or
bankrupt or any order of relief or other order approving any such
case or proceeding is entered; (d) the Company suffers any
appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 30
calendar days after such appointment; (e) the Company makes a
general assignment for the benefit of creditors; (f) the
Company calls a meeting of its creditors with a view to arranging a
composition, adjustment or restructuring of its debts; or
(g) the Company, by any act or failure to act, expressly
indicates its consent to, approval of or acquiescence in any of the
foregoing or takes any corporate or other action for the purpose of
effecting any of the foregoing.

 

“Business Day” means any
day other than a Saturday, Sunday or other day on which commercial
banks are authorized to close under the laws of, or are in fact
closed in, Orange County, California.

 

“Debtor Relief Laws” means
the Bankruptcy Code of the United States, and all other
liquidation, conservatorship, bankruptcy, assignment for the
benefit of creditors, moratorium, rearrangement, receivership,
insolvency, reorganization, or similar debtor relief laws of the
United States or other applicable jurisdictions from time to time
in effect and affecting the rights of creditors
generally.

 

“Indebtedness” means
(a) all obligations for borrowed money; (b) all
obligations evidenced by bonds, debentures, notes, or other similar
instruments and all reimbursement or other obligations in respect
of letters of credit, bankers acceptances, current swap agreements,
interest rate hedging agreements, interest rate swaps, or other
financial products; (c) all capital lease obligations;
(d) all obligations or liabilities secured by a lien or
encumbrance on any asset of the Company, irrespective of whether
such obligation or liability is assumed; (e) all obligations
for the deferred purchase price of assets; (f) all synthetic
leases; and (g) any obligation guaranteeing or intended to
guarantee (whether directly or indirectly guaranteed, endorsed,
co-made, discounted or sold with recourse) any of the foregoing
obligations of any other person; provided, however, Indebtedness
shall not include (x) usual and customary trade debt incurred
in the ordinary course of business and (y) endorsements for
collection or deposit in the ordinary course of
business.

 

“Lien” means any mortgage,
pledge, hypothecation, assignment, deposit arrangement,
encumbrance, lien (statutory or other), charge, or preference,
priority or other security interest or preferential arrangement in
the nature of a security interest of any kind or nature whatsoever
(including any conditional sale or other title retention agreement,
any easement, right of way or other encumbrance on title to real
property, and any financing lease having substantially the same
economic effect as any of the foregoing).

 

"Liquidity Event" means any of
the following, in each case with respect to either Company (or
both) or any of their respective subsidiaries and/or affiliates:
(a) the raising of any additional capital by any Company, whether
in the form of debt, equity or otherwise, in which Company receives
aggregate net cash proceeds therefrom of at least $1,000,000,
including, without limitation, the anticipated investment, whether
in the form of equity, debt or otherwise, by United Capital
Partners LLC and/or any of its affiliates, (b) any merger or
consolidation in which any Company is a constituent party, or (c)
the sale, transfer, pledge or other disposition of any equity
interests of any Company and/or any of their respective
subsidiaries and/or affiliates, or (d) the sale, lease, transfer,
exclusive license or other disposition, in a single transaction or
series of related transactions, by the Company or any subsidiary or
affiliate of the Company of all or substantially all the assets of
the Company and its subsidiaries and/or affiliates.

 

	
 

	
	
 

	
 

	
 

	
 

 

-12-

 

“Material Adverse Effect”
means (a) a material adverse change in, or a material adverse
effect upon, the operations, business, properties, liabilities
(actual or contingent), condition (financial or otherwise) or
prospects of the Company; (b) a material impairment of the rights
and remedies of the Holder under any Transaction Document or of the
ability of Company to perform its obligations under any Transaction
Document; (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against the Company of
any Transaction Document; or (d) the issuance by any third party
lender to the Company of a notice of default on
Indebtedness.

 

"Maturity Date" means the
earlier to occur of (a) a Liquidity Event or (b) October 1,
2020.

 

“Note” means this Secured
Promissory Note, as amended, restated, supplemented, extended or
otherwise modified from time to time.

 

“Person” means any
individual, firm, corporation, partnership, trust, incorporated or
unincorporated association, joint venture, joint stock company,
limited liability company, governmental authority or other entity
of any kind.

 

“Security Agreement” means
the Security Agreement of even date herewith made by Company in
favor of the Holder, as amended, restated, supplemented, extended
or otherwise modified from time to time.

 

"Series A Certificate" means
that certain Certificate of Designations, Preferences and Rights of
the Series A Convertible Preferred Stock of True Drinks Holdings,
Inc. (now known as Charlie's Holdings, Inc.) as in effect as of the
date of this Agreement.

 

“Transaction Documents”
means this Note, the Security Agreement, each guaranty entered into
in connection herewith, if any, and each other instrument, document
or agreement now or hereafter executed by the Company in favor of
the Holder in connection with this Note, in each case as amended,
restated, supplemented, extended or otherwise modified from time to
time.

 

 

 

-13-

 

 

EXHIBIT B

SECURITY
AGREEMENT

 

THIS SECURITY
AGREEMENT (as amended, restated, supplemented, extended or
otherwise modified from time to time, this "Agreement") dated as
of April 8, 2020, is jointly and severally entered into by
Charlie's Holdings, Inc., a Nevada corporation ("Holdings"),
Charlie's Chalk Dust, LLC, a Delaware limited liability company
("Chalk
Dust"), and Don Polly LLC, a Nevada limited liability
company ("Don
Polly" and together with Holdings and Chalk Dust,
individually and collectively, the "Debtor"), as debtor
in favor of Red Beard Holdings, LLC, a Delaware limited liability
Company ("Red
Beard" and together with its successors and assigns,
"Secured
Party").

 

WHEREAS,
concurrently herewith, Debtor is issuing that certain Secured
Promissory Note of even date herewith in favor of Secured Party (as
amended, restated, supplemented, extended or otherwise modified
from time to time, the "Red Beard
Note").

 

WHEREAS, as a
condition to the obligation of Secured Party to enter into the Red
Beard Note and to loan and advance funds thereunder pursuant to the
Red Beard Note, Secured Party has required Debtor to enter into
this Agreement, and Debtor to grant the security interests
described herein in the Collateral in favor of Secured
Party.

 

NOW THEREFORE, in
consideration of the premises and mutual covenants contained herein
and for other good, valuable, and binding consideration, the
receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound hereby, agree as
follows:

 

1. Definitions.

 

(a)     
Capitalized terms
used herein and not otherwise defined herein shall have the
meanings provided in the Red Beard Note. This Agreement is the
"Security Agreement" referred to in the Red Beard Note. This
Agreement is one of the "Transaction Documents" referred to in the
Red Beard Note. To the extent that any terms or concepts defined or
used herein are defined or used in the UCC (as defined below), such
terms or concepts shall be interpreted for purposes hereof in a
manner that is consistent with such definition or use in the
UCC.

 

(b) The following terms
shall have the meanings set forth below:

 

"Collateral"
shall mean all right, title, and interest of the Debtor in and to
all of the following property of the Debtor, whether now owned or
hereafter acquired and whether now existing or hereafter coming
into existence:

 

(i)           Accounts;

 

(ii)           Chattel
Paper and rights to receive monies included thereby;

 

(iii)           Commercial
Tort Claims;

 

(iv)           Deposit
Accounts;

 

(v)           Documents;

 

(vi)           Equity
Collateral;

 

(vii)           General
Intangibles;

 

(viii)           Goods,
including Inventory and Equipment;

 

(ix)           Instruments
and rights to receive monies included thereby;

 

 

 

 

 

-14-

 

 

 

(x)           Intellectual
Property;

 

(xi)           Investment
Property, including Commodity Accounts and Commodity
Contracts;

 

(xii)           Letter-of-Credit
Rights;

 

(xiii)           Notes;

 

(xiv)           other
tangible and intangible personal property and Fixtures of the
Debtor;

 

(xv)           to
the extent related to any property described in the clauses (i)
through (xiv), all books, correspondence, loan files, records,
invoices, and other papers, including without limitation all tapes,
cards, computer runs, and other papers and documents in the
possession or under the control of the Debtor or any computer
service company from time to time acting for the Debtor;
and

 

(xvi)           cash
and non-cash Proceeds of any and all of the foregoing.

 

"Copyright
Collateral" shall
mean all Copyrights, whether now owned or hereafter acquired by the
Debtor.

 

"Copyrights"
shall mean all copyrights, copyright registrations, and
applications for copyright registrations, including, without
limitation, all renewals and extensions thereof, the right to
recover for all past, present, and future infringements thereof,
and all other rights of any kind whatsoever accruing thereunder or
pertaining thereto.

 

"Equity
Collateral" shall
mean Pledged Equity and Pledged Equity Proceeds.

 

"Intellectual
Property" shall mean,
collectively, all Copyright Collateral, all Patent Collateral, and
all Trademark Collateral, together with (a) all inventions,
processes, production methods, proprietary information, know-how,
and trade secrets; (b) all licenses or user or other
agreements granted to the Debtor with respect to any of the
foregoing, in each case whether now or hereafter owned or used;
(c) all information, customer lists, identification of
suppliers, data, plans, blueprints, specifications, designs,
drawings, recorded knowledge, surveys, engineering reports, test
reports, manuals, materials standards, processing standards,
performance standards, catalogs, computer and automatic machinery
software and programs, splash screens, films, masters, and artwork;
(d) all field repair data, sales data, and other information
relating to sales or service of products now or hereafter
manufactured; (e) all accounting information and all media in
which or on which any information or knowledge or data or records
may be recorded or stored and all computer programs used for the
compilation or printout of such information, knowledge, records, or
data; and (f) all licenses, consents, permits, variances,
certifications, and approvals of governmental agencies now or
hereafter held by the Debtor.

 

"Lien" shall mean a pledge, assignment, lien,
charge, mortgage, encumbrance, or other security interest obtained
under this Agreement or under any other agreement or instrument
with respect to any present or future assets, property, contract
rights, or revenues in order to secure the payment of indebtedness
of the party referred to in the context in which the term is
used.

 

"Motor
Vehicles" shall mean
motor vehicles, tractors, trailers, and other like property,
whether or not the title thereto is governed by a certificate of
title or ownership.

 

"Notes" shall mean all Promissory Notes or
other debt instruments (including, without limitation, bonds and
debentures of any nature whatsoever) from time to time issued to,
or held by, the Debtor.

 

 

 

-15-

 

 

 

"Obligations"
shall mean (i) (x) the principal of and any interest on the Red
Beard Note (including, without limitation, any further advances),
and (y) all other obligations and liabilities of the Debtor,
whether now existing or hereafter incurred, under, arising out of,
or in connection with, the Red Beard Note and the due performance
and compliance by the Debtor with all of the terms, conditions, and
agreements contained in the Red Beard Note; (ii) any and all sums
advanced by the Secured Party in order to preserve the
Collateral or preserve its Lien and security interest in the
Collateral; (iii) in the event of any proceeding for the collection
or enforcement of any indebtedness, obligations, or liabilities
referred to in clauses (i) and (ii) above, all costs and expenses
of any exercise by the Secured Party of its rights hereunder,
together with attorneys' fees and court costs; and (iv) to the
extent not otherwise included in clauses (i), (ii), or (iii) above,
the Debtor's obligations set forth in this Agreement, including,
without limitation, the Debtor's obligations set forth in
Section
21.

 

"Patent
Collateral" shall
mean all Patents, whether now owned or hereafter acquired by the
Debtor.

 

"Patents" shall mean all patents and patent
applications, including, without limitation, the inventions and
improvements described and claimed therein together with the
reissues, divisions, continuations, renewals, extensions, and
continuations-in-part thereof, all income, royalties, damages, and
payments now or hereafter due and/or payable under and with respect
thereto, including, without limitation, damages and payments for
past or future infringements thereof, the right to sue for past,
present, and future infringements thereof, and all rights
corresponding thereto throughout the world.

 

"Pledged
Equity" shall mean
(i) the shares of stock of, or partnership and other ownership
interest in, any entity, and any and all equity interests now or
hereafter issued in substitution, exchange or replacement therefor
or with respect thereto, and (ii) all ownership interests of any
class or character of a successor entity formed by or resulting
from a consolidation or merger in which any such issuer is not the
surviving entity; in each case, whether now or hereafter owned by
the Debtor, together with any certificates evidencing any of the
foregoing.

 

"Pledged Equity
Proceeds" shall mean
all shares, securities, moneys, or property representing a dividend
on any of the Pledged Equity, or representing a distribution or
return of capital upon or in respect of the Pledged Equity, or
resulting from a split-up, revision, reclassification, or other
like change of the Pledged Equity or otherwise received in exchange
therefor, and any subscription warrants, rights, or options issued
to the holders of, or otherwise in respect of, the Pledged
Equity.

 

"Trademark
Collateral" shall
mean all Trademarks, whether now owned or hereafter acquired by the
Debtor.

 

"Trademarks"
shall mean all trade names, trademarks and service marks, logos,
domain names, trademark and service mark registrations, and
applications for trademark and service mark registrations,
including, without limitation, all renewals of trademark and
service mark registrations, all rights corresponding thereto
throughout the world, the right to recover for all past, present,
and future infringements thereof, all other rights of any kind
whatsoever accruing thereunder or pertaining thereto, together, in
each case, with the product lines and goodwill of the business
connected with the use of, and symbolized by, each such trade name,
trademark, and service mark.

 

"UCC" shall mean the Uniform Commercial Code
as in effect in the State of California from time to
time.

 

2.  Grant of Liens

 

. As security for
the due and punctual payment and performance in full of all
Obligations (whether at the stated maturity, by acceleration, or
otherwise and whether now owing or incurred in the future), the
Debtor hereby pledges, assigns, charges, delivers, and grants to
the Secured Party a continuing perfected first priority security interest in and a general
Lien upon all of the Debtor's right, title, and interest in and to
the Collateral and all additions thereto and substitutions
therefor, whether heretofore, now or hereafter received by or
delivered or transferred to the Secured
Party hereunder.

 

 

 

-16-

 

 

 

3. Continuing Security Interest.
This Agreement creates an assignment, pledge, charge, continuing
perfected first priority security interest in, and general
Lien upon, the Collateral and shall (a) remain in full force and
effect until all Obligations have been indefeasibly paid in full in
cash, (b) be binding upon the Debtor and its successors, permitted
transferees, and permitted assigns, and (c) inure, together with
the rights and remedies of the Secured Party hereunder, to the
benefit of the Secured Party and its successors, transferees,
and assigns.

 

4. Debtor
Remains Liable

 

. Anything herein
to the contrary notwithstanding, (a) the Debtor shall remain liable
under any agreements which have been (in whole or in part) pledged
or assigned herein to perform all of its duties and obligations
thereunder to the same extent as if this Agreement had not been
executed; (b) the exercise by the Secured Party of any of the
rights hereunder shall not release the Debtor from any of its
duties or obligations under any such agreements; and (c) the
Secured Party shall not have any obligation or liability under
any such agreements by reason of this Agreement, nor shall the
Secured Party be obligated to perform any of the obligations
or duties of the Debtor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.

 

5. Delivery
and Perfection

 

. The Debtor hereby
authorizes the Secured Party to file one or more financing or
continuation statements, and amendments thereto, relating to all or
any part of the Collateral, and agrees to take all such other
actions and to execute and deliver and file or cause to be filed
such other instruments or documents, as the Secured Party may
reasonably require in order to establish and maintain a perfected,
valid, and continuing security interest and Lien in the Collateral
in accordance with this Agreement and the UCC and other applicable
law.

 

(a) The Debtor shall,
at the request of the Secured Party:

 

(i) immediately deliver
any and all Documents, Instruments, and Chattel Paper (including,
without limitation, any Certificates of Title) evidencing or
relating to the Collateral to the Secured Party at the time and
place and manner specified in the Secured Party's
request;

 

(ii) immediately execute
(if applicable) and deliver to the Secured Party (or file or
record in such offices as the Secured Party may deem necessary
or appropriate) any and all financing and continuation statements,
other agreements, instruments, or other documents or amendments
thereto, and perform any acts which may be necessary or desirable
(A) to create, perfect, preserve, or otherwise protect the security
interest and Liens granted herein or (B) to enable the Secured
Party to exercise and enforce its rights
hereunder;

 

(iii) with respect to any
Certificated Security not otherwise credited to a Securities
Account, the Debtor shall immediately effect transfer thereof to
the Secured Party (A) by physical delivery of such
Certificated Security to the Secured Party endorsed to the
Secured Party or its nominee or in blank or (B) in the case of
a Certificated Security in registered form, by physical delivery of
such Certificated Security to the Secured Party specially
endorsed to the Secured Party or its nominee and thereafter
reregistered in the name of the Secured Party or their
nominee;

 

(iv) with respect to any
Uncertificated Security not otherwise credited to a Securities
Account, the Debtor shall immediately (A) effect transfer thereof
to the Secured Party by registration thereof on the books and
records of the issuer in the name of the Secured Party or its
nominee or (B) obtain the agreement of the issuer of such
Uncertificated Securities that it will comply with instructions
originated by the Secured Party without further consent by the
registered owner, through a written agreement in form and substance
satisfactory to the Secured Party; and

 

 

 

-17-

 

 

 

(v) mark all
Certificates of Title in the manner specified in a written notice
of the Secured Party to the Debtor requesting such marking, to
evidence the fact that such Certificates of Title are subject to
the security interest and Lien of the Secured Party granted
herein.

 

(b) Upon the request of
the Secured Party, the Debtor agrees immediately to deliver to the
Secured Party, appropriately endorsed to the order of the Secured
Party, any Notes, trade acceptance, Chattel Paper, or other
Instrument in which a security interest must be perfected by
delivery or transfer of such Collateral to a secured party, which
are acquired by the Debtor from time to time.

 

(c) Notwithstanding
Section 9207 of the UCC, the Secured Party may hold as additional
security any Proceeds, including money and funds, received from the
Collateral, all of which shall constitute Collateral hereunder, and
the Secured Party shall not be required to apply such money or
funds to reduce the Obligations other than as expressly set forth
herein.

 

6. Proceeds
of Sale

 

. Nothing contained
in this Agreement shall limit or restrict in any way the Secured
Party's right to receive Proceeds of the Collateral in any form in
accordance with the provisions of this Agreement. All Proceeds that
are received by the Debtor contrary to the provisions of this
Agreement shall be received in trust for the benefit of the Secured
Party, shall be segregated from other property or funds of the
Debtor and shall be forthwith paid over to the Secured
Party as Collateral in the same form as so received (with any
necessary endorsement, document or instrument of
transfer).

 

7. Records
and Information

 

. The Debtor agrees
to keep, at its office set forth in Section 11(d), its records
concerning the Collateral. The Debtor agrees to promptly furnish to
the Secured Party such information concerning itself, the
Collateral, and any Account Debtor as the Secured Party may
request at any time and from time to time.

 

8. Inspection

 

. The Debtor agrees
upon notice provided by the Secured Party, to permit the Secured
Party, through its officers and agents, to examine and inspect the
Collateral and all records pertaining thereto, and to make extracts
from such records as the Secured Party may
require.

 

9. Use
of Collateral

 

. Except upon the
occurrence and during the continuance of any Event of Default, the
Debtor may in the ordinary course of its business use, consume,
exhibit, demonstrate, sell, lease, or otherwise dispose of its
Inventory in carrying on its businesses substantially in the same
manner as now conducted; provided, however, that a sale,
disposition or transfer in the ordinary course of business shall
not include any sale, disposition or transfer in satisfaction,
partial or complete, of a debt owed by the Debtor or any sale,
transfer or disposition to any shareholder or affiliate of the
Debtor; and provided further that any such sale,
disposition or transfer shall be for fair equivalent value and
shall not be unlawful or inconsistent with the terms of this
Agreement or of any policy of insurance covering such
Collateral.

 

10. No
Disposition

 

. The Debtor
covenants and agrees that it will not sell, assign, transfer,
exchange, or otherwise dispose of, or grant any option with respect
to, any of the Collateral, except as provided for in Section 9 hereof, nor will it
create, incur, or permit to exist any Lien on or with respect to
any of the Collateral, any interest therein, or any Proceeds
thereof.

 

11. Representations
and Warranties

 

. The Debtor
represents, warrants and covenants to the Secured
Party throughout the term of this Agreement that:

 

(a) The Debtor is and
will be the sole legal and beneficial owner of all of the
Collateral now owned or hereafter acquired free and clear of any
Lien, security interest, assignment, option, or other charge or
encumbrance;

 

 

 

-18-

 

 

 

(b) This Agreement has
been duly and validly authorized by the Debtor and executed and
delivered by the Debtor and constitutes the legal, valid, and
binding obligation of the Debtor, enforceable against the Debtor in
accordance with its terms (subject to applicable bankruptcy,
reorganization, insolvency, moratorium, or similar laws affecting
creditors' rights generally) and, subject to the performance of the
relevant procedures as specified in Section 5 herein with respect
to such Collateral, creates a valid, binding, enforceable, and
first priority perfected security interest in and general first
Lien upon all of the Collateral, and the Debtor is duly authorized
to make all filings and take all other actions necessary or
desirable to perfect and to continue perfected such security
interest;

 

(c) As of the date
hereof and on the date of delivery or transfer to the Secured
Party of any Collateral under this Agreement, the Debtor has
good and marketable title to the Collateral;

 

(d) The office where
the Debtor maintains all records relating to the Collateral is
located at:

 

	
 

	
1007 Brioso
Drive

Costa Mesa CA
92627

 

(e) Holdings is a
corporation duly incorporated and validly existing under the laws
of the State of Nevada. Chalk Dust is a limited liability company
duly organized and validly existing under the laws of the State of
Delaware. Don Polly is a limited liability company duly organized
and validly existing under the laws of the State of
Nevada.

 

(f) The Debtor's exact
legal name as that name appears on the Debtor's Certificate of
Formation or equivalent formation document is exactly as set forth
in the signature page for Debtor below.

 

(g) All Pledged Equity
in which the Debtor currently has or shall hereafter acquire an
interest is and will be, as applicable, duly authorized, validly
existing, fully paid, and non-assessable (in the case of any equity
interest in a corporation) and duly issued and outstanding (in the
case of any equity interest in any other entity), and none of such
Pledged Equity is or will be subject to any contractual
restriction, or any restriction under the charter, by-laws,
partnership agreement, or other organizational document of the
respective issuer, upon the transfer of such Pledged
Equity;

 

(h) Except pursuant to
licenses and other user agreements entered into by the Debtor in
the ordinary course of business, the Debtor owns and possesses the
right to use, and has done nothing to authorize or enable any other
Person to use, any Copyright, Patent or Trademark owned or used by
the Debtor on the date hereof, and all registrations therefor are
valid and in full force and effect; and the Debtor owns or
possesses the right to use all such Copyrights, Patents and
Trademarks;

 

(i) To the Debtor's
knowledge, (i) there is no violation by others of any right of
the Debtor with respect to any Copyright, Patent or Trademark of
Debtor and (ii) the Debtor is not infringing in any respect
upon any Copyright, Patent or Trademark of any other Person; and no
proceedings have been instituted or are pending against the Debtor
or, to the Debtor's knowledge, threatened, and no claim against the
Debtor has been received by the Debtor, and

 

(j) To the best of
Debtor's knowledge, there are no actions, suits, proceedings or
investigations pending or threatened in writing against Debtor
before any governmental authority which could reasonably be
expected to cause any portion of the Intellectual Property to be
adjudged invalid or unenforceable, in whole or in
part.

 

 

-19-

 

 

 

12. Covenants.

 

(a)            The Debtor
shall:

 

(i) Maintain, or cause
to be maintained, all items of the Collateral in good condition and
repair, ordinary wear and tear excepted in the case of Equipment,
and pay, or cause to be paid, the costs of repairs to or
maintenance of that Collateral which is of a type that could be
repaired or maintained;

 

(ii) Take all steps to
preserve and protect the Collateral, including, with respect to the
Intellectual Property, the filing of any renewal affidavits and
applications;

 

(iii) Not use any
Collateral in violation of applicable laws or any applicable policy
of insurance;

 

(iv) Pay or cause to be
paid when due all taxes, assessments, and other charges relating to
the Collateral or this Agreement and reimburse the Secured
Party for all costs of and fees incurred in connection with
any filing of the documents and instruments referred to in
Section
5;

 

(v) Not change its: (a)
name or the name under which it does business; (b) chief executive
office; (c) type of organization; (d) jurisdiction of
incorporation; or (e) other legal structure without at least 30
day's prior written notice to the Secured Party. Prior to
effectuating any change described in the preceding sentence, the
Debtor shall take or cause to be taken all actions deemed by the
Secured Party to be necessary or desirable to prevent any
financing or continuation statement from becoming seriously
misleading or rendered ineffective, or the security interests
granted herein from becoming unperfected or the relative priority
thereof otherwise impaired, as a result of such removal or
change;

 

(vi) Perform and observe
all the terms and provisions of any agreement for the sale or lease
of goods, or any agreement for the rendering of services, giving
rise to an Account to be performed or observed by it, maintain any
such agreement in full force and effect, enforce any such agreement
in accordance with its terms, and take all such action to such end
as may be from time to time reasonably requested by the Secured
Party;

 

(vii) Render any
assistance, as Secured Party may solely determine is necessary, to
Secured Party in any proceeding before the USPTO, the USCO, any
federal or state court, or any similar office or agency in the
United States of America, or any State therein, to maintain any
Patent Collateral, Trademark Collateral or Copyright Collateral and
to protect Secured Party's security interest therein, including,
without limitation, filing of renewals, affidavits of use,
affidavits of incontestability and opposition, interference, and
cancellation proceedings;

 

(viii) Immediately notify
Secured Party if Debtor learns of any use by any Person of any term
or design likely to cause confusion with any of the Trademark
Collateral, or of any use by any Person of any other process or
product which infringes upon any of the Trademark Collateral in a
manner which is adverse to Debtor's business, and if requested by
Secured Party, Debtor, at its expense, shall join with Secured
Party in such action as Secured Party in Secured Party's discretion
may deem advisable for the protection of Secured Party's interest
in and to the Trademark Collateral;

 

 

 

-20-

 

 

 

(ix) Assume all
responsibility and liability arising from the use of the
Intellectual Property, and Debtor hereby indemnifies and holds
Secured Party harmless from and against any claim, suit, loss,
damage or expense (including attorneys' fees) arising out of any
alleged defect in any product manufactured, promoted, or sold by
Debtor in connection with any Intellectual Property or out of the
manufacture, promotion, labeling, sale, or advertisement of any
such product by Debtor;

 

(x) Immediately notify
Secured Party in writing of any adverse determination in any
proceeding in the USPTO, USCO, or any other foreign or domestic
governmental authority, court or body, Debtor becomes aware of
regarding Debtor's claim of ownership in any of the Trademark
Collateral, Patent Collateral or Copyright Collateral, and in the
event of any infringement of any Trademark, Patent or Copyright
owned by Debtor by a third party which is adverse to Debtor's
business, Debtor shall promptly notify Secured Party of such
infringement and sue for and diligently pursue damages for such
infringement, and if Debtor shall fail to take such action within
one (1) month after such notice is given to Secured Party, Secured
Party may, but shall not be required to, itself take such action in
the name of Debtor, and Debtor hereby appoints Secured Party the
true and lawful attorney of Debtor, for it and in its name, place
and stead, on behalf of Debtor, solely, without limitation on any
other rights of Secured Party under this Agreement, to commence
judicial proceedings in any court or before any other tribunal to
enjoin and recover damages for such infringement, any such damages
due to Debtor, net of costs and attorneys' fees, to be applied to
the Obligations;

 

(xi) (A) Maintain, with
responsible insurance companies, insurance covering the Collateral
against such insurable losses as is consistent with sound business
practice and, in any event, as is required by the Transaction
Documents and, (B) cause Secured Party to be designated as loss
payee (as customary for secured parties based on the type of
insurance) with respect to all insurance (whether or not required
by the Transaction Documents), (C) obtain the written agreement of
the insurers that such insurance shall not be cancelled, terminated
or materially modified to the detriment of Secured Party without at
least 30 days' prior written notice to Secured Party, and (D)
furnish copies of such insurance policies or certificates to
Secured Party immediately upon request therefor and otherwise
comply with the terms and provisions of the Transaction Documents
with respect to such insurance coverage; and

 

(xii) with respect to the
Copyright Collateral, at its sole expense, do, make, execute and
deliver all such additional and further acts, things, deeds,
assurances, and instruments, in each case in form and substance
satisfactory to Secured Party, relating to the creation, validity,
or perfection of the security interests provided for in this
Agreement under 35 U.S.C. Section 261, 15 U.S.C. Section 1051 et
seq., 17 U.S.C. Sections 101, 201 et seq., the UCC or other law of
the United States of America, the State of California, other States
or any other domestic or foreign jurisdiction as Secured Party may
from time to time reasonably request, and shall take all such other
action as Secured Party may reasonably require to perfect Secured
Party's security interest in any of the Copyright Collateral and to
completely vest in and assure to Secured Party its rights hereunder
in any of the Copyright Collateral; and

 

(xiii) within 10 days
after any request by Secured Party, Debtor shall, and shall cause
each depository or intermediary holding any of the Debtor's Deposit
Accounts, Securities Accounts, or other deposit, brokerage,
securities or other similar accounts to, enter into control
agreements in favor of Secured Party, in form and substance
satisfactory to Secured Party in its sole and absolute discretion,
over such accounts.

 

 

 

-21-

 

 

 

13. Further Assurances and
Protections.

 

(a)     
 The Debtor shall at
its expense do, file, record, make, execute, and deliver all such
acts, notices, instruments, statements, or other documents as the
Secured Party may request to perfect, preserve, or otherwise
protect the security interest and Liens of the Secured
Party in the Collateral or any part thereof or to give effect
to the rights, powers, and remedies of the Secured Party under
this Agreement;

 

(b) The Debtor will
give prompt written notice to the Secured Party of, and defend
the Collateral against, any suit, action, or proceeding related to
the Collateral or which could adversely affect the security
interests and Liens granted hereunder; and

 

(c) Debtor authorizes
Secured Party to have this or any other similar agreement recorded
or filed with the USCO, USPTO or other appropriate federal, state
or foreign government office.

 

14. Events
of Default

 

. The occurrence of
any of the following events or conditions shall constitute an event
of default (each an "Event of Default")
under this Agreement:

 

(a) The occurrence and
continuation of an Event of Default as defined in the Red Beard
Note;

 

(b) any representation
or warranty made in this Agreement or the Red Beard Note or any
written statement pursuant hereto or thereto or any other report,
financial statement or certificate made or delivered to the Secured
Party shall be untrue or incorrect in any respect as of the date
when made or deemed made;

 

(c) The failure or
refusal by the Debtor to perform, or the breach or violation of,
any of the terms, obligations, covenants, or warranties of this
Agreement or the Red Beard Note.

 

15. Remedies
upon an Event of Default

 

. On and after the
occurrence and continuance of an Event of Default, the Secured
Party may, in its discretion:

 

(a) request that the
Debtor, and upon such request the Debtor shall, assemble the
Collateral at such place or places convenient to the Secured
Party designated in such request;

 

(b) enforce collection
of any of the Collateral by suit or any other lawful means
available to the Secured Party, or demand, collect, or receive any
money or property at any time payable or receivable on account of
or in exchange for any of the Collateral;

 

(c) surrender, release,
or exchange or otherwise modify the terms of all or any part of the
Collateral, or compromise or extend or renew for any period any
indebtedness thereunder or evidenced thereby;

 

 

 

-22-

 

 

 

(d) assert all other
rights and remedies of a secured party under the UCC (whether or
not in effect in any applicable jurisdiction) and all other
applicable law, including, without limitation, the right to take
possession of, hold, collect, sell, lease, deliver, grant options
to purchase, or otherwise retain, liquidate, or dispose of all or
any portion of the Collateral. The proceeds of any collection,
liquidation, or other disposition of the Collateral shall be
applied by the Secured Party first to the payment of all
expenses (including, without limitation, all fees, taxes,
attorneys' fees and legal expenses) incurred by the Secured
Party in connection with retaking, holding, collecting, or
liquidating the Collateral. The balance of such proceeds, if any,
shall, to the extent permitted by law, be applied to the payment of
the Obligations in the order and manner designated by the Secured
Party in its sole discretion until all Obligations are indefeasibly
paid in full in cash. After all of the Obligations have been
indefeasibly paid in full in cash, the balance of such proceeds, if
any, shall be remitted to the Debtor or as otherwise required by
law. In case of any deficiency, the Debtor shall, whether or not
then due, remain liable therefor. If notice prior to disposition of
the Collateral or any portion thereof is necessary under applicable
law, written notice mailed to the Debtor at its notice address
specified in the Red Beard Note ten (10) days prior to the date of
such disposition shall constitute commercially reasonable notice,
but notice given in any other reasonable manner shall be
sufficient. Without precluding any other methods of sale or other
disposition, the sale or other disposition of the Collateral or any
portion thereof shall have been made in a commercially reasonable
manner if conducted in conformity with commercial practices of
creditors disposing of similar property; but in any event the
Secured Party may sell, lease, deliver, grant options to
purchase or otherwise retain, liquidate or dispose such Collateral
on such terms and to such purchaser(s) (including the Secured
Party) as the Secured Party in its absolute discretion may
choose, and for cash or for credit or for future delivery, without
assuming any credit risk, at public or private sale or other
disposition, without demand of performance, and without any
obligation to advertise or give notice of any kind other than that
necessary under applicable law. The Debtor hereby waives and
releases to the fullest extent permitted by law any right or equity
of redemption with respect to the Collateral, whether before or
after sale or other disposition hereunder, and all rights, if any,
of marshalling the Collateral and any other security for the
Obligations or otherwise. At any such sale or other disposition,
unless prohibited by applicable law, the Secured Party may bid
for and purchase all or any part of the Collateral so sold free
from any such right or equity of redemption. The Secured
Party shall not be liable for failure to collect or realize
upon any or all of the Collateral or for any delay in so doing nor
shall it be under any obligation to take any action whatsoever with
regard thereto.

 

The Secured
Party shall incur no liability as a result of the sale of the
Collateral, or any part thereof, at any private sale pursuant to
this Agreement. The Debtor hereby waives any claims against the
Secured Party arising by reason of the fact that the price at
which the Collateral may have been sold at such a private sale was
less than the price that might have been obtained at a public sale
or was less than the aggregate amount of the Obligations, even if
the Secured Party accepts the first offer received and does
not offer the Collateral to more than one offeree.

 

The Debtor
recognizes that, by reason of certain prohibitions contained in the
Securities Act of 1933, as amended, and applicable state securities
laws, the Secured Party may be compelled, with respect to any
sale of all or any part of the Collateral, to limit purchasers to
those who will agree, among other things, to acquire the relevant
Collateral for their own account, for investment and not with a
view to the distribution or resale thereof. The Debtor acknowledges
that any such private sale may be at prices and on terms less
favorable to the Secured Party than those obtainable through a
public sale without such restrictions, and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to
have been made in a commercially reasonable manner and that the
Secured Party shall have no obligation to engage in public
sales and no obligation to delay the sale of any Collateral for the
period of time necessary to enable the registration of the
Collateral or related transaction so as to permit a public offer to
be made with respect thereto;

 

 

-23-

 

 

 

(e) license or
sublicense, whether general, special or otherwise, and whether on
an exclusive or non-exclusive basis, any Intellectual Property
included in the Collateral throughout the world for such term or
terms, on such conditions and in such manner as the Secured
Party shall in its sole discretion determine;

 

(f) without assuming
any obligation or liability thereunder, at any time and from time
to time, in its sole discretion, enforce (and shall have the
exclusive right to enforce) against any licensee or sublicensee all
rights and remedies of the Debtor in, to and under any of its
Intellectual Property and take or refrain from taking any action
under any thereof, and the Debtor releases the Secured
Party from liability for, and agrees to hold the Secured
Party free and harmless from and against any claims and
expenses arising out of, any lawful action so taken or omitted to
be taken with respect thereto;

 

(g) make a request upon
the Debtor (which shall not be construed as implying any limitation
on the rights or powers of the Secured Party), and upon such
request the Debtor shall, execute and deliver to the Secured
Party a power of attorney, in form and substance satisfactory
to the Secured Party, for the implementation of any sale, lease,
license or other disposition of Intellectual Property owned by the
Debtor or any such action related thereto. In connection with any
such disposition, the Debtor will supply to the Secured
Party its know-how and expertise relating to the relevant
Intellectual Property, and its customer lists and other records
relating to such Intellectual Property and to the distribution of
said products or services;

 

(h) to the extent not
already so transferred, transfer all or any part of the Collateral
into the Secured Party's names or the name of their nominee or
nominees; and

 

(i) give all consents,
waivers, and ratifications in respect of the Collateral and
otherwise act with respect thereto as though it were the outright
owner thereof (the Debtor hereby irrevocably constituting and
appointing the Secured Party the proxy and attorney-in-fact of the
Debtor, with full power of substitution to do so, which power is
coupled with an interest), including, without limitation, the
exercise of all voting, consensual and other powers of ownership
pertaining to the Collateral.

 

16. Secured Party Appointed
Attorney-in-Fact

 

. Without limiting
any rights or powers granted to the Secured Party pursuant to
this Agreement, applicable law or otherwise, the Debtor hereby
appoints the Secured Party as its attorney-in-fact, with full
power and authority in the place and stead of the Debtor and in the
name of the Debtor or otherwise, from time to time in the Secured
Party's discretion to take any and all action and to execute, file
and record any and all instruments, agreements, and documents which
the Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement, including, without
limitation, to execute any assignment of Intellectual Property to
the Secured Party or other transferee, and to receive, endorse
and collect all instruments made or payable to the Debtor
representing any Collateral or Proceeds in respect of the
Collateral or any part thereof and to give full discharge for the
same. The appointment set forth in this Section 16 is coupled with an
interest and is irrevocable.

 

17. Secured Party May Perform

 

. If the Debtor
fails to perform any agreement, covenant, or obligation contained
herein, the Secured Party may itself perform, or cause
performance of such agreement, covenant or obligation and the
expenses and costs of the Secured Party incurred in connection
therewith shall be payable by the Debtor.

 

18. Security
Interest Absolute

 

. All rights of the
Secured Party and all Liens hereunder, and all obligations of
the Debtor hereunder, shall be absolute and unconditional
irrespective of:

 

(a) lack of validity or
enforceability of this Agreement or the Red Beard Note or any other
Transaction Document;

 

 

 

-24-

 

 

 

(b) any change in the
time, manner, or place of payment of, or in any other term of any
or all of the Obligations or any amendment or waiver of any
provision of this Agreement or the Red Beard Note or any other
Transaction Document;

 

(c) any release or
non-perfection of any portion of the Collateral or any exchange,
release, or non-perfection of any other collateral, or any release,
amendment, or waiver of any guaranty for all or any of the
Obligations; or

 

(d) any other
circumstance which might otherwise constitute a defense available
to, or a discharge of the Debtor in respect of the Obligations or
this Agreement or the Red Beard Note or any other Transaction
Document.

 

19. Secured Party's Duties

 

. The powers
conferred to the Secured Party hereunder are solely to protect
the Secured Party's interest in the Collateral and shall not impose
any duty upon it to exercise any such powers except for the safe
custody of any Collateral or any portion thereof in its possession,
and the Secured Party shall exercise that standard of care
with respect to the Collateral in its possession which it exercises
in the administration of its own assets and property; provided, however, that the Secured
Party shall not be liable for any action taken or omitted with
respect to the Collateral or this Agreement unless such liability
results solely from the gross negligence or willful misconduct of
the Secured Party as determined by a final non-appealable judgment
by a court of competent jurisdiction. The Secured Party shall
have no duty as to the Collateral or as to the taking of any
necessary steps to preserve rights against other parties pertaining
to the Collateral.

 

20. Rights
Cumulative

 

. The rights,
powers, and remedies of the Secured Party under this Agreement
shall be in addition to all rights, powers, and remedies given to
the Secured Party by virtue of any statute or rule of law or
any agreement, all of which rights, powers and remedies shall be
cumulative and may be exercised successively or concurrently
without impairing the Secured Party's security interest, Lien, and
assignment in the Collateral.

 

21. Indemnity and
Expenses.

 

(a)            The Secured
Party shall not have any liability to any Person and shall be
indemnified and held harmless by the Debtor for any liability
incurred by reason of taking or refraining from taking any action
with respect to the Collateral, except in the case such liability
results solely from the gross negligence or willful misconduct of
the Secured Party as determined by a final non-appealable judgment
by a court of competent jurisdiction. The Debtor agrees to
indemnify the Secured Party from and against any and all
claims, losses, and liabilities arising out of or connected with
this Agreement (including, without limitation, enforcement of this
Agreement), except such claims, losses, or liabilities resulting
solely from the Secured Party's gross negligence or willful
misconduct as determined by a final non-appealable judgment by a
court of competent jurisdiction. This Section 21(a) shall survive any
termination of this Agreement.

 

(b) The Debtor agrees
to pay all expenses, costs, and disbursements incurred by the
Secured Party (including, without limitation, all attorneys'
fees and other legal expenses incurred by the Secured Party in
connection therewith) in connection with (i) retaking, holding,
collecting, preparing for sale, and selling or otherwise realizing
upon, liquidating, or disposing of the Collateral, (ii) the
enforcement of its rights hereunder upon the occurrence and during
the continuance of an Event of Default, (iii) the performance by
the Secured Party of any agreement, covenant, or obligation of
the Debtor contained herein that the Debtor has failed or refused
to perform, and (iv) the participation or other involvement of the
Secured Party with (x) bankruptcy, insolvency, receivership,
foreclosure, winding up, or liquidation proceedings, or any actual
or attempted sale, or any exchange, enforcement, collection,
compromise, or settlement in respect of any of the Collateral, and
for the care of the Collateral and defending or asserting rights
and claims of the Secured Party in respect thereof, by litigation
or otherwise, including expenses of insurance, (y) judicial or
regulatory proceedings, and (z) workout, restructuring, or other
negotiations or proceedings (whether or not the workout,
restructuring or transaction contemplated thereby is
consummated).

 

 

 

-25-

 

 

 

22. Amendment
or Waiver

 

. Neither this
Agreement nor any terms hereof may be changed, waived, discharged,
or terminated unless such change, waiver, discharge or termination
is in writing signed by the parties hereto.

 

23. Notices

 

. Except as
otherwise expressly provided herein, all notices and other
communications provided for hereunder shall be in writing and
mailed or delivered to the Debtor or the Secured Party at the
respective addresses specified in the Red Beard Note; or at such
other address as shall be designated by any party in a written
notice to the other parties hereto. All such notices and
communications shall, when mailed, be effective three business days
after deposit in the mails and shall, when delivered, be effective
upon delivery of such notice.

 

24. No
Waiver

 

. No failure or
delay on the part of the Secured Party in exercising any
right, power or privilege hereunder or under the UCC or any other
applicable law shall operate as a waiver hereof or thereof; nor
shall any single or partial exercise of any right, power, or
privilege hereunder or under the UCC or any other applicable law
preclude any other or further exercise thereof or the exercise of
any other right, power or privilege hereunder or thereunder. No
notice to or demand on the Secured Party in any case shall
entitle the Debtor to any other or further notice or demand in
similar or other circumstances or constitute a waiver of the rights
of the Secured Party to any other or further action in any
circumstances without notice or demand.

 

25. Severability
of Provisions

 

. Any provision of
this Agreement that is prohibited or unenforceable in any
jurisdiction shall, as to that jurisdiction, be ineffective to the
extent of that prohibition or unenforceability without invalidating
the remaining provisions hereof or affecting the validity or
enforceability of that provision in any other
jurisdiction.

 

26. Non-Assignment

 

. The Debtor shall
not have the right to assign its rights or delegate its obligations
hereunder or any part thereof to any other person without the
Secured Party's prior written consent. This Agreement shall be
binding upon any successors or assigns of the Debtor, and shall
benefit any successors or assigns of the Secured
Party.

 

27. Integration
of Terms

 

. This Agreement
contains the entire agreement between the parties with respect to
the subject matter hereof and supersedes all oral statements and
prior writings with respect thereto.

 

28. Governing
Law

 

. This Agreement
and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the law of the
State of California without regard to choice of law principles
thereof that would cause the laws of any other jurisdiction to
apply.

 

29. Counterparts

 

. This Agreement
may be executed in any number of counterparts and by the different
parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall
together constitute one and the same instrument.

 

30. Joint
and Several Liability

 

. Each of Holdings,
Chalk Dust and Don Polly acknowledge that each of the undersigned
are parties to this Agreement as the "Debtor" as joint and several
grantors hereunder. Any references in this Agreement to the
"Debtor" shall refer to any of Holdings, Chalk Dust or Don Polly,
or both such Persons as the context may require. Each of Holdings,
Chalk Dust and Don Polly accept joint and several liability for the
payment and performance of all of the obligations of the Debtor
hereunder, and each of such obligations constitute the absolute and
unconditional full recourse obligations of each such Person
enforceable against each such Person to the full extent of its
properties and assets. Each of Holdings, Chalk Dust and Don Polly
hereby waive, to the fullest extent permitted by law, any and all
defenses or benefits that may be derived from or afforded by
applicable law limiting the liability of or exonerating guarantors
or sureties (including co-borrowers to the extent applicable),
including , including but not limited to any rights and defenses
that are or may become available to any such Person by reason of
Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code.

 

[Signature Page
Follows]

 

 

-26-

 

IN WITNESS WHEREOF,
the parties hereto have caused this Agreement to be duly executed
and delivered as of the day and year first written
above.

 

DEBTOR:

CHARLIE'S HOLDINGS,
INC.,

a Nevada
corporation

 

 

By: Brandon
Stump

Name: Brandon Stump
                      

Title: Chief
Executive Officer   

                     

 

CHARLIE'S CHALK
DUST, LLC,

a Delaware limited
liability company

 

 

By: Brandon
Stump

Name: Brandon Stump
                      

Title: Chief
Executive Officer
                       

 

DON POLLY
LLC,

a Nevada limited
liability company

 

 

By: Brandon
Stump

Name: Brandon Stump
                      

Title: Chief
Executive Officer    

                     

 

SECURED
PARTY:

RED BEARD HOLDINGS,
LLC

a Delaware limited
liability company

 

 

By: Vinny Smith

Name: Vinny Smith
              

Title: General
Partner
                     

 

 

 

 

	
 

	
	
 

	
 

	
 

	
 

 

-27-Exhibit
10.1

 

ASSET
PURCHASE AGREEMENT

 

THIS
ASSET PURCHASE AGREEMENT (the “Agreement ”) is made and entered into as of the date of the last signature
to this Agreement (the “Effective Date”), by and among LMP AUTOMOTIVE HOLDINGS, INC., a Delaware corporation
with a mailing address of c/o Sam Tawfik, 601 North State Road 7, Plantation, Florida 33317 and an email address of sam@lmpmotors.com,
and or its assigns (“Purchaser”); BECKLEY BUICK-GMC AUTO MALL, INC., a West Virginia corporation with
a mailing address of 334 Old Grandview Road Beaver, West Virginia 25813, and an email address of ldavis@beckleyautomall.com (“BBGAM”),
KING COAL CHEVROLET CO., a West Virginia corporation with a mailing address of 334 Old Grandview Road Beaver, West Virginia
25813, and an email address of ldavis@beckleyautomall.com (“KCC”), and HOMETOWN PREOWNED VEHICLES, INC.,
a West Virginia corporation with a mailing address of 334 Old Grandview Road Beaver, West Virginia 25813, and an email address
of ldavis@beckleyautomall.com (“HPV ” and, together with BBGAM and KCC, collectively, the “Seller”).
The Purchaser and Seller may each be referred to herein as a “Party” or collectively as the “Parties.”
ERNEST B. DAVIS, JR., an individual resident of West Virginia with a mailing address of 334 Old Grandview Road Beaver,
West Virginia 25813, and an email address of erniedavis@hometownsubaru.com (“EBD”), LORI A. DAVIS, an
individual resident of West Virginia with a mailing address of 334 Old Grandview Road Beaver, West Virginia 25813, and an email
address of ldavis@beckleyautomall.com (“ LAD”), TRACY W. HYLTON, II, an individual resident of West
Virginia with a mailing address of P.O Box 1109 Beckley, West Virginia 25802, and an email address of jerry@wrminc.com (“TWH”
and, together with EBD and LAD, the “Shareholder ”), E & W, LLC, a West Virginia limited liability
company (“ E & W”), and THE MEG RENTAL CORPORATION, a West Virginia corporation (“MEG”),
each join in this Agreement for the purposes set forth in the attached joinder.

 

WITNESSETH

 

WHEREAS,
the Seller owns certain assets used or useful in the operation of the Buick, GMC, Chevrolet, Hyundai, Kia, and Subaru motor vehicle
sales and service dealerships set forth on Exhibit A (collectively, the “Franchised Dealerships”);
and

 

WHEREAS,
the Seller owns certain assets used or useful in the operation of 5 used motor vehicle dealerships, as set forth on Exhibit
B (collectively, the “Ancillary Dealerships” and, together with the Franchised Dealerships, the “Business”);
and

 

WHEREAS,
the Franchised Dealerships and the Ancillary Dealerships are operated from the addresses set forth on Exhibit C
(collectively, the “Dealership Premises”);

 

WHEREAS,
the Shareholder owns, directly or indirectly, all of the outstanding and issued shares of stock in the Seller; and

 

WHEREAS,
subject to, and in accordance with, the terms and conditions of this Agreement the Purchaser desires to purchase substantially
all of the Dealership Assets from the Seller; and the Purchaser desires to secure dealer sales and service agreements from the
Manufacturers appointing the Purchaser as an authorized Buick GMC, Chevrolet, Hyundai, Kia, and Subaru dealer at the Beckley BG
Premises, the Oak Hill Chevrolet Premises, the Beckley Hyundai Premises, the Mt. Hope Kia Premises, and the Mt. Hope Subaru Premises,
respectively; and

 

WHEREAS,
the Seller desires to sell to the Purchaser substantially all of the Dealership Assets, subject to, and in accordance with, the
terms and conditions of this Agreement; and

 

    1

     

    

 

WHEREAS,
in connection with the Purchaser’s acquisition of the Dealership Assets, the Purchaser has entered into (a) a real estate
purchase agreement with MEG, an Affiliate of the Seller, for the sale and purchase of the Beckley BG Premises (the “Beckley
BG REPA”); and (b) a real estate purchase agreement with E & W, an Affiliate of the Seller, for the sale and purchase
of the Oak Hill Chevrolet Premises (the “Oak Hill Chevrolet REPA”); and

 

WHEREAS,
in connection with the Purchaser’s acquisition of the Dealership Assets, the Purchaser or its assigns, as tenant, and MEG,
as landlord, will enter into a lease agreement at the Closing for the use and occupancy of the Beckley Hyundai Premises, the Mt.
Hope Kia Premises, the Mt. Hope Subaru Premises, and the Lewisburg Premises (the “MEG Lease Agreement”). The
form of the MEG Lease Agreement shall be agreed upon by the Purchaser and MEG during the OA Prep Period; and

 

WHEREAS,
in connection with the Purchaser’s acquisition of the Dealership Assets, the Purchaser or its assigns, as tenant, and E
& W, as landlord, will enter into a lease agreement at the Closing for the use and occupancy of the Oak Hill Used Premises
(the “E & W Lease Agreement”). The form of the E & W Lease Agreement shall be agreed upon by the Purchaser
and E & W during the OA Prep Period; and

 

WHEREAS,
in connection with the Purchaser’s acquisition of the Dealership Assets, the Parties will seek the consent of the Princeton
Landlord, the Summersville Landlord, and the Beaver Landlord to permit the assignment of the Princeton Premises Lease, the Summersville
Premises Lease, and the Beaver Premises Lease, respectively, to the Purchaser or its assigns.

 

NOW,
THEREFORE, in consideration of the Parties’ execution of this Agreement, and the premises, mutual covenants and promises
hereinafter set forth, and other valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties
agree as follows:

 

1.
DEFINITIONS

 

1.1
Certain Definitions. For purposes of this Agreement, the following terms shall have the meanings set forth below:

 

(a) “Affiliate”
of a Person shall mean a Person that, directly or indirectly, controls, is controlled by or is under common control with the first
Person.

 

(b) “Applicable
Law” shall mean all applicable provisions of any federal, state, local, municipal, statute, law, common law, permit,
ordinance, code, rule, regulation, decision, order, decree, treaty or judgment enacted, promulgated or issued by any Governmental
Authority in effect on the Closing Date.

 

(c) “Applicable
Rate” means 8% per annum, computed on the basis of a 360-day year or, with respect to any amount that an Indemnifying
Party has been finally adjudicated as liable to an Indemnifying Party pursuant to Section 6, such higher post-judgment
interest as may be imposed by any court of competent jurisdiction

 

(d) “Assumed
Liability Credits” shall mean the credits due Purchaser as set forth under Section 3.1(i) and (j)

 

(e) “Basis”
shall mean any past or present fact, situation, circumstance, status, condition, activity, practice, plan, occurrence, event,
incident, action, failure to act or transaction that forms or could form the basis for any specified consequence.

 

    2

     

    

 

(f)
“Beaver Landlord” shall mean Little General Store, Inc., a West Virginia corporation.

 

(g) “Beaver
Premises Lease” shall mean that certain Lease Agreement dated May 1, 2019, by and between HPV and the Beaver Landlord,
pursuant to which HPV is leasing the Beaver Premises from the Beaver Landlord.

 

(h) “Business
Day” shall mean any day excluding Saturday, Sunday, and any day on which commercial banks are by law closed in the State
of West Virginia.

 

(i)
“Code” shall mean the Internal Revenue Code of 1986, as amended.

 

(j) “Consent”
shall mean all consents, approvals, authorizations, stipulations, ratifications, waivers, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to, any Person, including any Governmental Authority.

 

(k) “Contract”
or “Contracts” shall mean all agreements, contracts, commitments, orders, licenses, leases and other instruments,
arrangements and understandings (whether written or oral) to which a Person is a party, or by which any of its assets or properties
are bound.

 

(l) “Control”
(including the terms “controlled by” and “under common control with”) means the possession
of the power to direct or cause the direction of the management or policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

 

(m) “Current
Financials” shall mean the internally prepared, un-audited financial statements of the Seller in the form required by
the Manufacturers, for the fiscal years ending 2017, 2018, 2019, and year-to-date 2020.

 

(n)
“Cut-Off Date” shall mean the date that is 180 days after the Effective Date.

 

(o) “Davis
HoldCo” shall mean the entity formed by EBD and LAD to own an interest in LMP Beckley Holdings, LLC, a Delaware limited
liability company.

 

(p)
“DMS” shall mean a dealership management system.

 

(q)
“EEOC” shall mean the U.S. Equal Employment Opportunity Commission.

 

(r)
“EIN” shall mean Employer’s Innovative Network, LLC.

 

(s) “EIN
Contract” shall mean collectively, the following contracts for providing employees to Seller: (a) contract between EIN
and KCC, dated December 3, 2013; (b) contract between EIN and BBGAM dated September 17, 2013, and (c) contract between EIN and
HPV dated September 17, 2013.

 

    3

     

    

 

(t) “Employee
Benefit Plan” shall mean any (i) employee benefit plan within the meaning of Section 3(3) of ERISA, (ii) profit sharing,
bonus, compensation, stock purchase, stock option, employment, termination, severance, retention or other similar plan, agreement
or arrangement, and (iii) hospitalization, medical, life, or supplemental unemployment benefits plan, program, agreement or arrangement,
which are or have been sponsored, maintained or contributed to or required to be contributed to by the Seller, any of its subsidiaries
or any ERISA Affiliate for the benefit of any former or current consultant, employee, officer or director of the Seller, any of
its subsidiaries or any ERISA Affiliate, whether formal or informal and whether legally binding or not.

 

(u) “Encumbrance”
shall mean any charge, claim, community property interest, equitable interest, lien, option, pledge, security interest, right
of first option, right of first refusal or similar restriction, including any restriction on use, voting (in the case of any security
or equity interest), transfer, or exercise of any other attribute of ownership that is imposed by agreement, understanding, Applicable
Law or otherwise, whether of record or otherwise.

 

(v) “Environmental,
Health and Safety Liabilities” shall mean any Losses, natural resource damages, Encumbrances, orders, and consulting
fees, (i) which are incurred as a result of (A) the existence or alleged existence of Hazardous Substances in, on, under, at or
emanating from the Dealership Premises, (B) the actual or alleged offsite transportation, treatment, storage or disposal of Hazardous
Substances generated by the Seller or at the Dealership Premises or (C) the violation or alleged violation of any Environmental
Laws or (ii) which arise under the Environmental Laws.

 

(w) “Environmental
Laws” shall mean all Applicable Laws pertaining to the injury to, or the pollution or protection of human health and
safety and the environment, including the regulation, control, clean-up, generation, use, collection, treatment, storage, transportation,
recovery, removal, discharge or disposal of Hazardous Substances.

 

(x) “ERISA”
shall mean the Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated thereunder.

 

(y) “ERISA
Affiliate” shall mean any trade or business, whether or not incorporated, that together with the Seller or any of its
subsidiaries would be deemed a "single employer" within the meaning of Section 4001(b)(1) of ERISA.

 

(z) “Escrow
Agent” shall mean Bass Sox Mercer, 2822 Remington Green Circle, Tallahassee, Florida 32308.

 

(aa) “Existing
Leases” shall mean any lease agreements or arrangements existing prior to the Closing Date and related to the Beckley
Hyundai Premises, the Mt. Hope Kia Premises, the Mt. Hope Subaru Premises, the Lewisburg Premises, or the Oak Hill Used Premises.

 

(bb)
“GM” shall mean General Motors LLC.

 

(cc) “Governmental
Authority” means any nation or government, any state or other political subdivision thereof, any entity exercising legislative,
executive, judicial, quasi-judicial, regulatory or administrative functions of or pertaining to government, or any tribunal or
arbitrators of competent jurisdiction.

 

(dd) “Hazardous
Substances” shall mean any chemical, material, substance, constituent, contaminant, waste or pollutant regulated under
any Environmental Law, including:

 

(i) any
toxic or hazardous wastes, materials, pollutants or substances, including petroleum products and by-products, flammable explosives,
radioactive materials, asbestos, polychlorinated byphenyls, pesticides, herbicides, pesticide or herbicide containers, untreated
sewage, industrial process sludge;

 

    4

     

    

 

(ii)
any substances defined as “hazardous substances” or “toxic substances” or similarly identified under CERCLA
(42 U.S.C. § 9601 et seq., as amended);

 

(iii) “hazardous
materials” as identified under the Hazardous Materials Transportation Act, 49 U.S.C. § 1801 et seq., as amended;

 

(iv) any
chemical substance or mixture regulated under the Toxic Substance Control Act of 1976, 15 U.S.C. § 2601 et seq., as amended;

 

(v) any
“toxic pollutant” under the Clean Water Act, 33 U.S.C. § 466 et seq., as amended, any hazardous air pollutant
under the Clean Air Act, 42 U.S.C. § 7401 et seq., as amended; or

 

(vi) any
toxic or hazardous wastes, materials, pollutants or substances regulated under any other Environmental Law including any so-called
“Super Fund” or “Super Lien” legislation, now existing, pertaining to hazardous materials, pollutants
or wastes.

 

(ee)
“HMA” shall mean Hyundai Motor America, LLC.

 

(ff) “IRCA”
shall mean the Immigration Reform and Control Act of 1986, as amended, and all regulations promulgated thereunder.

 

(gg)
“KMA” shall mean Kia Motors America, Inc.

 

(hh) “Knowledge”
means the actual knowledge of EBD or LAD, and Seller will be deemed to have “Knowledge” of a particular fact or other
matter if the foregoing named individuals are actually aware of such fact or other matter, or if a reasonable person in his position
would have been aware of such fact or matter.

 

(ii) “Liability”
or “Liabilities” shall mean with respect to any Person, any liability or obligation of such Person of any kind,
character or description, whether known or unknown, absolute or contingent, accrued or unaccrued, disputed or undisputed, liquidated
or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable
or otherwise and whether or not the same is required to be accrued on the financial statements of such Person.

 

(jj) “Licenses”
shall mean all licenses, grants, franchises, permits, approvals, Consents and other authorizations issued to or maintained by
the Seller in connection with its ownership, possession, use, occupancy or operation of any of the Dealership Assets, or its operation
of the Business.

 

(kk)
“LMP HoldCo” shall mean LMP Automotive Holdings, LLC, a Delaware limited liability company.

 

(ll) “Losses”
shall mean any and all damages (including punitive damages and consequential damages awarded to a third party by a court of competent
jurisdiction in respect of a third-party claim), losses, charges, liabilities, claims, demands, Proceedings, payments, judgments,
settlements, assessments, obligations, deficiencies, Taxes, interest, penalties, costs, and expenses (including reasonable attorneys’
fees).

 

(mm)
“Manufacturer” shall mean either GM, KMA, SA, or HMA, as the case may be.

 

(nn)
“Manufacturers” shall collectively mean GM, KMA, SA, and HMA.

 

    5

     

    

 

(oo) “Manufacturer
Parts Inventory” shall mean all of the Seller’s inventories of new, current, returnable, and non-obsolete Manufacturer
parts and accessories in their original, unbroken packages, which are located on or in transit to the Seller as of the Closing
Date, and which are listed in a applicable Manufacturer’s current parts and accessories price book/catalogues, with supplements
in effect on the inventory date described in Section 3.2. Notwithstanding the foregoing, Manufacturer Parts shall not
include any “Obsolete” parts, defined as parts (a) not being listed in the current Manufacturer’s
Master Parts Price List/Suggested List Prices and Dealer Prices (or other applicable similar Manufacturer price lists, with supplements
or the equivalent in effect as of the Inventory date, the “Master Price List”), as returnable to the
applicable Manufacturer at not less than the value reflected in the Master Price List, or (b) that have been in the Seller’s
inventory longer than 15 months prior to Closing Date.

 

(pp) “Material
Adverse Change” shall mean any change in, or effect on, the Seller (including the business thereof) which is, or could
reasonably be expected to be, materially adverse to the business, operations, assets, condition (financial or otherwise) or prospects
of the Seller.

 

(qq) “Miscellaneous
Inventory” shall mean all miscellaneous inventory of the Seller located at the Dealership Premises on the Closing Date
and consisting of non-Manufacturer Parts, batteries, tires, and paint, gas, oil and grease, etc., each of which is less than 1
year old, and all of which (in the case of fluids and paint) shall be in unopened containers and usable.

 

(rr)
“OA Prep Period” shall mean a period of 30 days following the Effective Date.

 

(ss) “Operating
Agreement” means that certain operating agreement by and between LMP HoldCo, Davis HoldCo, and the Purchaser, a form
of which shall be agreed upon by the Parties during the OA Prep Period.

 

(tt) “Other
Agreements” shall mean collectively, the Bill of Sale and Assignment, the Non-Competition and Non-Solicitation Agreement,
and any other agreements, instruments, certificates, and documents executed by the Parties in connection herewith or therewith.

 

(uu)
“Parts” shall mean collectively, the Manufacturer Parts and the Non-Manufacturer Parts.

 

(vv) “Permitted
Encumbrances” shall mean (i) Encumbrances securing indebtedness or other monetary obligations that constitute an Assumed
Liability and (ii) statutory Encumbrances securing real and personal property taxes assessed in West Virginia, prorated on a calendar
year basis, to the extent that such property taxes are not yet due and payable as of the Closing Date.

 

(ww) “Person”
shall mean any natural person, firm, partnership, association, corporation, company, limited liability company, trust, business
trust, Governmental Authority, or other entity (foreign or domestic).

 

(xx)
“Princeton Landlord” shall mean Mitchem Enterprises, Inc. a Virginia corporation.

 

(yy) “Princeton
Premises Lease” shall mean that certain Lease dated August 3, 2020, by and between BBGAM and the Princeton Landlord,
pursuant to which BBGAM is leasing the Princeton Premises from the Princeton Landlord.

 

    6

     

    

 

(zz) “Proceeding”
shall mean any action, claim, demand, suit, proceeding, arbitration, grievance, citation, summons, subpoena, inquiry or investigation,
civil, criminal, regulatory or otherwise, in law or in equity.

 

(aaa) “Returns”
shall mean any return, report, declaration, form, claim for refund or information return or statement relating to Taxes, including
any schedule or attachment thereto and any amendment thereof.

 

(bbb) “Required
Initial Capitalization” shall mean an amount equal to the Goodwill purchase price plus the Fixed Asset purchase price
plus the Manufacturer’s required net working capital requirement less allowable debt incurred by LMP Beckley Holdings, LLC
based upon such items, to be determined at the Closing.

 

(ccc)
“SA” shall mean Subaru of America, Inc.

 

(ddd) “Service
Loaners” shall mean motor vehicles owned by the Seller, located on the Dealership Premises on the Closing Date, and
provided by the Seller to customers while their vehicles are being serviced by the Seller. Service Loaners shall include motor
vehicles that are current in status as well as vehicles that have been retired from such status.

 

(eee) “Summersville
Landlord” shall mean Harper Manor Estates, LLC, a West Virginia limited liability company.

 

(fff) “Summersville
Premises Lease” shall mean that certain Commercial Lease Agreement dated May 1, 2020, by and between KCC and the Summersville
Landlord, pursuant to which KCC is leasing the Summersville Premises from the Summersville Landlord.

 

(ggg) “Tax”
or “Taxes” shall mean any federal, state, local, foreign or other income, alternative, minimum, accumulated
earnings, personal holding company, franchise, capital stock, net worth, capital, profits, windfall profits, gross receipts, value
added, sales (including bulk sales), use, goods and services, excise, customs duties, transfer, conveyance, mortgage, registration,
stamp, documentary, recording, premium, severance, environmental (including taxes under section 59A of the Code), real property,
personal property, ad valorem, intangibles, rent, occupancy, license, occupational, employment, unemployment insurance, social
security, disability, workers’ compensation, payroll, health care, withholding, estimated or other similar tax, duty or
other governmental charge or assessment or deficiencies thereof, including all interest and penalties thereon and additions thereto
whether disputed or not.

 

(hhh) “Third-Party
Claim” means a third-party claim asserted against an Indemnified Party by a Person other than (a) an Affiliate of such
Indemnified Party or (b) any director, stockholder, officer, member, partner, equity holder or employee of any such Indemnified
Party or its Affiliates.

 

(iii) “Transaction”
shall mean the sale by the Seller and the purchase by the Purchaser of an undivided interest in the Dealership Assets, and the
assumption by the Purchaser of the Assumed Liabilities, all in accordance with the terms of this Agreement.

 

(jjj) “Treasury
Regulations” shall mean the Federal income tax regulations promulgated under the Code, as such Treasury Regulations
may be amended from time to time.

 

(kkk)
“URL” shall mean a uniform resource locator.

 

    7

     

    

 

(lll) “Used
Vehicles” shall mean all vehicles that are located on the Dealership Premises on the Closing Date and owned and held
by the Seller for resale, to include Service Loaners, but excluding New Vehicles, Demos, or company vehicles.

 

(mmm) “WARN
Act” shall mean the Worker Adjustment and Retraining Notification Act or any similar state or local Applicable Law.

 

(nnn) “We-Owes”
shall mean a promise by the Seller to a customer for the delivery of goods or services in the future.

 

1.2
Other Defined Terms. Certain other terms are defined in this Agreement (or the exhibits) and are used with the meanings
so ascribed to them.

 

2.
THE TRANSACTION

 

2.1
Purchased Assets. Subject to the terms and conditions of this Agreement, on the Closing Date (as defined in Section
4.1 below), the Seller shall sell to the Purchaser and the Purchaser shall purchase from the Seller, all of the Seller’s
right, title and interest in and to each of the following assets (collectively, the “Dealership Assets”), free
and clear of all Encumbrances (except Permitted Encumbrances):

 

(a) all
of the Seller’s furniture, fixtures, signs, product marketing displays, office equipment and computers, machinery and shop
equipment, parts equipment, special tools, lifts, hybrid charging stations and related equipment, removable compressors, shop
tools, and other items of tangible personal property owned and used by the Seller in the operation of the Business, including
those items listed on the outside appraisal of fixed assets pursuant to Section 3.1(b), and on Schedule 2.1(a) attached
hereto (the “Fixed Assets”); provided, Fixed Assets does not include leasehold improvements, vehicles, or parts
inventory;

 

(b) each
new, undamaged, and not previously titled (even if later reversed) or reported sold (even if later reversed), 2020 and newer model
year Manufacturer motor vehicles, which (i) has no more than 350 miles recorded on it odometer as of the Closing Date,
(ii) has been in inventory fewer than 365 days as of the Closing Date, and (iii) is located at or in transit to the Dealership
Premises as of the Closing Date (collectively, the “New Vehicles”);

 

(c) each
vehicle that would be a New Vehicle but for having more than 350 miles recorded on its odometer as of the Closing Date
(collectively, the “Demos”). Notwithstanding the foregoing, a Demo shall not include any vehicle with more
than 4,000 miles recorded on its odometer as of the Closing Date;

 

(d) such
of the Seller’s inventory of Used Vehicles for which the Parties are able to agree to a value. Any Used Vehicle(s) for which
the Parties cannot reach an agreement on value shall be considered an Excluded Asset;

 

(e) the
Seller’s assignable rights and privileges under (i) the Contracts identified on Schedule 2.1(e)(i) attached hereto,
which are required to be assumed by Purchaser, (ii) the Contracts identified on Schedule 2.1(e)(ii), which as part of the Purchaser’s
business due diligence the Purchaser shall elect whether to assume, (collectively with the Contracts identified on Schedule 2.1(e)(i),
the “Assumed Contracts”); and (ii) other Assumed Liabilities;

 

(f)
all of the Seller’s Manufacturer Parts Inventory;

 

    8

     

    

 

(g)
all of the Seller’s Miscellaneous Inventories;

 

(h) all
of the Seller’s sublet repairs and work in process repairs for which (i) the Seller possesses an initial repair order signed
by the customer authorizing such repair, (ii) the repair order has been open for fewer than 10 Business Days prior to the
Closing Date, (iii) in the case of work in process repairs, the subject vehicle is present at the Dealership Premises on the Closing
Date, and (iv) in the case of sublet repairs, the subject vehicle is present at the sublet repair facility on the Closing Date
(collectively, the “WIP”). The Purchaser may review all WIP prior to the Closing Date;

 

(i)
the Seller’s return privileges, if any, concerning the Manufacturer Parts;

 

(j) the
Seller’s assignable rights to its email addresses, PO Boxes, telephone and facsimile numbers (local and toll-free), as listed
on Schedule 2.1(j);

 

(k)
to the extent transferable, all Licenses;

 

(l) all
rights of the Seller relating to deposits and prepaid expenses, claims for refunds and rights to offset in respect thereof, each
of which relates to an Assumed Liability and are not otherwise an Excluded Asset;

 

(m) all
offices supplies, janitorial supplies, and similar items owned by the Seller and located at the Dealership Premises as of the
Closing Date;

 

(n) any
assignable rights relating to or arising out of or under any express or implied warranties from suppliers with respect to the
Dealership Assets;

 

(o) all
assignable rights of the Seller arising under any non-compete or restrictive covenant agreements between the Seller and any former
member(s), or between the Seller and its employees, current or former;

 

(p) any
insurance proceeds for claims or damages to the Dealership Assets that occurs prior to the Closing Date, unless such damages have
been repaired prior to the Closing Date; and

 

(q) all
of the Seller’s perpetual inventory records, sales records, customer lists, customer service records and all other customer
data, deal jackets, supply and manufacturer lists, technical data, and sales and marketing literature, advertising materials,
promotional materials, including merchandising literature from the Manufacturers, whether in hard or digital copies (the “Records”),
and all of the Seller’s intangible property rights and goodwill associated with the Business, including all assignable franchise
rights under the Manufacturers’ dealer sales and service agreements, all tradenames and URLs owned or controlled by the
Seller and utilized by the Business, and any and all of the Seller’s rights to content and access (including usernames and
passwords, or other access means) related to GooglePlusLocal, GooglePlusBusiness, yelp, LinkedIn®, Facebook®,
MySpace®, foursquare, Twitter®, Dealer Rater, Edmunds, and Cars.com, and other intellectual
property owned by Seller and used or useable in the Business, and all other intangible assets, rights and properties of the Seller
whatsoever (along with the Records, collectively, the “Goodwill”), except as described in Section 2.2.

 

Notwithstanding
the foregoing, the transfer of the Dealership Assets under this Agreement shall not include the assumption of any Liability in
respect thereof unless the Purchaser expressly assumes such Liability under Section 2.3(a).

 

    9

     

    

 

2.2
Excluded Assets. Notwithstanding any contrary provision contained herein, the Seller shall retain, and shall not sell to
the Purchaser, the assets not included in the Dealership Assets, including the following specific items (collectively, the “Excluded
Assets”):

 

(a) cash
and cash equivalents on hand and in banks, certificates of deposit, commercial paper, stocks, bonds and other liquid investments;

 

(b) accounts
receivable of the Seller (including any “contracts in transit,” rebates receivable, holdbacks, discounts receivable,
credit life commissions receivable, A & H commissions and finance Seller receivables, both current and deferred);

 

(c) any
prepaid expense, insurance, interest, utilities, or rent and any deposits related thereto, which accrue to the benefit of the
Seller as of the day prior to the Closing Date;

 

(d)
the minute book, corporate, accounting, and Tax records, and corporate seal of the Seller;

 

(e) any
correspondence or records of the Seller that constitutes attorney-client privileged communications;

 

(f) the
consideration for the Dealership Assets to be delivered by the Purchaser to the Seller under this Agreement;

 

(g)
the Seller’s right to enforce this Agreement;

 

(h) vehicle
parts and accessories that do not constitute Manufacturer Parts Inventory or Miscellaneous Inventories;

 

(i)
vehicles not purchased by the Purchaser hereunder;

 

(j) the
Seller’s contracts or policies of insurance and any refunds of taxes or tax loss carry forwards of the Seller;

 

(k) any
assets leased by the Seller that would otherwise constitute Fixed Assets if not so leased, unless the Purchaser assumes such lease
obligations;

 

(l)
all rights under any Licenses and Contracts, except for Assumed Contracts and assigned Licenses;

 

(m)
real estate owned by the Seller;

 

(n) those
items of personal property owned by the Shareholder and located at the Dealership Premises, which are listed on Schedule 2.2(n);

 

(o)
all Employee Benefit Plans;

 

(p) any
and all new and used RV inventory, RV parts inventory, and heavy equipment owned by HPV and used in the RV business of HPV (“RV
Business”);

 

(q)
“Buy here Pay here” software; and

 

(r)
the items listed on Schedule 2.2(r).

 

    10

     

    

 

2.3 Assumption
of Liabilities.

 

(a) At
the Closing, the Purchaser shall assume (and shall agree to discharge, pay and perform in accordance with their terms) only the
following Liabilities of the Seller (each an “Assumed Liability,” and collectively, the “Assumed Liabilities”),
and no other liabilities or obligations of the Seller whatsoever:

 

(i) all
of the Seller’s Liabilities under the Assumed Contracts arising on or after the Closing Date (other than any Liabilities
arising out of any breach or default that occurred prior to the Closing Date);

 

(ii) all
of the Seller’s Liabilities to customers under the conditions of the Seller’s vehicle order forms or special parts
order forms arising with respect to any customer deposits received in the ordinary course consistent with past practices, to the
extent that (A) the terms and conditions thereof are reasonably acceptable to the Purchaser and consistent with the Seller’s
past practices and current market, (B) the associated deposit is not escheatable or otherwise subject to forfeiture to the State
of West Virginia as unclaimed property, and (C) the associated vehicles are currently scheduled for production, which such Liabilities
shall be reflected at the Closing on a schedule, and, along with any such Seller’s vehicle order or special parts order
forms, shall be delivered at the Closing (the “Customer Deposits”); provided, however, that the Purchaser shall
not assume any of the Seller’s Liabilities arising out of any breach of or default under such vehicle order that occurred
prior to the Closing Date;

 

(iii)
all of the Seller’s obligations to complete WIP;

 

(iv)
all of the Seller’s We-Owes, the value of which shall be subtracted from the Asset Purchase Price; and

 

(v) all
of the Seller’s Liabilities under the Princeton Premises Lease, the Summersville Premises Lease, and the Oak Hill Used Premises
Lease arising on or after the Closing Date (other than any Liabilities arising out of any breach or default that occurred prior
to the Closing Date).

 

(b)
Except as otherwise provided in this Section 2.3, the Purchaser shall not assume, or in any way be responsible or
liable for, any Retained Liabilities. “Retained Liabilities” shall mean each and every Liability of the
Seller, other than the Assumed Liabilities, including (i) any Liabilities of the Seller arising out of the operation of the
Business prior to the Closing Date, (ii) conditions existing or alleged to have existed or any acts or omissions occurring or
alleged to have occurred at the Dealership Premises, in each case, alleged by a third party prior to the Closing Date,
including any Liabilities described in this Agreement or the Schedules, (iii) any Liabilities attributable to violations of
any Applicable Law, (iv) any Proceeding pending or threatened against the Seller, and (v) chargebacks from the
cancellation/termination of finance or insurance products on vehicles sold by the Seller prior to the Closing
Date.

 

(c) Except
for the Assumed Liabilities, following the Closing, the Seller shall pay all amounts due to creditors of the Seller for goods
or services provided to the Seller with respect to the Business as such amounts come due, it being understood that Seller shall
use its best efforts to discharge such obligations in a timely manner so as not to result in any unreasonable interruption of
business or delivery of services or products to the Purchaser. Seller retains the right of setoff with regard to any amounts due
to creditors of the Seller.

 

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(d) Without
limitation of the foregoing, it is specifically understood and agreed between the Parties that the Purchaser shall not be responsible
for any express or implied warranties given by the Seller to customers prior to the Closing Date. Further, should any customer
make a claim upon any warranty given by the Seller or for defective vehicle repair by the Seller prior to the Closing, then, in
that event, the Purchaser at its option may adjust any such minor item as it so desires, at the Seller’s expense, and on
any major item shall notify the Seller and, upon the Seller’s approval, shall repair said item at the Seller’s expense.
Any major item shall be defined as any item at cost to the Purchaser in excess of $250.00.

 

(e) Subject
to Section 6.6, the obligations of the Seller and Purchaser under this Section 2.3 shall survive the Closing of
this Transaction.

 

2.4
Simultaneous Transactions . This Agreement represents one facet of a three -part transaction. The other facets consist
of the Beckley BG REPA and the Oak Hill Chevrolet REPA. The respective obligations of the Seller and the Purchaser to close the
Transaction hereunder are conditioned on the closing of the transactions contemplated under the Beckley BG REPA and the
Oak Hill Chevrolet REPA. In addition, this Agreement, the Beckley BG REPA, and the Oak Hill Chevrolet REPA are hereby cross-defaulted
such that a default by a party under this Agreement, the Beckley BG REPA, or the Oak Hill Chevrolet REPA shall constitute a default
by that same party or its Affiliate under the other agreements. If this Agreement is terminated and cancelled, the Beckley BG
REPA and the Oak Hill Chevrolet REPA shall become void, and there shall be no further liability or obligation of any party to
this Agreement, the Beckley BG REPA, or the Oak Hill REPA, except as otherwise provided for herein.

 

3.
ASSET PURCHASE PRICE

 

3.1
Asset Purchase Price. The consideration to be paid by the Purchaser to the Seller for the Dealership Assets (the “Asset
Purchase Price”) shall be an amount equal to the value of the following Dealership Assets and Assumed Liability Credits,
determined and allocated as follows, and shall be payable at Closing in accordance with Section 4.5(a):

 

(a) Goodwill:
The purchase price for the Goodwill, and all the items listed in Section 2.1 but not explicitly mentioned in this Section
3.1, shall be $14,000,000; PLUS

 

(b) Fixed
Assets: The purchase price for the Fixed Assets shall be determined by a third-party appraiser, which shall be selected by
the Parties during the Due Diligence Period. The purchase price for the Fixed Assets will be subject to (i) reduction (at replacement
cost) prior to the Closing for Fixed Assets which are listed on Schedule 2.1(a) on the Effective Date but missing
from the Dealership Premises or not in good working condition as of the Closing Date, and (ii) increase (at an appraised value)
prior to the Closing Date for Fixed Assets which are not listed on Schedule 2.1(a) at the Effective Date, but are
added to Fixed Assets prior to the Closing Date with the Purchaser’s prior written approval, not to be unreasonably withheld,
conditioned, or delayed; PLUS

 

(c) Manufacturer
Parts Inventory: The purchase price for the Manufacturer Parts Inventory shall be the value shown in the most recent Manufacturer
parts and accessories price book or catalogues, as applicable, with all supplements in effect as of the date of an inventory,
with such value to be reduced by any credits, discounts, allowances, rebates, or other incentives for which the Seller has received
on said Manufacturer Parts Inventory on or before the Closing Date or would be eligible to receive after the Closing Date, but
not reduced by the GM parts purchase target incentive; PLUS

 

(d) Miscellaneous
Inventory: The purchase price for the Seller’s Miscellaneous Inventory shall be the Seller’s verifiable costs
in such inventories; PLUS

 

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(e) New
Vehicles: The purchase price for each New Vehicle shall be an amount equal to the aggregate sum of (i) the Manufacturer’s
invoice cost to the Seller, including Manufacturer charges for freight and handling, PLUS (ii) the wholesale cost (without
internal markup) to the Seller of all “add-on” parts or accessory items (installed consistent with the Seller’s
past practices, but specifically excluding reconditioning charges and soft adds such as etch, leather treatment, undercoatings,
paint sealants, etc.), MINUS (iii) dealer holdback, floorplan assistance, advertising or marketing allowance and any dealer
cash/rebates or carryover allowances, and any other dealer factory incentives with respect to such vehicles and for which the
Seller has previously been paid, MINUS (iv) a credit in favor of the Purchaser equal to the value of any Manufacturer installed
accessories removed or missing from a vehicle, valued at cost reflected on such vehicle’s invoice, MINUS (v) the
amount of any PDI payment received from the Manufacturer but for which no PDI activity has been performed on such vehicle (such
formula being hereinafter referred to as the “Triple Net Formula”). Any dealer-traded vehicle that constitutes
a New Vehicle shall be valued in accordance with the Triple Net Formula. The value of each New Vehicle shall not include
any cleaning or reconditioning charges or any Seller-imposed surcharge or “pack” (whether or not such amounts have
been or were to be taken into income by the Seller); PLUS

 

(f) Demos:
The purchase price for each Demo shall be calculated in accordance with the Triple Net Formula, except there shall be an additional
credit in favor of the Purchaser in the amount of $0.25 per mile for each mile in excess of 350 miles recorded on
such Demo’s odometer as of the Closing Date; PLUS

 

(g) Used
Vehicles: The purchase price for each Used Vehicle shall be as mutually agreed upon by the Parties using the MMR Clean value
of each vehicle as a guide for said Used Vehicle’s value; PLUS

 

(h) WIP:
The purchase price for the WIP shall be the Seller’s cost of parts and accessories (with no internal markup) and the cost
of the Seller’s service technician wage expense (with no internal markup); MINUS

 

(i) Customer
Deposits: The sum of the value of all Customer Deposits held by the Seller as of the Closing Date for all New Vehicles or
special-order parts and accessories to be delivered on or after the Closing Date; MINUS

 

(j) We-Owes:
The sum of the value of all outstanding We-Owes issued prior to the Closing Date, which shall be reflected at the Closing on a
schedule attached to the closing statement.

 

3.2
Physical Inventories. The classification and valuation of the Manufacturer Parts Inventory and Miscellaneous Inventory
shall be established, in accordance with the provisions hereof, by a physical inventory count conducted by an independent inventory
service reasonably acceptable to the Parties (the “Parts Inventory”). The Parts Inventory shall be taken as
close as practicable to the Closing Date, but no later than 2 days before the Closing Date, and will be adjusted to reflect
purchases and sales of the Parts between the date of such physical inventory count and the Closing Date. The Seller agrees that
no such additions and deductions shall be made in such inventory except in the ordinary course consistent with past practices
and, further, to keep its usual and adequate records of such additions and deductions, which records shall be made available to
the Purchaser for review and verification.

 

3.3
Allocations. The Asset Purchase Price shall be allocated in accordance with Exhibit D, and at Closing, subject
to any adjustments or prorations provided for herein, classified in accordance with Section 1060 of the Code and the Treasury
Regulations thereunder (and any similar provision of state, local or foreign law, as appropriate), which allocations and classifications
shall be binding upon the Parties. Each of the Parties shall take all actions and file all Returns (including IRS Form 8594 “Asset
Acquisition Statement”) consistent with such allocation and classification. The Parties shall timely and properly prepare,
execute, file and deliver all such documents, forms and other information as may be reasonably requested by another Party to prepare
such allocation

 

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3.4 Audit
of Seller’s 2018 and 2019 Financials; Non-Audited Financials.

 

(a)
On or before the 10th Business Day after the Effective Date, the Seller agrees to engage a public
accounting firm to commence an independent audit of the Seller’s book and records for the fiscal years 2018 and 2019 and
to prepare audited financial statements and related statements of income (profit and loss), cash flow, and member equity
(balance sheet) (collectively, the “Audited Financial Statements”), to be delivered to the Seller on or
before the 60th day after the Effective Date. The Audited Financial Statements shall be prepared in
accordance with (i) GAAP applied on a consistent basis throughout the periods covered thereby and shall be consistent with
the books and records of the Seller; and (b) the standards and rules of the Public Company Accounting Oversight Board. Within 3
Business Days of receipt of the Audited Financial Statements, the Seller shall deliver to the Purchaser, together with
the Audited Financial Statements, an opinion of Seller's independent auditors that the Audited Financial Statements present
fairly the financial condition and results of operations of the business relating to the Dealership Assets of the Seller.
Seller shall make available to the Purchaser and the Purchaser’s accountants the Seller’s work papers and backup
materials used in the preparation of the Audited Financial Statements.

 

(b) Within
30 days after the Effective Date, the Seller shall provide to the Purchaser the following CPA-prepared financial statements
for the fiscal years 2018 and 2019: profit and loss statement, cash-flow statement, and balance sheet. Such financial statements
shall be prepared according to United States generally accepted accounting principles.

 

3.5 Prorations.

 

(a) All
obligations and liabilities represented by ad valorem taxes and assessments on the Dealership Assets for the calendar year in
which the Closing occurs, and all prepaid and accrued expenses related to utilities, prepaid items, non-refundable utility deposits
and the like relating to the Business or Assumed Liabilities, shall be apportioned between the Seller and the Purchaser as of
the Closing Date on a calendar-year basis, it being understood that the Seller shall be responsible for any such obligations and
liabilities accrued or allocable to periods prior to the Closing Date (whether or not then paid) and the Purchaser shall be responsible
for any such obligations and liabilities accruing or allocable for the periods on and after the Closing Date.

 

(b) To
the extent not fixed at the Closing Date, the initial apportionment of taxes shall be upon the basis of the appropriate rate or
charge for the preceding year or other applicable period and applied to the latest assessment. If any final bill, including one
for taxes and other apportioned obligations and liabilities, is different from that upon which the initial apportionment is made,
the Parties shall promptly thereafter make an appropriate adjustment.

 

(c) Payments
between the Parties to effect any apportionment under this Section 3.5 shall occur on the Closing Date or promptly after
such adjustments have been determined and mutually agreed to by the Parties.

 

3.6 Deposit.

 

(a) Within
3 Business Days of the Effective Date, the Purchaser shall deliver to the Escrow Agent the amount of $500,000.00,
to be held in the Escrow Agent’s IOLTA Attorneys Trust Account (the “Deposit”). If the Transaction shall
be consummated, the Deposit shall be applied to the Purchaser’s obligations at the Closing as set forth in Section 4.5,
and if this Agreement shall be terminated and the Transaction abandoned, then the Deposit shall be applied as set forth in Section
8.2.

 

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(b) By
its execution of a counterpart of this Agreement or other signed agreement among Escrow Agent, the Seller, and the Purchaser,
the Escrow Agent hereby accepts its designation as the escrow agent with respect to the Deposit, acknowledges receipt of the Deposit,
subject to collection, and agrees to hold, invest and disburse the same as herein provided. The Escrow Agent shall not be liable
for any acts taken in good faith, shall only be liable for its willful default or action, or gross negligence, and may, in its
sole discretion, rely in good faith upon the written notices, communications, orders or instructions given by any Party; provided,
however, that if any notice or correspondence is not executed by both the Purchaser and the Seller, the Escrow Agent shall
give to the Purchaser or the Seller, as the case may be, copies of any notice or correspondence received from the other and shall
not take any actions with regard thereto for 5 Business Days following the giving of such notice.

 

(c) In
the event of a disagreement between the Seller and the Purchaser as to the proper disbursement of the Deposit, the Escrow Agent
reserves the right to deposit said funds into the Registry of the Clerk of Court of Raleigh County, West Virginia (the “Court
Registry”), by filing an interpleader action and Escrow Agent shall thereupon be discharged from the liability hereunder
and shall be entitled to reimbursement from the Seller and the Purchaser for all attorney’s fees incurred and court costs
expended in connection therewith. The parties acknowledge that the Escrow Agent is also the Purchaser’s attorney with respect
to this Transaction and that, in the event an interpleader action is filed with respect to the Escrow Deposit, the Escrow Agent
may continue to represent the Seller in such action or in any other action against the Seller with respect to this Agreement.

 

(d) The
Seller and the Purchaser hereby agree to indemnify and hold harmless the Escrow Agent against any and all losses, claims, damages,
liabilities and expenses which may be incurred by the Escrow Agent in connection with its acceptance of this appointment or the
performance of its duties hereunder; provided, however, that if the Escrow Agent shall be found guilty of willful default or action,
or gross negligence, then, in such event, the Escrow Agent shall bear all such losses, claims, damages, liabilities and expenses.
In the event the Escrow Agent places the Deposit in the Court Registry, upon the delivery of same to the prevailing party, whether
by court order or otherwise, the non-prevailing party shall (i) pay to the prevailing party at the time of such delivery, interest
on said monies at the publicly announced prime rate of J.P. Morgan Chase Bank, as such rate may change from time to time, said
interest to run from the date of deposit into the Court Registry until delivery of same to the prevailing party, and (ii) notwithstanding
any contrary provision contained herein, pay to the Escrow Agent all monies necessary to reimburse the Escrow Agent for any losses,
claims, damages, liabilities and expenses incurred by the Escrow Agent in connection with its appointment as the Escrow Agent
or the performance of its duties hereunder.

 

4.
CLOSING

 

4.1 Time,
Date and Place of Closing.

 

(a) Subject
to the provisions of Section 8, the closing of the Transaction (the “Closing”) shall take place at such
time and location as the Parties shall mutually select on or before the 30th day following the later of: (i)
Manufacturer’s approval of the Purchaser, as provided in Section 4.2(c) below, (ii) the expiration of the Due Diligence
Period, or (iii) such other date agreed to by Seller and Purchaser (the “Closing Date”); provided, the satisfaction
(or appropriate waiver in writing) of the conditions set forth in Sections 4.2 and 4.3 below; provided, the foregoing
does not diminish the requirement of the fulfillment (or appropriate waiver in writing) of those conditions that by their terms
or nature are to be satisfied at the Closing, and such conditions to be satisfied at the Closing shall not be grounds for delaying
the scheduling of the Closing.

 

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(b)
The Closing shall be effective at 12:00:01 am (Eastern) on the Closing Date.

 

4.2
Conditions to Obligations of the Purchaser . The obligations of the Purchaser to make the payments and deliveries required
under Section 4.5 and to consummate the Transaction are subject to the fulfillment prior to or at the Closing Date of each
of the following conditions:

 

(a) Accuracy
of Representations. Each of the representations and warranties of the Seller contained in this Agreement, or in any certificate,
exhibit, Schedule or other document delivered by the Seller in connection with this Agreement shall be true and correct in all
material respects, in each case on the Effective Date and at and as of the Closing Date as though made on and as of the Closing
Date and each of such representations and warranties that is qualified as to materiality shall be true and correct in all respects
in each case on the Effective Date and at and as of the Closing Date as though made on and as of the Closing Date (except in each
case for such representations and warranties as are dated as of a particular date, which shall be true and correct in all material
respects or true and correct in all respects, as the case may be, as of such date).

 

(b) Performance
of Obligations. The Seller and the Shareholder shall have fully complied with and performed all of their obligations and covenants
under this Agreement required to be performed or complied with prior to or at the Closing, including tendering for delivery to
the Purchaser all of the items set forth in Section 4.4 below. It is contemplated that Seller’s floorplan liabilities
and any other secured debt is paid at Closing.

 

(c) No
Material Adverse Change. Between the Effective Date and the Closing Date there shall have been no Material Adverse Change.

 

(d) Manufacturer
Approval. The Manufacturers shall have approved in writing the Transaction and the appointment of the Purchaser as an authorized
motor vehicle dealer in the Manufacturers’ products at the applicable Dealership Premises, all on terms (including any facility
or image improvement requirements) acceptable to the Purchaser, and the Manufacturers shall have issued to the Purchaser such
documentation necessary for issuance of a West Virginia new motor vehicle dealer license. The Seller shall have executed all documents
required by the Manufacturers to terminate its dealer sales and service agreements with the Manufacturers, to be effective as
of the Closing Date and to be delivered to the Purchaser and the Manufacturers at Closing.

 

(e) Financing.
Within 30 days of the Effective Date, the Purchaser shall have received a written commitment for floor plan and acquisition
financing, all on terms and conditions acceptable to the Purchaser.

 

(f) Third
Party Consents. With respect to each Assumed Contract that requires, prior to an assignment of the Seller’s interest
therein, the Consent of a third party, each such third party shall, without cost to the Purchaser, have granted its Consent, in
form and substance reasonably satisfactory to the Purchaser, authorizing the assignment of each of the Assumed Contracts from
the Seller to the Purchaser.

 

(g) No
Litigation. No Proceeding shall be pending, or threatened, or reasonably foreseeable, before any court or other Governmental
Authority, wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) restrain, enjoin, prohibit
or prevent consummation of the Transaction or any other transaction contemplated by this Agreement, (ii) cause the Transaction
to be rescinded following consummation, or (iii) affect adversely the right of the Purchaser to own the Dealership Assets and
to operate the Business (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect).

 

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(h) Licenses.
The Purchaser shall have obtained all required Licenses from Governmental Authorities to operate the Business at the Dealership
Premises, in the same manner as currently operated by the Seller.

 

(i) Due
Diligence. The Purchaser shall be satisfied with its due diligence investigations and inspections of the Business and the
Dealership Assets. This provision shall be deemed satisfied at the end of the 2nd Business Day after the end of the Due
Diligence Period, unless the Purchaser terminates this Agreement pursuant to Section 8.1(f).

 

(j) Landlord
Consents. The Princeton Landlord, the Summersville Landlord, and the Beaver Landlord shall have consented to the Seller’s
assignment of the Princeton Premises Lease, the Summersville Premises Lease, and the Beaver Premises Lease, respectively, to the
Purchaser or its assigns.

 

(k) Subordination,
Non-Disturbance and Attornment Agreement. Each of the Princeton Landlord’s lenders, the Summersville Landlord’s
lenders, and the Beaver Landlord’s lenders shall have entered into a Subordination, Non-Disturbance and Attornment Agreement
with regard to the Princeton Premises Lease, the Summersville Premises Lease, and the Beaver Premises Lease, respectively, in
form reasonably acceptable to the Purchaser’s counsel.

 

(l) Leases.
MEG and E & W shall each have executed the MEG Lease Agreement and the E & W Lease Agreement, respectively.

 

(m) REPAs.
The Beckley BG REPA and the Oak Hill Chevrolet REPA shall have closed simultaneously with the Closing.

 

4.3
Conditions to Obligations of the Seller. The obligations of the Seller to make the deliveries set forth in Section 4.4
and to consummate this Transaction are subject to the fulfillment prior to or at the Closing Date of each of the following
conditions:

 

(a) Accuracy
of Representations. Each of the representations and warranties of the Purchaser contained in this Agreement, or in any certificate,
exhibit, Schedule or other document delivered by the Purchaser in connection with this Agreement shall be true and correct in
all material respects in each case on the Effective Date and at and as of the Closing Date as though made on and as of the Closing
Date and each of such representations and warranties that is qualified as to materiality shall be true and correct in all respects
in each case on the Effective Date and at and as of the Closing Date as though made on and as of the Closing Date (except in each
case for such representations and warranties as are dated as of a particular date, which shall be true and correct in all material
respects or true and correct in all respects, as the case may be, as of such date).

 

(b) Performance
of the Purchaser’s Obligations. The Purchaser shall have fully complied with and performed all its obligations and covenants
under this Agreement required to be performed or complied with prior to or at the Closing, including tendering for delivery to
the Purchaser all of the items set forth in Section 4.5 below.

 

(c) No
Litigation. No Proceeding shall be pending, or threatened, or reasonably foreseeable, before any court or other Governmental
Authority, wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would (i) restrain, enjoin, prohibit
or prevent consummation of any of the Transaction or any other transaction contemplated by this Agreement, or (ii) cause the Transaction
to be rescinded following consummation.

 

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(d) Landlord
Consents. The Princeton Landlord, the Summersville Landlord, and the Beaver Landlord shall have consented to the Seller’s
assignment of the Princeton Premises Lease, the Summersville Premises Lease, and the Beaver Premises Lease, respectively, to the
Purchaser or its assigns.

 

(e) Leases.
The Purchaser, or its Affiliate(s), shall have executed the MEG Lease Agreement and the E & W Lease Agreement.

 

(f) REPAs.
The Beckley BG REPA and the Oak Hill Chevrolet REPA shall have closed simultaneously with the Closing.

 

(g) Manufacturer
Approval. The Manufacturers shall have approved in writing the Transaction and the appointment of the Purchaser as an authorized
motor vehicle dealer in the Manufacturers’ products at the applicable Dealership Premises, all on terms (including any facility
or image improvement requirements) acceptable to each of the Manufacturers, and the Purchaser shall have obtained from each of
the Manufacturers all documentation necessary for issuance of a West Virginia new motor vehicle dealer license. Each of the Manufacturers
shall have executed all documents required to terminate its dealer sales and service agreements with the Seller, to be effective
as of the Closing Date and to be delivered to the Seller at Closing.

 

4.4
Deliveries by the Seller at the Closing. On or before the Closing Date, the Seller and the Shareholder, as the case may
be, shall deliver the following to the Purchaser (or as otherwise provided herein), each, where applicable, duly executed (or
endorsed, as the case may be) by the Seller and/or Shareholder:

 

(a) (i)
such deeds, bills of sale, endorsements, assignments and other good and sufficient instruments of conveyance (collectively, the
“Conveyance Instrument”) as will effectively convey to the Purchaser all title to and interest in the Dealership
Assets, together with releases or termination statements of all Encumbrances (other than Permitted Encumbrances) on the Dealership
Assets, and (ii) an instrument of assignment and assumption with respect to the Assumed Liabilities (the “Assignment
and Assumption Instrument,” and along with the Conveyance Instrument, collectively, the “Bill of Sale and Assignment”),
in substantially the form attached hereto as Exhibit E;

 

(b) an
instrument of assignment and assumption with respect to the tradenames, trademarks, domain names and URLs listed on Schedule
5.2(q), in substantially the form attached hereto as Exhibit F (the “IP Assignment Agreement”);

 

(c) an
agreement concerning the allocation of the Asset Purchase Price and preparation of IRS Form 8594, in substantially the form attached
hereto as Exhibit G (the “8594 Agreement”);

 

(d) a
non-competition and non-solicitation agreement, in substantially the form attached hereto as Exhibit H (the “Non-Competition
Agreement”);

 

(e)
a post-Closing agreement (the “Post-Closing Agreement”), as applicable;

 

(f) a
closing and disbursement statement enumerating the Asset Purchase Price, prorations, and adjustments, all in accordance with this
Agreement or as otherwise agreed upon by the Seller and the Purchaser (the “Closing Statement”);

 

(g) an
assignment and assumption agreement with respect to the Princeton Premises Lease, the Summersville Premises Lease, and the Beaver
Premises Lease (the “Lease Assumption Instrument”);

 

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(h)
the Operating Agreement;

 

(i) all
manufacturer statements of origin furnished by a Manufacturer for the New Vehicles, Demos, and Service Loaners, and all titles
for the Used Vehicles and the company vehicles (collectively, the “Titles”), along with a limited power of
attorney in favor of the Purchaser with respect to the Titles;

 

(j) letters
of good standing from the West Virginia State Tax Department (“WVSTD”) stating that, as of a date not more
than 20 days prior to the Closing Date, the Seller is in compliance with all of the requirements of the WVSTD pertaining
to the filing of tax returns and payment of taxes. The foregoing certifications shall be collectively referred to as the “Tax
Certificates.” If the Seller is unable to deliver the Tax Certificates, the Purchaser may waive this delivery requirement
subject to the Seller authorizing the Withheld Tax Amount described in Section 7.11 and executing the Tax Escrow Agreement
attached hereto as Exhibit I;

 

(k) all
owners’ manuals, all headsets, all DVD remotes (if applicable), all navigation system SD cards and DVDs, all floor mats,
and at least 2 keys and wireless key fobs for each New Vehicle, Demo, and Service Loaner, and 1 key to each of the
Used Vehicles acquired by the Purchaser;

 

(l) schedules,
inventories, and other data from the Seller’s DMS reasonably requested by the Purchaser as part of building closing inventory/accounting
schedules;

 

(m) a
certificate dated the Closing Date and executed by an authorized representative of the Seller, certifying (i) that the representations
and warranties of the Seller in this Agreement are true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on and as of such date, (ii) the covenants and agreements
to be performed or complied with by the Seller prior to the Closing have been performed and complied with in all respects, (iii)
the resolutions of the Seller authorizing the execution and delivery of this Agreement and the agreements contemplated hereby
and approving the consummation of the Transaction, and (iv) the incumbency and signatures of any representatives of the Seller
executing this Agreement;

 

(n) such
document(s) as may be required by the Manufacturers to (i) memorialize or confirm the surrender or termination by the Seller of
its dealer sales and service agreements and franchise rights with respect to the Manufacturers’ brands, (ii) confirm successful
Closing of the Transaction, or (iii) memorialize the agreed disposition of the Seller’s parts accounts (e.g., the
“Parts Account Settlement Acknowledgement”);

 

(o) certificates
of good standing with respect to the Seller from the West Virginia Secretary of State, dated as of a recent date prior to the
Closing Date;

 

(p)
the cancellation of, or transfer to the Purchaser, of all fictitious names associated with the Business;

 

(q)
written terminations of the Existing Leases;

 

(r) the
Capital Contribution, which shall be satisfied by a credit on the Closing Statement in favor of the Purchaser at Closing, as further
described in Section 4.7; and

 

(s) such
other documents or instruments as may be required under this Agreement or as may be reasonably requested by the Purchaser in connection
with the consummation of the Transaction.

 

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4.5
Deliveries by the Purchaser at the Closing. On or before the Closing Date, the Purchaser shall deliver or cause to be delivered
the following to the Seller (or as otherwise provided herein), each, where applicable, duly executed (or endorsed, as the case
may be) by the Purchaser:

 

(a) delivery
to the Escrow Agent (who will serve as a disbursement agent at the Closing) by wire transfer in immediately available funds of
an amount equal to the sum of the Asset Purchase Price, subject to the adjustments provided herein MINUS the Deposit MINUS
the Indemnification Escrow Amount MINUS the Withheld Tax Amount MINUS the amount of the Capital Contribution
and PLUS or MINUS any adjustments for prorations and other payments and withholdings to be paid or otherwise borne by the
Seller or the Purchaser under this Agreement, which such net amount shall be disbursed by the Escrow Agent to the Seller by wire
transfer to an account designated by the Seller, in immediately available funds;

 

(b) the
Deposit, which shall be disbursed by the Escrow Agent to the Seller by wire transfer in immediately available funds or by certified
check;

 

(c)
the Membership Interest, described in Section 4.7;

 

(d)
the Bill of Sale and Assignment;

 

(e)
the IP Assignment Agreement;

 

(f)
the 8594 Agreement;

 

(g)
the Non-Competition Agreement;

 

(h)
the Post-Closing Agreement;

 

(i)
the Lease Assumption Instrument;

 

(j)
the Operating Agreement;

 

(k) evidence
of the issuance to the EBD and LAD of a combined 15% membership interest in the Purchaser;

 

(l)
the Closing Statement;

 

(m)
as applicable, the Tax Escrow Agreement;

 

(n) a
certificate of good standing with respect to the Purchaser from the West Virginia Secretary of State, dated as of a recent date
prior to the Closing Date;

 

(o)
a certificate dated the Closing Date and executed by an officer of the Purchaser, certifying (i) that the representations and
warranties of the Purchaser in this Agreement are true and correct in all material respects on and as of the Closing Date with
the same effect as though such representations and warranties had been made on and as of such date, (ii) the covenants and agreements
to be performed or complied with by the Purchaser prior to the Closing have been performed and complied with in all respects,
(iii) the resolutions of the Purchaser authorizing the execution and delivery by the Purchaser of this Agreement and the agreements
contemplated hereby and approving the consummation of the Transaction, and (ii) the incumbency and signatures of the officer of
the Purchaser executing this Agreement;

 

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(p)
the MEG Lease Agreement and the E & W Lease Agreement, each executed by the Purchaser; and

 

(q) such
other documents or instruments as may be reasonably required by the Seller in accordance with this Agreement, each in form and
substance reasonably satisfactory to the Purchaser.

 

4.6 Post-Closing
Matters.

 

(a) Delivery
of Possession. The Seller shall take all necessary action to provide the Purchaser with possession of the Dealership Assets
on the Closing Date. Within 5 Business Days after the Closing Date, the Seller shall remove from the Dealership Premises
the Excluded Assets not sold to the Purchaser hereunder, during which time the Purchaser shall not be liable for any damages or
losses to any of the Seller’s assets while on the Dealership Premises. If any of the Seller’s Excluded Assets remain
on the Dealership Premises after such period, the Purchaser shall provide the Seller with written notice to remove the remaining
Excluded Assets within 5 Business Days, and any Excluded Assets not removed by the Seller by the end of such additional
period shall be deemed included in the Transaction. The Seller agrees to indemnify and hold the Purchaser harmless from any claims
from customers or employees concerning their respective assets located on the Dealership Premises on the Closing Date.

 

(b) Records.
The Purchaser agrees to store the Records, at no expense to the Seller, for the period(s) required under Applicable Law. The Purchaser
shall be obligated to exercise only the same degree of care in the safeguard and maintenance of said Records as the Purchaser
provides its own records. After the Closing Date, the Purchaser shall give to the Seller, and its agents, reasonable access to
the Records as shall be necessary for recordkeeping and tax purposes, or in connection with any third-party demand or claim made
by or against the Seller.

 

(c) Seller’s
Receivables. Following the Closing, the Purchaser agrees for a period of 120 days or 4 month-ends, whichever
is greater (the “Run Out Period”), to accept payment of the Seller’s accounts receivable payments arising
out of the operation of the Business prior to Closing and to hold same for prompt payment over to the Seller. At the end of the
Run Out Period, the Purchaser shall no longer be obligated to accept payments of such accounts receivable. If the Purchaser does
accept payment of any of the Seller’s accounts receivable after expiration of the Run Out Period, the Purchaser shall promptly
pay same over to the Seller. It is understood that the Purchaser’s responsibility, so far as such collection is concerned,
is only to accept monies paid on such accounts receivable and shall not include any obligation to attempt to enforce payment thereof,
or to send out bills or statements therefor.

 

(d) Run
Out of Books. The Purchaser agrees to turn over to the Seller all payments, mail, invoices, general correspondence, and any
other business-related items (“Residual Transactions”) related to the Seller’s Business operations prior
to the Closing Date that are received by the Purchaser after the Closing Date, so the Seller may account for such items in
the wind-down of its business affairs. The Purchaser and Seller will work closely to reasonably ensure that all Residual Transactions
that may impact both the Purchaser and Seller will be reconciled, reviewed, and settled on a weekly basis for the first month
and thereafter on a bi-weekly basis through the end of the Run Out Period.

 

(e) Erroneous
Payments. The Parties shall in good faith work together and use their commercially reasonable efforts to ensure that (i) amounts
paid by the Seller but owed by the Purchaser as a result of Manufacturer or vendor erroneously billing the Seller for items arising
out of or in connection with the operation of the Business following Closing shall be paid over to the Seller promptly, and (ii)
amounts paid by the Purchaser but owed by the Seller as a result of Manufacturer or vendor erroneously billing the Purchaser for
items arising out of or in connection with the operation of the Dealership prior to Closing shall be paid over to the Purchaser
promptly.

 

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(f)
Further Assurances.

 

(i) To
the extent that any of the Assumed Contracts is not assignable without the consent of another party, this Agreement shall not
constitute an assignment or attempted assignment thereof at any time prior to receipt of such consent. If such consent shall not
be obtained on or prior to the Closing, the Seller agrees to cooperate with the Purchaser after the Closing in implementing any
reasonable arrangement designed to provide for the Purchaser the benefits under any such Assumed Contracts.

 

(ii) The
Seller shall, from time to time after the Closing, deliver to the Purchaser such further deeds, bills of sale and assignment,
documents of title and other instruments necessary or desirable, in the reasonable opinion of the Purchaser’s counsel, to
perfect the transfers of the Dealership Assets and the Assumed Liabilities to the Purchaser, free and clear of all Encumbrances
other than the Permitted Encumbrances. The Purchaser shall, from time to time after the Closing, deliver to the Seller such further
assignments, instruments of assumption, or other documents as may be necessary or desirable, in the reasonable opinion of the
Seller’s counsel, to perfect or clarify the Purchaser’s assumption of the Assumed Liabilities.

 

(g) Post-Closing
Assistance and Allstate Office. Notwithstanding anything herein to the contrary, Purchaser will allow (i) Alex Williams to
assist Seller with the closing of Seller’s financial statements for the month of the Closing, and (ii) the Allstate Office,
operated by a relative of Seller, to remain on the Beckley BG Premises for up to 12 months, and shall not require a rental
payment from the Allstate Office.

 

(h)
Survival. The matters under this Section 4.6 shall survive the Closing.

 

4.7 Membership
Interest; Capital Contribution.

 

(a) On
the Closing Date, the Purchaser shall deliver or cause to be delivered to Davis HoldCo a 15% membership interest in the
Purchaser (the “Membership Interest”).

 

(b) On
the Closing Date, in exchange for the Purchaser’s issuance of the Membership Interest, Davis HoldCo shall deliver or cause
to be delivered to the Purchaser an amount equal to 15% of the Required Initial Capitalization (the “Capital Contribution”),
which shall be delivered in the form of a credit in the closing statement in favor of the Purchaser at Closing. The Membership
Interest shall be subject to the Operating Agreement.

 

5.
REPRESENTATIONS AND WARRANTIES

 

5.1
Representations and Warranties by the Purchaser. The Purchaser hereby represents and warrants to the Seller as of the Effective
Date and as of the Closing Date as follows:

 

(a)
Corporate Matters.

 

(i) The
Purchaser is duly organized, validly existing, and in good standing under the laws of the state of its formation and in West Virginia.

 

(ii)
The execution, delivery and performance of this Agreement and the Other Agreements to which it is a party by the Purchaser have
been duly authorized by all requisite company action. Except for the required Licenses and the Consent of the Manufacturers to
the appointment of the Purchaser as an authorized dealer in the Manufacturers’ products, no approval or consent of any other
person is required in connection with the execution, delivery, and performance by the Purchaser of this Agreement and the Other
Agreements to which it is a party.

 

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(iii) This
Agreement has been, and at the Closing the Other Agreements to which the Purchaser is a party will be duly executed and, assuming
due authorization, execution, and delivery by the Seller and Shareholder, this Agreement constitutes and the Other Agreements
to which the Purchaser is a party will constitute legal, valid and binding obligations of the Purchaser, enforceable in accordance
with their respective terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency and
other laws and equitable principles affecting creditors’ rights generally and the discretion of the courts in granting equitable
remedies.

 

(iv) The
execution and delivery by the Purchaser of this Agreement and the Other Agreements to which it is a party, and the consummation
by the Purchaser of the transactions contemplated hereby and thereby, will not constitute (with or without the giving of notice
or the lapse of time or both) a violation of, contravene, be in conflict with, result in the acceleration of or entitle any party
to accelerate (whether after the giving of notice or lapse of time or both), or constitute a default under (A) any term or provision
of the articles of organization or operating agreement of the Purchaser, (B) any Contract to which the Purchaser is subject or
by which it is bound, or (C) subject to compliance with any Applicable Law.

 

(b) Brokers.
Except as set forth in Schedule 5.1(b), no broker, agent, consultant, finder or other similar person has assisted the Purchaser
in procuring, negotiating or executing this Agreement, and the Purchaser is under no contract with any such party.

 

(c) Financial
Ability. Purchaser has the financial ability to consummate the Transaction and will have the financial ability to consummate
the Transaction at Closing.

 

(d) No
Material Misrepresentation or Omission. No representation or warranty by the Purchaser contained in this Agreement, and no
statement contained in any instrument, list, certificate, or writing furnished by the Purchaser to the Seller under the provisions
hereof or in connection with the Transaction, contains any untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements contained herein or therein not misleading.

 

5.2 Representations
and Warranties by the Seller. The Seller represents and warrants to the Purchaser as of the Effective Date and as of the
Closing Date as follows:

 

(a)
Corporate Matters.

 

(i)
Each of BBGAM, KCC, and HPV are corporations duly organized, validly existing and in good standing under the laws of the State
of West Virginia.

 

(ii) The
execution, delivery and performance of this Agreement and the Other Agreements to which it is a party by the Seller have been
duly authorized by all requisite company action (including approval by the Shareholder). Except for the Consent of the Manufacturers
to the appointment of the Purchaser as an authorized dealer in the Manufacturers’ products, and the approval of the Princeton
Landlord, the Summersville Landlord, and the Beaver Landlord to the assignment of the Princeton Premises Lease, the Summersville
Premises Lease, and the Beaver Premises Lease, respectively, no approval or consent of any other person is required in connection
with the execution, delivery, and performance by the Seller and the Shareholder of this Agreement and the Other Agreements to
which they are parties.

 

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(iii) This
Agreement has been, and at the Closing the Other Agreements to which the Seller is a party will be duly executed and, assuming
due authorization, execution and delivery by the Purchaser, this Agreement constitutes and the Other Agreements to which the Seller
is a party will constitute the legal, valid and binding obligations of the Seller, enforceable in accordance with their respective
terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency and other laws and equitable
principles affecting creditors’ rights generally and the discretion of the courts in granting equitable remedies.

 

(iv) The
execution and delivery by the Seller of this Agreement and the Other Agreements to which the Seller is a party, and the consummation
by the Seller of the transactions contemplated hereby and thereby, will not constitute (with or without the giving of notice or
the lapse of time or both) a violation of, contravene, be in conflict with, result in the acceleration of or entitle any party
to accelerate (whether after the giving of notice or lapse of time or both), or constitute a default under (A) any term or provision
of the articles of incorporation or by-laws of the Seller, (B) any Contract to which the Seller is subject or by which it is bound,
or (C) subject to compliance with any Applicable Law.

 

(b) Title.
The Seller owns, and has, or shall have as of the Closing Date, good title to, the Dealership Assets, free and clear of all Encumbrances,
other than the Permitted Encumbrances. Except as set forth in Schedule 5.2(b), all Fixed Assets located at the Dealership
Premises and utilized by the Seller in the operation of its Business are owned by the Seller.

 

(c) Taxes.
The Seller has duly filed all foreign, federal, state, county and local income, excise, sales, property, withholding, social security,
franchise, license, information returns and other applicable tax returns and reports, or appropriate and permitted extensions
thereto, required to be filed by it as of the Effective Date with respect to the Business and the Dealership Assets. To the Seller’s
Knowledge, each such return is true, correct, and complete, and the Shareholder has paid all taxes, assessments, amounts, interest
and penalties due to any Governmental Authority. To its Knowledge, the Seller has no liability for any taxes, assessments, amounts,
interest or penalties of any nature whatsoever other than those for which the Seller has created sufficient reserves or made other
adequate provision. No Governmental Authority is now asserting or, to the Seller’s Knowledge, threatening to assert any
deficiency or assessment for additional taxes, interest, penalties or fines with respect to the Seller, the Business, or the Dealership
Assets.

 

(d)
Contracts. Except as set forth in Schedule 5.2(d):

 

(i) Each
Assumed Contract listed on Schedule 2.1(e) is in full force and effect and constitutes a legal, valid and binding agreement,
enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium, similar laws
affecting creditors’ rights and remedies generally and general principles of equity. No event or condition has occurred
and is continuing which, with or without the lapse of time or giving of notice, constitutes, or would ripen into or become, a
breach of or default under an Assumed Contract by the Seller, or, to the Seller’s Knowledge, by any other party thereto,
in any term, covenant or condition of each Assumed Contract; and

 

(ii) Except
for (A) the Assumed Contracts, (B) Contracts listed on Schedule 2.1(e)(ii) which Purchaser has elected not to assume, and (C)
Contracts involving in each case less than $2,000.00 over their respective terms or which are terminable at will by the
Seller without payment or penalty of any nature whatsoever, the Seller is not a party to any assignable Contract.

 

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(e) Employees
and Employment Matters. Unless otherwise set forth in detail in Schedule 5.2(e), to Seller’s knowledge:

 

(i) The
Seller has complied with all requirements of Applicable Law relating to the Seller’s employees (each an “Employee”
and collectively, the “Employees”) and will have paid all wages, salary, vacation, and sick leave (even if
not specifically accrued for by the Seller), and bonuses due to the Employees (the “Employee Compensation”)
through the Closing Date (including any accrued bonuses). The Seller has not received any notice regarding a current claim against
it for (A) overtime pay, wages, salary or bonus, excluding current payroll periods or (B) vacation time, excluding time earned
in current payroll periods.

 

(ii)
The Seller is not currently paying any pension, deferred compensation, or retirement allowance to anyone.

 

(iii) The
Seller has no oral or written collective bargaining or organized labor contracts, employment agreements, bonus or commission agreements,
pay plans, deferred compensation agreements, profit sharing agreements, welfare or health benefit agreements, or retirement plans
or arrangements, whether or not legally binding. In accordance with the deadlines in Section 7.4, the Seller shall deliver
to the Purchaser true and correct copies of each agreement, plan, or arrangement described on Schedule 5.2(e), if any.

 

(iv) The
Seller has taken no action that would interfere with any employment by the Purchaser of any Employee.

 

(v) The
Seller is not aware that any Employee intends to terminate his or her employment relationship with the Seller. The Seller has
no contract for the future employment of any Employee.

 

(vi) The
Seller is not aware of any Employee who intends to refuse employment with the Purchaser after the Closing or will terminate his/her
employment with the Purchaser within 2 weeks after the Closing Date.

 

(vii)
There have been no Employee walk-outs, strikes, or similar events within the last 3 years.

 

(viii)
No current or former Employee has filed a charge with the EEOC within the last 2 years.

 

(ix) The
Seller maintains current files containing all Labor Condition Applications and related public and non-public access documentation
which they must present upon request by the Department of Labor including all documentation noted in 20 CFR §655.760. The
Seller also maintain current files containing all documentation which they are required to maintain in the event of an audit related
to labor certification for permanent employment filings, including all documentation noted in 20 CFR §655 and 656 and the
rules and regulations promulgated thereunder.

 

(x) The
Seller has taken the required actions under Applicable Law to confirm the identity and work status eligibility of its Employees.
The Seller has not received any written notice of any inspection or investigation relating to their alleged noncompliance with
or violation of IRCA, nor has the Seller been warned, fined or otherwise penalized for any failure to comply with IRCA or for
any willful violation of any other immigration law, rule or regulation.

 

(xi)
The Seller has complied in all material respects with the applicable requirements for its employee medical and benefit plans
as set forth in the Code and ERISA, including Section 4980B of the Code (as well as its predecessor provision, Section 162(k)
of the Code) and Sections 601 through 608, inclusive, of ERISA, which provisions are hereinafter referred to collectively as
“COBRA.”

 

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(xii) Subject
to the Purchaser’s observance and performance of the covenant by the Purchaser set forth in Section 7.3(g) of this
Agreement, the Seller has not violated and will not violate the WARN Act.

 

(f) Financial
Statements. True, correct and complete copies of the Current Financials have been delivered by the Seller to the Purchaser
for Purchaser’s review in connection with its due diligence investigation of the Business and the Dealership Assets. The
Current Financials (i) have been prepared in accordance with the Manufacturers’ reporting requirements, (ii) represent actual,
bona fide transactions, and (iii) fairly present the financial condition and the results of operations of the Business as at the
respective dates of and for the periods referred to in such records. To the Knowledge of the Seller, neither the Seller nor its
independent accountants have identified or been made aware of any fraud, whether or not material, that involves the Seller’s
management or other employees who have a role in the preparation of financial statements or the internal controls utilized by
the Seller, or any claim or allegation regarding any of the foregoing. Except as disclosed on Schedule 5.2(f), since June
1, 2020, there has been:

 

(i) no
business condition or any fact that has specific application to the Seller that may result in a Material Adverse Change;

 

(ii) no
damage to, or destruction or loss of, any assets of the Seller materially and adversely affecting the Dealership Assets or the
condition (financial or otherwise), business, operations or prospects of the Business;

 

(iii) no
sale, lease, abandonment or other disposition or removal of any assets that would have constituted Dealership Assets except in
the ordinary course consistent with past practices with replacement by assets of similar utility and value;

 

(iv) no
material increases in the compensation, commissions or bonuses payable to any employee or agent of the Seller performing services
with respect to the Business; no entry into or amendment or modification of any employment, severance or similar contract; no
adoption of or material increase in benefits under any employee benefit plan or program; and no labor problems, strikes or other
occurrences of a similar nature; or

 

(v)
no change in the accounting methods used by the Seller with respect to the Business.

 

(g) Absence
of Undisclosed Liabilities. Except as set forth in Schedule 5.2(g), the Seller has no debts, claims, liabilities or
obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due,
asserted or un-asserted, except (1) to the extent disclosed or reserved against in the Seller’s balance sheet for the 12
months ended December 31, 2019, and (2) for liabilities and obligations that were incurred after December 31, 2019 in the
ordinary course consistent with past practices and that, individually or in the aggregate, do not exceed $10,000.

 

(h)
Condition of the Dealership Assets and Dealership Premises. Except as set forth in Schedule 5.2(h):

 

(i) the
Dealership Assets constitute all of the assets used by the Seller in connection with, and necessary for, the operation of the
Business in the ordinary course and as historically operated by the Seller;

 

    26

     

    

 

(ii) the
Seller has not received notice of and has no actual knowledge of (A) any pending or contemplated condemnation, eminent domain
or rezoning Proceeding affecting the Dealership Premises, (B) any proposal or other consideration for increasing the assessed
value of the Dealership Premises for state, county, local or other ad valorem or similar Taxes by an amount that would materially
affect the profitability of the Business, or (C) any Proceedings or public improvements which could or might result in the levy
of any special Tax or assessment against the Dealership Premises;

 

(iii)
the only real estate, properties, and interests used by the Seller in the Business or necessary to the operation of the Business
are the Dealership Premises;

 

(iv)
a true and correct copy of the Princeton Premises Lease is attached hereto as Exhibit J;

 

(v)
a true and correct copy of the Summersville Premises Lease is attached hereto as Exhibit K; and

 

(vi)
a true and correct copy of the Beaver Premises Lease is attached hereto as Exhibit L.

 

(i) Litigation.
Except as set forth in Schedule 5.2(i), there is no Proceeding pending or, to the Knowledge of the Seller, threatened against
or relating to the Seller (including in connection with or relating to the Transaction or the Other Agreements or of any action
taken or to be taken in connection therewith or the consummation of the transactions contemplated hereby or thereby).

 

(j) Compliance
with Applicable Laws. Except as set forth in Schedule 5.2(j), To its Knowledge, the Seller has complied in all material
respects with all Applicable Laws relating to the Business, the Dealership Assets and its use and occupation of the Dealership
Premises (including zoning laws), and is not and has not been either charged with, in receipt of any notice or warning of, or
to the Knowledge of the Seller, under investigation with respect to, any failure or alleged failure to comply with any provision
of any Applicable Law.

 

(k) Brokers.
Except as set forth in Schedule 5.2(k), no broker, agent, consultant or other similar person has assisted Seller in procuring,
negotiating or closing this Transaction, and the Seller is under no contract with any such party.

 

(l)
Environmental. Except as set forth in Schedule 5.2(l):

 

(i) To
the Seller’s Knowledge, there are no Hazardous Substances present at, on, in or under any portion of the Dealership Premises
the Seller operated such portion of the Dealer Premises and was owned by the Shareholder, or a Shareholder Affiliate, except for
consumables used and waste generated in the ordinary course of the Seller’s business, in each case in compliance with applicable
Environmental Laws.

 

(ii) The
Seller has not received any notice, whether oral or written, from any Governmental Authority or other Person of any actual or
threatened Environmental, Health and Safety Liabilities that are pending or unresolved with respect to the Dealership Premises
Storage or the Business.

 

(iii)
To the Seller’s Knowledge, all gasoline, oil and other petroleum products stored, treated, used or disposed of on, in or
about any portion of the Dealership Premises by the Seller have been stored, treated, used or disposed of in full and strict compliance
with all Applicable Laws. All such above -ground gasoline, oil or petroleum product storage tanks placed upon the Dealership Premises
by the Seller or used by the Seller on the Dealership Premises, if any, have been properly registered.

 

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(iv) The
Seller has provided to the Purchaser all material environmental reports, assessments, audits, studies, investigations, data and
other nonprivileged written environmental information in its custody, possession or control concerning the Business or the Dealership
Premises.

 

(m) Manufacturer
Communications. Except as set forth on Schedule 5.2(m), no Manufacturer has (i) notified the Seller of any deficiency
in dealership operations (including brand imaging, facility conditions, sales efficiency, customer satisfaction, warranty work
and reimbursement, or sales incentives); (ii) advised the Seller of a present or future need for facility improvements, upgrades,
or relocation in connection with the Business; (iii) notified the Seller of such Manufacturer’s desire to alter the configuration
of the Business, including facility utilization; (iv) notified the Seller of a plan to establish an additional dealer within 40
or fewer miles from the Dealership Premises, (v) notified the Seller of the relocation of an existing dealership for any of
such Manufacturer’s products within 20 miles of the Dealership Premises, or (vi) notified the Seller of any reduction
in the Seller’s new vehicle allocation for such Manufacturer’s products. The Seller is not a party to any “exclusive
use agreement,” “site control agreement,” or other Contract with any Manufacturer (other than a dealer sales
and service agreement) concerning the occupation and use of the Dealership Premises.

 

(n) Manufacturer
Audits. Except as set forth on Schedule 5.2(n), in the last 5 years, no Manufacturer has conducted any audit
of the Seller’s sales practices and documentation or service practices and warranty claim documentation, and the Seller
has not been subject to a chargeback of monies previously paid to the Seller with respect to its vehicle sales and warranty claims.

 

(o) Dealership
Marketing Plans. Except as set forth on Schedule 5.2(o), in the last 5 years, the Seller has not participated,
and currently does not participate, in customer marketing or added value plans such as “tires for life,” “batteries
for life,” “lifetime oil changes,” customer coupon programs, customer gift certificates, extended service warranties,
insurance related products, or similar customer programs, and the Seller has not offered its customers any products or services
for which the Seller, or any of its Affiliates, has an ongoing responsibility for administration and the Liability thereof.

 

(p) Tradenames;
Domain Names; URLs. Schedule 5.2(p) sets forth a complete list of all tradenames and trademarks that have been utilized
by the Seller in its Business and a list of all Internet domain names or URLs registered, owned, or leased by the Seller, Shareholder,
or their Affiliates. The Seller owns, solely and exclusively, or possesses the valid and enforceable right to use all of the Seller’s
tradenames.

 

(q) Odometer
Accuracy. The odometer on each of the motor vehicles included in the Seller’s inventory on the Closing Date represents
the actual mileage that such motor vehicle has been driven unless otherwise disclosed on the odometer disclosure statement accompanying
such motor vehicle.

 

(r) Privacy
Laws. The Seller has complied with the Gramm-Leach-Bliley Act (the “GLB Act”) with respect to customer
information received by the Seller, including, if applicable, responsibility for providing any notice required, and the Seller
has implemented and maintained privacy practices to protect any financial information received by the Seller from its customers.
Schedule 5.2(r) contains a copy of the Seller’s internal policies and procedures document for compliance with the
GLB Act and a copy of the notice provided to the Seller’s customers.

 

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(s) Solvency.
The Seller is not insolvent and will not be rendered insolvent by the Transaction. As used in this Section 5.2(s), “insolvent”
means that the sum of the Seller’s debts and other probable Liabilities exceeds the present fair saleable value of the Seller’s
assets.

 

(t) Intellectual
Property Rights. The Seller either owns or is otherwise entitled to use (under a license or otherwise) all Proprietary Rights
necessary to conduct the business of the Business as presently conducted. For purposes of this Agreement, “Proprietary
Rights” means all (i) trademarks, service marks, trade dress, logos, trade names and corporate names and registrations
and applications for registration thereof, (ii) copyrights and registrations and applications for registration thereof, (iii)
mask works and registrations and applications for registration thereof, (iv) computer software data and documentation, (v) trade
secrets and confidential business information (including ideas, formulas, compositions, inventions (whether patentable or unpatentable
and whether or not reduced to practice), copyrightable works, financial, marketing and business data, pricing and cost information,
business and marketing plans and customer and supplier lists and information), (vi) other proprietary rights or any intellectual
property, and (vii) copies and tangible embodiments thereof (in whatever form or medium).

 

(u) Licenses.
Schedule 5.2(u) contains a list of all Licenses that, to the Knowledge of Seller, constitute all material Licenses as required
for the operation of the Business as presently conducted and as presently intended to be conducted. The Seller currently has all
such Licenses, and to its Knowledge, the Seller is not in default or violation (and no event has occurred which, with notice or
the lapse of time or both, would constitute a default or violation) of any term, condition or provision of any such License, nor
are any facts or circumstances that could form the Basis for any such default or violation.

 

(v) No
Material Misrepresentation or Omission. No representation or warranty by the Seller contained in this Agreement, and no statement
contained in any instrument, list, certificate, or writing furnished by the Seller to the Purchaser under the provisions hereof
or in connection with the Transaction, contains any untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein or therein not misleading.

 

5.3
Representations and Warranties by the Shareholder. The Shareholder represents and warrants to the Purchaser as of the Effective
Date and as of the Closing Date as follows:

 

(a)
Corporate Matters.

 

(i)
Each of BBGAM, KCC, and HPV are corporations duly organized, validly existing and in good standing under the laws of the State
of West Virginia.

 

(ii) The
execution, delivery and performance of this Agreement and the Other Agreements to which it is a party by the Seller have been
duly authorized by all requisite company action (including approval by the Shareholder). Except for the Consent of the Manufacturers
to the appointment of the Purchaser as an authorized dealer in the Manufacturers’ products, and the approval of the Princeton
Landlord, the Summersville Landlord, and the Beaver Landlord to the assignment of the Princeton Premises Lease, the Summersville
Premises Lease, and the Beaver Premises Lease, respectively, no approval or consent of any other person is required in connection
with the execution, delivery, and performance by the Seller and the Shareholder of this Agreement and the Other Agreements to
which they are parties.

 

(iii)
This Agreement has been, and at the Closing the Other Agreements to which the Seller and/or the Shareholder are parties will be
duly executed and, assuming due authorization, execution and delivery by the Purchaser, this Agreement constitutes and the Other
Agreements to which the Seller and/or the Shareholder are parties will constitute the legal, valid and binding obligations of
each of the Seller and the Shareholder, as applicable, enforceable in accordance with their respective terms, except to the extent
that enforceability may be limited by applicable bankruptcy, insolvency and other laws and equitable principles affecting creditors’
rights generally and the discretion of the courts in granting equitable remedies.

 

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(iv) The
execution and delivery by the Seller of this Agreement and the execution and delivery by the Seller and the Shareholder of the
Other Agreements to which the Seller and/or the Shareholder are parties, and the consummation by the Seller and the Shareholder,
as applicable, of the transactions contemplated hereby and thereby, will not constitute (with or without the giving of notice
or the lapse of time or both) a violation of, contravene, be in conflict with, result in the acceleration of or entitle any party
to accelerate (whether after the giving of notice or lapse of time or both), or constitute a default under (A) any term or provision
of the articles of incorporation or by-laws of the Seller or the Shareholder, (B) any Contract to which the Seller or the Shareholder
are subject or by which they are bound, or (C) subject to compliance with any Applicable Law.

 

(b) Legal
Capacity. The Shareholder has the necessary legal capacity to join this Agreement for the purposes set forth in the applicable
joinder(s) and the Seller’s Closing Documents to which the Shareholder is a party and to perform his or her obligations
hereunder and thereunder, if any.

 

6.
SURVIVAL; INDEMNIFICATION

 

6.1Survival.
Subject to Section 6.6, the representations, warranties, covenants and agreements made by the Parties and in any agreement,
certificate, instrument or other document delivered under this Agreement shall survive the Closing and consummation of the Transaction
for a period of 24 months following the Closing.

 

6.2 Indemnities
of the Seller.

 

(a) Subject
to the provisions of this Article 6, the Seller shall, jointly and severally, indemnify, hold harmless and agree to defend
the Purchaser and its Affiliates, officers, directors, employees, agents, consultants, representatives, stockholders and controlling
Persons and their respective successors and assigns (collectively, the “Purchaser Indemnified Parties”) at
all times from and after the date of this Agreement, from and against any and all Losses incurred by any of the Purchaser Indemnified
Parties (the “Purchaser Damages”), which may now or in the future be paid, incurred or suffered by or asserted
against the Purchaser Indemnified Parties by any Person resulting or arising from or incurred in connection with any one or more
of the following:

 

(i) any
misrepresentation or breach of any warranty of the Seller or the Shareholder made or contained in this Agreement;

 

(ii) any
failure of the Seller to perform any covenant or agreement made or contained in this Agreement or fulfill any obligation in respect
thereof;

 

(iii)
any Retained Liability or Excluded Asset;

 

(iv) any
non-compliance by the Seller with any fraudulent transfer law in connection with the Transaction; or

 

(v) any
brokerage or finder’s fees or commissions or similar payments based upon any Contract made, or alleged to have been made,
by any Person, with the Seller or the Shareholder (or any Person acting on their behalf) in connection with the Transaction.

 

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(b) Basket.
In no event will any amount be recovered from the Seller for any Purchaser Damages resulting from matters described in Section
6.2(a)(i), until the aggregate amount of all Purchaser Damages incurred by the Purchaser Indemnified Parties exceeds $50,000
(the “Basket”), in which event the Seller, jointly and severally, will be obligated, subject to the other
provisions of this Agreement, to indemnify the Purchaser Indemnified Parties to the full extent of such Purchaser Damages, including
the Basket, on a dollar for dollar basis; provided, however, that the Seller’s Liability for any Purchaser Damages
will not be limited as set forth in this Section 6.2(b) if such Purchaser Damages relate to a breach of representation
or warranty set forth in Sections 5.2(a) 5.2(b), 5.3(a) or 5.3(b) (inclusive).

 

(c) Cap.
In no event will the amount recovered from the Seller for any Purchaser Damages resulting from matters described in Section
6.2(a) exceed $3,000,000.00 (the “Cap”), provided, however, that the Seller’s Liability
for any Purchaser Damages will not be limited as set forth in this Section 6.2(c) if such Purchaser Damages relate to a
breach of representation or warranty set forth in Sections 5.2(a) 5.2(b), 5.3(a) or 5.3(b) (inclusive).

 

(d) Insurance.
The Seller’s indemnification obligations shall be reduced to the extent that the subject matter of any indemnification claim
brought by the Purchaser is covered by and paid to Purchaser pursuant to a warranty or indemnification from a third-party or third-party
insurance.

 

(e) Indemnification
Escrow. At the Closing, an amount equal to $600,000.00 of the Asset Purchase Price shall be withheld and delivered
to the Escrow Agent and deposited in escrow by the Purchaser (the “Indemnification Escrow Amount”), to be held
for a period of 24 months following the Closing Date (the “Indemnification Escrow Period”) to secure
the Seller’s indemnification obligations under this Section 6.2. The Escrow Agent shall deposit the Indemnification
Escrow Amount in a non-interest-bearing account to be held in accordance with the form of escrow agreement (“Indemnification
Escrow Agreement”) attached hereto as Exhibit M.

 

(i) 50%
of the Indemnification Escrow Amount shall be released and paid by the Escrow Agent to the Seller on the 1st
anniversary of the Closing Date (the “First Release”); provided, however, the First Release shall be reduced
by any amounts either (A) paid to a Purchaser Indemnified Party from the Indemnification Escrow Amount, or (B) subject to a disputed
claim as of the date of the First Release.

 

(ii) The
remaining portion of the Indemnification Escrow Amount shall be released and paid by the Escrow Agent to the Seller on the 2nd
anniversary of the Closing Date (the “Second Release”); provided, however, the Second Release shall
be reduced by any amounts either (A) paid to a Purchaser Indemnified Party from the Indemnification Escrow Amount, or (B) subject
to a disputed claim as of the date of the Second Release.

 

(iii) If
the Seller receives notice from the Purchaser of a request for indemnification during the Indemnification Escrow Period and the
Seller does not dispute its indemnification obligation in connection therewith within 10 Business Days of receiving written
notice from the Purchaser as provided below in this Section 6.2(e)(iii), the Purchaser may, only after complying with the
procedures described in the Indemnification Escrow Agreement, set off the amount owed to it in respect of such indemnification
obligation against the Indemnification Escrow Amount. Such amount will reduce the Indemnification Escrow Amount and any corresponding
release owed to the Seller during the applicable period set forth in this Section 6.2(e), or upon termination of the Indemnification
Escrow Period, as the case may be. Prior to exercising its right of set-off hereunder, the Purchaser shall notify the Seller in
writing of the matter in dispute together with all material facts and circumstances reasonably necessary for the Seller to determine
the Basis for such claim or asserted obligation.

 

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6.3 Indemnities
of the Shareholder.

 

(a) Subject
to the provisions of this Section 6, EBD shall, severally, indemnify, hold harmless and agree to defend the Purchaser Indemnified
Parties, at all times from and after the date of this Agreement, from and against any and all Purchaser Damages which may now
or in the future be paid, incurred or suffered by or asserted against the Purchaser Indemnified Parties by any Person resulting
or arising from or incurred in connection any misrepresentation or breach of any warranty of the Shareholder made or contained
in this Agreement, to the extent that such misrepresentation or breach is caused by the act or omission of EBD.

 

(b) Subject
to the provisions of this Section 6, LAD shall, severally, indemnify, hold harmless and agree to defend the Purchaser Indemnified
Parties, at all times from and after the date of this Agreement, from and against any and all Purchaser Damages which may now
or in the future be paid, incurred or suffered by or asserted against the Purchaser Indemnified Parties by any Person resulting
or arising from or incurred in connection any misrepresentation or breach of any warranty of the Shareholder made or contained
in this Agreement, to the extent that such misrepresentation or breach is caused by the act or omission of LAD.

 

(c) Subject
to the provisions of this Section 6, TWH shall, severally, indemnify, hold harmless and agree to defend the Purchaser Indemnified
Parties, at all times from and after the date of this Agreement, from and against any and all Purchaser Damages which may now
or in the future be paid, incurred or suffered by or asserted against the Purchaser Indemnified Parties by any Person resulting
or arising from or incurred in connection with any misrepresentation or breach of any warranty of the Shareholder made or contained
in this Agreement, to the extent that such misrepresentation or breach is caused by the act or omission of TWH.

 

(d) For
the sake of clarity, neither EBD, LAD nor TWH shall be required to indemnify, hold harmless or defend any of the Purchaser Indemnified
Parties from or against any Purchaser Damages resulting from or incurred in connection with any misrepresentation or breach of
any warranty of the Shareholder made or contained in this Agreement which is not caused, in whole or in part, by the act or omission
of such Person.

 

(e) Exhaustion
against the Seller. In no event will any amount be recovered from EBD, LAD or TWH individually for any Purchaser Damages resulting
from matters described in Sections 6.2(a), 6.2(b) or 6.2(c) (inclusive) unless and until (i) the applicable
Purchaser Indemnified Parties have first made claims for indemnification against the Seller with respect to such Purchaser Damages,
(ii) such claims are held by a court described in Section 9.6 to be valid, and (iii) the applicable Purchaser Indemnified
Parties are unable to enforce such claims against the Seller or unable to collect the full amount of such Purchaser Damages (as
determined by said court) from the Seller.

 

(f)
Individual Caps.

 

(i) In
no event will the amount recovered collectively from EBD individually and LAD individually for any Purchaser Damages resulting
from matters described in Section 6.3(a) exceed $1,500,000.00.

 

(ii)
In no event will the amount recovered from TWH individually for any Purchaser Damages resulting from matters described in Section
6.3(b) exceed $1,500,000.00.

 

(g)
Insurance. The indemnification obligations of EBD, LAD and TWH shall be reduced to the extent that the subject matter of
any indemnification claim brought by the Purchaser is covered by and paid to Purchaser pursuant to a warranty or indemnification
from a third-party or third-party insurance.

 

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6.4 Indemnities
of the Purchaser.

 

(a) Subject
to the provisions set forth in this Section 6, the Purchaser shall, and hereby does indemnify, hold harmless and agree to defend
the Shareholder and the Seller and its Affiliates, officers, directors, employees, agents, consultants, representatives, stockholders
and controlling Persons and their respective successors and assigns (collectively, the “Seller Indemnified Parties”)
at all times from and after the date of this Agreement, from and against any and all Losses incurred by any of the Seller Indemnified
Parties (the “Seller Damages”), which may now or in the future be paid, incurred or suffered by or asserted
against the Seller Indemnified Parties by any Person resulting or arising from or incurred in connection with any one or more
of the following:

 

(i)
any misrepresentation or breach of any warranty of the Purchaser made or contained in this Agreement;

 

(ii)
any failure of the Purchaser to perform any covenant or agreement made or contained in this Agreement or fulfill any obligation
in respect thereof;

 

(iii) any
brokerage or finder’s fees or commissions or similar payments based upon any Contract made, or alleged to have been made,
by any Person, with the Seller or the Shareholder (or any Person acting on their behalf) in connection with the Transaction;

 

(iv)
a failure of Purchaser to fulfill the obligations of an Assumed Contract or other Assumed Liability; or

 

(v) any
and all liabilities arising from or related to the operation of the business and Dealership Assets after Closing.

 

(b) Basket.
In no event will any amount be recovered from the Purchaser for any Seller’s Damages resulting from matters described in
Section 6.4(a)(i) until the aggregate amount of all Seller Damages incurred by the Seller Indemnified Parties exceeds the
Basket, in which event the Purchaser will be obligated, subject to the other provisions of this Agreement, to indemnify the Seller
to the full extent of such Seller’s Damages, including the Basket, on a dollar for dollar basis.

 

6.5
Claim Procedures. Each Person that desires to make a Claim for indemnification pursuant to this Section 6 (an “Indemnified
Party”) will provide notice (a “ Claim Notice”) thereof in writing to the Purchaser (if the Indemnified
Party is a Seller Indemnified Party) or to the Seller and the Shareholder, as applicable, (if the Indemnified Party is a Purchaser
Indemnified Party) (in each such case, an “Indemnifying Party”), specifying the nature and Basis for such Claim
and a copy of all papers served with respect to such Claim (if any). For purposes of this Section 6.4, receipt by a Person
of written notice of any Third-Party Claim which gives rise to a Claim on behalf of such Person will require delivery of a Claim
Notice to the Indemnifying Party within 20 days following the receipt of such Third-Party Claim; provided, however,
that an Indemnified Party’s failure to send or delay in sending a Claim Notice will not relieve an Indemnifying Party from
Liability hereunder with respect to such Claim except to the extent and only to the extent the Indemnifying Party is materially
prejudiced by such failure or delay.

 

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6.6 Limitations
on Indemnification.

 

(a) Except
as otherwise provided herein, and except for claims for indemnification arising out of (i) the Seller’s Retained Liabilities
and Excluded Assets, (ii) the Seller’s breach of Sections 5.2(a) and 5.2(b), (iii) the Purchaser’s breach
of Section 5.1(a), or (iv) the Seller’s or Purchaser’s willful, fraudulent, or intentional misrepresentation,
each of which shall survive the Closing through the period that ends 60 days after all statutes of limitation applicable
to the underlying claim(s), any other claims for indemnification by the Seller or the Purchaser Indemnitees under this Agreement
must be made within 24 months following the Closing.

 

(b) The
representations, warranties and covenants that are the subject of an on-going claim timely submitted by a Party under this Section
6.6 shall survive until the claim is finally determined

 

(c) In
no event will either Party or the Shareholder be liable for any consequential, incidental, indirect, special, or punitive damages.

 

6.7 Calculation,
Timing, Manner and Characterization of Indemnification Payments.

 

(a) Payments
of all amounts owing by an Indemnifying Party other than as a result of a Third-Party Claim will be made within 15 Business
Days after the later of (i) the date the Indemnifying Party is deemed liable therefor pursuant to this Section 6 or
(ii) if disputed, the date of the adjudication of the Indemnifying Party’s Liability to the Indemnified Party under this
Agreement.

 

(b) Payments
of all amounts owing by an Indemnifying Party as a result of a Third-Party Claim will be made as and when Losses with respect
thereto are incurred by the Indemnified Party and within 15 Business Days after the Indemnified Party makes demand therefor
to the Indemnifying Party.

 

(c) All
amounts due and payable under this Agreement (i) with respect to a Third-Party Claim, will bear interest at the Applicable Rate
from the date due and payable hereunder until the date paid and (ii) with respect to a Claim other than a Third-Party Claim, will
bear interest at the Applicable Rate from the date the Indemnified Party suffers the Losses until the date paid. Such interest
shall be calculated daily on the basis of a 365-day year and the actual number of days elapsed.

 

(d) Notwithstanding
the foregoing, the Purchaser acknowledges and agrees that it shall first offset any indemnification obligations of the Seller,
so agreed or finally adjudicated arising under this Section 6, against the Indemnification Escrow Amount. To the extent
the remaining balance of the Indemnification Escrow Amount (after taking into account prior offsets or any releases of any portion
of the Indemnification Escrow Amount pursuant to Section 6.2(d)) is less than any amounts to which the Purchaser is entitled
to indemnification, the Seller shall remain liable for the balance of any amounts owed pursuant to such indemnification obligations
and shall satisfy them in accordance with this Section 6.7.

 

6.8 Third-Party
Claims.

 

(a)
In the event of the assertion of any Third-Party Claim, the Indemnifying Party, at its option, may assume (with legal counsel
reasonably acceptable to the Indemnified Party) at its sole cost and expense the defense of such Third-Party Claim if it acknowledges
to the Indemnified Party in writing its obligations to indemnify the Indemnified Party with respect to all elements of such Third-Party
Claim and may assert any defense of the Indemnified Party or the Indemnifying Party; provided that the Indemnified Party
will have the right at its own expense to participate jointly with the Indemnifying Party in the defense of any such Third-Party
Claim. Counsel representing both the Indemnifying Party and the Indemnified Party must acknowledge in writing its obligation to
act as counsel for all parties being represented and must acknowledge and respect separate attorney-client privileges with respect
to each party represented. If the Indemnifying Party elects to undertake the defense of any Third-Party Claim under this Agreement,
the Indemnified Party will cooperate with the Indemnifying Party in the defense or settlement of the Third-Party Claim, including
providing access to information, making documents available for inspection and copying, and making employees available for interviews,
depositions and trial, in each case, at the Indemnifying Party’s expense. The Indemnifying Party will not be entitled to
settle any Third-Party Claim without the prior written consent of the Indemnified Party, which consent will not be unreasonably
withheld or delayed.

 

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(b) If
the Indemnifying Party, by the 30th day after receipt of notice of any Third-Party Claim (or, if earlier, by
the 10th day preceding the day on which an answer or other pleading must be served in order to prevent Judgment
by default in favor of the Person asserting such Third-Party Claim) does not assume actively and in good faith the defense of
any such Third-Party Claim or action resulting therefrom, the Indemnified Party may, at the Indemnifying Party’s expense,
defend against 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 the Indemnifying Party will be entitled to participate in (but not control) the defense of such
action, with its counsel and at its own expense. The Indemnified Party will not settle or compromise any Third-Party Claim for
which it is entitled to indemnification under this Agreement, without the prior written consent of the Indemnifying Party, which
consent will not be unreasonably withheld or delayed.

 

(c) Notwithstanding
anything in this Section 6.8 to the contrary, the Purchaser will in all cases be entitled to control the defense of a Third-Party
Claim if the Purchaser reasonably believes (i) such Third-Party Claim could result in Liabilities which, taken together with other
then outstanding Claims by the Purchaser under this Agreement, could exceed the remaining potential Losses payable by the Seller
under this Agreement or the amount that the Purchaser believes it will be able to collect from the Seller under this Agreement
or (ii) such Third-Party Claim could adversely affect in any material respect the Purchaser or its Affiliates (other than as a
result of money damages) or if injunctive or other non-monetary relief has been sought against the Purchaser or its Affiliates.

 

6.9
Exclusive Remedy. In the absence of fraud or criminal conduct, the indemnification provisions in this Section 6
will be the sole and exclusive remedy and recourse for any breach of this Agreement by the Purchaser and Seller, except as expressly
provided in this Agreement. In addition, any Party will be entitled to seek specific performance against any other Party in accordance
with this Agreement.

 

6.10
Materiality. For purposes of determining the amount of Losses that are the subject matter of a Claim for indemnification
or reimbursement hereunder, each such representation or warranty shall be read without regard and without giving effect to the
term “material” or “materiality” or similar phrases contained in such representation or warranty.

 

6.11
Treatment. Any indemnity payments made under this Agreement will be treated for all U.S. federal income Tax purposes as
an adjustment to the aggregate Asset Purchase Price, unless otherwise required by any applicable Legal Requirement.

 

7.
OTHER AGREEMENTS

 

7.1 Covenants
of the Seller. On and after the Effective Date and until the Closing Date:

 

(a)
Continuing Operation of Business. The Seller will (i) carry on the Business in the ordinary course consistent with past
practices, shall not engage in any transaction or activity or enter into any Contract or make any commitment except in the ordinary
course consistent with past practices, (ii) comply with all Applicable Laws, (iii) file all required tax returns and pay all required
Taxes, (iv) maintain or cause to be maintained in full force and effect fire, property damage, and extended coverage insurance
in the amount of the full replacement cost of the Dealership Assets under the Seller’s blanket insurance policy or policies,
(v) use its commercial reasonable efforts to preserve and promote the Business and preserve intact the reputation of the Business
and the Seller’s relationship with Employees, customers, and vendors, (vi) maintain all of the Dealership Assets (including
all buildings, structures and improvements on the Dealership Premises) in good operating condition and repair, ordinary wear and
tear excepted, and make any necessary repairs, and (vii) not take or permit any act or omission to act which would have a Materially
Adverse Change to the Business.

 

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(b) Financial
Statements. The Seller will furnish to the Purchaser within 15 days after the end of each month a statement of income
and a balance sheet as of the end of such month with respect to the Business, all of which shall be prepared in accordance with
the Manufacturers’ accounting standards.

 

(c) Books
and Records. The Seller will maintain books, accounts and records relating to the Business in the ordinary course consistent
with past practices.

 

(d) Negative
Covenants of the Seller. After the Effective Date and without the consent of the Purchaser, which consent shall not be unreasonably
withheld or delayed, the Seller will not with respect to the Business:

 

(i)
enter into any employment, collective bargaining or professional services Contract;

 

(ii) change
employment terms, including with respect to wages, salary or bonuses, or institute or modify any benefit plans or programs, except
in the ordinary course consistent in all material respects with past practices;

 

(iii)
make any material change in management personnel;

 

(iv)
enter into any new, or amend or terminate any Assumed Contract;

 

(v)
take or omit to take any action which would cause a material breach of any Assumed Contract;

 

(vi)
implement any operation decision(s) of a material nature relating to the Business; or

 

(vii)
make any change in the “dealer agreement” (or any equivalent Contract with the Manufacturers).

 

Except
as set forth in Schedule 7.1(d), none of the foregoing has occurred between January 1, 2020 and the Effective Date.

 

(e) Parts
Return. Upon the satisfaction of the Manufacturer approval condition in Section 4.2(d), if the Seller has any Parts
return privileges or allowances that are not assignable, then the Seller shall initiate a Parts return (designating for return
Parts selected by the Purchaser) prior to the Closing Date, with the intent of exhausting any such non-assignable outstanding
return privileges or allowances.

 

(f) Dealer
Trades. From the Effective Date through the Closing Date, the Seller agrees not to transfer any of its New Vehicle inventory
to any new vehicle dealer unless the Seller receives in trade for placement in its New Vehicle inventory a replacement New Vehicle
of like kind and quality and in a model and trim that the Seller has sold in the 3-month period prior to the Effective
Date.

 

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(g) Damage
Disclosure. At Closing, the Seller agrees to inform the Purchaser as to whether or not any of the motor vehicle inventory
sold to the Purchaser hereunder is known by the Seller to have incurred damages, and will provide repair records for such vehicles.

 

(h) No
Interference. The Seller shall not to take any action that is designed or intended to have the effect of discouraging any
lessor, licensor, customer, supplier, Employee, or other business associate of the Business, or the Seller, from maintaining the
same business relationships with the Business and the Purchaser after the Closing Date as they maintained with the Business and
the Seller prior to the Closing. The Seller will refer all customer inquiries relating to the Business to the Purchaser from and
after the Closing Date.

 

(i) Changes
in Warranties, Representations and Schedules. The Seller (i) shall not take or permit any action or omit to take any
action which would cause any of the representations and warranties of the Seller contained in this Agreement or the Other Agreements
become untrue, and (ii) shall promptly notify the Purchaser in writing of any changes to the Seller’s warranties and representations
contained herein.

 

7.2 Third
Party Consents.

 

(a) Each
Party shall cooperate in good faith and shall use its respective reasonable best efforts to obtain any Consents required under
this Agreement.

 

(b) Within
2 Business Days after the Effective Date, the Seller shall deliver a notice on the Seller’s letterhead, addressed
to each Manufacturer, and prepared in accordance with Applicable Law, expressing the Seller’s desire to consummate the Transaction
and otherwise obtain the Manufacturers’ consent to the Transaction and appointment of the Purchaser as an authorized dealer
in the Manufacturers’ products at the applicable Dealership Premises. Such notice shall include a request that the Manufacturers
provide to the Seller and the Purchaser any forms or applications necessary to achieve the Transaction. The Seller will provide
any and all information and assistance reasonably necessary to assist the Purchaser in its application to the Manufacturers.

 

7.3 Employees
of the Seller; Employee Benefits; Payroll Tax Related Matters.

 

(a)
Within 10 Business Days after the Effective Date, the Seller shall provide to the Purchaser:

 

(i) a
complete and correct list of the names, job title, and current salary, bonus and commission arrangements, written or unwritten,
for each Employee of the Seller working at or for the Business; and

 

(ii) true
and correct copies of each employment/bonus/commission agreement, plan or arrangement described on Schedule 5.2(e).

 

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(b)
On the Closing Date, the Seller shall, and shall direct EIN to also, terminate the employment of all of its Employees working
at or for the Business, and shall fully pay and satisfy all outstanding Liabilities of the Seller for wages and other compensation,
including any unused vacation, sick leave, or paid time-off benefits (even if not specifically accrued for by the Seller), or
bonuses, in whole or part, even though a partial month of business has only occurred prior to the Closing Date. Nothing in this
Agreement is intended to confer upon any Employee any rights or remedies, including, any rights of employment of any nature or
kind whatsoever. Notwithstanding the foregoing, on the Closing Date, if Purchaser assumes the EIN Contract, Seller shall, with
respect to all such Employees employed by EIN, fully pay and satisfy all outstanding Liabilities of the Seller for wages and other
compensation, including any unused vacation, sick leave, or paid time-off benefits (even if not specifically accrued for by the
Seller), or bonuses, in whole or part, even though a partial month of business has only occurred prior to the Closing Date, and
Purchaser shall reimburse Seller for any deposit held by EIN for said EIN Contract.

 

(c) The
Seller shall after the Closing Date, in accordance with Applicable Law, terminate or take all appropriate action in connection
with Employee Benefit Plans, if any, that are applicable to the Seller and/or Employees. The Seller acknowledges that the Purchaser
shall have no responsibility or liability or obligation of any nature under any Employee Benefit Plans to any person, firm
or corporation whatsoever; it being understood and agreed that if any Applicable Law provides that the Purchaser is or will be
liable for any liability or obligation under any Employee Benefit Plans despite the Seller’s contractual liability for such
liability or obligation hereunder, and the Seller fails to pay or perform such liability or obligation within 5 Business Days
of the Purchaser’s written demand, then any and all such amounts may be subject to indemnification in accordance with
Section 6.

 

(d) The
Seller, or, where appropriate, the Seller’s health and welfare benefit plans that are “group health plans,”
shall retain liability for and shall pay when due all benefits (including all liabilities and obligations for or arising from
any “COBRA” health care continuation coverage required to be provided under Section 4980B of the Code, and Sections
601-608 of ERISA) arising out of a “qualifying event” prior to the Closing Date to “covered employees”
or “qualified beneficiaries” entitled to “continuation coverage” (as those terms are defined in section
4980B of the Code) regardless of when services were rendered or expenses incurred. The Parties acknowledge that, after giving
effect to the actions to be taken at the Closing, the Seller will not have any employees and will not maintain any health and
welfare benefit plans after the Closing Date. No later than 10 Days prior to the Closing Date, the Seller shall provide
the Purchaser with a list of all individuals to whom the Seller is as of that date liable to provide access to COBRA benefits
as well as those employees who have terminated their employment with the Seller prior to Closing and may still apply for COBRA
benefits. In accordance with Treasury Regulation Section 54.4980B9 Q&A-8, as of the Closing Date (or, if later, the date on
which the Seller ceases to offer any group health plan coverage), the Purchaser, or its health and welfare benefit plans that
are “group health plans,” will assume the Seller’s post-Closing non-default liability to provide
the Business’s “merger and acquisition qualified beneficiaries” (as that term is defined under COBRA, which
includes qualified beneficiaries whose COBRA qualifying event occurred before or in connection with the sale and who is, or whose
COBRA qualifying event occurred in connection with a covered employee whose last employment before the COBRA qualifying event
was, associated with assets being sold) access to continuing health insurance coverage required under COBRA (at such “beneficiaries’”
cost), as well as providing applicable employee notices required under COBRA, and the Seller shall provide to the Purchaser
sufficient employee information to enable the Purchaser to carry out such obligations..

 

(e) Upon
the Parties’ receipt of the Manufacturers’ written approvals of the Transaction and agreement to appoint the Purchaser
as an authorized dealer in the Manufacturers’ products, the Purchaser may begin to interview key Employees for purposes
of considering whether and on what terms to offer employment to them effective as of the Closing Date, in accordance with the
Purchaser’s hiring practices and requirements. It is the intention of the Purchaser, and the Seller hereby acknowledges
such intention, that any Employees that the Purchaser hires will be new employees of the Purchaser as of the Closing Date or the
date of hire, whichever is later. Such new employees shall only be entitled to such compensation and employee benefits as are
agreed to by such employees and the Purchaser, or as are otherwise provided by the Purchaser, in its sole discretion.

 

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(f)
If requested by the Purchaser, the Seller agrees to provide reasonable assistance to the Purchaser in the latter’s efforts
to be restated as a successor employer for employment tax purposes with respect to the Employees hired by the Purchaser, including
the annual wage limitation for FICA tax, and to meet the requirements of Revenue Procedure 2004 -53, Section 4, Standard Procedure,
for federal payroll tax purposes. The Purchaser agrees to perform the obligations imposed upon it under such Revenue Procedure,
together with such requirements as may be imposed by FICA. If requested by the Purchaser, the Seller shall execute all documents
reasonably necessary to allow the Purchaser to benefit from and take advantage of the payroll tax withholding and deductions of
the Seller for the current Tax year, as may be allowed by the Internal Revenue Service and/or state agencies.

 

(g) If
the Purchaser does not assume the EIN Contract, Purchaser agrees to hire a sufficient number of Employees upon similar employment
terms so as not to (i) require any Employee notice from Seller or EIN under the WARN Act prior to Closing, or, (ii) otherwise
create or impose any liability upon Seller or EIN arising from or related to the WARN Act.

 

7.4 Schedule
Delivery; Access to Property and Records. All schedules to this Agreement (each a “Schedule,” and
collectively, the “Schedules”) shall be arranged in paragraphs corresponding to the lettered and numbered
paragraphs contained in this Agreement and delivered by the Seller on or before the 30th Day after the
Effective Date (the “Schedule Due Date”), along with a signed certificate from the Seller that the
Schedules so delivered are complete (the “Schedule Certificate”). Without limiting the foregoing, each
Schedule shall identify with particularity and describe in relevant detail all relevant facts to be described in such
Schedules; the mere listing of (or inclusion of a copy) of a document or other item shall not be deemed adequate to disclose
an exception to a representation or warranty made by the Seller herein unless the representation or warranty has to do with
the existence of the document or other item itself. Notwithstanding anything herein to the contrary, the Seller shall have
the ability to update the Schedules attached hereto within 5 days of learning of a fact that would cause a change to
any of the Schedules, with an updated Schedule Certificate attached thereto. The Seller shall disclose to the Purchaser in
writing promptly upon discovery thereof (the “Updated Disclosures”) any material variances
from the representations and warranties contained in Section 5.2 and/or any information necessary or appropriate to
make such representations and warranties true and correct as of such date. None of the foregoing supplemental disclosures
shall limit or otherwise affect the remedies available to the Purchaser hereunder; provided, that if such Updated
Disclosures (i) were not required to be disclosed to make the representations and warranties true and correct
in all material respects as of the Effective Date, (ii) disclose underlying events that occurred and circumstances that arose
exclusively between the Effective Date and the Closing, or (iii) are of an Immaterial (as defined below) nature, and are
delivered to the Purchaser at least 5 Business Days prior to the Closing Date (any disclosure meeting the requirements
of clauses (i), (ii), or (iii), shall constitute a “Qualifying Updated Disclosure”), then such
Qualifying Updated Disclosure(s) shall amend and supplement the representations and warranties in Section 5.2 as of
the Closing Date for purposes of indemnification under Section 6.2 hereunder but not for purposes of determining
whether the conditions set forth in Section 4.2(a) have been satisfied, if the Purchaser gives a written termination
notice within 10 Business Days after its receipt of such Qualifying Updated Disclosures and such termination is based
on the failure to satisfy the conditions set forth in Section 4.2(a) as a result of the contents of such Qualifying
Updated Disclosures. For purposes of this Section 7.4, the term “Immaterial” shall refer to a level
of insignificance that would not have affected any decision of a reasonable person in the Purchaser’s position
regarding whether to enter into this Agreement or would not affect any decision of a reasonable person in the
Purchaser’s position regarding whether to consummate the Transaction.

 

7.5 Due
Diligence Inspections.

 

(a)
The Purchaser shall have 60 days from the later of (i) the Effective Date, or (ii) the date on which the Schedule Certificate
is delivered by the Seller in accordance with Section 7.4 above (the “Due Diligence Period”) to complete
to its satisfaction due diligence regarding the Business and the Dealership Assets, including obtaining such reports and studies
as the Purchaser deems appropriate. The Parties agree that the Due Diligence Period shall be extended, as applicable, so that
the Purchaser shall have no less than 10 Business Days to review the Audited Financial Statements after receipt by the
Purchaser.

 

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(b) The
Purchaser may conduct due diligence regarding the Business, including obtaining such reports and studies as the Purchaser deems
appropriate. The Seller agrees to provide to the Purchaser and Purchaser’s representatives reasonable access to the books,
records, reports, information and facilities of the Dealership, and will make the officers, comptroller, accountants and attorneys
of the Seller available at reasonable times to discuss with the Purchaser and Purchaser’s representatives such aspects of
the Business as the Purchaser may wish.

 

(c) The
Purchaser may, at Purchaser’s expense, commission the services of a qualified geotechnical and environmental consultant
(hereinafter referred to as the “Engineer”) to conduct a “Phase I Environmental Site Assessment”
(a “Phase I”) upon the Dealership Premises to identify any “recognized environmental conditions”
and to determine whether the Dealership Premises are in substantial compliance with applicable Environmental Laws, in general
accordance with standards recommended by the American Society for Testing and Materials -- ASTM E1527-13 “Standard
Practice for Environmental Site Assessments: Phase I Environmental Site Assessment Process.” The Purchaser will provide
the Seller a copy of the Engineer’s Phase I report(s). All access to the Dealership Premises must be arranged and scheduled
with EBD (cell phone: (304)673-6533), so that the Seller, or its representative, is present or available at the
time of inspection. The Purchaser shall have no obligation to indemnify the Seller with respect to the presence of any Hazardous
Substances discovered during the Purchaser’s due diligence nor shall the Purchaser have any obligation to engage in the
remediation of the Dealership Premises with respect to such Hazardous Substances.

 

(d) Should
the Purchaser be dissatisfied with its inspections during the Due Diligence Period, it may terminate this Agreement under Section
8.1(f), and thereafter the Purchaser’s right to inspect or to receive data and information shall terminate.

 

(e) No
investigation made by, nor any disclosure made prior to or after the Effective Date by, the Purchaser on the one hand, or by the
Seller, on the other hand, shall affect the enforceability of, or the remedies available under this Agreement with respect to,
any such representations, warranties, covenants, agreements or undertakings or their survival.

 

(f) After
Manufacturer approval and prior to the Closing Date, the Seller agrees to afford the Purchaser and its agents, attorneys, accountants
and representatives such access to the Dealership Premises, business records and properties of the Seller, and shall furnish to
the Purchaser such information concerning the Business, as the Purchaser shall reasonably deem necessary or desirable for the
purpose of enabling the Purchaser to prepare for Closing, including preparation of closing inventory schedules. The Seller will
make its appropriate officers, employees and representatives available to the Purchaser at all reasonable times for the purpose
of assisting, in all reasonable respects, the Purchaser with Closing preparations.

 

7.6 Confidentiality.

 

(a)
Except as may be required by law or legal process, the Purchaser agrees that any confidential information received in due diligence
will be kept confidential by the Purchaser and its representatives and will not be disclosed by the Purchaser to any Person except
the Manufacturers, the Purchaser’s attorneys, accountants, representatives, financial sources, engineers, etc., or otherwise
with the specific prior written consent of the Seller. The foregoing obligations and restrictions shall not apply to that part
of the Seller’s information that (a) was or becomes generally available to the public other than as a result of a disclosure
by the Purchaser, or (b) was available, or becomes available, to the Purchaser on a non-confidential basis prior to its disclosure
to the Purchaser by the Seller. Notwithstanding anything herein to the contrary, the Purchaser may provide notice of this Transaction
to the United States Securities and Exchange Commission by filing of a copy of this Agreement.

 

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(b) The
Parties also agree that the terms and conditions of this Agreement, the Transaction, and the fact the Transaction exists, are
to remain confidential. Neither the Seller nor the Purchaser will issue or approve a news release or other announcement of the
Transaction without the prior approval of the other as to the contents of the announcement and its release, which approval will
not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing, the fact the Transaction exists may be disclosed
after the Effective Date by the Seller to its vendors and by the Purchaser to Seller’s employees and contractors, with the
prior written approval of the other. Furthermore, nothing in this Section 7.6 shall be construed to prohibit the Purchaser
or the Purchaser’s Affiliates from applying for, and publishing in the local or regional newspaper as required by West Virginia
law, fictitious names for the operation of the Business post-Closing, and the Purchaser shall not be required to obtain the Seller’s
permission to make such applications and publications.

 

7.7 Expenses.

 

(a) General.
Except as may otherwise be provided in Section 7.7(b) or Section 9.12, whether or not the Transaction is consummated,
each Party shall bear its own costs and expenses incurred in connection with the negotiation, drafting and execution of this Agreement.
Except as otherwise set forth below or elsewhere in this Agreement, each Party shall bear its own costs and expenses of consummating
the Transaction.

 

(b)
Specific Expenses. Notwithstanding the foregoing:

 

(i) The
Seller shall pay all costs, expenses and fees to obtain the Audited Financial Statements, release and discharge any Encumbrances
on the Dealership Assets (other than Permitted Encumbrances), all federal and state Taxes of Seller in connection with the Transaction,
one-half (1/2) of the fees, costs, and expenses of the Parts Inventory, and one-half (1/2) of the fees, costs, and
expenses of the Fixed Assets appraisal.

 

(ii) The
Purchaser shall all pay all costs, expenses and fees related to its due diligence and financing, all federal and state Taxes of
Purchaser in connection with the Transaction, one-half (1/2) of the fees, costs, and expenses of the Parts Inventory, and
one-half (1/2) of the fees, costs, and expenses of the Fixed Assets appraisal.

 

(iii) Provided,
however, notwithstanding anything to the contrary set forth in this Agreement (including, without limitation, in Section 8.1),
in the event that this Agreement is terminated by the Purchaser pursuant to Section 8.1(d) or 8.1(f) or is terminated
by the Seller pursuant to Section 8.1(c), then, in any such case, the Purchaser shall pay to the Seller, as reimbursement,
an amount equal to one-half (1/2) of all costs, expenses and fees incurred by the Seller in connection with (A) the Audited
Financial Statements (but not to exceed $75,000.00), (B) the Parts Inventory and (C) the Fixed Assets appraisal (the “Reimbursement
Amount”), and, upon written demand from the Seller, the Escrow Agent shall, without undue delay, disburse to the Seller
a portion of the Deposit equal to the Reimbursement Amount.

 

(iv) The
Purchaser shall pay (or reimburse the Seller, as the case may be) for all costs, expenses and fees related to its due diligence
and financing.

 

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7.8
Pre-Closing Access. The Seller shall afford to the Purchaser and its employees and subcontractors, on reasonable prior
notice, reasonable access before Closing to the Dealership Premises for the purpose of installing communications lines (“
New Communications Lines”) which in the Purchaser’s reasonable judgment are necessary to allow the Purchaser,
immediately after Closing, to connect those premises and the computer systems, telephone systems, networks and data bases in them
to the Purchaser’s computer systems, telephone systems, networks and data bases; provided, however, that the Purchaser shall
not use the New Communications Lines before the Closing, other than for testing purposes, without the Seller’s consent.
If this Agreement is terminated for any reason, the Purchaser shall undertake to promptly, but in no event later than 30 days
after such termination, remove the New Communications Lines. The Purchaser’s installation and, if applicable, removal
of the New Communications Lines shall be done in a manner that does not unreasonably interfere with the Seller’s operation
of the Business and that does not damage the Dealership Premises. At least 1 week before the anticipated Closing Date,
the Seller shall provide the Purchaser with digital access to the Seller’s vehicle inventory. The Purchaser may also arrange
for the Seller’s employees to attend DMS and other training prior to Closing so long as such training does not materially
interfere with such employee’s work duties to the Seller.

 

7.9
Records. The Seller agrees to deliver to the Purchaser on the Closing Date the Records in a format that meets the Purchaser’s
reasonable requests. To the extent the Records are in a digital form, the Purchaser and the Seller acknowledge and understand
that the transfer of a copy of a digital form of the Records involves a joint and collaborative effort of the Parties along with
the Seller’s DMS vendor and requires the cooperation of the Parties and the vendor. The Seller agrees to contact its DMS
vendor and arrange for the transfer of a copy of its Records that are in digital form on its DMS to the Purchaser on or before
the Closing, either through the creation of a separate sign-on and creation of a mirror store on the Seller’s DMS or transfer
of a copy of the Records to a location of the Purchaser’s choice, it being contemplated that the Purchaser shall have all
necessary access to these Records immediately after the Closing. Should the Purchaser obtain access to the Records prior to the
Closing, the Purchaser shall hold the Records subject to Section 7.6. In the event the Transaction does not close, any
Records in the Purchaser’s possession or control shall be destroyed and the Purchaser shall be enjoined from using the Records
for its or any of its affiliates’ benefit. The Parties agree to equally share in the expense of creating a mirror store
and separate sign-on on the Seller’s DMS.

 

7.10
No Negotiations or Discussions. Until the earlier of (i) termination of this Agreement by Purchaser or Seller pursuant
to the terms of this Agreement, or (ii) the Closing Date, the Seller and the Shareholder shall deal exclusively with the Purchaser
regarding the sale of the Dealership Assets. In order to avoid any possible interference with or frustration of this Transaction,
neither the Seller nor the Shareholder shall, directly or indirectly (including any agent or designee, or use of the services
of a third party), at any time on or prior to the Closing Date, pursue, initiate, encourage or engage in any negotiations or discussions
with, or provide any information to, any person or entity (other than the Purchaser and its representatives and affiliates) regarding
the sale or possible sale to any such person or entity of all or any of the Dealership Assets, Dealership Premises or stock of
the Seller or any merger, consolidation, joint venture, management agreement, or any other transaction of any nature with the
Seller or the Shareholder, which would hinder or frustrate the Purchaser from closing in accordance with the terms of this Agreement
(a “Prohibited Discussion”). If any person or entity other than the Purchaser makes inquiry of the Seller or
the Shareholder of any matter which could involve a Prohibited Discussion, then the Seller or the Shareholder (as the case may
be) shall inform the Purchaser in writing and inform such person or entity of the existence of this Agreement, and that any Prohibited
Discussion would constitute a violation of this Agreement.

 

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7.11
Tax Certificate; Withheld Amount; Clearance In the event the Tax Certificate is not delivered to the Purchaser prior to
the Closing Date, an amount equal to 11⁄2 times the average aggregate amount of the Seller’s sales tax obligations
and liabilities paid each month during the 6 month period prior to the Closing Date, shall be withheld from the Asset Purchase
Price and shall remain in escrow with the Escrow Agent (the “Withheld Tax Amount”), to be held in accordance
with the Tax Escrow Agreement for the purpose of assuring the Purchaser that the aggregate of the Seller’s unpaid sales
tax obligations to the WVSTD (as contemplated under West Virginia Code) and any related amounts, will be paid.

 

7.12 Unemployment
Rate Factor; Worker’s Compensation Experience Factor.

 

(a) The
Purchaser, at its election, may utilize the Seller’s State of West Virginia unemployment rate factor to the extent allowed
under law. The Seller agrees to assist and cooperate with the Purchaser in such efforts.

 

(b) The
Purchaser, at its election, may utilize the Seller’s worker’s compensation experience factor to the extent allowed
under West Virginia law. The Seller agrees to assist and cooperate with the Purchaser in such efforts.

 

8. TERMINATION
AND ABANDONMENT

 

8.1
Termination and Abandonment. This Agreement may be terminated at any time prior to the Closing:

 

(a)
by mutual agreement of the Seller and the Purchaser; or

 

(b) by
the Purchaser by Notice to the Seller, if the conditions set forth in Section 4.2 have not been satisfied or the deliveries
required by Section 4.4 shall not have been complied with and performed, and any such noncompliance or nonperformance shall
not have been cured or eliminated (or by its nature cannot be cured or eliminated) on or before the Cut-Off Date unless such failure
shall be due to the failure of the Purchaser to comply with any of its obligations to be performed or complied with by it prior
to the Closing; or

 

(c) by
the Seller by Notice to the Purchaser, if the conditions set forth in Section 4.3 have not been satisfied or the deliveries
required by Section 4.5 have not been complied with and performed and such noncompliance or nonperformance shall not have
been cured or eliminated (or by its nature cannot be cured or eliminated) on or before the Cut-Off Date, unless such failure shall
be due to the failure of the Seller to comply with any of its obligations to be performed or complied with by it prior to the
Closing; or

 

(d) by
the Purchaser if the Closing has not occurred on or before the Cut-Off Date, or such later date as the Parties may agree upon,
unless the Purchaser is in material breach of or default under this Agreement; or

 

(e) by
the Seller if the Closing has not occurred on or before the Cut-Off Date, or such later date as the Parties may agree upon, unless
the Seller or the Shareholder is in material breach of or default under this Agreement; or

 

(f) by
the Purchaser, within 2 Business Days after the expiration of the Due Diligence Period, as extended, if the Purchaser is
dissatisfied with its due diligence inspections; or

 

(g) by
either Party, after the expiration of the OA Prep Period, if the form of the Operating Agreement, the MEG Lease Agreement, or
the E & W Lease Agreement has not been substantially agreed upon, with the substantial form thereof being appended to this
Agreement through Amendment to this Agreement, with such Operating Agreement to be executed by the Parties at Closing; or

 

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(h) by
either Party, if there shall be a final non-appealable order of a court of competent jurisdiction in effect preventing the Closing;
or

 

(i) by
either Party, if a Manufacturer shall exercise, or purport to exercise, any right of first refusal to purchase all or any material
portion of the Dealership Assets.

 

8.2 Rights
and Obligations on Termination.

 

(a) Except
as otherwise provided in Section 8.2(b) below, if this Agreement is terminated as provided in Section 8.1, this
Agreement shall forthwith become void, the Escrow Agent shall return the Deposit to Purchaser, and there shall be no liability
or obligation on the part of any Party or their respective officers, directors, partners, members, shareholders, principals, agents
or representatives.

 

(b)
Notwithstanding the provisions of Section 8.2(a) above:

 

(i) if
this Agreement is terminated and abandoned pursuant to Section 8.1(c), due to a material breach or material default by
the Purchaser under any of its express or implied covenants and obligations hereunder, then the Seller shall be entitled to the
Deposit, which will constitute payment in full payment of liquidated damages of the Seller, and which shall be the Seller’s
sole and exclusive remedy.

 

(ii) if
this Agreement is terminated and abandoned pursuant to Section 8.1(b) due to a material breach or material default by the
Seller under any of its express covenants and obligations hereunder, then the Purchaser, at its sole discretion, may seek specific
performance or reimbursement by the Seller of its reasonable out of pocket costs not to exceed $250,000.00. The Seller
agrees that it is estopped from subsequently asserting in any action to enforce the provisions of the covenants contained herein
that the Purchaser has an adequate remedy at law and therefore is not entitled to specific performance or injunctive relief.

 

(c) The
Parties acknowledge and agree that the rights and obligations set forth in this Section 8.2 shall not in any way affect
or limit the respective rights and obligations of the Parties that arise out of, and survive, the Closing of the Transaction,
including the provisions of Section 6 above.

 

9.
MISCELLANEOUS

 

9.1
Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs,
successors and permitted assigns.

 

9.2
No Waiver. The waiver by any Party of a breach of any covenant, agreement or undertaking contained herein shall be made
only by an instrument in writing signed by the Party giving such waiver, and no such waiver shall operate or be construed as a
waiver of any prior or subsequent breach of the same covenant, agreement or undertaking. Except as otherwise specifically provided
herein, the exercise of any remedy provided by law or otherwise, and the provisions of this Agreement for any remedy, shall not
exclude any other remedy.

 

9.3
Severability. If any provision of this Agreement shall be held invalid, illegal or unenforceable, in whole or in part,
the validity, legality and enforceability of the remaining part of such provision, and the validity, legality and enforceability
of the other provisions hereof shall not be affected thereby. Any provision of this Agreement that is held invalid, illegal or
unenforceable in any jurisdiction shall not be deemed invalid, illegal or unenforceable in any other jurisdiction.

 

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9.4
Entire Agreement; Amendment. This Agreement, together with all exhibits and Schedules hereto constitutes the entire agreement
among the Parties pertaining to the Transaction, and supersedes all prior agreements, understandings, negotiations, and discussions,
whether oral or written, of the Parties. Except as otherwise provided herein, no supplement to, or modification of, this Agreement
shall be binding unless executed in writing by each of the Parties.

 

9.5
Governing Law. This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the State
of West Virginia without regard to any principles of conflict of laws.

 

9.6
Submission to Jurisdiction; Jury Trial Waiver. Each of the Parties (a) consents to submit itself to the exclusive personal
jurisdiction of any state or federal court sitting in the State of West Virginia, Raleigh County, in any Proceeding for the adjudication
of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, (b) agrees
that all claims in respect of such action or proceeding may be heard and determined only in any such court, and (c) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or other request for leave from any such court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of any proceeding so brought and waives any bond, surety
or other security that might be required of any other Party with respect thereto. Any Party may make service on the other Party
by sending or delivering a copy of the process to the Person to be served at the address and in the manner provided for the giving
of Notices in Section 9.9. Nothing in this Section 9.6, however, shall affect the right of any Party to serve legal
process in any other manner permitted by law. EACH PARTY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHTS
TO TRIAL BY JURY IN ANY SUCH PROCEEDING, AND WAIVES INCIDENTAL, CONSEQUENTIAL, AND PUNITIVE DAMAGES.

 

9.7
Assignability. Subject to the terms and conditions of this Section 9.7, the Purchaser may assign its rights under
this Agreement, in whole or in part, to any Affiliate of the Purchaser. Except as expressly provided in this Section 9.7,
neither this Agreement, nor any of the rights and obligations arising hereunder, may be assigned by either Party without the prior
written consent of the other Party.

 

9.8
Notices. All notices, demands and other communications (each, a “Notice”) required or permitted hereunder
shall be in writing (including facsimile), and shall be (a) sent by registered or certified mail, First Class postage attached,
(b) sent by hand or overnight delivery, or (c) sent by electronic mail or facsimile, in each case addressed to the respective
Parties at the addresses first set forth above, or to such other address and to the attention of such other Persons as a Party
hereto may specify from time to time by Notice to the other Parties. Each Notice shall be deemed given and be effective only upon
actual receipt (or refusal of receipt). Copies of any Notices shall be provided as below:

 

If
to the Purchaser, then to its Counsel (which copy shall not constitute notice) to:

 

Bass
Sox Mercer

Attention:
Robert A. Bass, Esq.

2822
Remington Green Circle

Tallahassee,
Florida 32308

Telephone:
(850) 878-6404

Email:
bassra@dealerlawyer.com

 

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If
to the Seller or to Shareholder, then to their Counsel (which copy shall not constitute notice) to:

 

Underwood
& Roberts, PLLC

Attention:
Jeff Roberts

3110
Edwards Mill Road, Suite 100

Raleigh,
North Carolina 27612

Email:
jgroberts@rlulaw.com

 

and

 

Jones
& Associates

Attention:
E. Forrest Jones

13
Kanawha Boulevard West

Charleston,
West Virginia 25387

Email:
efjones@efjones.com

 

9.9
Counterparts; Effective Date; Facsimile Copies. This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original, but all of which shall be deemed to be a single instrument, and shall be effective as of the
date when one or more counterparts have been signed by each of the Parties and delivered to the other Parties. A facsimile copy
of this Agreement and any signatures on any counterpart hereof shall be considered for all purposes as originals.

 

9.10
Time of Essence; Computation of Time. Time is of the essence with respect to all dates and time periods set forth or referred
to in this Agreement and each of its provisions. Whenever this Agreement requires that something be done within a period of days,
such period shall: (a) not include the day from which such period commences; (b) include the day upon which such period expires;
(c) expire at 8:00 p.m. (ET) on the date by which such thing is to be done; or (d) be extended by 2 Business Days if the
final day of such period falls on a Saturday, Sunday, or bank holiday in the state where such thing is to be done.

 

9.11
Agreement Not Recordable. No Party shall have the right or the authority to file this Agreement or any notice thereof of
record in any public office unless the same is necessary in order to assert, vindicate, enforce or defend the Party’s rights
under this Agreement.

 

9.12
Attorneys’ Fees. Should any Party institute any suit, action or Proceeding in court or otherwise to enforce or interpret
this Agreement by reason of or with respect to an alleged breach of any provision hereof, the prevailing Party shall be entitled
to receive from the non-prevailing Party such amount as the court may judge to be reasonable attorneys’ and paralegals’
fees for the services rendered to the prevailing Party in such action or Proceeding, plus the prevailing Party’s costs and
expenses therein, regardless of whether such suit, action or Proceeding is prosecuted to judgment.

 

9.13
Interpretation. The Parties acknowledge and agree that: (a) each Party and its counsel reviewed and negotiated the terms
and provisions of this Agreement and the Other Agreements and have contributed to their revision; and (b) the rule of construction
to the effect that any ambiguities are resolved against the drafting party shall not be employed in the interpretation of this
Agreement and the Other Agreements. The words “include,” “includes,” “included,” “including,”
and “such as” do not limit the preceding words or terms and shall be deemed to be followed by the words “without
limitation”. All pronouns and any variations thereof refer to the masculine, feminine or neuter, singular or plural, as
the context may require. All terms defined in this Agreement in their singular or plural forms, have correlative meanings when
used herein in their plural or singular forms, respectively. The section headings contained in this Agreement are solely for the
purpose of reference, are not part of the agreement of the Parties and shall not in any way affect the meaning or interpretation
of this Agreement.

 

*****

 

[signatures
on following page]

 

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IN
WITNESS WHEREOF, the Parties have duly executed this Asset Purchase and Contribution Agreement on the day and year noted below.

 

	PURCHASER:	 
	 	 
	LMP AUTOMOTIVE HOLDINGS, INC.,	 
	a Delaware corporation	 
	 	 	 
	By:	/s/ Sam Tawfik	 
	 	Sam Tawfik, CEO	 
	 	 	 
	Dated:	August 28, 2020	 
	 	 	 
	SELLER:	 
	 	 	 
	BECKLEY BUICK-GMC AUTO MALL, INC.,
    

a West Virginia corporation
	 	 	 
	By:	/s/ Ernest B. Davis, Jr.	 
	 	Ernest B. Davis, Jr., President	 
	 	 	 
	Dated:	August 28, 2020	 
	 	 	 
	KING COAL CHEVROLET CO.,	 
	a West Virginia corporation	 
	 	 	 
	By:	/s/ Ernest B. Davis,
    Jr.	 
	 	Ernest B. Davis, Jr., President	 
	 	 	 
	Dated: 	August 28, 2020	 
	 	 	 
	HOMETOWN PREOWNED VEHICLES, INC.,
    

a West Virginia corporation	 
	 	 	 
	By:	/s/ Ernest B. Davis, Jr.	 
	 	Ernest B. Davis, Jr., President	 
	 	 	 
	Dated: 	August 28, 2020

        
	 

 

    47

     

    

 

JOINDERS

 

The undersigned joins in this Agreement
solely for the purposes of agreeing to: (a) negotiate the MEG Lease Agreement, as described in the Eighth Recital; (b) execute
the MEG Lease Agreement at the Closing; and (c) terminate the Existing Leases at the Closing, as provided for in Section 4.4(q).

 

	THE MEG RENTAL CORPORATION, 	 	 
	a West Virginia corporation
	 	 	 	 
	By: 	/s/ Ernest B. Davis, Jr.	 	Dated: August 28, 2020
		Ernest B. Davis, Jr., President	 	 

 

The undersigned joins in this Agreement solely for the purposes
of agreeing to: (a) negotiate the E & W Lease Agreement, as described in the Ninth Recital; (b) execute the E & W Lease
Agreement at the Closing; and (c) terminate the Existing Leases at the Closing, as provided for in Section 4.4(q).

 

	E & W, LLC,
	 	 
	a West Virginia limited liability company
	 	 	 	 
	By: 	/s/ Ernest B. Davis, Jr.	 	Dated: August 28, 2020
		Ernest B. Davis, Jr., Member	 	 

 

	By:  	/s/ Tracy W. Hylton, II	 	Dated: August 28, 2020
		Tracy W. Hylton, II, Member	 	 

 

The undersigned join in this Agreement solely for the purposes
of agreeing to: (a) negotiate the Operating Agreement (as defined in the Agreement) and execute the Operating Agreement at the
Closing; (b) negotiate the Non-Competition Agreement (as defined in the Agreement) and execute the Non-Competition Agreement at
the Closing; (c) make the representations and warranties of the Shareholder set forth in Section 5.3 of the Agreement; and (d)
perform the indemnification obligations of such undersigned under Section 6.3 of the Agreement.

 

	ERNEST B. DAVIS, JR.
	 	LORI A. DAVIS

	 	 	 
	/s/ Ernest B. Davis, Jr.	 	/s/ Lori A. Davis
		 	
	Dated: August 28, 2020	 	Dated: August 28, 2020

 

    48

     

    

 

The
undersigned joins in this Agreement solely for the purposes of agreeing to: (a) negotiate the Non-Competition Agreement (as defined
in the Agreement) and execute the Non-Competition Agreement at the Closing; (b) make the representations and warranties of the
Shareholder set forth in Section 5.3 of the Agreement; and (c) perform the indemnification obligations of such undersigned under
Section 6.3 of the Agreement.

 

	TRACY W. HYLTON, II

	 	 
	 	 	 
	/s/ Tracy W. Hylton, II	 	 
		 	 
	Dated: August 28, 2020	 	 

 

    49

     

    

 

ACKNOWLEDGMENT
BY ESCROW AGENT

 

The undersigned, on behalf of Bass Sox Mercer, joins in the
execution of this Agreement for the purpose of agreeing to act as the Escrow Agent hereunder.

 

Dated: August 28, 2020

 

	 	BASS SOX MERCER
	 	 
	 	By: 	/s/ Robert A. Bass
	 	 	Robert A. Bass, Esq.
	 	 	Shareholder

 

The undersigned Escrow Agent acknowledges receipt of the $500,000.00
earnest money deposit referred to in Section 3.6 of the foregoing Asset Purchase Agreement, and agrees to hold and disburse
said funds and all accrued interest thereon in accordance with the terms of said Agreement.

 

Dated: August ___, 2020

 

	 	BASS SOX MERCER
	 	 
	 	By: 	 
	 	 	Robert A. Bass, Esq.
	 	 	Shareholder

 

    50

     

    

 

INDEX TO EXHIBITS AND SCHEDULES

 

	Exhibit Letter	 	Description of Exhibit
	 	 	 
	A	 	Franchised Dealerships
	B	 	Ancillary Businesses
	C	 	Dealership Premises
	D	 	Allocation
	E	 	Bill of Sale and Assignment
	F	 	IP Assignment Agreement
	G	 	8594 Agreement
	H	 	Non-Competition Agreement
	I	 	Tax Escrow Agreement
	J	 	Princeton Premises Lease
	K	 	Summersville Premises Lease
	L	 	Beaver Premises Lease
	M	 	Indemnification Escrow Agreement
	 	 	 
	Schedule Number	 	Description of Schedule
	 	 	 
	2.1(a)	 	Fixed Assets
	2.1(e)(i)	 	Firm Assumed Contracts
	2.1(e)(ii)	 	Proposed Assumed Contracts
	2.1(j)	 	Email Addresses, PO Boxes, Telephone and Facsimile numbers
	2.2(n)	 	Excluded Assets
	2.2(r)	 	Additional Excluded Assets
	5.1(b)	 	Purchaser’s Brokers
	5.2(b)	 	Title
	5.2(d)	 	Exceptions to Assumed Contracts
	5.2(e)	 	Employees and Employment Matters
	5.2(f)	 	Exceptions to Financial Statements
	5.2(g)	 	Absence of Undisclosed Liabilities
	5.2(h)	 	Condition of the Dealership Assets and Real Estate
	5.2(i)	 	Litigation
	5.2(j)	 	Compliance of Applicable Laws
	5.2(k)	 	Seller’s Brokers
	5.2(l)	 	Environmental
	5.2(m)	 	Manufacturer Communications
	5.2(n)	 	Manufacturer Audits
	5.2(o)	 	Dealership Marketing Plans
	5.2(p)	 	Tradenames; Domain Names; URLs
	5.2(r)	 	GLB Act Compliance
	5.2(u)	 	Licenses
	7.1(d)	 	Negative Covenants

 

    51

     

    

 

EXHIBIT A

FRANCHISED DEALERSHIPS

 

	Entity Name	 	Brands	 	D/B/A	 	Location
	Beckley Buick-GMC- Auto Mall, Inc.	 	Buick and GMC	 	Beckley Buick GMC Auto Mall	 	3934 Robert C. Byrd Drive, Beckley, West Virginia 25801
	 	 	 	 	 	 	 
	King Coal Chevrolet Co.	 	Chevrolet	 	King Coal Chevrolet	 	1508 East Main Street, Oak Hill, West Virginia 25901
	 	 	 	 	 	 	 
	Hometown Preowned Vehicles, Inc.	 	Hyundai	 	Hyundai of Beckley	 	3921 Robert C. Byrd Drive, Beckley, West Virginia 25801
	 	 	 	 	 	 	 
	Hometown Preowned Vehicles, Inc.	 	Kia	 	Hometown Kia	 	111 Midtown Avenue, Mt. Hope, West Virginia 25880
	 	 	 	 	 	 	 
	Hometown Preowned Vehicles, Inc.	 	Subaru	 	Hometown Subaru	 	117 Midtown Avenue, Mt. Hope, West Virginia 25880

 

    

     

    

 

EXHIBIT B

ANCILLARY DEALERSHIPS

 

	Entity Name	 	Operations	 	Location
	Beckley Buick-GMC- Auto Mall, Inc.	 	Used Car Dealership	 	199 Rogers Street, Princeton, West Virginia 24740
	 	 	 	 	 
	Beckley Buick-GMC- Auto Mall, Inc.	 	Used Car Dealership	 	368 Seneca Trail, Lewisburg, West Virginia 24901
	 	 	 	 	 
	King Coal Chevrolet Co.	 	Used Car Dealership	 	874 Broad Street, Summersville, West Virginia 26651
	 	 	 	 	 
	Hometown Preowned Vehicles, Inc.	 	Used Car Dealership	 	762 Ritter Drive, Beaver, West Virginia 25813
	 	 	 	 	 
	Hometown Preowned Vehicles, Inc.	 	Used Car Dealership	 	111 Pacwood Drive, Oak Hill, West Virginia 25901

 

		*	The RV Business of Hometown Preowned Vehicles, Inc. is
specifically excluded.

 

    

     

    

 

EXHIBIT C

DEALERSHIP PREMISES

 

	Address	 	Owner	 	Method of Transfer
	3934 Robert C. Byrd Drive, Beckley, West Virginia 25801 

(the “Beckley BG Premises”)	 	MEG	 	Purchase
	1508 East Main Street, Oak Hill, West Virginia 25901

 (the “Oak Hill Chevrolet Premises”)	 	E & W	 	Purchase
	3921 Robert C. Byrd Drive, Beckley, West Virginia 25801

 (the “Beckley Hyundai Premises”)	 	MEG	 	Lease
	111 Midtown Avenue, Mt. Hope, West Virginia 25880

 (the “Mt. Hope Kia Premises”)	 	MEG	 	Lease
	117 Midtown Avenue, Mt. Hope, West Virginia 25880 

(the “Mt. Hope Subaru Premises”)	 	MEG	 	Lease
	199 Rogers Street, Princeton, West Virginia 24740 

(the “Princeton Premises”)	 	Princeton Landlord	 	Assignment
	368 Seneca Trail, Lewisburg, West Virginia 24901 

(the “Lewisburg Premises”)	 	MEG	 	Lease
	874 Broad Street, Summersville, West Virginia 26651

 (the “Summersville Premises”)	 	Summersville Landlord	 	Assignment
	762 Ritter Drive, Beaver, West Virginia 25813

 (the “Beaver Premises”)	 	Beaver Landlord	 	Assignment
	111 Pacwood Drive, Oak Hill, West Virginia 25901 

(the “Oak Hill Used Premises”)	 	E & W	 	Lease

 

    

     

    

 

EXHIBIT D

ALLOCATION

 

	 	 	 	 	 	 	 	 	 	 	New	 	 	 	 	 	 	 	 
	 	 	 	 	Fixed	 	Manufacturer	 	Misc.	 	Vehicles
    &	 	Used	 	 	 	Customer	 	 
	 	 	Goodwill	 	Assets	 	Parts	 	Inventory	 	Demos	 	Vehicles	 	WIP	 	Deposits	 	We-Owes
	Buick and GMC	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Chevrolet  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Hyundai  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Kia  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Subaru  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Princeton Used	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Lewisburg Used	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Summersville Used	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Beaver Used  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing
	Oak Hill  	 	TBD during the Due Diligence Period	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing	 	TBD at the Closing

 

    

     

    

 

EXHIBIT E

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

(see attached)

 

    

     

    

 

Exhibit E

 

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

THIS BILL OF SALE
AND ASSIGNMENT AND ASSUMPTION AGREEMENT (this “Agreement”) is executed as of the ____ day of ________, 2020 (the
“Closing Date”), by and between BECKLEY BUICK-GMC AUTO MALL, INC., a West Virginia corporation, KING
COAL CHEVROLET CO., a West Virginia corporation, and HOMETOWN PREOWNED VEHICLES, INC., a West Virginia corporation (collectively,
the “Seller”), in favor of LMP AUTOMOTIVE HOLDINGS, INC., a Delaware corporation (the “Purchaser,”
and together with the Seller, the “Parties”).

 

This Agreement is
executed and delivered pursuant to that certain Asset Purchase Agreement dated August ____, 2020, by and among the Seller,
the Purchaser, and others (the “Purchase Agreement”), relating to the Seller’s Buick, GMC,
Chevrolet, Hyundai, Kia, Subaru and used motor vehicle dealerships (collectively, the “Business”) located
at the Dealership Premises.

 

Capitalized terms
not otherwise defined herein shall have the meaning ascribed thereto in the Purchase Agreement.

 

KNOW ALL MEN BY THESE PRESENTS:

 

1. 
CONVEYANCE. Pursuant to the Purchase Agreement and in consideration of the receipt of Ten Dollars ($10.00) in hand
paid by the Purchaser to the Seller, and for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the Seller hereby sells, transfers, sets over and assigns to the Purchaser all of the Seller’s right, title
and interest in and to each of the assets described in Exhibit A attached hereto and made a part hereof (collectively,
the “Dealership Assets”), to have and to hold the same unto the Purchaser forever, free and clear of all Encumbrances
(except Permitted Encumbrances and the Assumed Liabilities). The Seller shall, however, retain and not sell to the Purchaser, the
assets not included in the enumeration of the Dealership Assets, including, without limitation, the items described in Exhibit
B attached hereto and made a part hereof (collectively, the “Excluded Assets”).

 

2. 
WARRANTY OF TITLE. The Seller warrants that the representation as to warranty of title given by Seller in the Purchase
Agreement is true and correct as of the Closing Date, and Seller covenants and agrees to defend the title vested in the Purchaser
under this Bill of Sale as required by the Purchase Agreement.

 

3. 
FURTHER ASSURANCES. The Seller agrees that, at any time and from time to time after the Closing Date, it will upon
request of the Purchaser and at the Purchaser’s sole cost, duly execute, acknowledge and deliver, or will cause to be done,
executed, acknowledged and delivered, all such further acts, bills of sale, assignments, transfers, or assurances as may be reasonably
required to assign, transfer, convey and confirm to the Purchaser the Purchased Asset Interest.

 

4. 
ASSIGNMENT AND ASSUMPTION. The Seller does hereby sell, transfer, set over and assign unto the Purchaser all of the
Seller’s rights and privileges in and to the liabilities and obligations described in Exhibit C attached hereto (collectively,
the “Assumed Liabilities”).

 

The Purchaser hereby
accepts the foregoing assignment of the Assumed Liabilities as defined in the Purchase and Contribution Agreement and assumes,
covenants and agrees to fully and faithfully perform and discharge each and every covenant, duty, obligation, liability and term
on the part of the Seller to be performed in connection with the Assumed Liabilities relating to periods from and after the Closing
Date, to the extent, and only to the extent, such obligations first accrue and are required to be performed subsequent to the Closing
Date (provided that such obligations did not arise as a result of a breach by the Seller of any contract on or prior to the Closing
Date or a breach of the Seller’s covenants and agreements under the Purchase Agreement).

 

    

     

    

 

Exhibit E

 

Except for the Assumed
Liabilities expressly set forth in Exhibit C, the Purchaser shall not assume, or in any way be responsible or liable
for, any Retained Liabilities. “Retained Liabilities” shall having the meaning for such defined term as is set
forth in the Purchase Agreement.

 

Without limitation
of the foregoing, it is specifically understood and agreed between the Parties that the Purchaser shall not be responsible for
any express or implied warranties given by the Seller to customers prior to the Closing Date. Further, should any customer make
a claim upon any warranty given by the Seller or for defective vehicle repair by the Seller prior to the Closing, then, in that
event, the Purchaser at its option may adjust any such minor item as it so desires, at the Seller’s expense, and on any major
item shall notify the Seller and, upon the Seller’s approval, shall repair said item at the Seller’s expense. Any major
item shall be defined as any item at cost to the Purchaser in excess of $250.00. The Parties further agree that any breach
of this Agreement will be subject to and governed by Article 6 of the Purchase Agreement.

 

5. 
BINDING EFFECT. The terms, covenants and agreements herein contained shall be binding upon, and inure to the benefit
of, the Parties and their respective successors and assigns.

 

6. 
GOVERNING LAW. This Agreement shall be construed in accordance with and shall be governed by the laws of the State
of West Virginia. The Parties agree that the state or federal courts in and for Raleigh County, West Virginia are the proper venue
and exclusive jurisdiction for any disputes hereunder. THE PARTIES HERETO HEREBY IRREVOCABLY WAIVE ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY.

 

7. 
COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, but all of which shall be deemed to be a single instrument. Facsimile and/or electronic copies of this Agreement and
any signatures on any counterpart hereof shall be considered for all purposes as originals.

 

8. 
INCONSISTENCIES. If there is any conflict or inconsistency between the terms of this Bill of Sale and the Purchase
Agreement, the terms of the Purchase Agreement shall govern and control.

 

9. 
AMENDMENTS. This Agreement may be amended only by a written agreement executed by the Parties. No waiver granted
shall be deemed effective unless in writing and executed by the party against whom enforcement of the waiver is sought.

 

10. CLOSING
DATE. This Agreement shall be effective as of the Closing Date.

 

[signatures on following page]

 

    

     

    

 

Exhibit E

 

IN WITNESS WHEREOF, the Parties have caused
this Agreement to be signed and sealed by their respective duly authorized representatives on the date first set forth above.

 

	 	SELLER:
	 	 
	 	BECKLEY BUICK-GMC AUTO MALL, INC.,
	 	a West Virginia corporation
	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	KING COAL CHEVROLET CO.,
	 	a West Virginia corporation
	 	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	HOMETOWN PREOWNED VEHICLES, INC., 

a
    West Virginia corporation
	 	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	PURCHASER:
	 	 
	 	LMP AUTOMOTIVE HOLDINGS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By: 	 
	 	 	Sam Tawfik, CEO

 

Signature Page to Bill of Sale and Assignment
and Assumption Agreement

 

    

     

    

 

Exhibit E

 

EXHIBIT A

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

Dealership Assets

 

		●	All of the Seller’s furniture, fixtures, signs, product
marketing displays, office equipment and computers, machinery and shop equipment, parts equipment, special tools, lifts, hybrid
charging stations and related equipment, removable compressors, shop tools, company vehicles, and other items of tangible personal
property owned and used by the Seller in the operation of the Business, including those items listed on the Seller’s depreciation
schedules and on Schedule 1 attached hereto (the “Fixed Assets”);

 

		●	The Seller’s New Vehicles and Demos listed on Schedule
2 attached hereto;

 

		●	The Seller’s Used Vehicles listed on Schedule
3 attached hereto;

 

		●	The Seller’s assignable rights and privileges under
the Contracts identified on Schedule 4 attached hereto (the “Assumed Contracts”);

 

		●	The Seller’s Parts, all as summarized on Schedule
5 attached hereto;

 

		●	The Seller’s WIP, as listed on Schedule 6
attached hereto (“WIP”);

 

		●	The Seller’s return privileges, if any, concerning
the Manufacturer Parts;

 

		●	The Seller’s assignable rights to its email addresses,
PO Boxes, telephone and facsimile numbers (local and toll-free), as listed on Schedule 7 attached hereto;

 

		●	To the extent transferable, all Licenses;

 

		●	All assignable rights of the Seller relating to deposits
and prepaid expenses, claims for refunds and rights to offset in respect thereof;

 

		●	The Seller’s offices supplies, janitorial supplies,
and similar items;

 

		●	Any assignable rights relating to or arising out of or
under any express or implied warranties from suppliers with respect to the Dealership Assets;

 

		●	All assignable rights of the Seller arising under any non-compete
or restrictive covenant agreements between the Seller and any former member(s), or between the Seller and its current or former
employees;

 

		●	Any insurance proceeds for claims or damages to the Dealership
Assets, except such proceeds which have been used prior to the Closing Date for repair or restoration; and

 

		●	All of the Seller’s perpetual inventory records,
sales records, customer lists, customer service records and all other customer data, deal jackets, supply and manufacturer lists,
technical data, and sales and marketing literature, advertising materials, promotional materials, including merchandising literature
from the Manufacturers, whether in hard or digital copies, and all of the Seller’s intangible property rights and goodwill
associated with the Business, including all assignable franchise rights under the Manufacturers’ dealer sales and service
agreements, and any and all of the Seller’s rights to content and access (including usernames and passwords, or other access
means) related to GooglePlusLocal, GooglePlusBusiness, yelp, LinkedIn®, Facebook®, MySpace®,
foursquare, Twitter®, Dealer Rater, Edmunds, and Cars.com, and other intellectual property
owned by the Seller and used or useable in the Business, and all other intangible assets, rights and properties of the Seller
whatsoever, except the Excluded Assets.

 

    

     

    

 

Exhibit E

 

EXHIBIT B

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

Excluded Assets

 

		●	Cash and cash equivalents on hand and in banks, certificates
of deposit, commercial paper, stocks, bonds and other liquid investments;

 

		●	Accounts receivable of the Seller (including any “contracts
in transit,” rebates receivable, holdbacks, discounts receivable, credit life commissions receivable, A & H commissions
and finance Seller receivables, both current and deferred);

 

		●	Any prepaid expense, insurance, interest, utilities, or
rent and any deposits related thereto, which accrue to the benefit of the Seller as of the day prior to the Closing Date;

 

		●	The minute book, corporate, accounting, and Tax records,
and corporate seal of the Seller;

 

		●	Any correspondence or records of the Seller that constitutes
attorney-client privileged communications;

 

		●	The consideration for the Purchased Asset Interest to be
delivered by the Purchaser to the Seller under the Purchase Agreement;

 

		●	The consideration (membership interest) for the Contributed
Asset Interest;

 

		●	The Seller’s right to enforce the Purchase Agreement;

 

		●	Vehicle parts and accessories that do not constitute Manufacturer
Parts Inventory or Miscellaneous Inventories;

 

		●	Vehicles not purchased by the Purchaser;

 

		●	The Seller’s contracts or policies of insurance and
any refunds of taxes or tax loss carry forwards of the Seller;

 

		●	Any assets leased by the Seller that would otherwise constitute
Fixed Assets if not so leased (unless the Purchaser assumes such lease obligations);

 

		●	All rights under any Licenses and Contracts, except for
the Assumed Contracts and assigned Licenses;

 

		●	Real estate owned by the Seller;

 

		●	Those items of personal property owned by the Shareholder,
as listed on Schedule 8 attached hereto; and

 

		●	All of the Seller’s Employee Benefit Plans.

 

    

     

    

 

Exhibit E

 

EXHIBIT C

BILL OF SALE AND ASSIGNMENT AND ASSUMPTION
AGREEMENT

 

Assumed Liabilities

 

		●	All of the Seller’s Liabilities under the Assumed
Contracts, as listed on Schedule 4 attached hereto, arising on or after the Closing Date (other than any Liabilities
arising out of any breach or default that occurred prior to the Closing Date);

 

		●	All of the Seller’s Liabilities to customers under
the conditions of the Seller’s vehicle order forms or special parts order forms, as listed on Schedule 9 attached
hereto (“Customer Deposits”);

 

		●	All of Seller’s obligations to complete WIP, as listed
on Schedule 6 attached hereto; and

 

		●	All of the Seller’s We-Owes, as listed on Schedule
10 attached hereto (“We-Owes”), the value of which shall be subtracted from the Asset Interest Price.

 

    

     

    

 

EXHIBIT F

ASSIGNMENT OF INTANGIBLE PROPERTY

 

(see attached)

 

    

     

    

 

Exhibit F

 

ASSIGNMENT OF INTANGIBLE PROPERTY

 

THIS
ASSIGNMENT OF INTANGIBLE PROPERTY (the “Assignment”) is made as of the _____ day of ________________, 2020 (the
“Effective Date”), by and between BECKLEY BUICK-GMC AUTO MALL, INC., a West Virginia corporation, KING
COAL CHEVROLET CO., a West Virginia corporation, and HOMETOWN PREOWNED VEHICLES, INC., a West Virginia corporation
(collectively, “Assignor”), and LMP AUTOMOTIVE HOLDINGS, INC., a Delaware corporation
(“Assignee”).

 

WITNESSETH:

 

WHEREAS, this
Assignment is executed and delivered pursuant to that certain Asset Purchase Agreement dated August _____, 2020 (the “Purchase
Agreement”), by and among Assignor, Assignee, and others, concerning the assets of Assignor’s Buick, GMC, Chevrolet,
Hyundai, Kia, Subaru and used motor vehicle dealerships located in Beckley, Oak Hill, Mt. Hope, Princeton, Lewisburg, Summersville
and Beaver, West Virginia (collectively, the “Business”); and

 

WHEREAS, Assignor
owns or has an interest in the Intangible Property and desires to transfer such Intangible Property to Assignee.

 

NOW, THEREFORE, it is agreed that:

 

1. 
Recitals and Capitalized Terms. The above recitals are true and correct and are incorporated herein by reference.
Capitalized terms used but not defined herein shall have the meanings ascribed to such terms in the Purchase Agreement.

 

2. 
Transfer and Assignment. Assignor hereby transfers and assigns to Assignee, effective as of the Effective
Date, all of Assignor’s right, title, benefit and interest in and to the following assets regarding the Business, subject
to the terms and conditions contained in the Purchase Agreement:

 

All of Assignor’s tradenames and
URLs owned or controlled by the Seller and utilized by the Business, as listed on Schedule 1 attached hereto (collectively,
the “Intangible Property”).

 

3.
Acceptance of Assignment. Assignee hereby accepts the Assignment set forth in Section 2 above.

 

4. 
Representation and Warranty. Assignor represents and warrants that all corporate action to authorize this
Assignment has been completed.

 

5. 
Cooperation. Assignor and Assignee agree to promptly do all things necessary or appropriate to accomplish
the transfer to Assignee of the Intangible Property.

 

6. 
Binding Effect. The terms, covenants, and agreements herein contained shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.

 

7. 
Governing Law. This Assignment shall be construed in accordance with and shall be governed by the laws of
the State of West Virginia.

 

8.  Counterparts.
This Assignment may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of
which shall be deemed to be a single instrument. Facsimile and/or electronic copies of this Assignment and any signatures on
any counterpart hereof shall be considered for all purposes as originals.

 

9. 
Inconsistencies. If there is any conflict or inconsistency between the terms of this Assignment and the Purchase
Agreement, the terms of the Purchase Agreement shall govern.

 

[signatures on following page]

 

    1

     

    

 

Exhibit F

 

IN WITNESS WHEREOF,
Assignor and Assignee have executed this Assignment the day and year first above written.

 

	 	ASSIGNOR:
	 	 
	 	BECKLEY BUICK-GMC AUTO MALL, INC.,
	 	a West Virginia corporation
	 	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	KING COAL CHEVROLET CO.,
	 	a West Virginia corporation
	 	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 
	 	HOMETOWN PREOWNED VEHICLES, INC., 

a
    West Virginia corporation
	 	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	ASSIGNEE:
	 	 
	 	LMP AUTOMOTIVE HOLDINGS, INC.,
	 	a Delaware corporation
	 	 	 
	 	By:	 
	 	 	Sam Tawfik, CEO

 

Signature Page
to Assignment of Intangible Property

(sale-purchase)

 

    2

     

    

 

EXHIBIT G

AGREEMENT REGARDING IRS FORM 8594

 

(see attached)

 

    

     

    

 

Exhibit G

 

AGREEMENT REGARDING IRS FORM 8594

 

THIS AGREEMENT REGARDING IRS FORM 8594 (this
“Agreement”) is made as of the _____ day of _____, 2020 by and among BECKLEY BUICK-GMC AUTO MALL, INC.,
a West Virginia corporation, KING COAL CHEVROLET CO., a West Virginia corporation, and HOMETOWN PREOWNED VEHICLES, INC.,
a West Virginia corporation (collectively, “Seller”), and LMP AUTOMOTIVE HOLDINGS, INC., a Delaware corporation
(“Purchaser”).

 

RECITALS

 

WHEREAS, Seller,
Purchaser, and others, entered into that certain Asset Purchase Agreement dated August _____, 2020 (the “Purchase Agreement”),
concerning the assets of Seller’s Buick, GMC, Chevrolet, Hyundai, Kia, Subaru and used motor vehicle dealerships described
therein (the “Dealership Assets”), on the terms and conditions set forth therein; and

 

WHEREAS, the parties
desire to agree upon the fair market values and the allocation of the asset interest price for the Dealership Assets among the
various classes of assets as will be set forth on Form 8594 which will be attached to the respective Federal Income Tax Returns
of Purchaser and Seller so that the form which is submitted to the Internal Revenue Service by each of them will be identical as
to such fair market values and allocation.

 

NOW, THEREFORE, in
consideration of the promises and agreements herein contained, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:

 

1. 
Fair Market Values/Allocation of Asset Interest Price. The parties agree that the aggregate fair market values and
the aggregate allocation of the asset interest price of the Dealership Assets among the various classes of assets as provided for
on Form 8594 shall be as set forth in Part II of the Form 8594 attached hereto as Exhibit A and made a part hereof.
Each party agrees to complete and attach a Form 8594, completed identically to Exhibit A attached hereto, to its
Federal Income Tax Return for the year in which the closing of the purchase and sale of the Dealership Assets under the Purchase
Agreement takes place.

 

2. 
Taxes and Expenses. Each of the parties shall be solely responsible for the preparation and timely filing of its
respective Federal Income Tax Return and Form 8594 and the payment of all taxes, interest and/or penalties, if any, associated
therewith.

 

3. 
Governing Law. This Agreement shall be construed in accordance with and shall be governed by the laws of the State
of West Virginia.

 

4. 
Attorneys’ Fees and Costs, Etc. In the event a dispute arises between the parties under this Agreement and suit is
instituted, the prevailing party shall be entitled to recover its costs and reasonable attorneys’ fees from the non-prevailing
party. As used herein, costs and reasonable attorneys’ fees include any costs and reasonable attorneys’ fees in any appellate proceeding.

 

5. 
No Third-Party Beneficiary. This Agreement is solely between the parties hereto and no person not a party to this
Agreement shall have any rights hereunder, either as a third-party beneficiary or otherwise.

 

6. 
Complete Agreement. This Agreement and the Purchase Agreement constitute the complete agreement between the parties
hereto and incorporates all prior discussions, agreements and representations made in regard to the matters set forth herein. This
Agreement may not be amended, modified or changed except by a writing signed by the party to be charged by said amendment, change
or modification. To the extent there is any conflict between the terms of this Agreement and the Purchase Agreement, the terms
of the Purchase Agreement shall govern and control.

 

[signatures on following page]

 

    1

     

    

 

Exhibit G

 

IN WITNESS WHEREOF, the parties
have executed this Agreement as of the date first set forth above.

 

	BECKLEY BUICK-GMC AUTO MALL, INC.,

a West Virginia corporation	 	LMP AUTOMOTIVE HOLDINGS, INC.,

a Delaware corporation
	 	 	 	 	 
	By:	 	 	By:	 
	 	Ernest B. Davis, Jr., President	 	 	Sam Tawfik, CEO
	 	 	 	 	 
	KING COAL CHEVROLET CO.,

a West Virginia corporation	 	 	 
	 	 	 	 	 
	By:	 	 	 	 
		Ernest B. Davis, Jr., President	 	 	 
	 	 	 	 	 
	HOMETOWN PREOWNED VEHICLES, INC.,

a West Virginia corporation	 	 	 
	 	 	 	 
	By:	 	 	 	 
	 	Ernest B. Davis, Jr., President	 	 	 

 

Signature Page to Agreement Regarding
IRS Form 8594

 

    2

     

    

 

EXHIBIT A

FORM 8594

 

(see attached)

 

    3

     

    

 

EXHIBIT H

NON-COMPETITION AGREEMENT AND NON-SOLICITATION
AGREEMENT

 

(see attached)

 

    

     

    

 

Exhibit H

 

NON-COMPETITION AND NON-SOLICITATION
AGREEMENT

 

THIS NON-COMPETITION
AND NON-SOLICITATION AGREEMENT (this “Agreement”) is made and entered into as of the ____ day of ___, 2020
(the “Effective Date”), by and among LMP AUTOMOTIVE HOLDINGS, INC., a Delaware corporation (“Purchaser”);
BECKLEY BUICK-GMC AUTO MALL, INC., a West Virginia corporation, KING COAL CHEVROLET CO., a West Virginia corporation,
and HOMETOWN PREOWNED VEHICLES, INC., a West Virginia corporation (collectively, “Seller”); and ERNEST
B. DAVIS, JR., an individual resident of West Virginia, LORI A. DAVIS, an individual resident of West Virginia, and
TRACY WARREN HYLTON, II, an individual resident of West Virginia (collectively, “Shareholder,” and together
with Seller, the “Restricted Parties,” and each, a “Restricted Party”).

 

RECITALS

 

WHEREAS, Seller
owned and operated franchised Buick, GMC, Chevrolet, Hyundai, Kia, and Subaru motor vehicle sales and service dealerships and five
used car dealerships (collectively, the “Dealership”) located at certain properties in Beckley, Oak Hill, Mt.
Hope, Princeton, Lewisburg, Summersville and Beaver, West Virginia (collectively, the “Dealership Premises”);
and

 

WHEREAS, Seller’s
operation of the Dealership has resulted in Seller developing a significant reputation in its market and the surrounding regions
in connection with the sales, lease, repair and service of Buick, GMC, Chevrolet, Hyundai, Kia, and Subaru new motor vehicles,
the sales lease, repair and service of used vehicles, and the general operation of the Dealership; and

 

WHEREAS, Shareholder
has been actively involved in the management, development, and strategic direction of the Dealership and has acquired considerable
experience/skill and has contributed to the goodwill of the Dealership; and

 

WHEREAS, Purchaser,
Seller and Shareholder entered into that certain Asset Purchase and Contribution Agreement dated August ___, 2020, regarding the
Dealership (the “Purchase Agreement”); and

 

WHEREAS, if
any of the Restricted Parties were to resume the business activities of a motor vehicle dealership, including but not limited to
selling vehicles and/or vehicle parts, clothing or accessories, in the area of the Dealership after the Effective Date, such activities
could have a material impact on the Protected Business (defined below). Accordingly, the execution of and compliance with the terms
of this Agreement by the Restricted Parties are essential to the business acquired pursuant to the Purchase Agreement; and

 

WHEREAS, in
order to protect the future business operations of Purchaser from such competition, the Restricted Parties have agreed, for the
Term, not to compete with Purchaser and to refrain from soliciting or hiring any of Purchaser’s employees following the Effective
Date.

 

NOW, THEREFORE,
in order to induce Purchaser to close the transactions pursuant to the Purchase Agreement, the transfer of financial consideration
under the Purchase Agreement, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound, hereby agree as follows:

 

1.
Recitals. The Recitals above are herein incorporated by reference.

 

    1

     

    

 

Exhibit H

 

2.
Definitions. As used in this Agreement the following terms shall have the following meanings:

 

(a) 
“Affiliate” or “Affiliates” of a Person shall mean a Person that, directly or indirectly,
controls, is controlled by or is under common control with the first Person.

 

(b) 
“Clients” includes any customer or other party who engages or has engaged in business with Purchaser
or with any other Protected Party as a customer. The term “Clients” includes any party whose business is actively solicited
by any Protected Party at any time during the term of this Agreement.

 

(c) 
“Competition” means any activity that is, directly or indirectly, competitive with the Dealership. Competition
includes working within the Restricted Area and making any offer or sale of, or marketing, any product or service competitive with
the activities of Protected Business as conducted by the Dealership on the Effective Date, even though the business of producing,
processing, shipping, or marketing such product or service may be located outside the Restricted Area. Competition also includes
the sale, rental, or service of new or used vehicles originally distributed by, or financed or otherwise regulated by other vehicle
manufacturers. For purposes of this Agreement, direct or indirect competition will include but not be limited to competition as
a sole proprietor, partner, corporate officer, director, manager, member, employee, lender, consultant, agent, independent contractor,
trustee, guarantor, advisor (including as an advisor to a family member), or in any other capacity whatsoever pursuant to which
the Restricted Party holds any beneficial interest in a competitor, derives any income or other benefit from a competitor, or provides
any service, advice, support (financial or otherwise), or assistance of any type whatsoever to a competitor. Notwithstanding the
foregoing, the mere ownership and leasing of real estate in the Restricted Area (without more) by Shareholder (or by an entity
owned by Shareholder) to a Person whose business may compete with Purchaser shall not constitute an act by Shareholder if competing
with Seller. Notwithstanding the foregoing, the sale of parts and/or vehicles in Seller’s possession on the Effective Date that
are not purchased by Purchaser shall not be deemed competing with Purchaser.

 

(d) 
“Confidential Information” shall mean any business information relating to the Restricted Parties’
operation of the Business, and regarding any of the operations, services, employee compensation, pricing procedures, organization,
finances, marketing, or sales and service customer lists of the Business, including, but not limited to, all Records (as defined
in the Purchase Agreement) purchased by Purchaser. Confidential Information also includes without limitation, all procedures, concepts,
methods, and other matters and information, specifically including but not limited to information such as price lists, publicity,
marketing strategies, Client, distributor, contractor, supplier and vendor identities and lists, revenues, key contact personnel,
financial relationships, methods of soliciting business, documents, financial data, and marketing programs. The term “Confidential
Information” is intended to be interpreted very broadly to encompass all items described in this paragraph regardless of
whether each item satisfies the legal concept of a trade secret. Confidential Information shall not include any information that
is or becomes available to the general public through no fault of the Restricted Parties.

 

(e) 
“Motor Vehicle Dealership Business” shall mean the operation of a motor vehicle dealership sales and/or
service business, including but not limited to the sales and service of new or used motor vehicles, internet sales, and the sale
of motor vehicle parts and accessories. Notwithstanding the foregoing, Motor Vehicle Dealership Business shall not include the
operation of Seller’s ongoing recreational vehicle dealership sales and/or service business (“RV Dealership Business”).

 

    2

     

    

 

Exhibit H

 

(f) 
“Person” shall mean an individual, a partnership, an association, a corporation, a limited liability
company, a trust, an unincorporated organization, or any other business entity or enterprise.

 

(g) 
“Protected Business” means the Dealership, as acquired and operated by Purchaser, including, but not
limited to, the operation of the motor vehicle dealership and the sale, rental, and/or service of (i) new and used products originally
distributed by, or financed or otherwise regulated by General Motors LLC, Kia Motors America, Inc., Subaru of America, Inc. or
Hyundai Motor America, LLC (collectively, “Manufacturer”); (ii) other used motor vehicles; and (iii) retail
distribution of new motor vehicle parts and accessories.

 

(h) 
“Protected Party” and “Protected Parties” include Purchaser, its shareholders, directors,
officers, and their respective successors and assigns.

 

(i) 
“Restricted Area” means from a location within a 75-mile radius of the Dealership Premises from
which the Dealership sold Buick, GMC, Chevrolet, Hyundai, Kia or Subaru new vehicles as of the Effective Date.

 

Any capitalized terms used herein which are not otherwise
defined herein shall have the meaning ascribed to them in the Purchase Agreement.

 

3. 
Non-Competition. After the Effective Date and through the end of a 36-month period after Seller (or Shareholder)
no longer is a limited liability company member of Purchaser or any of its Affiliate(s) (the “Term”), each of
the Restricted Parties agrees, during the Term, not to be involved directly or indirectly, either as an employee, officer, director,
agent, lender, stockholder, partner, member, self-employed individual, contractor, or consultant with a Person, or as manager,
owner or operator with any Person engaged in a Motor Vehicle Dealership Business within the Restricted Area. Further, during the
Term, each of the Restricted Parties agrees not to engage in Competition with any Protected Party within the Restricted Area. Competition
within the Restricted Area includes activities outside the Restricted Area to the extent that such activities include contacting
Clients within the Restricted Area or otherwise involve buying, selling, repairing or otherwise dealing in or with competitive
goods or services within the Restricted Area; provided, however, that general advertising or marketing (but not direct marketing
to Clients, such as direct mail, email, or telephone solicitation) that may be published in the Restricted Area will not violate
the foregoing restriction so long as such products do not promote the sale or service of products of Manufacturer or its Affiliates
or any other vehicle manufacturer or contain their trademarks. The provisions of this Section 3 will not, however, prevent
any Restricted Party from owning less than 1% of the outstanding stock of any publicly traded corporation engaged in competition,
so long as no Restricted Party engages in such corporation’s business or otherwise engages in Competition with any Protected
Party. Notwithstanding anything herein to the contrary, neither (i) the operation by Seller or Shareholder of the RV Dealership
Business in the Restricted Area, nor (ii) the future incidental sale of a vehicle or vehicle parts in the Restricted Area by any
Person in or with respect to which a Restricted Party owns an interest or manages as of the Effective Date, shall be a breach of
this Section 3.

 

4. 
Non-Solicitation and Hiring. During the Term, without the prior express written consent of Purchaser, which such
consent may be withheld in Purchaser’s absolute discretion, the Restricted Parties will not (and will not attempt to, permit
or cause any of its Affiliates, subsidiaries, contractors or representatives or their respective owners, directors, officers, employees,
contractors, agents, representatives or third parties to) for any reason: (a) hire or solicit to hire any employee under the control
of the Dealership, which has had a business relationship with the Dealership (and after the Effective Date, Purchaser) at any time
during the period of time from 6 months prior to the Effective Date through the Term (each, a “Restricted Person”),
or (b) directly or indirectly recruit, induce, encourage or solicit any Restricted Person to do any of the following (or engage
in any discussion, the topic, intent, goal or result of which is, to cause or encourage any such person or entity to): (i) terminate
or alter his, her or its employment, contract or relationship with the Dealership (and after the Effective Date, Purchaser), (ii)
act in such a manner that his, her or its employment contract or relationship with the Dealership (and after the Effective Date,
Purchaser) is terminated or altered, or (iii) become associated with, provide services to or become an employee, agent or representative
of any other Person. Notwithstanding anything herein to the contrary, the hiring by a Restricted Party (or Person in or with respect
to which a Restricted Party owns an interest or manages) of a Restricted Person that responds to a general publication or advertisement
made by a Restricted Party (or any such Person in or with respect to which a Restricted Party owns an interest or manages) for
the purpose of obtaining applicants for employment shall not be a breach of this Section 4.

 

    3

     

    

 

Exhibit H

 

5. 
No use of Confidential Information. The Restricted Parties will not (and will not attempt to, permit or cause any
of its Affiliates, subsidiaries, contractors or representatives or their respective owners, directors, officers, employees, contractors,
agents, representatives or third parties to attempt), for any reason, directly or indirectly, disclose to any Person, or use or
otherwise exploit for the Restricted Parties’ own benefit or for the benefit of any other Person, any Confidential Information,
including but not limited to the solicitation of prior customers of Seller’s Business.

 

6. 
Reasonableness of Restrictions. Each of the Restricted Parties agrees that the restrictions contained herein have
been carefully negotiated with a view toward avoiding unreasonable interference with the ability of each of the Restricted Parties
to engage in gainful employment or other advantageous economic activities. In particular, the scope of the Protected Business,
the Restricted Area, and the duration of the Restricted Period have been carefully defined to provide necessary protection to the
Protected Parties without unreasonably limiting the ability of the Restricted Parties to engage in productive and profitable activities.
Each Restricted Party represents that said party (a) is familiar with the covenants set forth in this Agreement; (b) is fully aware
of the obligations imposed on the Restricted Parties hereunder, including, without limitation, the length of time, scope and geographic
coverage of these covenants; (c) has received specific, bargained for consideration for the covenants contained in this Agreement;
and (d) the performance of such Restricted Party’s obligations under this Agreement will not conflict with, or result in
a violation or breach of, any other agreement to which such Restricted Party is a part or any judgment, order or decree to which
such Restricted Party is subject.

 

7.
Enforcement.

 

(a) 
Injunctive Relief; Individual Restricted Party Liability. The parties hereto recognize that because of the role of
Restricted Parties in the management, operation and ownership of the Dealership and because of the knowledge of the Dealership’s
customers, business plans and financial strengths and weaknesses, irreparable damage will result to Purchaser in the event of a
breach of the terms of this Agreement by a Restricted Party. Each Restricted party shall be liable to Purchaser for a breach of
this Agreement by such Restricted Party. A Restricted Party that has not committed a breach of this Agreement shall not be liable
in any manner whatsoever to Purchaser with respect to a breach of this Agreement by another Restricted Party. The Restricted Parties
agree that in such event Purchaser shall be entitled, in addition to any other remedies and damages available, to an injunction
to restrain and enjoin each Restricted Party that has breached this Agreement from violating the restrictive covenants in Paragraphs
3, 4, or 5 above (collectively, the “Restrictive Covenants”) without the necessity of posting
any bond or proving special damages or irreparable injury. Moreover, it is agreed that the Restricted Party which has breached
this Agreement shall be responsible for any and all expenses incurred by Purchaser, including reasonable and necessary legal fees
of Purchaser in any litigation between Purchaser and such Restricted Party involving such breach of this Agreement in which Purchaser
prevails. It is understood and agreed between the parties to this Agreement that in the event there is a suit in equity by Purchaser
against a Restricted Party to enforce this Agreement, and the Court shall refuse for any reason to enforce this Agreement by injunction,
such suit in equity shall not be a bar to a later suit to recover damages.

 

    4

     

    

 

Exhibit H

 

(b) 
Interpretation; Severability. The parties hereto expressly agree and acknowledge that it is not their intention that
the Restrictive Covenants in this Agreement violate any public policy or statutory or common law. If a court of competent jurisdiction
renders a ruling (sustained on appeal, if any) holding that any one or more of the provisions of this Agreement, including the
stated term and/or geographic coverage of the Restrictive Covenants, constitute an unreasonable restriction, then the parties specifically
agree that the Restrictive Covenants shall not be rendered void but shall apply to such extent and as to such time period and geographic
areas as the court may determine constitutes a reasonable restriction under the circumstances.

 

(c) 
Term Extended. Notwithstanding anything herein to the contrary, and provided Purchaser furnishes written notice to
the Restricted Parties of its objection to a breach of this Agreement, the Term shall be automatically extended with respect to
a particular Restricted Party by a period of time equal to any and all times during which such particular Restricted Party is found
to be in breach of this Agreement.

 

8. 
Jury Waiver. THE PARTIES EACH HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY,
ANY MATTERS IN ANY WAY ARISING OUT OF, RELATED TO OR CONNECTED WITH THIS AGREEMENT OR THE MATTERS CONTEMPLATED HEREIN.

 

9. 
Advice of Legal Counsel. Each Restricted Party acknowledges and represents that, in executing this Agreement, he
or it has consulted with legal counsel (or has affirmatively chosen not to do so) and is fully aware of his or its rights and obligations
under this Agreement. This Agreement shall not be construed against any party by reason of its drafting or preparation.

 

10. 
Governing Law. This Agreement shall be governed in all respects by the laws of the State of West Virginia (without
regard to the conflict of laws principles thereof).

 

11. 
Severability. If any provision of this Agreement shall be held invalid, illegal, or unenforceable, in whole or in
part, the validity, legality and enforceability of the remaining part of such provision, and the validity, legality and enforceability
of the other provisions hereof shall not be affected thereby.

 

12. 
Assignment; Incorporation by Reference. Purchaser may freely assign its rights and duties under this Agreement by
providing Seller written notice. Purchaser and Seller each hereby covenants and agrees that Article 9 of the Purchase Agreement
is incorporated herein by reference and shall be a part of this Agreement, mutatis mutandis, and otherwise modified as necessary
to apply to this Agreement as if herein stated.

 

[signatures on following page]

 

    5

     

    

 

Exhibit H

 

IN WITNESS WHEREOF
the parties hereto have executed this Non-Competition Agreement under seal or caused this Non-Competition Agreement to be executed
under seal as of the day and year first written above.

 

	WITNESSES:	 	PARTIES:
	 	 	BECKLEY BUICK-GMC AUTO MALL, INC.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	 	 	By:	 
	Print Name: 	 	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 	KING COAL CHEVROLET CO.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	 	 	By:	 
	Print Name: 	 	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 	HOMETOWN PREOWNED VEHICLES, INC.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	           	 	By:	         
	Print Name: 	 	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 
	Print Name: 	 	 	ERNEST B. DAVIS, JR.
	 	 	 	 
	 	 	 
	Print Name: 	 	 	LORI A. DAVIS
	 	 	 	 
	 	 	 
	Print Name: 	 	 	TRACY WARREN HYLTON, II
	 	 	 	 
	 	 	 	LMP AUTOMOTIVE HOLDINGS, INC.,
	 	 	 	a Delaware corporation
	 	 	 	 
	 	 	By:	 
	Print Name: 	 	 	 	Sam Tawfik, CEO

 

    6

     

    

 

EXHIBIT I

TAX ESCROW AGREEMENT

 

(see attached)

 

    

     

    

 

Exhibit I

 

TAX ESCROW AGREEMENT

 

THIS TAX ESCROW AGREEMENT
(the “Agreement”), dated as of ___ ____, 2020 (the “Effective Date”), is by and among
BECKLEY BUICK- GMC AUTO MALL, INC., a West Virginia corporation, KING COAL CHEVROLET CO., a West Virginia corporation,
and HOMETOWN PREOWNED VEHICLES, INC., a West Virginia corporation (collectively, “Seller”), LMP AUTOMOTIVE
HOLDINGS, INC., a Delaware corporation (“Purchaser”), and BASS SOX MERCER (“Tax Escrow Agent”).

 

This Agreement is executed
and delivered pursuant to that certain Asset Purchase Agreement by and among Seller, Purchaser, and others, dated August ____,
2020 (the “Purchase Agreement”), regarding the assets of Seller’s Buick, GMC, Chevrolet, Hyundai, Kia,
Subaru and used motor vehicle dealership operations (the “Dealership”) located in Beckley, Oak Hill, Mt. Hope,
Princeton, Lewisburg, Summersville and Beaver, West Virginia. Capitalized terms not otherwise defined herein shall have the
meaning ascribed thereto in the Purchase Agreement.

 

Under Section 7.11
of the Purchase Agreement, the parties agreed to withhold the Withheld Tax Amount from the Asset Interest Price paid at Closing
for the purpose of assuring Purchaser that the aggregate of Seller’s unpaid sales tax obligations to the WVSTD (as contemplated
under West Virginia Code) and any related amounts, including any interest and penalties (collectively, the “Taxes”),
will be paid.

 

AGREEMENT

 

The parties, intending to be legally bound, hereby
agree as follows:

 

1.
Establishment of Escrow

 

(a)
Purchaser is depositing with Tax Escrow Agent the sum of $______ in immediately available funds (the
“Withheld Tax Amount”) (as reduced by any disbursements, the “Escrow Fund”). Wiring
instructions for Tax Escrow Agent are attached hereto as Exhibit A. Tax Escrow Agent acknowledges receipt of
the Escrow Fund. Seller acknowledges and agrees that the establishment of the Escrow Fund does not limit its obligations and
liabilities under the Asset Purchase Agreement.

 

(b) 
Tax Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the Escrow Fund pursuant to the
terms and conditions hereof.

 

2. Claims to be
Paid. The Escrow Fund shall be held by the Tax Escrow Agent for the purpose of, and to be applied to, payment of the following:

 

(a) Any and all
amounts claimed by the applicable State of West Virginia authorities, or any other applicable governmental authority(ies)
having jurisdiction over the Taxes (collectively, the “Department”) to be owed by Seller, in connection
with the Taxes (defined above), or any other claim, lien or assessment issued in connection therewith if not paid by Seller
upon final adjudication.

 

(b)
Seller reserves the right to contest the validity of any such claim, lien or assessment.

 

    1

     

    

 

Exhibit I

 

3.
Distribution. The Tax Escrow Agent shall distribute the Escrow Fund as follows:

 

(a) 
At such time as Seller delivers to Tax Escrow Agent a copy of a filed Sales Tax Return regarding Seller’s liability
to the Department, which shall include all taxes, penalties and interest, and proof of payment of Sales Tax Due, then, at Seller’s
direction, (i) the Tax Escrow Agent shall pay to the Department from the Escrow Fund the balance of such tax liability determined
to be due such Department, or (ii) the Tax Escrow Agent shall hold a portion of the Escrow Fund sufficient to pay the amount of
any such contested tax liability determination, including a sufficient reserve for interest and penalty, until Seller’s appeal
is finally determined by the Department or court with jurisdiction to hear such appeal.

 

(b) 
At the time the Tax Escrow Agent receives full payment confirmation reasonably acceptable to counsel for Seller and Purchaser,
the Tax Escrow Agent shall promptly pay the balance of the Escrow Fund to Seller.

 

(c) 
The Tax Escrow Agent may also make such partial payments from the Escrow Fund as Seller and Purchaser may jointly authorize
and direct from time to time due to partial releases of Seller’s obligations under the subject matter of this Agreement.
It is the express intention of the parties that the Tax Escrow Agent shall make payments from the Escrow Fund concurrent with receipt
from Seller of a clearance certificate or a notice of sales tax liability.

 

4.
Duties of Tax Escrow Agent

 

(a) 
Tax Escrow Agent shall not be under any duty to give the Escrow Fund held by it hereunder any greater degree of care than
it gives its own similar property and shall not be required to invest any funds held hereunder except as directed in this Agreement.
Uninvested funds held hereunder shall not earn or accrue interest.

 

(b) 
Tax Escrow Agent shall not be liable, except for its own gross negligence or willful misconduct and, except with respect
to claims based upon such gross negligence or willful misconduct that are successfully asserted against Tax Escrow Agent, the other
parties hereto shall jointly and severally indemnify and hold harmless Tax Escrow Agent (and any successor Tax Escrow Agent) from
and against any and all losses, liabilities, claims, actions, damages and expenses, including reasonable attorneys’ fees
and disbursements, arising out of and in connection with this Agreement. Without limiting the foregoing, Tax Escrow Agent shall
in no event be liable in connection with its investment or reinvestment of any cash held by it hereunder in good faith, in accordance
with the terms hereof, including, without limitation, any liability for any delays (not resulting from its gross negligence or
willful misconduct) in the investment or reinvestment of the Escrow Fund, or any loss of interest incident to any such delays.
This Section 4(b) shall survive notwithstanding any termination of this Agreement or the resignation of Tax Escrow Agent.

 

(c) 
Tax Escrow Agent shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument or other
writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact stated therein
or the propriety or validity of the service thereof. Tax Escrow Agent may act in reliance upon any instrument or signature believed
by it to be genuine and may assume that the person purporting to give receipt or advice or make any statement or execute any document
in connection with the provisions hereof has been duly authorized to do so. Tax Escrow Agent may conclusively presume that the
undersigned representative of any party hereto which is an entity other than a natural person has full power and authority to instruct
Tax Escrow Agent on behalf of that party unless written notice to the contrary is delivered to Tax Escrow Agent.

 

(d) 
Tax Escrow Agent may act pursuant to the advice of counsel with respect to any matter relating to this Agreement and shall
not be liable for any action taken or omitted by it in good faith in accordance with such advice.

 

    2

     

    

 

Exhibit I

 

(e) 
Tax Escrow Agent does not have any interest in the Escrow Fund deposited hereunder but is serving as escrow holder only
and having only possession thereof.

 

(f) 
Tax Escrow Agent makes no representation as to the validity, value, genuineness or the collectability of any security or
other document or instrument held by or delivered to it.

 

(g) 
Tax Escrow Agent (and any successor Tax Escrow Agent) may at any time resign as such by delivering the Escrow Fund to any
successor Tax Escrow Agent jointly designated by the other parties hereto in writing, or to any court of competent jurisdiction,
whereupon Tax Escrow Agent shall be discharged of and from any and all future obligations arising in connection with this Agreement.
The resignation of Tax Escrow Agent will take effect on the earlier of (a) the appointment of a successor (including a court of
competent jurisdiction) or (b) the day which is 30 days after the date of delivery of its written notice of resignation
to the other parties hereto. If at that time Tax Escrow Agent has not received a designation of a successor Tax Escrow Agent, Tax
Escrow Agent’s sole responsibility after that time shall be to retain and safeguard the Escrow Fund until receipt of a designation
of successor Tax Escrow Agent or a joint written disposition instruction by the other parties hereto or a final binding decision
of an arbitration panel, as provided herein. Purchaser and Seller shall have the right to replace Tax Escrow Agent at any time
by joint written Notice to Tax Escrow Agent and joint written designation of a successor Tax Escrow Agent. In such event, Tax Escrow
Agent shall promptly resign, and the preceding provisions of this Section 4(g) pertinent to Tax Escrow Agent’s resignation
shall become applicable.

 

(h) 
In the event of any disagreement between the other parties hereto resulting in adverse claims or demands being made in connection
with the Escrow Fund or in the event that Tax Escrow Agent is in doubt as to what action it should take hereunder, Tax Escrow Agent
shall be entitled to retain the Escrow Fund until Tax Escrow Agent shall have received (i) a final binding decision of an arbitration
panel, as provided herein, or (ii) a written agreement executed by the other parties hereto directing delivery of the Escrow Fund,
in which event Tax Escrow Agent shall disburse the Escrow Fund in accordance with such order or agreement. Any arbitration decision
shall be accompanied by a legal opinion by counsel for the presenting party satisfactory to Tax Escrow Agent to the effect that
the decision is final and binding. Tax Escrow Agent shall act on such decision and legal opinion without further question.

 

(i) 
No printed or other matter in any language (including, without limitation, prospectuses, notices, reports and promotional
material) that mentions Tax Escrow Agent’s name or the rights, powers, or duties of Tax Escrow Agent shall be issued by the
other parties hereto or on such parties’ behalf unless Tax Escrow Agent shall first have given its specific written consent
thereto.

 

(j) 
The other parties hereto authorize Tax Escrow Agent, for any securities held hereunder, to use the services of any United
States central securities depository it reasonably deems appropriate, including, without limitation, the Depositary Trust Company
and the Federal Reserve Book Entry system.

 

5. 
Limited Responsibility. This Agreement expressly sets forth all the duties of Tax Escrow Agent with respect to any
and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement against Tax Escrow Agent.
Tax Escrow Agent shall not be bound by the provisions of any agreement among the other parties hereto except this Agreement.

 

    3

     

    

 

Exhibit I

 

6. 
Notices. All notices, consents, waivers and other communications under this Agreement must be in writing and will
be deemed to have been duly given when (a) delivered to the appropriate address by hand or by a nationally recognized overnight
courier service (costs prepaid); (b) sent by email (with confirmation by the transmitting equipment); or (c) received by the addressee,
if sent by certified mail, return receipt requested, in each case to the following addresses and facsimile numbers and marked to
the attention of the person (by name or title) designated below (or to such other address, facsimile number or person as a party
may designate by notice to the other parties):

 

If to Seller:

 

Beckley Buick-GMC Auto Mall, Inc.,

King Coal Chevrolet Co., and

Hometown Preowned Vehicles, Inc.

Attn: Lori A. Davis

334 Old Grandview Road

Beaver,
WV 25813

Email: ldavis@beckleyautomall.com

 

with a copy to:

 

Jones & Associates

Attention: E. Forrest Jones

13 Kanawha Blvd West, Suite 200

Charleston,
WV 25387 

Email: efjones@efjones.com

 

If to Purchaser:

 

LMP Automotive Holdings, Inc.

Attn: Sam Tawfik

601 North State Road 7

Plantation, Florida 33317

Email: sam@lmpmotors.com

 

with a copy to:

 

Bass Sox Mercer

Attn: Robert A. Bass, Esq.

2822 Remington Green Circle

Tallahassee, Florida 32308

Email: bassra@dealerlawyer.com

 

If to Tax Escrow Agent:

 

Bass Sox Mercer

Attn: Robert A. Bass, Esq.

2822 Remington Green Circle

Tallahassee,
Florida 32308 

Email: bassra@dealerlawyer.com

 

7. 
Jurisdiction. Any Proceeding arising out of or relating to this Agreement shall be brought in the courts of the State
of West Virginia, County of Raleigh, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern
District of West Virginia, and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any
such Proceeding and waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims
in respect of the Proceeding shall be heard and determined only in any such court and agrees not to bring any Proceeding arising
out of or relating to this Agreement in any other court. Process in any Proceeding referred to in the preceding sentence may be
served on any party anywhere in the world. Upon depositing such monies with the court, the Tax Escrow Agent shall be released from
any further liability under this Agreement. Reasonable charges for the Tax Escrow Agent’s attorneys’ fees and court
costs may be deducted from the Escrow Account.

 

    4

     

    

 

Exhibit I

 

8. 
Counterparts. This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original
and all of which, when taken together, will be deemed to constitute one and the same agreement.

 

9. 
Section Headings. The headings of sections in this Agreement are provided for convenience only and will not affect
its construction or interpretation.

 

10. 
Waiver. The rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the
failure nor any delay by any party in exercising any right, power or privilege under this Agreement or the documents referred to
in this Agreement will operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right,
power or privilege will preclude any other or further exercise of such right, power or privilege or the exercise of any other right,
power or privilege. To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or the
documents referred to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the
claim or right unless in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except
in the specific instance for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or demand to take further action without notice or demand
as provided in this Agreement or the documents referred to in this Agreement.

 

11. 
Exclusive Agreement and Modification. This Agreement supersedes all prior agreements among the parties with respect
to its subject matter and constitutes (along with the documents referred to in this Agreement) a complete and exclusive statement
of the terms of the agreement between the parties with respect to its subject matter. This Agreement may not be amended except
by a written agreement executed by Purchaser, Seller and the Tax Escrow Agent.

 

12. 
Governing Law. This Agreement shall be governed by the laws of the State of West Virginia without regard to conflicts
of law principles.

 

[signature page follows]

 

    5

     

    

 

Exhibit I

 

IN WITNESS WHEREOF, the parties
have executed and delivered this Tax Escrow Agreement as of the date first written above.

 

	WITNESSES:	 	SELLER:
	 	 	 
	 	 	BECKLEY BUICK-GMC AUTO MALL, INC.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	 	 	By:	 
	Print Name:	 	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 	KING COAL CHEVROLET CO.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	 	 	By:	 
	Print Name:	 	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 	HOMETOWN PREOWNED VEHICLES, INC.,
	 	 	 	a West Virginia corporation
	 	 	 	 
	 	 	By:	 
	Print Name: 	      	 	 	Ernest B. Davis, Jr., President
	 	 	 	 	 
	 	 	 	PURCHASER:
	 	 	 	 
	 	 	 	LMP AUTOMOTIVE HOLDINGS, INC.,
	 	 	 	a Delaware corporation
	 	 	 	 
	 	 	By: 	 
	Print Name:	 	 	 	Sam Tawfik, CEO
	 	 	 	 	 
	 	 	 	TAX ESCROW AGENT:
	 	 	 	 
	 	 	 	BASS SOX MERCER
	 	 	 	 
	 	 	By:  	   
	Print Name:	 	 	 	Robert A. Bass, Esq.
	 	 	 	 	Shareholder

 

    6

     

    

 

EXHIBIT J

PRINCETON PREMISES LEASE

 

(see attached)

 

    

     

    

 

    

     

    

 

    

     

    

    

     

    

 

    

     

    

 

EXHIBIT K

SUMMERSVILLE PREMISES LEASE

(see attached)

 

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

 

    

     

    

 

EXHIBIT L

BEAVER PREMISES LEASE

 

(see attached)

 

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

    

     

    

 

EXHIBIT
M

INDEMNIFICATION
ESCROW AGREEMENT

 

(see
attached)

 

    

     

    

 

Exhibit
M

 

INDEMNIFICATION
ESCROW AGREEMENT

 

THIS
INDEMNIFICATION ESCROW AGREEMENT (this “Agreement”) is made and entered into as of ___________ _____, 2020 (the
“Effective Date”), by and among LMP AUTOMOTIVE HOLDINGS, INC., a Delaware co rporation (“Purchaser”);
LEY BUICK-GMC AUTO MALL, INC., a West Virginia corporation, KING COAL CHEVROLET CO., a West Virginia corporation,
and HOMETOWN PREOWNED VEHICLES, INC., a West Virginia corporation (collectively, “Seller”); and BASS
SOX MERCER (the “Indemnification Escrow Agent”)

 

RECITALS

 

A. Seller,
Purchaser, and others entered into that certain Asset Purchase and Contribution Agreement dated August ___, 2020 (the “Purchase
Agreement”), with respect to Seller’s Buick, GMC, Chevrolet, Hyundai, Kia, Subaru and used motor vehicle dealerships
located in Beckley, Oak Hill, Mt. Hope, Princeton, Lewisburg, Summersville and Beaver, West Virginia.

 

B. As
set forth in Section 6.2(d) of the Purchase Agreement, the parties agreed to withhold from the Asset Interest Price $[**]
(the “Original Escrow Amount”) (as reduced by any disbursements or amounts withdrawn under Section 3
hereof, the “Escrow Fund”) for the purpose of securing the performance of Seller’s obligation to
indemnify Purchaser against claims arising under the Purchase Agreement. [Note: Amount to be inserted when APA is finalized.]

 

C. Capitalized
terms used in this agreement without definition shall have the respective meanings given to them in the Asset Purchase Agreement.

 

AGREEMENT

 

The
parties, intending to be legally bound, hereby agree as follows:

 

1. ESTABLISHMENT
OF ESCROW

 

(a) Purchaser,
as a delivery of the Purchase Price under the Purchase Agreement, is depositing with the Indemnification Escrow Agent in immediately
available funds the Original Escrow Amount. Wiring instructions for the Indemnification Escrow Agent are attached hereto as Exhibit
A. The Indemnification Escrow Agent acknowledges receipt thereof.

 

(b) The
Indemnification Escrow Agent hereby agrees to act as escrow agent and to hold, safeguard and disburse the Escrow Fund pursuant
to the terms and conditions hereof.

 

2.
ACCOUNT

 

The
Indemnification Escrow Agent shall deposit the Escrow Fund into non-interest bearing attorney IOLTA accounts in any number of
different accounts with any number of different FDIC-insured institutions as the Indemnification Escrow Agent chooses.

 

3.
CLAIMS

 

(a)
From time to time on or before the 24th month after the Effective Date, an Authorized Representative (as defined
below) of Purchaser may give notice (a “Notice”) to Seller and the Indemnification Escrow Agent specifying
in reasonable detail the nature and dollar amount of any claim (a “Claim”) it may have under Section 6.2
of the Purchase Agreement; such Authorized Representative may make more than one claim with respect to any underlying state
of facts. If an Authorized Representative of Seller gives notice to Purchaser and the Indemnification Escrow Agent disputing
any Claim (a “Counter Notice”) within 30 days following receipt by the Indemnification Escrow Agent
of the Notice regarding such Claim, such Claim shall be resolved as provided in Section 3(b). If no Counter Notice is received
by the Indemnification Escrow Agent within such 30-day period, then the dollar amount of damages claimed by Purchaser as
set forth in its Notice shall be deemed established for purposes of this Agreement and the Purchase Agreement and, at the end
of such 30-day period, the Indemnification Escrow Agent shall pay to Purchaser the dollar amount claimed in the Notice
from (and only to the extent of) the Escrow Fund. The Indemnification Escrow Agent shall not inquire into or consider whether
a Claim complies with the requirements of the Purchase Agreement.

 

    1

     

    

 

Exhibit
M

 

(b)
If a Counter Notice is given by an Authorized Representative with respect to a Claim, the Indemnification Escrow Agent shall reserve
from the Escrow Fund a portion thereof equal to the Claim amount (a “Reserved Amount”) and thereafter shall
disburse such Reserved Amount only in accordance with (i) joint written instructions of each Authorized Representative of Purchaser
and Seller or (ii) a final, non-appealable order of a court of competent jurisdiction. Any court order shall be accompanied by
a legal opinion by counsel for the presenting party satisfactory to the Indemnification Escrow Agent to the effect that the order
is final and non-appealable. The Indemnification Escrow Agent shall act on such court order and legal opinion without further
question.

 

4. PARTIAL
RELEASE AND TERMINATION OF ESCROW

 

At
the end of the 12th month after the Effective Date, $[**] (50% of the Original Escrow Amount) of the
Escrow Fund, less (i) the amount of all offsets and reductions previously made in accordance with this Agreement less
(ii) any Reserved Amount for any Claims that are then pending in an amount equal to the aggregate dollar amount shown in the
Notice(s) of such Claim(s), shall be released to Seller. At the end of the 24th month after the Closing Date
and provided that all claims by Purchaser under Section 6.2 of the Purchase Agreement, if any, have been finally resolved
and further provided that no Claims are then pending, the remaining amount of the Escrow Fund shall be released to Seller. All
disbursements provided for in this Section 4 hereof require joint written instructions of Purchaser and Seller or a final,
non-appealable order of a court of competent jurisdiction as contemplated by Section 3(b) hereof. [Note: Amount to be
inserted when APA is finalized.]

 

5.
DUTIES OF INDEMNIFICATION ESCROW AGENT

 

(a) The
Indemnification Escrow Agent agrees to hold and distribute the Escrow Funds under the terms and conditions of this Agreement and
to perform the acts and duties expressly set forth in this Agreement, which shall be deemed purely ministerial in nature, in good
faith and in a commercially-reasonable manner. This Agreement expressly sets forth all the duties of the Indemnification Escrow
Agent with respect to any and all matters pertinent hereto. No implied duties or obligations shall be read into this Agreement
against the Indemnification Escrow Agent. Unless the Indemnification Escrow Agent is a party thereto, the Indemnification Escrow
Agent shall not be bound by the provisions of any agreement among the other parties hereto except this Agreement.

 

(b)
The Indemnification Escrow Agent shall be entitled to rely upon any order, judgment, certification, demand, notice, instrument
or other writing delivered to it hereunder without being required to determine the authenticity or the correctness of any fact
stated therein or the propriety or validity of the service thereof. The Indemnification Escrow Agent may act in reliance upon
any instrument or signature reasonably believed by it to be genuine and to have been signed by an Authorized Representative, as
applicable. The Indemnification Escrow Agent may conclusively presume that the undersigned Authorized Representative of any party
hereto has full power and authority to instruct the Indemnification Escrow Agent on behalf of that party unless written notice
to the contrary is delivered to the Indemnification Escrow Agent.

 

    2

     

    

 

Exhibit
M

 

(c) Except
in the case of fraud, willful misconduct or gross negligence, the Indemnification Escrow Agent shall not be liable for any action
taken or omitted to be taken by it (or any action suffered by it to be taken or omitted to be taken) in good faith and reasonably
believed by it to be authorized or within the rights or powers conferred upon it by this Agreement.

 

(d) The
Indemnification Escrow Agent may resign and thus be discharged from its duties or obligations hereunder by giving 5 days’
notice in writing of such resignation to each of the other parties to this Agreement, specifying a date when such resignation
shall take effect, which shall not be less than 10 days or more than 30 days after the date of such resignation
notice. A successor escrow agent shall be appointed in writing by the mutual written agreement of the other parties or, failing
such, by a court of competent jurisdiction. A successor escrow agent shall execute a copy of this Agreement agreeing to be bound
by the terms of this Agreement.

 

(e)
Purchaser and Seller shall each be severally responsible for 1/2 of the commercially-reasonable expenses, disbursements
and advances, including, without limitation, reasonable attorneys’ fees and costs, incurred or paid by the Indemnification
Escrow Agent in connection with carrying out its duties under this Agreement; provided, however, that no attorneys’
fees and costs shall be paid by the Indemnification Escrow Agent to the Indemnification Escrow Agent’s law firm. No other
compensation will be due or payable to the Indemnification Escrow Agent for its services under this Agreement.

 

(f) Each
of Purchaser, on the one hand, and Seller, on the other hand, agree to indemnify the Indemnification Escrow Agent for, and to
hold it harmless against, 1/2 of any loss, damage, cost, liability or expense (including, without limitation, reasonable
attorneys’ fees and costs, and costs of defending itself against any claim or liability) incurred or sustained (including,
without limitation, any third-party claims) without gross negligence, bad faith or willful misconduct on the part of the Indemnification
Escrow Agent, by reason of its compliance in good faith with the terms of this Agreement. To avoid any doubt, this Section
5 shall survive for the maximum time period permitted under applicable law.

 

6.
LIMITED RESPONSIBILITY

 

This
Agreement expressly sets forth all the duties of the Indemnification Escrow Agent with respect to any and all matters pertinent
hereto. No implied duties or obligations shall be read into this Agreement against the Indemnification Escrow Agent. The Indemnification
Escrow Agent shall not be bound by the provisions of any agreement among the other parties hereto except this Agreement.

 

7.
OWNERSHIP FOR TAX PURPOSES

 

Seller
agrees that, for purposes of federal and other taxes based on income, Seller will be treated as the owner of the Escrow Fund and
that Seller will report all income, if any, that is earned on, or derived from, the Escrow Fund as its income in the taxable year
or years in which such income is properly includible and pay any taxes attributable thereto.

 

8.
AUTHORIZED REPRESENTATIVES

 

The
parties acknowledge and agree that the following individuals shall serve as the authorized representatives of such party (the
“Authorized Representatives”): (a)(i) Lori A. Davis has been appointed as Seller’s Authorized Representative,
(ii) any instructions to be given or actions to be taken hereunder may be given or taken by Sellers’ Authorized Representative
on behalf of Seller, and (iii) as between Sellers, Purchaser and the Indemnification Escrow Agent, all actions taken or consented
to by Seller’s Authorized Representative hereunder shall be final, irrevocable and binding upon each of the Seller; and
(b) (i) [**] has been appointed as Purchaser’s Authorized Representative, (ii) any instructions to be given or actions to
be taken hereunder may be given or taken by Purchaser’s Authorized Representative on behalf of Purchaser, and (iii) as between
Seller, Purchaser and the Indemnification Escrow Agent, all actions taken or consented to by Purchaser’s Authorized Representative
hereunder shall be final, irrevocable and binding upon Purchaser.

 

    3

     

    

 

Exhibit
M

 

9. NOTICES

 

All
notices, Consents, waivers and other communications required or permitted under this Agreement shall be in writing and shall be
deemed given to a party when (a) delivered to the appropriate address by hand or by a nationally recognized overnight courier
service (costs prepaid); (b) sent by email (with confirmation by the transmitting equipment); or (c) received by the addressee,
if sent by certified mail, return receipt requested, in each case to the following addresses and facsimile numbers and marked
to the attention of the person (by name or title) designated below (or to such other address, facsimile number or person as a
party may designate by notice to the other parties):

 

If
to Seller:

 

Beckley
Buick-GMC Auto Mall, Inc.,

King Coal Chevrolet Co., and

Hometown Preowned Vehicles, Inc.

Attn: Lori A. Davis

334
Old Grandview Road

Beaver,
West Virginia 25813

Email:
ldavis@beckleyautomall.com

 

with
a copy to:

 

Jones
& Associates

Attention:
E. Forrest Jones

13
Kanawha Blvd West, Suite 200

Charleston,
WV 25387

Email:
efjones@efjones.com

 

If
to Purchaser:

 

LMP
Automotive Holdings, Inc.

Attn:
Sam Tawfik

601
North State Road 7

Plantation, Florida 33317

Email: sam@lmpmotors.com

 

with
a copy to:

 

Bass
Sox Mercer

2822
Remington Green Circle

Tallahassee, Florida 32308

Attention: Robert A. Bass

Email: bassra@dealerlawyer.com

 

    4

     

    

 

Exhibit
M

 

If
to Indemnification Escrow Agent:

 

Bass
Sox Mercer

2822
Remington Green Circle

Tallahassee, Florida 32308

Attention: Robert A. Bass

Email: bassra@dealerlawyer.com

 

10.
INDEMNIFICATION ESCROW AGENT AS COUNSEL

 

The
parties acknowledge that the Indemnification Escrow Agent acts as counsel on behalf of Purchaser. The parties acknowledge that
the Indemnification Escrow Agent has accepted appointment as escrow agent under this Agreement only at the specific request of
Purchaser and Seller. Further, Seller acknowledges that it is represented by independent counsel. Seller hereby waives any and
all real or perceived conflicts of interest between Purchaser and the Indemnification Escrow Agent resulting from the existing
representation of Purchaser so long as the Indemnification Escrow Agent acts in accordance with the terms of this Agreement. The
Indemnification Escrow Agent’s service hereunder shall not affect the Indemnification Escrow Agent’s ability to represent
Purchaser in connection with any matters arising from or in connection with the Purchase Agreement, with the exception of any
matters which may involve this Agreement, so long as the Indemnification Escrow Agent has resigned from its position as escrow
agent.

 

11.
JURISDICTION; SERVICE OF PROCESS

 

Any
Proceeding arising out of or relating to this Agreement may be brought in the courts of the State of West Virginia, County of
Raleigh, or, if it has or can acquire jurisdiction, in the United States District Court for the Southern District of West Virginia,
and each of the parties irrevocably submits to the exclusive jurisdiction of each such court in any such Proceeding and waives
any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the Proceeding
shall be heard and determined only in any such court and agrees not to bring any Proceeding arising out of or relating to this
Agreement in any other court. Process in any Proceeding referred to in the preceding sentence may be served on any party anywhere
in the world.

 

12.
EXECUTION OF AGREEMENT

 

This
Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of this Agreement and
all of which, when taken together, will be deemed to constitute one and the same agreement. The exchange of copies of this Agreement
and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Agreement as to the
parties and may be used in lieu of the original Agreement for all purposes. Signatures of the parties transmitted by facsimile
shall be deemed to be their original signatures for any purposes whatsoever.

 

13.
SECTION HEADINGS, CONSTRUCTION

 

The
headings of sections in this Agreement are provided for convenience only and will not affect its construction or interpretation.

 

    5

     

    

 

Exhibit
M

 

14.
WAIVER

 

The
rights and remedies of the parties to this Agreement are cumulative and not alternative. Neither the failure nor any delay by
any party in exercising any right, power or privilege under this Agreement or the documents referred to in this Agreement will
operate as a waiver of such right, power or privilege, and no single or partial exercise of any such right, power or privilege
will preclude any other or further exercise of such right, power or privilege or the exercise of any other right, power or privilege.
To the maximum extent permitted by applicable law, (a) no claim or right arising out of this Agreement or the documents referred
to in this Agreement can be discharged by one party, in whole or in part, by a waiver or renunciation of the claim or right unless
in writing signed by the other party; (b) no waiver that may be given by a party will be applicable except in the specific instance
for which it is given; and (c) no notice to or demand on one party will be deemed to be a waiver of any obligation of such party
or of the right of the party giving such notice or demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.

 

15.
ENTIRE AGREEMENT AND MODIFICATION

 

This
Agreement supersedes all prior agreements among the parties with respect to its subject matter and constitutes (along with the
documents referred to in this Agreement) a complete and exclusive statement of the terms of the agreement between the parties
with respect to its subject matter. This Agreement may not be amended except by a written agreement executed by Purchaser, Seller
and the Indemnification Escrow Agent.

 

16.
GOVERNING LAW

 

This
Agreement shall be governed by the laws of the State of West Virginia without regard to conflicts of law principles that would
require the application of any other Law.

 

[Signatures
to begin on following page]

 

    6

     

    

 

Exhibit
M

 

IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement as of the date first written above.

 

	 	SELLER:
	 	 
	 	BECKLEY
                    BUICK-GMC AUTO MALL, INC.,

                    a
                    West Virginia corporation

	 	 	 
	 	By:	
	 	 	Ernest B. Davis, Jr., President
	 	 
	 	KING
                    COAL CHEVROLET CO.,

                    a
                    West Virginia corporation

	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	HOMETOWN
                    PREOWNED VEHICLES, INC.,

                    a
                    West Virginia corporation

	 	 
	 	By:	 
	 	 	Ernest B. Davis, Jr., President
	 	 	 
	 	PURCHASER:
	 	 	 
	 	LMP
                    AUTOMOTIVE HOLDINGS, INC.,

                    a
                    Delaware corporation

	 	 	 
	 	By:	 
	 	 	Sam Tawfik, CEO
	 	 	 
	 	INDEMNIFICATION
                    ESCROW AGENT: 

                     

                    BASS
                    SOX MERCER

	 	 
	 	By:	 
	 	 	Robert
        A. Bass, Esq.

        Shareholder

 

 

7

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00313-of-00352.parquet"}]]