Document:

Exhibit 10.10

EXHIBIT 10.10

 

MECHANICAL TECHNOLOGY, INCORPORATED

RESTRICTED STOCK AWARD AGREEMENT 

 

This RESTRICTED STOCK AWARD AGREEMENT (this "Agreement")
is dated as of _________ __, ____ ("Grant Date"), and is made by and
between Mechanical Technology, Incorporated, a New York corporation (the "Company"),
and ______________, an individual resident of the State of New York and
[officer] [director] of the Company ("Grantee").   Company and
Grantee are sometimes referred to herein, individually, as a "party"
and, collectively, as the "parties".

RECITALS

WHEREAS, the Company has adopted the Mechanical
Technology, Incorporated 2014 Equity Incentive Plan (the "Plan"), under
which awards of restricted shares of the Company's common stock may be granted;
and

WHEREAS, the Compensation Committee of the board of
directors of the Company (the "Compensation Committee"), in its
capacity as administrator under the Plan ("Administrator"), has
determined that it is in the best interests of the Company and its shareholders
to grant the award of Restricted Stock (as defined below) provided for herein.

NOW, THEREFORE, for good and valuable consideration,
receipt of which is acknowledged, the parties agree as follows:

1.         Grant and Issuance of Restricted Stock.  

(a)              
Pursuant to the Plan, the Company hereby issues to Grantee, on
the Grant Date, an Award of restricted stock consisting of, in the aggregate,__________
(____) shares of common stock of the Company (the "Restricted Stock"),
on the terms and conditions and subject to the restrictions set forth in this
Agreement and the Plan.  Capitalized terms that are used but not defined herein
have the meaning ascribed to them in the Plan.

(b)              
The grant of Restricted Stock pursuant to this Agreement is being
made in consideration for the performance of past services provided, and/or
future services to be provided, by Grantee to or for the benefit of the Company
and its affiliates.

(c)              
As of the Grant Date, the Fair Market Value of each share of
common stock of the Company underlying the Restricted Stock is $_____ per
share.  

2.         Vesting.  

(a)              
Subject to Grantee's continuous employment by or continued
relationship as an individual services provider or director of the Company
and/or its affiliates ("Continuous Service") through the applicable
vesting date, the Restricted Stock granted and issued hereby shall become
vested as follows: [_____________________________].  The period over which
applicable shares of Restricted Stock remain unvested is referred to as the "Restricted
Period" with respect to solely such applicable shares of unvested
Restricted Stock (such that, for the avoidance of doubt, upon vesting any
Vested Stock shall no longer be considered within the Restricted Period). 
Shares of Restricted Stock that have vested in accordance with the provisions
of this Section 2 are referred to as "Vested Stock".  Shares of
Restricted Stock that have not vested in accordance with the provisions of this
Section 2 are referred to as "Unvested Stock".  

 

(b)              
If Grantee's Continuous Service terminates for any reason, other
than death or Disability, at any time before all of his or her Restricted Stock
has vested, Grantee's Unvested Stock shall be automatically forfeited upon such
termination of Continuous Service and neither the Company nor any affiliate of
the Company shall have any further obligations to Grantee under this Agreement
with respect to such Unvested Stock.

(c)              
The foregoing vesting schedule notwithstanding, if Grantee's
Continuous Service terminates due to Grantee's death, 100% of the Unvested
Stock shall vest as of the date of such termination.

(d)              
The foregoing vesting schedule notwithstanding, if Grantee's
Continuous Service is terminated by the Company or an affiliate of the Company
due to a Disability, 100% of the Unvested Stock shall vest as of the date of
such termination.

(e)              
The foregoing vesting schedule notwithstanding, upon the
occurrence of a Substantial Corporate Change, 100% of the Unvested Stock shall
vest as of the date of the Substantial Corporate Change.

3.         Restrictions.  Notwithstanding Section 7(e) of the Plan,
but subject to any other exceptions set forth in this Agreement or the Plan,
following the Restricted Period, the applicable shares of Vested Stock or the
rights relating thereto may be assigned, alienated, pledged, attached, sold or
otherwise transferred or encumbered by Grantee.  During the Restricted Period,
the applicable shares of Restricted Stock or the rights relating thereto may
not be assigned, alienated, pledged, attached, sold or otherwise transferred or
encumbered by Grantee.  Any attempt to assign, alienate, pledge, attach, sell
or otherwise transfer or encumber the applicable shares of Restricted Stock or
the rights relating thereto during the Restricted Period shall be wholly
ineffective and, if any such attempt is made, the applicable shares of
Restricted Stock will be forfeited by Grantee and all of Grantee's rights to
such shares shall immediately terminate without any payment or consideration by
the Company.  

4.          Rights as a Shareholder; Dividends.

(a)              
Grantee shall be the record owner of the Restricted Stock until
the applicable underlying shares of common stock of the Company are sold or
otherwise disposed of, and shall be entitled to all of the rights of a
shareholder of the Company including, without limitation, the right to vote such
shares and receive all dividends or other distributions paid with respect to
such shares.  Notwithstanding the foregoing, any dividends or other
distributions that are not in the form of cash shall be subject to the same
restrictions on transferability as the shares of Restricted Stock with respect
to which they were paid.

2

(b)              
The Company may issue stock certificates or evidence Grantee's
interest by using a restricted book entry account with the Company's transfer
agent, in the Company's sole discretion.

(c)              
If Grantee forfeits any rights he or she has under this Agreement
in accordance with Section 2 of this Agreement, Grantee shall, on the
date of such forfeiture, no longer have any rights as a shareholder with
respect to the applicable Restricted Stock so forfeited and shall no longer be
entitled to vote or receive dividends on such shares.

5.         No Right to Continued Employment or Service.  Neither the
Plan nor this Agreement shall confer upon Grantee any right to be employed or
retained by the Company or its affiliates as a director, employee, consultant
or in any other capacity.  Further, nothing in the Plan or this Agreement shall
be construed to limit the discretion of the Company or its affiliates to
terminate Grantee's Continuous Service at any time.

6.          Adjustments.
If any change is made to the outstanding common stock of the Company or the
capital structure of the Company, the shares of common stock of the Company
underlying the Restricted Stock shall, if required, be adjusted in any manner
as contemplated by the Plan.

7.          Tax.  Grantee agrees that, within 30 days after the date
hereof, Grantee shall give notice to the Company on the form attached hereto as
Exhibit A as to the making of an election pursuant to section 83(b) of
the Internal Revenue Code with respect to the Restricted Stock acquired as of
the Grant Date.  Grantee acknowledges that Grantee will be solely responsible
for any and all tax liabilities payable by Grantee in connection with Grantee's
acquisition of the Restricted Stock or attributable to Grantee's making or
failing to make such an election.  The form for making the section 83(b)
election is attached hereto as Exhibit B.  Grantee agrees to consult
with his or her tax advisor to determine the tax consequences of acquiring the
Restricted Stock and the advantages and disadvantages of filing the section
83(b) election.  The Company (i) makes no representation or undertaking
regarding the treatment of any income tax, social insurance, payroll tax or
other tax-related withholding ("Tax-Related Items") in connection with
the grant or vesting of the Restricted Stock or the subsequent sale of any
shares underlying the Restricted Stock and (ii) does not commit to structure
the Restricted Stock to reduce or eliminate Grantee's liability for any Tax-Related
Items.

8.           Compliance
with Law.  The issuance and transfer of the Restricted Stock, and
the shares of common stock underlying such Restricted Stock, shall be subject
to compliance by the Company and Grantee with all applicable requirements of
federal and state securities laws and with all applicable requirements of any
stock exchange on which the Company's shares of common stock may be listed.  No
shares of Restricted Stock or common stock of the Company underlying the
Restricted Stock shall be issued or transferred unless and until any then
applicable requirements of state and federal laws and regulatory agencies have
been fully complied with to the satisfaction of the Company and its counsel. 
Grantee understands that the Company is under no obligation to register the
Restricted Stock or shares of common stock of the Company underlying the
Restricted Stock with the United States Securities and Exchange Commission, any
state securities commission or any stock exchange to effect such compliance.

3

9.         Miscellaneous.

(a)              
Legends.
A legend may be placed on any certificate(s) or other document(s) delivered to
Grantee indicating restrictions on transferability of the shares of Restricted
Stock pursuant to this Agreement or any other restrictions that the Committee may
deem advisable under the rules, regulations and other requirements of the U.S.
Securities and Exchange Commission, any applicable federal or state securities
laws or any stock exchange on which the shares of common stock of the Company
are then listed or quoted.

(b)              
Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to any choice or conflicts of law provision or rule (whether of the
State of New York or any other jurisdiction) that would cause the application
of the laws of any jurisdiction other than the State of New York.

(c)              
Interpretation; Jurisdiction.  The Committee shall have
full authority to interpret, construe and administer this Agreement, and the
Committee's reasonable interpretation and construction hereof, and reasonable
actions hereunder, shall be final, binding and conclusive on all persons for
all purposes; provided, that, if any such interpretation, construction
or administration of this Agreement involves a director of the Company
then-serving on the Committee as Grantee hereunder, such director shall be
recused from the Committee for the purposes of such interpretation,
construction or administration.  Subject to the foregoing, in the event of a
judicial proceeding involving any dispute, controversy or claim arising out of
or relating to this Agreement, Grantee and the Company unconditionally accept
the exclusive jurisdiction and venue of any federal or state located in or for
the State of New York.  In any such judicial proceeding, Grantee and the
Company agree that in addition to any method for the service of process
permitted or required by such courts, to the fullest extent permitted by law,
service of process may be made by prepaid certified mail with a proof of
mailing receipt validated by the U.S. Postal Service constituting evidence of
valid service.  GRANTEE AND THE COMPANY HEREBY WAIVE TRIAL BY JURY IN ANY
JUDICIAL PROCEEDING INVOLVING ANY DISPUTE, CONTROVERSY OR CLAIM ARISING OUT OF
OR RELATING TO THIS AGREEMENT.

(d)              
Withholding Taxes.  All Restricted Stock acquired pursuant
hereto and allocations or distributions with respect to such Restricted Stock
and the common stock of the Company underlying such Restricted Stock shall be
subject to withholding as required by applicable federal, state and local laws,
and the Company may make such arrangements for the payment of any withholding
taxes with respect to such Restricted Stock and the common stock of the Company
underlying such Restricted Stock as the Company deems satisfactory.

(e)              
Severability.  In the event that any one or more of the
provisions of this Agreement shall be or become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby.

(f)               
Binding Effect; Assignment.  This Agreement shall be
binding on and inure to the benefit of the Company and its respective
successors and permitted assigns.  This Agreement shall also be binding on and
inure to the benefit of Grantee and Grantee's heirs, executors, administrators
and legal representatives.  This Agreement shall not be
assignable by any party hereto without the prior written consent of the other
party hereto, except as provided pursuant to this Section 9(f).  The
Company may effect such an assignment without prior written approval of Grantee
upon a Substantial Corporate Change or any other sale of the Company or the
transfer of all or substantially all of its business and/or assets (by whatever
means).

4

(g)              
Discretionary
Nature of Plan. The Plan is discretionary and may be amended,
cancelled or terminated by the Company in the manner provided for in the Plan. 
The grant of the Restricted Stock in this Agreement does not create any
contractual right or other right to receive additional restricted stock or
other Awards in the future.  Future Awards, if any, will be at the sole
discretion of the Company.

(h)              
Notice.  Any notice required to be delivered to the
Company under this Agreement shall be in writing and addressed to the Chief
Executive Officer of the Company at the Company's principal corporate offices. 
Any notice required to be delivered to Grantee under this Agreement shall be in
writing and addressed to Grantee at Grantee's address as shown in the records
of the Company.  Either party may designate another address in writing (or by
such other method approved by the Company) from time to time.

(i)                
Entire Agreement.  This Agreement and Plan constitute the
entire agreement between the parties, and supersede all prior agreements and
understandings relating to the subject matter of this Agreement.  The terms of
the Plan are deemed incorporated into this Agreement pursuant to this Section
9(i).

(j)                
Amendments; Waiver.  No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or discharge is
approved in writing by an authorized officer of the Company (that is not
Grantee) and is either agreed to in writing by Grantee or otherwise authorized
by the Plan.  No waiver by any party hereto at any time of any breach by any
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time.  No waiver of any provision of this Agreement shall be implied
from any course of dealing between or among the parties hereto or from any
failure by any party hereto to assert its rights hereunder on any occasion or
series of occasions.

(k)              
Counterparts.  This Agreement may be executed in one or
more counterparts (including by means of a facsimile or portable document
format), each of which shall be deemed an original but all of which together
shall constitute one and the same instrument. 

(l)                
Headings.  The headings contained in this Agreement are
for reference only and shall not under any circumstances be deemed to affect
the meaning or interpretation of this Agreement.

[signature page
follows]

 

5

 

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

		

MECHANICAL
TECHNOLOGY, 

INCORPORATED

			
	

 

			
	

 

			
	

By:                                                                              

			
	

      Name:

			
	

      Title:

			
	

 

			
	

 

			
	

Grantee:

			
	

 

			
	

 

			
	

 

			
	

                                                                                    

			
	

[Name]

			

 [Signature Page to Restricted Stock Award Agreement]

 

Exhibit A

 

 

[DATE]

 

Mechanical Technology,
Incorporated

325 Washington Avenue, Extension

Albany, New York 12205

Attention:  Chief Executive Officer

Email:  rjones@mtiinstruments.com

           

Notification
of Section 83(b) Election 

 

To whom it may concern:

 

On _______ __, ____, I acquired __________ (______) restricted common
stock shares (the "Restricted Stock") of Mechanical Technology,
Incorporated pursuant to a Restricted Stock Award Agreement, dated as of such
date (the "Agreement").  Pursuant to Section 7 of the Agreement, I
hereby notify you that:

[  ]        I have made an election under Section 83(b) of the Internal
Revenue Code (the "Code") with respect to the Restricted Stock.

[  ]        I have not yet made an election under Section 83(b) of the
Code with respect to the Restricted Stock, but I intend to do so no later than
the date which is 30 days after the acquisition of the Restricted Stock.

[  ]        I do not intend to make an election under Section 83(b) of
the Code with respect to the Restricted Stock.

I also acknowledge pursuant to Section 7 of the Agreement that I am
solely responsible for any and all tax liabilities payable in connection with
the Restricted Stock or attributable to my decision regarding the election
under Section 83(b) of the Internal Revenue Code.

 

Signature:_______________________

Printed
Name____________________

Date___________________________

 
A-1

Exhibit B

 

Section 83(b) Election

The undersigned taxpayer hereby makes this election
pursuant to Section 83(b) of the Internal Revenue Code of 1986, as amended (the
"Code"),
and Treasury Regulations Section 1.83-2 promulgated thereunder.

 

1.         The name, taxpayer
identification number, address of the undersigned, and the taxable year for
which this election is being made are:

 

      Taxpayer's Name: 
________________________________

      Taxpayer's Social Security Number:___________________

      Address: _________________________________________

_________________________________________

Taxable Year:  Calendar Year ____

2.         The property which is the subject of this election is
__________________ restricted shares of common stock of Mechanical Technology,
Incorporated, a New York corporation (the "Company").

 

3.         The restricted shares of common stock were transferred to the
undersigned on _________ __, ___.  This election is being made with respect to
the calendar year ____.

 

4.         The restricted shares of common stock are subject to the
following restrictions:  the restricted shares of common stock are subject to
time based vesting conditions and restrictions on transferability during a
restricted period with respect thereto.

 

5.         The fair market value of the restricted shares of common
stock at the date of transfer (determined without regard to any restriction
other than a nonlapse restriction, as defined in Section 1.83-3(h) of the
Income Tax Regulations) was $________________________, based on a fair market
value of $_____ per share. 

 

6.         The amount paid for the restricted shares of common stock was
$_______.

 

7.         The amount to include in gross income is $___________________
(the result of the amount reported in Item 5 minus the amount reported in Item
6).

 

The undersigned
taxpayer will file this election with the Internal Revenue Service office with
which taxpayer files his or her annual income tax return not later than 30 days
after the date of transfer of the property.  A copy of the election will also
be furnished to the person for whom the services were performed.  Additionally,
the undersigned will include a copy of the election with his or her income tax
return for the taxable year in which the property is transferred.  The
undersigned is the person performing the services in connection with which the
property was transferred.  The undersigned
understands that the foregoing election may not be revoked except with the
consent of the Internal Revenue Commissioner.

 

Dated:_______________________                           ___________________________________

                                                                                    Taxpayer

 

B-1Exhibit 10.20

Execution copy

 

EXHIBIT
10.20

 

 

OPERATING
AND MANAGEMENT AGREEMENT 
BETWEEN 
SOLUNA TECHNOLOGIES, LTD. 
AND

ECOCHAIN, INC.

Dated: January 13, 2020

 

 

 

OPERATING AND MANAGEMENT AGREEMENT

 

This OPERATING AND  MANAGEMENT AGREEMENT (this "Agreement"),
dated January 13, 2020 (the "Effective Date"), is entered into by and
between Soluna Technologies, Ltd., a private limited company
incorporated under the laws of British Columbia (the "Operator"), and
EcoChain, Inc., a Delaware corporation (the "Company").  The Operator
and the Company are sometimes referred to herein, individually, as a "party"
and, collectively, as the "parties".

 

R E C I T A L S:

 

WHEREAS, simultaneous
with the entering into of this Agreement, an Affiliate of the Company is consummating
an investment pursuant to which such Affiliate of the Company is becoming the
holder of Class A Preferred Stock of the Operator;

 

WHEREAS the
Company proposes to create, develop, assemble and construct, as applicable, a
pilot cryptocurrency mining facility to be composed of tangible and intangible
assets that interact to integrate with the bitcoin blockchain network physically
located in North America or another geographic location mutually agreed to by
the parties (all such assets currently and in the future owned by the Company,
collectively, the "Pilot Mine Program"); and

 

WHEREAS, the
Company desires to retain the Operator to assist with and carry out the design,
specification, construction and assembly of the Pilot Mine Program, perform
physical operations and otherwise maintain the Pilot Mine Program as set forth
herein.

 

NOW, THEREFORE,
in consideration of the premises and the mutual promises and covenants
contained herein, and intending hereby to be legally bound, the Company and the
Operator hereby agree and stipulate as follows:

 

ARTICLE I

DEFINITIONS; INTERPRETATION

 

            1.1       
Definitions.  As used in this Agreement, the following terms have
the respective meanings set forth below or set forth in the Sections referred
to below.

 

"AAA" has the meaning set forth in Section
10.2 (Selection of Arbitrator).

 

"Accounts" has the meaning set forth in Section
3.1 (Payment for Costs and Expenses).

 

"Affiliate" means, with respect to any Person,
any other Person that, directly or indirectly, controls, is controlled by or is
under common control with, such Person.  For the purposes of this Agreement,
"control," when used with respect to any specified Person, means the power,
direct or indirect, to direct or cause the direction of the management and
policies of such Person, whether through ownership of voting securities or partnership
or other ownership interests, by contract or otherwise; and the terms
"controlling" and "controlled" shall have correlative meanings.

 

1

 

 

"Agreement" has the meaning set forth in the
Preamble. 

 

"Annual Compensation Statement" has the meaning
set forth in Section 3.4(b) (Management Fee). 

 

 "Applicable Law" means, as to any Person, any
federal, state, municipal and local law, statute, ordinance, regulation, order,
directive, policy and decision rendered by any Governmental Authority, in each
case applicable to or binding upon such Person or any of its property or to
which such Person or any of its property is subject or pertaining to any or all
of the transactions contemplated or referred to herein, including, in the case
of the Company, any requirements of the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the rules and regulations
thereunder which shall be in effect from time to time.

 

"Arbitration Notice" has the meaning set forth
in Section 10.1 (Submission Requirement).

 

"Arms-Length Contract" means a contract or
agreement entered into by the Company (or Operator, as agent for the Company),
on the one hand, and Operator or any Affiliate of Operator, on the other hand,
the terms and conditions of which are not less favorable to the Company (or
Operator, as agent for the Company) than could be obtained on an arms-length
basis from unrelated third parties.

 

"Bankrupt" means, with respect to any Person,
(a) that such Person has made an assignment for the benefit of creditors or
applied for the appointment of a trustee, liquidator or receiver of any
substantial part of its assets, or commenced any proceeding relating to itself
under any bankruptcy, reorganization or similar laws (including the Federal
Bankruptcy Code of 1978, Title 11 of the United States Code and any state
insolvency act), or any such application has been filed or proceeding is
commenced against such Person and such Person indicates its consent thereto or
does not diligently oppose such proceedings within thirty (30) days of receipt
of notice of filing or the commencement of such proceeding; or (b) an order,
judgment or decree has been entered by any court of competent jurisdiction,
appointing a trustee, liquidator or receiver for that Person or for all or a
substantial part of that Person's assets and such order, judgment or decree has
continued unstayed and in effect for any period of sixty (60) consecutive days.

 

"Budget Ceiling" has the meaning set forth in Section
4.5(b) (Authorization; Expenditure Cap).

 

"Business Day" means a day other than a
Saturday, a Sunday or a day that is a nationally recognized holiday in the
United States.

 

"Capital Budget" has the meaning set forth in Section
4.1 (Submittal).

 

2

 

 

"Capital Report" has the meaning set forth in Section
5.4 (Capital Project Reports). 

 

"Cloud Provider" has the meaning set forth in Section
11.5 (Hosting of Software; Passwords).

 

"Cloud Services" has the meaning set forth in Section
11.5 (Hosting of Software; Passwords).

 

"Commissioning" means the delivery of a Pilot
Mine Program that is designed, installed, operated and maintained in a manner
that permits complete integration of the Pilot Mine Program with the bitcoin
blockchain network in accordance with Prudent Industry Practice.

 

"Company" has the meaning set forth in the
Preamble.

 

"Company Parties" has the meaning set forth in Section
6.1 (Limitation of Liability).

 

"Confidential Information" has the meaning set
forth in Section 2.6 (Confidentiality; Press Releases).

 

"Cost of Services" has the meaning set forth in
Section 3.1 (Payment for Costs and Expenses).

 

"Default Term" means that period of time that
is five (5) years from the date hereof. 

 

"Dispute" has the meaning set forth in Section
10.1 (Submission Requirement).

 

"Disputing Parties" has the meaning set forth
in Section 10.1 (Submission Requirement).

 

"EBITDA" means, with respect to any applicable period of calculation, the net
income before interest, income taxes, depreciation and amortization of and with
respect to solely the Pilot Mine Program for such period, determined in the
reasonable discretion of the Company in accordance with GAAP, but applied and
calculated in a manner consistent with historical accounting practices of the
Company and its Affiliates.

 

"Effective Date" means the date set forth in
the Preamble.

 

"Financial Report" has the meaning set forth in
Section 5.1 (Books and Records; Operating Reports).

 

3

 

 

"Financing Source" means any Person that has
committed to provide or has otherwise entered into agreements providing for debt
financing or equity financing of the Pilot Mine Program, the Company or its
Affiliates, together with Affiliates and direct or indirect officers,
employees, directors, general or limited partners, members, advisors, agents
and representatives and the respective successors and assigns of any of the
foregoing involved in the foregoing debt financing and/or equity financing. 

 

"Force Majeure" means any cause beyond the
reasonable control of a party, including, without limitation, the following
causes: acts of God, strikes, lockouts or other industrial disturbances,
sabotage, wars, blockades, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fires, storms, floods, civil disturbances, explosions, uncontrollable
breakage or accident to platforms, equipment or machinery, and any other similar
causes, whether of the kind herein enumerated or otherwise, which by the
exercise of reasonable diligence the party claiming Force Majeure would not be able
to prevent or overcome.

 

"GAAP" means generally accepted accounting
principles in the United States that are applicable to the circumstances as of
the date of determination, consistently applied.

 

"General Manager" has the meaning set forth in Section
2.8 (General Manager).

 

"Governmental Authority" means the government
of any nation, state, city, locality or other political subdivision thereof, and
any entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.

 

"Initial Budget" has the meaning set forth in Section
4.1 (Submittal). 

 

"Licensed Operator IP" has the meaning set
forth in Section 11.2 (License to the Company).

 

"Listing Requirements" means any ordinance,
regulation, order, directive, policy and decision promulgated or rendered by
regulatory process by any public securities exchange, including, without
limitation the New York Stock Exchange, The Nasdaq Stock Market or the OTC
Markets Group.

 

"Losses" means losses, liabilities, claims
(including third party claims), demands, suits, causes of action, judgments,
awards, damages, interest, fines, fees, penalties, costs and expenses
(including all attorneys' fees and other costs and expenses incurred in
defending any such claims or other matters or in asserting or enforcing any
indemnity obligation under Article 6 (INDEMNITY)) of whatsoever kind and
nature.

 

"Management Fee" has the meaning set forth in Section
3.4(b) (Management Fee). 

 

"Material Contracts" means the agreements,
contracts, documents or other instruments binding upon the Company, whether
entered into pursuant to Section 2.5 (Contracting Authority) or
otherwise, that apply to or affect the Pilot Mine Program and are material to
its current or ongoing operation. 

 

4

 

 

"One-Time Payment" has the meaning set forth in
Section 3.4(a) (Management Fee).

 

"Operating Budget" has the meaning set forth in
Section 4.1 (Submittal).

 

"Operating Report" has the meaning set forth in
Section 5.1 (Books and Records; Operating Reports).

 

"Operator" has the meaning set forth in the
Preamble.

 

"Operator Parties" has the meaning set forth in
Section 6.1 (Limitation of Liability).

 

"Person" means any individual, joint venture,
general partnership, limited partnership, limited liability company,
corporation, trust, business trust, cooperative, association or other incorporated
or unincorporated entity, and the heirs, executors, administrators, legal
representatives, successors and assigns of that person where the context so
admits.

 

"Pilot Mine Program" has the meaning set forth
in the Recitals.

 

"Prudent Industry Practice" means those
practices, standards, procedures and acts engaged in or approved by a
significant portion of the cryptocurrency mining industry in the United States
during the relevant time period and accepted as good, safe and prudent
practices in connection with the design, construction, testing, commissioning,
engineering, equipping, operation and maintenance of cryptocurrency mining
projects in the United States and with due regard for the requirements of all Applicable
Laws and Material Contracts. "Prudent Industry Practice" as defined herein does
not necessarily mean one particular practice, standard, procedure or act in all
cases, but is instead intended to encompass a broad range of acceptable
practices, standards, procedures and acts. 

 

"Quarterly Compensation Statement" has the
meaning set forth in Section 3.4(b) (Management Fee).

 

"Services" has the meaning set forth in Section
2.2 (Scope of Services).

 

"Term" has the meaning set forth in Section
8.1 (Term).

 

"Third Party IP Rights" has the meaning set
forth in Section 11.3 (Third Party Intellectual Property).

 

"Threshold" has the meaning set forth in Section
3.4(b) (Management Fee).

 

"Works" has the meaning set forth in Section
11.11 (Ownership of Intellectual Property).

 

5

 

 

                  
1.2        Interpretation.  Unless the context requires otherwise: (a) the
gender (or lack of gender) of all words used in this Agreement includes the
masculine, feminine and neuter; (b) references to "Articles" and "Sections"
refer to articles and sections of this Agreement; (c) references to
"Exhibits" refer to the exhibits attached to this Agreement, each of which is
made a part hereof for all purposes; (d) references to laws or agreements
refer to such laws or agreements as they may be amended from time to time, and
references to particular provisions of a law include any corresponding
provisions of any succeeding law; (e) the terms defined herein include the
plural as well as the singular and vice versa; (f) references to money
refer to legal currency of the United States of America; and (g) the word
"including" or similar derivations thereof shall be deemed to mean "including,
but without restricting the generality of the foregoing".

 

ARTICLE II

DUTIES AND POWERS OF OPERATOR

 

                  
2.1        Retention of Operator.  The Company hereby retains the Operator to perform the
Services.  The Operator hereby accepts such retention and agrees to perform the
Services in accordance with this Agreement.

 

                  
2.2        Scope of Services.  The "Services" shall consist of (a) the
services specified in Exhibit A, attached hereto and (b) any services
related to the Pilot Mine Program that the Company and the Operator may agree,
from time to time, that the Operator is to perform under this Agreement.

 

                  
2.3        Standard of Care; Performance
of Obligations.  Subject to the other
provisions hereof, the Operator shall perform the Services and carry out its
responsibilities under this Agreement: (a) as a reasonable and prudent operator;
(b) consistent with the Operator's business practices and policies and Prudent
Industry Practices; (c) in a manner consistent with the Material Contracts
disclosed to Operator or of which Operator has knowledge; and (d) in compliance
with all Applicable Law.  The Operator has or shall timely obtain, at its
expense, all licenses and permits necessary to perform its obligations under
this Agreement and shall pay all taxes, fees or charges imposed on the business
of the Operator hereunder (except for licenses, permits and taxes required by
Applicable Law to be obtained by or imposed on Operator for solely the
operation of the Pilot Mine Program which shall be obtained by the Operator at
the Company's expense).

 

                  
2.4        Independent Contractor. In performing the Services, the Operator shall be an
independent contractor, and the Operator shall not be deemed for any purpose to
be a servant, employee or representative of the Company.  The Operator shall
have full legal charge and control of its employees, agents and equipment
engaged in the performance of the Services. The assets and business of the Pilot
Mine Program shall, however, be owned solely by the Company.

 

                  
2.5        Contracting Authority. The Company engages the Operator, upon the terms and
conditions of this Agreement, to perform certain actions on behalf of and as
agent for the Company, specifically including those actions contemplated by Section
2.2 (Scope of Services) related to the Pilot Mine Program and any other
actions consistent with the Services specified from time to time in writing by
a duly authorized officer of the Company and agreed by the Operator to be done
by the Operator on behalf of the Company pursuant to this Agreement.

 

6

 

 

(a)       
Dealing with Company Assets. Without limiting any other powers or duties of the
Operator provided in this Agreement, the Operator is hereby authorized, subject
to obtaining the prior written consent of the Company and further subject
always to Section 4.5(b) (Authorization; Expenditure Cap) to, in the
Company's name and on its behalf, execute, deliver, accept, assign, amend,
extend, terminate, license or release, in the normal course of the Company's
business and solely for the purposes of carrying out the Services:

 

(i)        for the Company, contracts for the
purchase of goods or services related to the Pilot Mine Program, including
(without limitation) master agreements, purchase contracts, purchase orders,
releases for goods or services, licensing agreements or letters of intent or
memoranda of understanding associated with negotiations for contracts for such
purchase of goods or services; and

 

(ii)       certificates, licenses, reports and
permits and other governmental authorizations of any kind required to carry out
or establish the Pilot Mine Program.

 

(b)        Delegation of Authority.  Any delegation of authority to an employee of the
Operator to deal with assets, rights or liabilities of the Operator shall be
considered an authorization for such employee to deal with assets, rights or
liabilities of the Company, within the limits of this Article 2 (DUTIES
AND POWERS OF OPERATOR), to the same extent, except as may be expressly
provided in such delegation.

 

(c)         Instruments in the Name of
Operator.  Except as otherwise
provided herein, any instrument or document entered into by the Operator
pursuant to and in compliance with this Agreement, to the extent that it deals
with assets, liabilities or other rights or obligations of the Company directly
related to the Pilot Mine Program, complies with Section 4.5(b) (Authorization;
Expenditure Cap) and states it is entered into in the name of the Operator as
agent of the Company, shall be considered an instrument or document entered
into by the Operator as agent for the Company.  Any such instrument or document
shall be valid and binding upon the Company as if it had been signed in the
name of the Company.  The Company shall have the right, either in its own name
or through the Operator, to enforce any performance due under such instruments
or documents from any third party.  Notwithstanding the other provisions of
this Article 2 (DUTIES AND POWERS OF OPERATOR), the rights and
obligations of the Operator under the following instruments and documents shall
remain with the Operator:

 

(i)        this Agreement;

 

(ii)       any instrument or document which
primarily deals with the relationship between the Operator and its employees;

 

7

 

 

(iii)      any instrument or document related
to the Pilot Mine Program which fails to state that the Operator is entering
into such instrument or document as agent for the Company; and

 

(iv)      any instrument or document entered
into by the Operator that does not directly relate to the Pilot Mine Program.

 

(d)        Transactions with Affiliates. In connection with the performance of its duties and
responsibilities under this Agreement for and on behalf of the Company, the Operator
shall not (i) purchase goods, supplies and services from or through any of its
Affiliates, other than at standard market rates or (ii) enter into contractual
arrangements with Affiliates, other than pursuant to an Arms-Length Contract.  The
Operator shall provide the Company with copies of all proposed contracts or
arrangements involving the Company (acting through the Operator, as agent for
the Company), on the one hand, and the Operator or any Affiliate of the
Operator, on the other hand, at least ten(10) days prior to the Company (or the
Operator, as agent for the Company) executing any such contract or arrangement.

 

            
2.6       Confidentiality; Press Releases.  

 

(a)         The parties acknowledge that, from
time to time, they may receive information from or regarding the other party,
its customers or any of its Affiliates in the nature of trade secrets or secret
or proprietary information or information that is otherwise confidential ("Confidential
Information"), the release of which may be damaging to or otherwise
contrary to the interests of the other party, its Affiliates or Persons with
which it does business.  Without restricting the foregoing, "Confidential Information" shall include the
following information and materials containing such information (whether or not
reduced to writing and whether or not patentable or protected by copyright) to
the extent provided by one party to the other party:

 

(i)        any and all versions
of the disclosing party's business products (whether software or hardware) and
services and related documentation;

 

(ii)       all methods, processes, procedures, systems,
inventions (whether patentable or not), devices, discoveries, concepts,
know-how, data, databases, technology, products, software (in executable and
source code formats), templates, documentation, specifications, compilations,
designs, reports, trade-marks, and any enhancements, modifications, or
additions to the foregoing which relate, directly or indirectly, to the disclosing
party's present or reasonably foreseeable business and which are developed,
created, generated or reduced to practice;

 

(iii)       information regarding
the disclosing party's business operations, methods and practices, recruiting
and training policies, including marketing strategies, product plans (including
unannounced products), product pricing, margins, hourly rates, per diems and
information regarding the financial affairs of the disclosing party;

 

(iv)       customer lists,
quotations or proposals given to customers, requirements of specific customers
and the names of the suppliers;

8

 

 

 

(v)        technical and business
information of or regarding the clients or customers of the disclosing party,
including information regarding the business operations, methods and practices
and product plans of such clients; and 

 

(vi)       any other trade
secrets, confidential or proprietary information received by the disclosing
party from third parties and in the possession or control of the disclosing party.

 

Notwithstanding the foregoing, Confidential
Information shall not include any of the following (t) information which is
generally known or in the public domain at the time of disclosure, (u)
information which, although originally Confidential Information, becomes
generally available to the public through no fault of the receiving party as of
the date of its becoming part of the public knowledge, (v) information that was
or is developed by the receiving party without the use of Confidential
Information, (w) information which is approved for disclosure or release by the
disclosing party, (x) subject to and as contemplated by Section 2.6(c)
(Confidentiality; Press Releases) information which is requested or required to
be disclosed by Applicable Law or Listing Requirements, (y) information
which constitutes a Work hereunder pursuant to Section 11.1 (Ownership
of Intellectual Property) or (z) information which is licensed to the receiving
party pursuant to Article 11 (INTELLECTUAL PROPERTY), provided that, in
the case of this clause (z), solely with respect to the receiving party's use
of such information in connection with the carrying out of such party's
business.

 

The absence of any notice indicating
confidentiality on any material will not imply that same is not Confidential Information.

 

(b)        Each party shall use the
Confidential Information solely for the purposes of conducting the business of
the Company, carrying out the Services and fulfilling such party's obligations
under this Agreement.  Each party shall hold in strict confidence any
Confidential Information it receives and may not disclose such Confidential
Information to any Person, except for disclosures to (i) its Affiliates or (ii)
any consultant, auditor, accountant, contractor, agent, professional adviser,
director, officer and/or employee of such party; provided, that, in each
case, such recipient agrees in writing to keep such information confidential or
is bound by provisions of confidentiality not less restrictive than the
provisions of this Section 2.6 (Confidentiality, Press Releases).

 

(c)         The parties acknowledge that breach of the provisions
of this Section 2.6 (Confidentiality; Press Releases) may cause
irreparable injury for which monetary damages are inadequate, difficult to
compute or both.  Accordingly, the parties agree that the provisions of this Section
2.6 (Confidentiality; Press Releases) may be enforced by specific
performance.

 

(d)          Notwithstanding anything to the
contrary in this Agreement, the confidentiality obligations provided in this Section
2.6 (Confidentiality; Press Releases) shall not apply to disclosures (i)
required by Applicable Law or Listing Requirements or (ii) to advisers,
employees, consultants or representatives of the party, but only if such
recipients have agreed in writing to be bound by the provisions of this Section
2.6 (Confidentiality; Press Releases) or is bound by confidentiality provisions
not less restrictive than such provisions.  Except for any disclosure by the Company
with respect to the Securities Act of 1933, as amended, the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, if a party
is required by Applicable Law to disclose any information that would otherwise
be confidential under this Agreement, such party shall notify the other party
of such requirements as soon as legally permissible and provide the other party
the opportunity to resist such disclosure by appropriate proceedings; provided,
that, for the avoidance of doubt, the foregoing requirement with respect to
notice to the other party shall not apply with respect to any disclosure by the
Company required by Listing Requirements.

 

9

 

 

(e)        Notwithstanding anything to the
contrary in this Agreement, nothing shall prohibit the Company from (i) delivering
to any Financing Source or any of its direct or indirect equityholders any
reports, financial statements or other information (including any Confidential
Information) relating to the Pilot Mine Program received pursuant to this
Agreement or otherwise or (ii) making any public disclosures with respect to
any reports, financial statements or other information (including any
Confidential Information) received in connection with this Agreement relating
to the Pilot Mine Program pursuant to the public disclosure requirements of
Applicable Law or Listing Requirements.

 

(f)         No press release or other public
announcement related to the Pilot Mine Program or the business of the Company or
its Affiliates shall be made without the prior written consent of the Company,
which consent shall not be unreasonably withheld.

 

2.7       Operator cooperation with Auditors.         Upon
request of the Company, the Operator shall, from time-to-time, attend in-person
or telephonic meetings with the Company's auditors pursuant to which the
Operator shall discuss with such auditors the Financial Report(s), Operating
Report(s) and/or Capital Report(s) and any other matters which the auditors
determine to be reasonably required to prepare financial statements and reports
of the Company in accordance with the
then-current accounting practices of the Company and its Affiliates.

 

2.8       General Manager.  Subject to each of
the other terms and conditions hereof, the Operator shall appoint an
experienced and competent general manager (the "General Manager") who
shall devote his or her business time to the business of the Company and the
Pilot Mine Program as follows: (a) until Commissioning of the Pilot Mine
Program, at least eighty percent (80%) of his or her of overall time to the
business of the Company and the Pilot Mine Program; and (b) following
Commissioning of the Pilot Mine Program, approximately five (5) hours per week
of business time to the Company and the Pilot Mine Program.  The appointment
and/or replacement of any General Manager shall require the consent of the
Company. 

 

2.9       Insurance.  At all times during the Term,
the Operator shall maintain in force, with reputable insurers, the insurance
requirements set forth and described on Exhibit B.

 

10

 

 

ARTICLE 3

PAYMENT FOR COST OF SERVICES; MANAGEMENT FEE

 

3.1          Payment for Costs and Expenses.  Subject to the provisions of this Section 3.1
(Payment for Costs and Expenses) and Section 4.5(b) (Authorization;
Expenditure Cap) and unless otherwise agreed by the parties to the contrary,
the Operator shall pay all reasonable, direct costs and expenses and other financial
obligations of the Company that may be due and owing with respect to the
contracts, certificates, licenses, reports, permits and governmental
authorizations contemplated by and consented to by the Company pursuant to Section
2.5(a) (Dealing with Company Assets) (collectively, the "Cost of
Services") out of, in the Company's discretion, either the Company's bank
account(s) established for the Pilot Mine Program (the "Accounts") or the
Operator's own funds; provided, that, unless the Company provides
express written notice to the Operator to the contrary, all such Cost of
Services shall be paid out of the Accounts; provided, further, that
in the event the Company determines that the Operator should fund spending out
of its own funds, the Company shall fully reimburse the Operator for any and
all Cost of Services the Operator pays out of its own funds.  Notwithstanding
anything else herein, nothing in this Agreement shall abrogate or diminish the
ability of the Company to enter into or obtain contracts, certificates, licenses,
reports, permits and governmental authorizations related to the Pilot Mine
Program and to pay for the same on the Company's own behalf.  Any payment made
by the Operator under this Section 3.1 (Payment for Costs and Expenses)
shall not be deemed to be a waiver by the Company of the Company's right to
audit any related invoice in accordance with Section 5.2 (Audits).  If
the Company pays for the Cost of Services out of the Accounts, the Company
shall ensure that the Operator is duly authorized to draw upon the Accounts
(and shall make all necessary arrangements with its financial institution(s))
for purposes of permitting the Operator to pay the Cost of Services therefrom. 
If the Company pays for the Cost of Services out of the Accounts and the
Operator reasonably anticipates that the funds in the Accounts will not be
sufficient to pay the Cost of Services due for any month, then the Operator
shall notify the Company to permit the Company to deposit sufficient funds (taking
account of any funding milestones established by the parties) in the Accounts
to cover all such anticipated Cost of Services and shall provide the Company
with reasonable documentation to support such request; it being understood that
(a) the Company and the Operator shall establish a milestone based funding
schedule in accordance with Operating Budgets and Capital Budgets approved by
the parties each calendar year and (b) if the Company fails to make deposits
sufficient to pay the Cost of Services, the Operator shall not be obliged to
pay the amount of such Cost of Service and shall not be liable in any manner
for any costs, expenses or other liabilities the Company may incur as a result
of the Company's failure to timely deposit such funds.  Notwithstanding
anything to the contrary contained in this Section 3.1 (Payment for
Costs and Expenses), (x) the Company must affirmatively, pursuant to express
written notice to Operator, determine that the Operator shall pay the Cost of
Services out of the Operator's own funds before the Operator may seek
reimbursement from the Company following such expenditure of funds and (y) this
Section 3.1 (Payment for Costs and Expenses) shall be, unless mutually
approved in writing by the parties to the contrary, subject to the Budget
Ceiling with respect to the Pilot Mine Program established by Section 4.5(b)
(Authorization; Expenditure Cap).

 

11

 

 

3.2           Cost Allocation. The parties recognize that the Services to be
performed hereunder may, with the prior written consent of the Company, be
performed by the Operator in conjunction with the operation of other cryptocurrency
mining systems, platforms and facilities owned or operated by the Operator or
its Affiliates, and that certain resources, services and mobilizations may be
shared between the Company, the Operator and potentially other Persons in order
to gain operational efficiencies.  In the event of any such conjunctive performance
of the Services, the costs associated with the activities mentioned above will
be allocated between the Services and each other project or initiative on an
equitable basis benefit based upon actual costs incurred by each project or
initiative, actual employee time dedicated to each project or initiative and
actual usage of shared services by each project or initiative.  The portion of
the costs so allocated to the Services shall be deemed Cost of Services.  Any
such allocation shall be subject to the prior written consent in advance by the
Company and details of any such allocation shall be made available to the
Company as reasonably requested by the Company and subject to the audit
provisions set forth herein.

 

3.3            Payment of Operator's Employees.  The Company shall not be responsible for any claims
brought by Persons employed or contracted with by the Operator for non-payment
of any and all salaries, wages, payments, compensation, withholding deductions
or taxes.  Further, for the avoidance of doubt and notwithstanding anything in Section
3.2 (Cost Allocation) to the contrary, in no event shall any salaries,
wages, payments, compensation, withholding deductions or taxes due to employees
or independent contractors of the Operator be included in the Cost of Services
contemplated by this Agreement without the prior written consent of the Company.

 

3.4            Management Fee.  In addition to any payments made by the Company to
the Operator as Cost of Services pursuant to Section 3.1 (Payment for
Costs and Expenses), the Company shall, in further consideration for the
Services rendered by the Operator hereunder, pay the Operator:

 

(a)       simultaneous with or reasonably
promptly following the entering into of this Agreement, a one-time payment of
Sixty-Five Thousand United States Dollars ($65,000) (the "One-Time
Payment"); and

 

(b)       following such time as
aggregate EBITDA of the Pilot Mine Program exceeds the total amount of funding
provided by the Company to the Operator (whether pursuant to this Agreement or
otherwise) for the purposes of creating, developing, assembling and
constructing the Pilot Mine Program (the "Threshold"), twenty percent
(20.0%) of the EBITDA of the Pilot Mine Program in excess of the Threshold, calculated
on an annual basis (the "Management Fee").  The Management Fee shall be paid to the Operator
pursuant to interim payments as provided immediately below.  Within thirty (30)
days following the end of each calendar quarter during each fiscal year
composing the Term, the Company shall deliver to the Operator a written
statement (the "Quarterly Compensation Statement") setting forth the
applicable EBITDA of the Pilot Mine Program calculated at the conclusion of such
calendar quarter based on the EBITDA of the Pilot Mine Program over the calendar
quarter just concluded, and shall pay the Company the amount of the quarterly Management
Fee at such time.  Within ninety (90) days of the end of each fiscal year
composing the Term, the Company shall deliver to the Operator a written
statement (the "Annual Compensation Statement") setting forth the applicable
EBITDA of the Pilot Mine Program for the fiscal year just concluded (prorated
in the event of any partial fiscal year during the Term) together with a
reconciliation of the Management Fee paid during the past year to the
Management Fee actually payable in respect of such past year.  In the event the
reconciliation carried out by the Company results in the Company owing the
Operator additional amounts of Management Fee, such amount shall be paid to the
Operator simultaneous with the Company's delivery of the Annual Compensation
Statement.  In the event the reconciliation carried out by the Company results
in the Operator having been overpaid with respect to amounts of Management Fee
previously received during the applicable past fiscal year, such overpaid
amount shall be remitted back to the Company within thirty (30) days of the
Company's delivery of the Annual Compensation Statement.

 

12

 

 

3.5            Total Consideration.  Subject to Section 4.5(b) (Authorization;
Expenditure Cap), Operator and Company agree that as payment for the performance
of the Services, Company shall only be obligated to pay, and Operator shall
only be entitled to receive, the Cost of Services, the One-Time Payment and the
Management Fee.  For the avoidance of doubt, the Cost of Services and the
One-Time Payment, but not the Management Fee, shall be included in all
calculations and aggregations with respect to the Budget Ceiling established by
Section 4.5(b) (Authorization; Expenditure Cap).

 

ARTICLE 4

OPERATING BUDGET AND CAPITAL BUDGET

 

4.1             Submittal.  Within sixty (60) days of the Effective Date, the Operator
will prepare and deliver to the Company an initial budget for the construction
and commencement of initial operation of the Pilot Mine Program (the "Initial
Budget").  In respect of each year following the delivery of the Initial
Budget, a formal and reasonably detailed operating budget with respect to the
ongoing, day-to-day maintenance and operation of the Pilot Mine Program (to the
extent applicable) (the "Operating Budget") and capital budget
with respect to the development and carrying out of capital projects with
respect to the Pilot Mine Program (the "Capital Budget") will be
prepared by the Operator and submitted to the Company, along with reasonable
supporting documentation, including economic or other justification for capital
projects.  Such Operating Budget and Capital Budget may be updated, modified,
amended or otherwise revised at any time by the mutual written agreement of the
parties.  The updated Operating Budgets and Capital Budgets to be prepared and
delivered by the Operator pursuant to this Section 4.1 (Submittal) shall
be delivered to Company by October 31st of the year prior to the
applicable year to which such budgets relate, along with reasonable supporting
documentation, including economic or other justification for capital projects.  The
Initial Budget, Operating Budget and the Capital Budget shall each reflect
costs and expenses, on a monthly basis, consistent with the Services and
standard of care stipulated in this Agreement and shall set forth (a) in each
year following the year in which the Effective Date occurs, the sums actually
expended during the previous calendar year; (b) an updated forecast of the sums
to be expended during the current calendar year; (c) the sums the Operator proposes
to expend with respect to the Services during the next calendar year; and (d)
such other information as is reasonably requested by the Company.

 

4.2            Operating Budget Format.  The Operating Budget shall, with monthly allocations
(to the extent feasible) and taking account of the Budget Ceiling established
by Section 4.5(b) (Authorization; Expenditure Cap): (a) specifically
itemize labor costs; (b) specifically itemize each operating item
(including, without limitation, each maintenance and repair project), which is
reasonably estimated to exceed Ten Thousand United States Dollars ($10,000); (c)
group operating items, including, without limitation, maintenance and repair
projects, reasonably estimated to be less than Ten Thousand United States
Dollars ($10,000) per item or project by major expense category; (d) make
reasonable provisions for unforeseen costs and contingencies agreed between the Operator and the Company; and (e)
establish a milestone based funding schedule for the applicable upcoming
calendar year that permits the Company to adequately fund Cost of Services
pursuant to Section 3.1 (Payment for Costs and Expenses).

 

13

 

 

4.3           Capital Budget and Initial
Budget Format.  The Initial Budget
and Capital Budget shall, taking account of the Budget Ceiling established by Section
4.5(b) (Authorization; Expenditure Cap): (a) specifically itemize each
capital project which is reasonably estimated to exceed Ten Thousand United
States Dollars ($10,000); (b) group capital projects reasonably
estimated to be less than Ten Thousand United States Dollars ($10,000) per
project by major expense category; (c) make reasonable provisions for
unforeseen costs and contingencies agreed between the Operator and the Company;
and (d) establish a milestone based funding schedule for the applicable
upcoming calendar year that permits the Company to adequately fund Cost of Services
pursuant to Section 3.1 (Payment for Costs and Expenses).

 

4.4          Approval.  Within forty-five (45) days of the submission by
the Operator to the Company of the Initial Budget, the Operating Budget and the
Capital Budget as set forth in Section 4.1 (Submittal), the Company
shall notify the Operator in writing of its approval of such budgets in their
entirety or, if applicable, the budgeted line items it approves and the
budgeted line items with which it disagrees; it being understood that any item
not approved by the Company shall be deemed an item with which  the Company
disagrees.  Any item with which the Company does not agree shall be considered
a Dispute to be resolved in accordance with Article 10 (ARBITRATION).  Until
such time as such Dispute is resolved, the last approved budget (as it pertains
to routine, operational matters and not capital projects), increased by five
percent (5%) per category or line item, shall govern expenditures until a new
budget has been approved by the Company.

 

4.5          Authorization; Expenditure Cap.  

 

(a)        That portion of the then-current Initial
Budget, Operating Budget and the Capital Budget approved by the Company
hereunder shall, specifically subject to Sections 2.2 (Scope of
Services), 2.3 (Standard of Care; Performance of Obligations) and 2.5
(Contracting Authority), constitute general authorization for the Operator to
perform the Services contemplated therein.

 

(b)        The Operator is authorized to
expend only approved amounts under the Initial Budget, Operating Budget and the
Capital Budget.  The Operator shall obtain the Company's approval prior to the
expenditure of any amounts not included in those amounts described in the
immediately preceding sentence.  Notwithstanding anything herein to the
contrary, the parties expressly covenant and agree that, unless agreed in a
separate written instrument duly executed by authorized officers of the
Operator and the Company, the maximum amount of the funds or payments that will
be provided by the Company to the Operator with respect to constructing and operating
the Pilot Mine Program pursuant to this Agreement shall be Seven Hundred Fifty
Thousand United States Dollars ($750,000) (the "Budget Ceiling"); provided,
that, as contemplated by Section 3.5 (Total Consideration) the
Management Fee shall not be included in the funds or payments aggregated for
purposes of the Budget Ceiling.  Such Budget Ceiling shall include any and all
payments, reimbursements or other amounts that may be due from the Company
hereunder, including, without limitation, the Cost of Services and the One-Time
Payment, but excluding the Management Fee.  In the event that the Company's applicable
funding and payments hereunder have, or are reasonably expected to, exceed the
Budget Ceiling, the parties shall meet in good faith to analyze the Pilot Mine
Program and determine if, in the Company's sole and complete discretion, the
Budget Ceiling should be increased by any amount.

            

14

 

 

ARTICLE 5

BOOKS, RECORDS AND AUDITING

 

5.1          Books and Records; Operating
Reports.  The Operator shall, and
shall cause its Affiliates to, maintain full, complete, true and accurate books
and records of transactions with respect to the business and operations of the
Pilot Mine Program such that the Company is able, following review of such
books and records to accurately and completely report the financial position
and results of operations of the Pilot Mine Program in accordance with GAAP and
then-current accounting and financial reporting procedures and practices employed
by the Company and its Affiliates.  The Operator's maintenance of such books
and records, production of Financial Report(s), Operating  Report(s) and
Capital Report(s) and overall carrying out of the Services shall in all
instances be subject to compliance with and comport with the Company's and its
Affiliates' then-current reasonable accounting and financial reporting
procedures and practices, and the Operator hereby covenants and agrees, upon
request by the Company therefore, to modify its carrying out of the Services to
fully comply and comport with such reasonable procedures and practices.  Without
limiting the generality of the foregoing, the Operator shall, within ten (10) Business
Days of the conclusion of each month, deliver to the Company reports setting
forth the Operator's (a) financial position of the Pilot Mine Program ("Financial
Report") and (b)  accounts of operations, capital projects and
expenditures with respect to the Pilot Mine Program that enable the Company to
analyze the operational productivity, general progress of capital projects and
expenditures of the Pilot Mine Program over the applicable period ("Operating
Report"), all of the foregoing in form and substance reasonably consented
to by the Company. The Operator shall, upon request by the Company from
time-to-time, attend in-person or telephonic meetings with the Company pursuant
to which the Operator and the Company discuss and analyze the Financial Report
and/or the Operating Report or Capital Report. 

 

5.2           Audits.  The Company shall have the right, upon thirty (30)
days' prior written notice to the Operator, and at reasonable times during
usual business hours of the Operator or its Affiliates to audit, examine and
make copies of the books and records referred to in Section 5.1
(Books and Records); provided, that such audit does not unreasonably
interfere with the operations of the Operator or its Affiliates. The Company
may exercise such right through any agent or employee of the Company designated
in writing by the Company or by an independent public accountant, engineer,
attorney or other consultant or representative so designated.  The Company
shall bear all costs and expenses of the Company incurred in connection with
any inspection, examination or audit.  The Operator shall, and shall cause its
Affiliates to, review and respond in a timely manner to any requests or
inquiries made by the Company regarding matters revealed by any such
inspection, examination or audit.  If the Company does not challenge any
financial statement/report or invoice submitted by the Operator to the Company
within one (1) calendar year after the end of the calendar year of the date of
such financial statement/report or invoice, such financial statement/report or
invoice shall be presumed to be accurate.  If any audit reveals an error in any
invoice paid by the Company resulting in an overpayment or underpayment by the
Company, the Operator shall reimburse the Company or the Company shall pay the
Operator, as the case may be,  for the amount of such overpayment or
underpayment, together with interest thereon during the period from the date
such invoice was paid until the date of such reimbursement or payment. 

 

15

 

 

5.3           Physical Inspection.  The Company shall have the right, upon reasonable
prior written notice to the Operator, and at reasonable times during usual
business hours of the Operator to inspect any physical assets held or operated
by the Operator that comprise the Pilot Mine Program or otherwise belong to the
Company; it being understood that such inspection shall not unreasonably
interfere with the operations of the Operator or its Affiliates.  The Company
may exercise such right through any agent or employee of the Company designated
in writing by the Company or by an independent public accountant, engineer,
attorney or other consultant or representative so designated.  The Company
shall bear all costs, risks, liabilities and expenses of the Company incurred
in connection with such inspection.  The Operator shall review and respond in a
timely manner to any claims or inquiries made by the Company regarding matters
revealed by such inspection.

 

5.4           Capital Project Reports.  In the event the Operator is developing and
carrying out capital projects with respect to the Pilot Mine Program, the
Operator shall prepare and submit to the Company, not later than ten (10) days
after the conclusion of each month during the carrying out of such capital
project(s), construction and development reports, in form and substance reasonably
consented to by the Company and the Operator, that set forth and detail
stage-by-stage progress with respect to the completion of the applicable
capital project(s) and the Operator's financial record of funds used and future
funds reasonably required to complete the applicable capital project(s) ("Capital
Report").

 

ARTICLE 6

INDEMNITY

 

6.1           Limitation of Liability.  IN NO EVENT SHALL THE OPERATOR, ITS REPRESENTATIVES,
ITS AFFILIATES AND THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS (THE
"OPERATOR PARTIES") BE LIABLE TO THE COMPANY OR ITS AFFILIATES (THE "COMPANY
PARTIES") FOR ANY LOSSES THAT ARISE OUT OF, RELATE TO OR ARE OTHERWISE
ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY, THE PERFORMANCE OR NON-PERFORMANCE OF
THE SERVICES, EXCEPT TO THE EXTENT THAT THEY ARE CAUSED BY BREACH OF THIS
AGREEMENT BY THE OPERATOR OR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY
OF THE OPERATOR PARTIES.

 

16

 

 

6.2          Indemnification of Operator.  SUBJECT TO SECTION 3.3 (PAYMENT OF OPERATOR'S
EMPLOYEES) AND SECTION 6.4 (DISCLAIMER OF CERTAIN DAMAGES), DURING THE
TERM, THE COMPANY SHALL INDEMNIFY, PROTECT, DEFEND, RELEASE AND HOLD HARMLESS THE
OPERATOR FROM AND AGAINST ANY LOSSES ASSERTED BY OR ON BEHALF OF ANY PERSON
THAT ARISE OUT OF, RELATE TO OR ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR
INDIRECTLY, BREACH OF THIS AGREEMENT BY THE COMPANY OR THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY OF THE COMPANY PARTIES, EXCEPT TO THE EXTENT THEY ARE
CAUSED BY BREACH OF THIS AGREEMENT BY THE OPERATOR OR THE GROSS NEGLIGENCE OR
WILLFUL MISCONDUCT OF ANY OF THE OPERATOR PARTIES.

 

6.3           Indemnification of Company. SUBJECT TO SECTION 6.4 (DISCLAIMER OF CERTAIN
DAMAGES), THE OPERATOR SHALL INDEMNIFY, PROTECT, DEFEND, RELEASE AND HOLD
HARMLESS EACH COMPANY PARTY FROM AND AGAINST ANY LOSSES ASSERTED BY OR ON
BEHALF OF ANY PERSON THAT ARISE OUT OF, RELATE TO OR ARE OTHERWISE 
ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY, BREACH OF THIS AGREEMENT BY THE
OPERATOR OR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE OPERATOR
PARTIES,  EXCEPT TO THE EXTENT THEY ARE CAUSED BY BREACH OF THIS AGREEMENT BY
THE COMPANY OR THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF ANY OF THE ANY COMPANY
PARTIES.

 

6.4            Disclaimer of Certain Damages.  IN NO EVENT SHALL ANY PARTY BE LIABLE TO THE OTHER PARTY
FOR ANY LOST OR PROSPECTIVE PROFITS OR ANY OTHER CONSEQUENTIAL, SPECIAL,
INDIRECT, INCIDENTAL, PUNITIVE OR EXEMPLARY LOSSES OR DAMAGES THAT ARISE OUT
OF, RELATE TO OR ARE OTHERWISE ATTRIBUTABLE TO, DIRECTLY OR INDIRECTLY, THE
PERFORMANCE OR NON-PERFORMANCE OF THIS AGREEMENT.  NOTWITHSTANDING ANYTHING TO
THE CONTRARY IN THIS SECTION 6.4  (DISCLAIMER OF CERTAIN DAMAGES), IF
ANY PARTY OR THEIR INDEMNITEES IS HELD LIABLE TO A THIRD PARTY FOR ANY OF SUCH
DAMAGES AND THE OTHER PARTY IS OBLIGATED TO INDEMNIFY SUCH PARTY OR THEIR
INDEMNITEES FOR THE MATTER THAT GAVE RISE TO SUCH DAMAGES PURSUANT TO THIS
AGREEMENT, THEN THE INDEMNIFYING PARTY SHALL BE LIABLE FOR, AND OBLIGATED TO
REIMBURSE SUCH PARTY AND THEIR INDEMNITEES FOR, SUCH DAMAGES.

 

6.5            
Warranties by Vendors and
Subcontractors. With respect to
agreements with vendors, suppliers and subcontractors entered into after the
Effective Date, the Operator shall use commercially reasonable efforts, as
agent for the Company, to secure from vendors, suppliers and subcontractors,
for the Company's benefit, such warranties and guarantees as may be available
on commercially reasonable terms regarding supplies, materials, equipment and
services purchased for the Pilot Mine Program and to enforce such warranties
and guarantees on behalf of the Company.

 

17

 

 

6.6            Indemnities by Vendors and
Subcontractors.  With respect to
agreements with vendors, suppliers and subcontractors entered into after the
Effective Date, the Operator shall  use reasonable efforts, as agent for the
Company, to secure from vendors, suppliers and subcontractors, for the
Company's benefit, such indemnities as may be available on commercially
reasonable terms regarding supplies, materials, equipment and services
purchased for the Pilot Mine Program and to enforce such indemnities on behalf
of the Company.

 

ARTICLE 7

FORCE MAJEURE

 

7.1           Force Majeure.  A party's obligation under this Agreement shall be excused
when and to the extent its performance of that obligation is prevented due to
Force Majeure; provided, that a party shall not be excused by Force
Majeure from any obligation to pay money due under this Agreement that arose
prior to such event of Force Majeure.  The party that is prevented from
performing its obligation by reason of Force Majeure shall promptly notify the
other party of that fact and shall exercise all commercially reasonable efforts
to end its inability to perform as promptly as practicable.

 

ARTICLE 8

TERM AND TERMINATION

 

8.1          Term.  This Agreement shall become effective on the
Effective Date and shall remain in full force and effect until its termination
pursuant to either Section 8.2 (Termination by the Company) or Section
8.3 (Termination by the Operator) (the period of time during which this
Agreement is in full force and effect, the "Term").

 

8.2          Termination by the Company.

 

(a)        Upon the occurrence of the
following events, the Company may terminate this Agreement by giving written notice
of such termination to the Operator:

 

(i)        the Operator becomes Bankrupt;

 

(ii)       the Operator dissolves or
commences liquidation or winding-up; or

 

(iii)      the Operator fails to cure a
material breach of any provision of this Agreement within thirty (30) days
after receiving written notice from the Company of such breach; provided,
if such breach is not capable of being cured within such thirty (30) day
period, such cure period shall be extended solely to the extent that the
Operator promptly commences efforts to cure such breach and prosecutes such
curative efforts to completion within a reasonable time, as determined by the
Company, not to exceed an additional thirty (30) day period.

 

(b)        Any termination under Section
8.2(a) (Termination by the Company) shall become effective immediately upon
delivery of the notice first described therein or such later time (not to
exceed the first anniversary of the delivery of such notice) as may be
specified by the Company.

18

 

 

(c)        Following the completion of the
Default Term, the Company may terminate this Agreement for any reason by giving
at least one hundred twenty (120) days' prior written notice of such
termination to the Operator.

 

8.3          Termination by the Operator.

 

(a)       Upon the occurrence of the following
events, the Operator may terminate this Agreement by giving written notice of
such termination to the Company:

 

(i)        the Company becomes Bankrupt;

 

(ii)      
the Company dissolves or commences
liquidation or winding-up; or

 

(iii)    
the Company fails to cure a
material breach of any provision of this Agreement within thirty (30) days
after receiving written notice from the Operator of such breach; provided,
if such breach is not capable of being cured within such thirty (30) day
period, such cure period shall be extended solely to the extent that the Company
promptly commences efforts to cure such breach and prosecutes such curative
efforts to completion within a reasonable time, as determined by the Operator,
not to exceed an additional thirty (30) day period.

 

(b)        Any termination under Section
8.3(a) (Termination by the Operator) shall become effective immediately
upon delivery of the notice first described therein or such later time (not to
exceed the first anniversary of the delivery of such notice) as may be
specified by the Operator.

 

(c)        Following the completion of the
Default Term, the Operator may terminate this Agreement for any reason by
giving at least one-hundred and twenty (120) days' prior written notice of such
termination to the Company; provided, that during such one-hundred and twenty
(120) day period the Operator shall use reasonable efforts to assist the
Company in identifying a replacement Operator and assist the Company
transitioning the new Operator into its role as Operator hereunder.

 

8.4          Effect of Termination.  If this Agreement is terminated in accordance with
this Article 8 (TERM AND TERMINATION), all rights and obligations under
this Agreement shall cease except for:

 

(a)        obligations that expressly survive
termination of this Agreement, including, without limitation, the obligations
set forth in Section 8.5 (Operator's Continued Performance) and Article
11 (INTELLECTUAL PROPERTY);

 

(b)        liabilities and obligations that
have been incurred prior to such termination, including the obligation to pay
any amounts that have become due and payable prior to such termination; and

 

19

 

 

(c)        the obligation to pay any portion
of the Cost of Services that have been incurred prior to such termination, even
if such portion has not become due and payable at that time; provided,
that any payment obligation disputed by the Company in accordance with Article 10
(ARBITRATION) shall not become due and payable until settled or otherwise
resolved pursuant to Article 10 (ARBITRATION).

 

Upon termination of this Agreement for any reason, the
Operator shall deliver to the Company (x) any and all books and records, design
drawings, engineering specs and other records of the Company and all other
material(s) related to the operation and administration of the Pilot Mine
Program and (ii) originals of any permits, licenses and other authorizations
related to the operation of the Pilot Mine Program to the extent the Operator
was ever provided with such originals.

 

8.5           Operator's Continued
Performance. If the Company elects to
terminate this Agreement pursuant to Section 8.2(a) (Termination by the
Company), the Company may require that the effective date of such termination
be delayed for up to thirty (30) days after the date specified in the Company's
termination notice as the termination date of this Agreement, in which case the
Operator shall continue to perform all of the duties, responsibilities and
obligations of the Operator hereunder for a reasonable period of time not to
exceed thirty (30) days from the date specified in such termination notice or
until such time as the successor operator takes over such duties,
responsibilities and obligations, if earlier. The Company shall reimburse the
Operator in accordance with Section 3.1 (Payment for Costs and Expenses)
for any and all costs and expenses incurred by the Operator pursuant to this Section
8.5 (Operator's Continued Performance).

 

ARTICLE 9

NOTICES AND REPORTS

 

9.1         Notices and Reports.

 

(a)        Any notice, notification, demand
or request provided or permitted to be given under this Agreement by either party
to the other must be in writing and shall have been deemed to have been
properly given, unless explicitly stated otherwise, if sent by (i) FedEx or
other comparable overnight courier, (ii) registered or certified mail, postage
prepaid, return receipt requested, or (iii) email transmission, confirmation of
receipt requested, provided that such confirmation of receipt is given
(electronic "read receipt" being deemed sufficient).

 

(b)        For purposes of all notices, the physical
and email addresses of the parties shall be as follows; provided, that
either party may designate any other address in substitution for the address
set forth below by five (5) Business Days' notice duly given hereunder to the
other party:

 

(i)    
if to the Company:

 

EcoChain, Inc.

Address:  325 Washington Avenue Extension

                Albany, New York 12205

Email:     rjones@mtiinstruments.com

 

20

 

 

(ii) 
if to the Operator:

 

Soluna Technologies, Ltd.

Address:  232 Madison Avenue, Suite 600

                New York, NY 10016

Email:     john@soluna.io

 

(c)        All notices, notifications,
demands or requests so given shall be deemed given and received (i) if sent via
FedEx or other comparable overnight courier, the next business day after being
deposited with such courier, (ii) if mailed, five (5) Business Days after being
deposited in the mail, or (iii) if sent via email, the next Business Day after
being so transmitted.

 

ARTICLE 10

ARBITRATION

 

10.1        Submission Requirement.  Any dispute between the parties (the "Disputing
Parties") arising out of or relating to this Agreement (a "Dispute"),
whether based on contract, tort, statute or other legal or equitable theory
(including but not limited to any claim of fraud, misrepresentation or
fraudulent inducement or any question of validity or effect of this Agreement),
shall be settled in accordance with this Article 10 (ARBITRATION) which
shall be the exclusive method of resolving Disputes. The Disputing Party
submitting the claim or issue shall notify in writing other Disputing
Party(ies) or other Persons against whom redress is sought or who would be
affected by the interpretation, to offer those Disputing Parties an opportunity
to participate in the proceeding.  The notice shall describe the nature of the
claim or issue submitted, the provision or provisions of this Agreement which
is or are the basis of the claim or issue submitted, and the material facts
surrounding the claim or issue for interpretation. On delivery of the notice
(the "Arbitration Notice"), the parties shall attempt, in good
faith and for a period of thirty (30) days to resolve and informally mediate
the claim between the parties, after which period the claim or issue shall be
deemed to have been submitted to arbitration.

 

10.2        Selection of Arbitrator. The Disputing Party that submits a Dispute to
arbitration shall designate a proposed arbitrator in its Arbitration Notice. If
the other Disputing Party(ies) objects for any reason to such proposed
arbitrator, it/they may, on or before the fifteenth (15th) day following
delivery of the Arbitration Notice, notify the other Disputing Party(ies) of
such objection. The Disputing Parties shall attempt to agree upon a mutually
acceptable arbitrator. If they are unable to do so within ten (10) days
following delivery of such notice of objection, any Disputing Party may request
the American Arbitration Association ("AAA") to designate the arbitrator
who shall be qualified by his or her education, experience and training to
resolve the disputed matters. If the arbitrator so chosen shall die, resign or otherwise
fail or become unable to serve as arbitrator, a replacement arbitrator shall be
chosen in accordance with this Section 10.2 (Selection of Arbitrator).
Each Disputing Party and each proposed arbitrator shall promptly disclose to
the other Disputing Party(ies) any business, personal or other relationship or
affiliation that may exist between such Disputing Party and such proposed
arbitrator.

 

21

 

 

10.3        Arbitration Proceeding. Within thirty (30) days after the appointment of the
foregoing described arbitrator, the Disputing Parties shall hold an arbitration
proceeding before the arbitrator at a time and place selected by the Disputing
Parties. If the Disputing Parties cannot agree on a time and place for the
arbitration, then the arbitration shall be held at the place selected by the
arbitrator. At the arbitration proceeding, the AAA's rules and procedures for commercial
arbitration shall govern. Any arbitration proceeding hereunder shall be
conducted on a confidential basis. The arbitration shall be held in New York,
New York.

 

10.4        Binding Decision. Within twenty (20) days after the conclusion of the
arbitration proceeding, the arbitrator shall render a written decision of the
arbitration to each Disputing Party in accordance with the substantive laws of
the State of New York. The arbitrator may award costs, including attorneys'
fees, to the prevailing party. The decision of the arbitrator is binding on the
Disputing Parties, and, after the completion of the arbitration, a Disputing
Party to the arbitration may not institute litigation to reverse the decision
of the arbitrators. It may, however, institute litigation in any appropriate
venue to enforce the claim or issue determined by the arbitration proceeding or
to seek such protective order as may be necessary or desirable to address any
ongoing breach of the provisions of this Agreement or otherwise preserve its
rights pending any such decision. Neither Disputing Party may institute
litigation regarding any claim or issue under this Agreement, except to enforce
that arbitration decision. EXCEPT TO THE EXTENT PERMITTED BY THIS AGREEMENT,
THE ARBITRATOR AND ANY COURT ENFORCING THE AWARD OF THE ARBITRATOR SHALL NOT
HAVE THE RIGHT OR AUTHORITY TO AWARD CONSEQUENTIAL, INCIDENTAL, INDIRECT,
SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES TO ANY DISPUTING PARTY.

 

10.5        Costs of Arbitration.  The responsibility for paying the costs and
expenses of the arbitration, including compensation to the arbitrator, shall be
allocated among the Disputing Parties in a manner determined by the arbitrator
to be fair and reasonable under the circumstances. Each Disputing Party shall
be responsible for the fees and expenses of its respective counsel, consultants
and witnesses, unless the arbitrator determines that compelling reasons exist
for allocating all or a portion of such costs and expenses to one or the other
Disputing Party(ies).

 

 

 

22

 

 

ARTICLE 11

INTELLECTUAL PROPERTY

 

11.1     
  Ownership of Intellectual
Property.  Any work product resulting
from the Operator's carrying out of the Services after the Effective Date and
delivered to the Company in connection with the creation, development, assembly
and construction of the Pilot Mine Program that is specified by the parties as
a "work for hire" whether pursuant to Exhibit A hereto or a separate
scope of services or written agreement between the parties, including all such
designated ideas, inventions, know-how, patents, copyrights, trademarks,
proprietary rights or information, software (including both object and source
code), data (including data resulting from the use or optimization of the Pilot
Mine Program) and other intellectual property rights (the "Works"),
shall be deemed the property of the Company and "works made for hire" under Applicable Law, including as defined in 17
U.S.C. § 101.  The Operator agrees that, upon request, the Operator will
promptly make all disclosures, execute all assignments, instruments, patent
applications and papers and perform all acts whatsoever necessary or desired by
the Company to vest and confirm in the Company and its successors, assigns and
nominees all rights in the Works. 
Notwithstanding the foregoing, the parties understand that the Operator is in the
business of developing renewable energy generation facilities and related data
processing facilities and the Operator accordingly will retain ownership of,
without limitation, inventions or software and related intellectual property that
have general application to its business and any related data processing
facilities and the management of data mining facilities for third parties which
it has developed or will develop other than the "Works" contemplated by this Agreement.

 

11.2       
License to the Company.  In addition to the Company's right to the Works
contemplated by Section 11.1 (Ownership of Intellectual Property), the
Operator and its Affiliates hereby grant the Company a perpetual,
non-exclusive, worldwide, transferable (subject to the proviso below), sublicensable
(subject to the proviso below), fully paid-up and royalty free right and
license to access and use all patents, copyrights, trademarks, proprietary rights
or information, software (including both object and source code), data
(including data resulting from the use or optimization of the Pilot Mine
Program) and other intellectual property rights used or employed by the
Operator in connection with the operation of (a) the Pilot Mine Program and (b)
any additional cryptocurrency mining facility owned or serviced by the Operator
that utilizes technology or intellectual property similar to that utilized by
the Pilot Mine Program (collectively, the "Licensed Operator IP"), such
Licensed Operator IP to include, without limitation, (i) all such above
described intellectual property created or developed by Operator pursuant to
the carrying out of the Services, (ii) any changes, upgrades,
modifications, improvements, fixes or patches to or new versions of software
(in any form including both object and source code) or data constituting
Licensed Operator IP to the extent developed, written, generated, provided,
installed, obtained or implemented by Operator, and (iii) any deliverables, technical or functional descriptions,
requirements, plans or reports that describe or detail Licensed Operator IP;
provided, that the foregoing license granted by the Operator and its
Affiliates may only be assigned or sublicensed by the Company (x) without the
consent of the Operator and/or its Affiliates, to Affiliates of the Company and
(y) with the prior written consent of the Operator and/or its Affiliates (which
consent they may grant or refuse in their reasonable discretion), to any other Person. 
As set forth above, the license granted to the Company pursuant to this Section
11.2 (License to the Company) shall expressly survive following the
expiration of the Term hereunder and expressly contemplates, and is intended to
include, the license to the Company of software and data that constitutes a change,
upgrade, modification, improvement, fix or patch to pre-existing Works or
intellectual property previously licensed to the Company hereunder (including as
licensed pursuant to this Section 11.2 (License to the Company)) so as
to permit the ongoing operation of the Pilot Mine Program and any such additional
cryptocurrency mining facility that utilizes technology or intellectual
property similar to that utilized by the Pilot Mine Program in accordance with
Prudent Industry Practice.

 

23

 

 

11.3        Third Party Intellectual
Property.  The Operator shall use all
commercially reasonable efforts to procure the right to sublicense to or to
utilize for and on behalf of the Company, as applicable, all patents,
copyrights, trademarks, information, licenses and any other intellectual
property or proprietary rights of any third party obtained by the Operator for
use in connection with the Pilot Mine Program ("Third Party IP Rights"),
with the expectation that such Third Party IP Rights shall be further licensed
or sublicensed, as applicable, to the Company pursuant to Section 11.2
(License to the Company).

 

11.4        License to the Operator.  Unless agreed in writing by the parties to the
contrary, the Company gives and grants to the Operator a perpetual,
non-exclusive, worldwide, non-transferable, non-sublicensable fully paid-up and
royalty free right and license to use the Works for the purposes of carrying
out business of the Operator and its Affiliates.

 

11.5        Hosting of Software; Passwords.  The Operator shall cause any Works and Licensed
Operator IP that are or contain object code or source code to be hosted
via an applicable website or domain by one or more suitable third parties ("Cloud
Provider").  The services provided by the Cloud Providers, including their
contractors, pursuant to any Cloud Provider terms of services are referred to
herein as the "Cloud Services".  Following the date hereof, the parties
shall mutually agree to engage an acceptable Cloud Provider that is capable of
providing the Cloud Services in accordance with Prudent Industry Practice.  The
Operator shall provide the Company with updated passwords or access codes
required to access, review, analyze and use such Works and Licensed Operator IP
hosted by the Cloud Provider and the Company shall have the right to access,
review, analyze and use such hosted Works and Licensed Operator IP at all times
on a 24/7, 365 day per year basis (reasonable maintenance periods excepted). 
Upon request of the Company, the Operator shall execute any agreements or
documentation requested by the Cloud Provider to provide Company with the
access rights contemplated by this Section 11.5 (Hosting of Software;
Passwords).  Further, upon written request of the Company, the Operator shall
provide the Company with access, at reasonable times and upon reasonable
notice, to any Works or Licensed Operator IP that is not hosted by the Cloud
Provider via standards and methodologies that accord with Prudent Industry
Practice and enable the Company to review, analyze and use the same.  The
access rights (but not the Cloud Services hosting obligations) set forth in
this Section 11.5 (Hosting of Software; Passwords) shall expressly
survive following the expiration of the Term.  Upon any termination of this
Agreement, access to the Cloud Services and control over the terms of service
with respect thereto shall be immediately transferred to the Company.

 

 

24

 

 

ARTICLE 12

MISCELLANEOUS PROVISIONS

 

12.1        Governing Law; Severability. THIS AGREEMENT IS GOVERNED BY AND SHALL BE CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, EXCLUDING ANY
CONFLICT-OF-LAWS RULE OR PRINCIPLE THAT MIGHT REFER THE GOVERNANCE OR THE
CONSTRUCTION OF THIS AGREEMENT TO THE LAW OF ANOTHER JURISDICTION.  If any
provision of this Agreement or the application thereof to either party or any
circumstance is held invalid or unenforceable to any extent, (a) the remainder
of this Agreement and the application of that provision to the other party or
other circumstances is not affected thereby, and (b) the parties shall
negotiate in good faith to replace that provision with a new provision that is
valid and enforceable and that puts the parties in substantially the same
economic, business and legal position as they would have been in if the
original provision had been valid and enforceable.

 

12.2         Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties and their respective heirs, legal representatives,
permitted successors and assigns.

 

12.3         Waiver. No waiver by either party of any default by the
other party in the performance of any provision, condition or requirement
herein shall be deemed to be a waiver of, or in any manner a release of the
other party from, performance of any other provision, condition or requirement
herein, nor deemed to be a waiver of, or in any manner a release of the other party
from, future performance of the same provision, condition or requirement; nor
shall any delay or omission of either party to exercise any right hereunder in
any manner impair the exercise of any such right or any like right accruing to
it thereafter.

 

12.4         Amendment. This Agreement may not be modified or amended except
by written agreement of the parties.

 

12.5         Headings. The headings contained in this Agreement are for
convenience of reference only and do not constitute part of this Agreement.

 

12.6        Further Assurances.  Each of the parties agrees to use all reasonable
efforts to take, or to cause to be taken, all actions, and to do, or to cause
to be done, all things necessary, proper or advisable under Applicable Law to
consummate and make effective the transactions contemplated by this Agreement.

 

12.7               
Liens and Encumbrances. The Operator shall not create, suffer or permit to
exist, and shall promptly remove and discharge, any lien, charge, security
interest or other encumbrance against any property of the Company in connection
with this Agreement other than liens for amounts not yet due or amounts being
contested in good faith by the Operator; provided, that it is expressly
understood that the Operator shall not be responsible for removing or
discharging any such lien, charge, security interest or other encumbrance
associated with any work performed or materials furnished pursuant to
agreements entered into by the Company or by the Operator on behalf of the
Company directly with third parties.

 

25

 

 

12.8        Assignment.  Neither party shall assign its rights or
obligations hereunder without the prior written consent of the other party; provided,
that the Company may transfer its rights and obligations hereunder to an Affiliate
upon written notice to the Operator, without the prior written consent of the
Operator.

 

12.9         Energy Service Right.  In the event the Pilot Mine Program is moved to or
otherwise located in a geographic area within which the Operator or its
Affiliates provides the supply of energy, then the Company shall have the right
to demand receipt of the supply of energy from the Operator and/or its
Affiliates at a price (for both supply and delivery charges) that is equal to
the lowest price for such supply and delivery of energy provided to any other
customer (including Affiliated customers) of the Operator and/or its Affiliates
in such geographic area.

 

12.10        Entire Agreement.  This Agreement constitutes the entire agreement of
the parties relating to the relationship hereunder and supersede all provisions
and concepts contained in all prior contracts or agreements between the parties
with respect to such relationship, whether oral or written.

 

12.11        Counterparts.  This Agreement may be executed by electronic
signature in multiple counterparts, each of which, when executed, shall be
deemed an original, and all of which shall constitute but one and the same
instrument.

 

12.12        Remedies.  Except as expressly provided herein, the remedies
created by this Agreement are cumulative and in addition to any other remedies
otherwise available at law or in equity.

 

12.13        Survival.          The provisions contained in Section 5.2
(Audits), Article 6 (INDEMNITY), Section 8.5 (Operator's
Continued Performance), Article 9 (NOTICES AND REPORTS), Article 10
(ARBITRATION), Article 11 (INTELLECTUAL PROPERTY), Section 12.1
(Governing Law; Severability), and Section 12.12 (Remedies) shall
survive the termination of this Agreement.

 

[signature page follows]

 

 

 

 

26

 

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

 

 

		

Company:

			
	

 

			
	

ECOCHAIN,
INC.

			
	

 

			
	

 

			
	

By:
/s/ Frederick W. Jones_____________

			
	

Name:
Frederick W. Jones

			
	

Title:  
Chief Executive Officer

			
	

 

			
	

 

			
	

 

			
	

Operator:

			
	

 

			
	

SOLUNA
TECHNOLOGIES, LTD.

			
	

 

			
	

 

			
	

By:
/s/ John Belizaire__________________

			
	

Name:
John Belizaire

			
	

Title:  
CEO

			

 

 

 

 

 

 

 

[Signature Page to O&M Agreement]

 

EXHIBIT A

 

Scope of Development, Operating and Support Services

Capitalized
terms used, but not defined, herein shall have their respective meaning(s) set
forth in the Operating and Management Agreement, dated January 9, 2020, by and
between Soluna Technologies, Ltd. and EcoChain, Inc. (the "O&M Agreement")
to which this Exhibit is attached.

Introduction:

 

Operator will perform the below described Development
Services and Build and Operations Services in connection with the Pilot Mine
Program. The scope of the Services and the deliverables, budgets and timelines associated
therewith as contemplated by the O&M Agreement are outlined in this Exhibit
A.

Development
Services:

Operator
will undertake business development and planning activities to identify,
source, and secure a location for a pilot cryptocurrency mine.  Operator will
also to develop a detailed Initial Budget and Operating Budgets and Capital Budgets
with respect to the construction and operation of the Pilot Mine Program as
contemplated by the O&M Agreement.

Upon
conclusion of the development phase of the Pilot Mine Program, Operator will
deliver a detailed business plan to the Company, which will include the
following deliverables (together referred to as "Deliverables"): 

	
	Overview Presentation: a detailed presentation laying out
the competitive landscape, deployment strategies, capital investment ranges,
and identifying key KPIs and ROI calculations for the Pilot Mine Program so
that the Company and its Affiliates may be in a position to make informed
decisions with respect to the decisions needed for proceeding with the
operational development of cryptocurrency mining operations.

	
	Budget: development of a formal and
reasonably detailed Operating Budgets with respect to the ongoing, day-to-day
maintenance and operation of the Pilot Mine Program in and a formal and
reasonably detailed Initial Budget and Capital Budgets with respect to the development
and carrying out of capital projects with respect to the Pilot Mine Program,
all in compliance with the terms of the O&M Agreement.

	
	Financial Model: a detailed excel-based financial
model for a "phase one" deployment of the Pilot Mine Program, including robust
and market-tested assumptions.  The purpose of this deliverable, which will be
updated in accordance with the same principles of software developed and owned
by Company and its Affiliates, is to assist Company and its Affiliates in
making operating decisions that are dependent on a number of key variables.  It
is anticipated that this model will also enable Company and its Affiliates to
make predictive decisions as well.

 

A-1

 

 

	
	
	Deployment and
Operating Plan: a
technical data package for the Pilot Mine Program, including specifications for
the initial cryptocurrency mine, hashrate, price of power, bill of materials, analysis
of suitable cryptocurrency mining pools, blueprints and interfaces for
deployment as well as all software builds necessary for the deployment of the
cryptocurrency mining operation.   The purpose of this deliverable is to place Company
and its Affiliates in a position that any third party with sufficient knowledge
of the crypto mining space to proceed with the initial deployment in whatever
environment (hosted, the third party, owned outright) Company or its Affiliates
have chosen.

	
	
	Vendor
Selection and Purchase Orders: a panel of vendor and location option(s) will be presented
to Company for approval.  Operator will direct the final selected vendor(s) to
prepare necessary purchase orders and related services agreements for approval
by Company ("Purchase Orders").

Timeline

The
Development Services contemplated hereby will begin being provided by Operator
to Company on the Effective Date and be completed within sixty (60) days of the
Effective Date. The current projected date for the Deliverables is March 14,
2020.

Acceptance

It
is expressly understood that the Company will be the sole determiner of the
adequacy acceptance of the Deliverables and will be prompt in its review of all
materials both in early draft and final form. Company will have three (3) Business
Days to accept (or reject) the Deliverables in writing. 

Purchase
Order(s) will be accepted or rejected by the Company within three (3) Business
Days of presentation by Operator to the Company.  Acceptable Purchase Order(s)
will be executed within seven (7) Business Days of acceptance by the Company or
within any shorter time reasonably required by the vendor(s) (whichever is
sooner).  The Company's acceptance of the Development Services related
deliverables will not be unreasonably withheld.

Build and Operations Services: 

Operator will undertake activities to procure,
install, and operate all capital equipment, software, and related technology to
commence the operations of the Pilot Mine Program.  Once, in operation, Operator
will perform ongoing maintenance and support operations to keep the Pilot Mine
Program operating according to pre-determined specifications.

A-1

 

 

These
services will include, but not be limited to:

	Procurement: use funds (in line with
     approved budgets) from the Company to procure all necessary equipment to bring
     the Pilot Mine Program to full operational status.

 
	Build: setup of site hosting,
     cryptocurrency miners setup, and installation of remote hardware and
     systems monitoring, and all necessary support services to cause the Pilot
     Mine Program to become operational based an agreed upon timeline. 

 
	Operate: ensure adequate and reasonable
     ongoing operations and monitoring of the Pilot Mine Program including
     required software updates, cryptocurrency miner repairs as required,
     systems maintenance, thermal monitoring, and optimization.

Timeline

Build
and Operations Services will begin once the Purchase Orders for equipment
identified in the Deliverables from the Development Services have been approved
and signed by Company or Operator as agent of the Company pursuant to the
O&M Agreement.  

General:

 

In the event of an inconsistency between
the terms and conditions of this Exhibit and the O&M Agreement, the terms
and conditions of the O&M Agreement shall control.

 

 

 

 

A-1

 

EXHIBIT B

 

Operator Insurance Requirements

 

	
	
	Workers' Compensation Insurance to
fully comply with all Applicable Law of the jurisdiction where operations are
performed and Employers' Liability Insurance with a limit of not less than one
million U.S. dollars ($1,000,000) each accident.

	
	
	Commercial General Liability
Insurance with a combined single limit of not less than one million U.S.
dollars ($1,000,000) each occurrence for bodily injury (including death) and/or
property damage (including loss of use or occupancy) arising out of the
performance of activities and/or operations.  This policy shall include
products and completed operations liability, contractual liability and sudden
and accidental pollution liability.

	
	
	Automobile Liability Insurance
covering all automotive equipment (whether owned, non-owned or hired) with a
combined single limit of not less than one million U.S. dollars ($1,000,000)
each accident for bodily injury and/or property damage.

 

 

 

 

 

 

 

 

 

 

 

 

 

B-1

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