Document:

Legend Oil and Gas, Ltd. 8-K

Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase
Agreement (this “Agreement”) is dated as of March ___, 2016, between Legend Oil and Gas, Ltd., a Colorado corporation
(the “Company”), and each purchaser identified on the signature pages hereto (each, including its successors
and assigns, a “Purchaser” and collectively, the “Purchasers”).

 

WHEREAS, subject to the
terms and conditions set forth in this Agreement and pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the
“Securities Act”), and Rule 506 promulgated thereunder, the Company desires to issue and sell to each Purchaser,
and each Purchaser, severally and not jointly, desires to purchase from the Company securities of the Company, as more fully described
in this Agreement.

 

NOW, THEREFORE, IN CONSIDERATION
of the mutual covenants contained in this Agreement, and for other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the Company and each Purchaser agree as follows:

 

ARTICLE I. 

DEFINITIONS

 

1.1         Definitions.
 In addition to the terms defined elsewhere in this Agreement: (a) capitalized terms that are not otherwise defined herein have
the meanings given to such terms in the Debentures (as defined herein), and (b) the following terms have the meanings set forth
in this Section 1.1:

 

“Acquiring
Person” shall have the meaning ascribed to such term in Section 4.7.

 

“Action”
shall have the meaning ascribed to such term in Section 3.1(j).

 

“Affiliate”
means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common
control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Board
of Directors” means the board of directors of the Company.

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action to
close.

 

“Closing”
means the closing of the purchase and sale of the Securities pursuant to Section 2.1.

 

“Closing
Date” means the Trading Day on which all of the Transaction Documents have been executed and delivered by the applicable
parties thereto, and all conditions precedent to (i) the Purchasers’ obligations to pay the Subscription Amount and (ii)
the Company’s obligations to deliver the Securities, in each case, have been satisfied or waived.

 

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“Closing
Statement” means the Closing Statement in the form on Annex A attached hereto.

 

“Commission”
means the United States Securities and Exchange Commission.

 

“Common
Stock” means the common stock of the Company, par value $0.001 per share, and any other class of securities into which
such securities may hereafter be reclassified or changed.

 

“Common
Stock Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to
acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument
that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common
Stock.

 

“Company
Counsel” means Greenberg Traurig, LLP, with offices located at 3333 Piedmont Road NE, Suite 2500, Atlanta, Georgia 30305.

 

“Debentures”
means the Original Issue Discount Senior Convertible Debentures due, subject to the terms therein, March 1, 2018, issued by the
Company to the Purchasers hereunder, in the form of Exhibit A attached hereto.

 

“EGS”
means Ellenoff Grossman & Schole LLP, with offices located at 1345 Avenue of the Americas, New York, New York 10105-0302.

 

“Evaluation
Date” shall have the meaning ascribed to such term in Section 3.1(r).

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Exempt
Issuance” means the issuance of (a) shares of Common Stock or options to employees, officers or directors of the Company
pursuant to any stock or option plan duly adopted for such purpose, by a majority of the non-employee members of the Board of Directors
or a majority of the members of a committee of non-employee directors established for such purpose, (b) securities upon the exercise
or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible
into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended
since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or
conversion price of such securities, and (c) securities issued pursuant to acquisitions or strategic transactions approved by a
majority of the disinterested directors of the Company, provided that any such issuance shall only be to a Person (or to the equityholders
of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic
with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but
shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an
entity whose primary business is investing in securities.

 

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“FCPA”
means the Foreign Corrupt Practices Act of 1977, as amended.

 

“GAAP”
shall have the meaning ascribed to such term in Section 3.1(h).

 

“Indebtedness”
shall have the meaning ascribed to such term in Section 3.1(aa).

 

“Intellectual
Property Rights” shall have the meaning ascribed to such term in Section 3.1(o).

 

“Liens”
means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

 

“Material
Adverse Effect” shall have the meaning assigned to such term in Section 3.1(b).

 

“Material
Permits” shall have the meaning ascribed to such term in Section 3.1(m).

 

“Maximum
Rate” shall have the meaning ascribed to such term in Section 5.17.

 

“Participation
Maximum” shall have the meaning ascribed to such term in Section 4.12(a).

 

“Person”
means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability
company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Pre-Notice”
shall have the meaning ascribed to such term in Section 4.12(b).

 

“Pro
Rata Portion” shall have the meaning ascribed to such term in Section 4.12(e).

 

“Proceeding”
means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial
proceeding, such as a deposition), whether commenced or threatened.

 

“Purchaser
Party” shall have the meaning ascribed to such term in Section 4.10.

 

“Required
Approvals” shall have the meaning ascribed to such term in Section 3.1(e).

 

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“Required
Minimum” means, as of any date, the maximum aggregate number of shares of Common Stock equal to the sum of (i) the then
issued or potentially issuable in the future pursuant to the Transaction Documents, including any Underlying Shares issuable upon
conversion in full of all Debentures (including Underlying Shares issuable as payment of interest on the Debentures), ignoring
any conversion or exercise limits set forth therein, and assuming that the Conversion Price is at all times on and after the date
of determination 75% of the then Conversion Price on the Trading Day immediately prior to the date of determination and (ii) the
then issued or potentially issuable in the future upon the exercise or conversion of any other securities of the Company exercisable
or exchangeable for or convertible into shares of Common Stock that are outstanding and held by the Purchasers.

 

“Rule
144” means Rule 144 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended from time
to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same effect as such Rule.

 

“Rule
424” means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted
from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose
and effect as such Rule.

 

“SEC
Reports” shall have the meaning ascribed to such term in Section 3.1(h).

 

“Securities”
means the Debentures and the Underlying Shares.[CONFIRM STATUS OF INCREASE IN AUTHORIZED
SHARES]

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Short
Sales” means all “short sales” as defined in Rule 200 of Regulation SHO under the Exchange Act (but shall
not be deemed to include the location and/or reservation of borrowable shares of Common Stock). 

 

“Subscription
Amount” means, as to each Purchaser, the aggregate amount to be paid for the Debentures purchased hereunder as specified
below such Purchaser’s name on the signature page of this Agreement and next to the heading “Subscription Amount,”
in United States dollars and in immediately available funds.

 

“Subsequent
Financing” shall have the meaning ascribed to such term in Section 4.12(a).

 

“Subsequent
Financing Notice” shall have the meaning ascribed to such term in Section 4.12(b).

 

“Subsidiary”
means any subsidiary of the Company as set forth in the SEC Reports and shall, where applicable, also include any direct or indirect
subsidiary of the Company formed or acquired after the date hereof.

 

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“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New
York Stock Exchange or the OTC Bulletin Board (or any successors to any of the foregoing).

 

“Transaction
Documents” means this Agreement, the Debentures, all exhibits and schedules thereto and hereto and any other documents
or agreements executed in connection with the transactions contemplated hereunder.

 

“Transfer
Agent” means VStock Transfer, LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette
Place, Woodmere, NY 11598 and a facsimile number of 646-536-3179, and any successor transfer agent of the Company.

 

“Underlying
Shares” means the shares of Common Stock issued and issuable upon conversion or redemption of the Debentures.

 

“Variable
Rate Transaction” shall have the meaning ascribed to such term in Section 4.13.

 

ARTICLE II.

PURCHASE AND SALE

 

2.1         Closing.   On the Closing Date, upon the terms and subject to the conditions set forth herein, substantially concurrent with the execution
and delivery of this Agreement by the parties hereto, the Company agrees to sell, and the Purchasers, severally and not jointly,
agree to purchase, up to an aggregate of $410,788.00 in principal amount of the Debentures corresponding to an aggregate Subscription
Amount of $375,000. Each Purchaser shall deliver to the Company immediately available funds, via wire transfer or a certified check,
equal to such Purchaser’s Subscription Amount as set forth on the signature page hereto executed by such Purchaser, and the
Company shall deliver to each Purchaser its respective Debenture, as determined pursuant to Section 2.2(a), and the Company and
each Purchaser shall deliver the other items set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the covenants
and conditions set forth in Sections 2.2 and 2.3, the Closing shall occur at the offices of EGS or such other location as the parties
shall mutually agree.

 

2.2         Deliveries.

 

(a)          On or
prior to the Closing Date, the Company shall deliver or cause to be delivered to each Purchaser the following:

 

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(i)          this Agreement duly executed by the Company;

 

(ii)         a legal
opinion of Company Counsel, substantially in the form of Exhibit B attached hereto; and

 

(iii)        a Debenture
with a principal amount equal to such Purchaser’s Subscription Amount multiplied by 1.095433789, registered in the name of
such Purchaser.

 

(b)         On or
prior to the Closing Date, each Purchaser shall deliver or cause to be delivered to the Company the following:

 

(i)          this Agreement duly executed by such Purchaser; and

 

(ii)         such Purchaser’s
Subscription Amount by wire transfer to the account specified in writing by the Company.

 

2.3         Closing Conditions.

 

(a)         The obligations
of the Company hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the accuracy
in all material respects on the Closing Date of the representations and warranties of the Purchasers contained herein (unless as
of a specific date therein in which case they shall be accurate as of such date);

 

(ii)         all obligations,
covenants and agreements of each Purchaser required to be performed at or prior to the Closing Date shall have been performed;
and

 

(iii)        the delivery
by each Purchaser of the items set forth in Section 2.2(b) of this Agreement.

 

(b)          The respective
obligations of the Purchasers hereunder in connection with the Closing are subject to the following conditions being met:

 

(i)          the accuracy
in all material respects when made and on the Closing Date of the representations and warranties of the Company contained herein
(unless as of a specific date therein);

 

(ii)        all obligations,
covenants and agreements of the Company required to be performed at or prior to the Closing Date shall have been performed;

 

(iii)       the delivery
by the Company of the items set forth in Section 2.2(a) of this Agreement;

 

(iv)       there shall
have been no Material Adverse Effect with respect to the Company since the date hereof; and

 

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(v)        from the
date hereof to the Closing Date, trading in the Common Stock shall not have been suspended by the Commission or the Company’s
principal Trading Market and, at any time prior to the Closing Date, trading in securities generally as reported by Bloomberg L.P.
shall not have been suspended or limited, or minimum prices shall not have been established on securities whose trades are reported
by such service, or on any Trading Market, nor shall a banking moratorium have been declared either by the United States or New
York State authorities nor shall there have occurred any material outbreak or escalation of hostilities or other national or international
calamity of such magnitude in its effect on, or any material adverse change in, any financial market which, in each case, in the
reasonable judgment of such Purchaser, makes it impracticable or inadvisable to purchase the Securities at the Closing.

 

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

 

3.1        Representations
and Warranties of the Company.    The Company hereby makes the following representations and warranties to each Purchaser:

 

(a)          Subsidiaries.    All of the direct and indirect subsidiaries of the Company are set forth in the SEC Reports. The Company owns, directly or indirectly,
all of the capital stock or other equity interests of each Subsidiary free and clear of any Liens, and all of the issued and outstanding
shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar
rights to subscribe for or purchase securities. If the Company has no subsidiaries, all other references to the Subsidiaries or
any of them in the Transaction Documents shall be disregarded.

 

(b)          Organization
and Qualification.    The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly
existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power
and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company
nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation,
bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business
and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted
or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as
the case may be, could not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity
or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects
or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect
on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document
(any of (i), (ii) or (iii), a “Material Adverse Effect”) and no Proceeding has been instituted in any such jurisdiction
revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

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(c)          Authorization;
Enforcement.    The Company has the requisite corporate power and authority to enter into and to consummate the transactions
contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder
and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the
part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders
in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction
Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in
accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against
the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency,
reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii)
as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii)
insofar as indemnification and contribution provisions may be limited by applicable law.

 

(d)          No
Conflicts.    The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to
which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby
and thereby do not and will not: (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate
or articles of incorporation, bylaws or other organizational or charter documents, (ii) conflict with, or constitute a default
(or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon
any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration
or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing
a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which
any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict
with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court
or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations),
or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii)
and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

 

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(e)        Filings,
Consents and Approvals.    The Company is not required to obtain any consent, waiver, authorization or order of, give any notice
to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other
Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i)
the filings required pursuant to Section 4.6 of this Agreement and (ii) the filing of Form D with the Commission and such filings
as are required to be made under applicable state securities laws (collectively, the “Required Approvals”).

 

(f)          Issuance
of the Securities.    The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction
Documents, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company other
than restrictions on transfer provided for in the Transaction Documents. The Underlying Shares, when issued in accordance with
the terms of the Transaction Documents, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed
by the Company other than restrictions on transfer provided for in the Transaction Documents.

 

(g)          Capitalization.    The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since its most
recently filed periodic report under the Exchange Act, other than pursuant to the exercise of employee stock options under the
Company’s stock option plans, the issuance of shares of Common Stock to employees pursuant to the Company’s employee
stock purchase plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the date of
the most recently filed periodic report under the Exchange Act. No Person has any right of first refusal, preemptive right, right
of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as
a result of the purchase and sale of the Securities, there are no outstanding options, warrants, scrip rights to subscribe to,
calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable
or exchangeable for, or giving any Person any right to subscribe for or acquire any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common
Stock or Common Stock Equivalents. The issuance and sale of the Securities will not obligate the Company to issue shares of Common
Stock or other securities to any Person (other than the Purchasers) and will not result in a right of any holder of Company securities
to adjust the exercise, conversion, exchange or reset price under any of such securities. All of the outstanding shares of capital
stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all
federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors
or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or
other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge
of the Company, between or among any of the Company’s stockholders.

 

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(h)          SEC
Reports; Financial Statements.    The Company has filed all reports, schedules, forms, statements and other documents required
to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof,
for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such
material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, being collectively
referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of
filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC
Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and
none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required
to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they
were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial
statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements
and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements
have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during
the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all
material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and
the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal,
immaterial, year-end audit adjustments.

 

(i)           Material
Changes; Undisclosed Events, Liabilities or Developments.    Since the date of the latest audited financial statements included
within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof: (i) there
has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse
Effect, (ii) the Company has not incurred any liabilities (contingent or otherwise) other than (A) trade payables and accrued
expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected
in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, or (C) any other
liabilities, specifically liabilities relating to asset back loans with respect to the Company’s vehicles, that have been
approved by the Company’s Board, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared
or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements
to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer,
director or Affiliate, except pursuant to existing Company stock option plans. The Company does not have pending before the Commission
any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement,
no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or
exist with respect to the Company or its Subsidiaries or their respective businesses, properties, operations, assets or financial
condition, that would be required to be disclosed by the Company under applicable securities laws at the time this representation
is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation
is made.

 

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(j)           Litigation.    There is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company,
threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator,
governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”)
which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the
Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse
Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action
involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty.
There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission
involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order
or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange
Act or the Securities Act.

 

(k)          Labor
Relations.    No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of
the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’
employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither
the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries
believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company
or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality,
disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive
covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company
or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are
in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices,
terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(l)           Compliance.    Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been
waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has
the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture,
loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any
court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation
of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental
protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as
could not have or reasonably be expected to result in a Material Adverse Effect.

 

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(m)         Regulatory Permits.    The Company and the Subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could
not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the
Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material
Permit.

 

(n)          Title
to Assets.    Except as set forth in the SEC Reports or any widely disseminated press release of the Company or as set forth
on Schedule 3.1(n) attached hereto, the Company and the Subsidiaries have good and marketable title in fee simple to all
real property owned by them and good and marketable title in all personal property owned by them that is material to the business
of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect
the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company
and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been
made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property
and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases
with which the Company and the Subsidiaries are in compliance.

 

(o)          Intellectual
Property.    The Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark
applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights
and similar rights as described in the SEC Reports as necessary or required for use in connection with their respective businesses
and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”).
None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual
Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2)
years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited
financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual
Property Rights violate or infringe upon the rights of any Person, except as could not have or reasonably be expected to not have
a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is
no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except
where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

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(p)          Insurance.    The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks
and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including,
but not limited to, directors and officers insurance coverage at least equal to the aggregate Subscription Amount. Neither the
Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and
when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without
a significant increase in cost.

 

(q)          Transactions
With Affiliates and Employees.    Except as set forth in the SEC Reports, none of the officers or directors of the Company or
any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party
to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including
any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or
personal property to or from providing for the borrowing of money from or lending of money to, or otherwise requiring payments
to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case
in excess of $120,000 other than for: (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option
plan of the Company.

 

(r)         Sarbanes-Oxley;
Internal Accounting Controls.    The Company and the Subsidiaries are in compliance with any and all applicable requirements of
the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof, and any and all applicable rules and regulations promulgated
by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries
maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed
in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted
only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The
Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information
required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized
and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers
have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of
the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”).
The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers
about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the
Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange
Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal
control over financial reporting of the Company and its Subsidiaries.

 

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(s)          Certain
Fees.    No brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiaries to any
broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by the Transaction Documents. The Purchasers shall have no obligation with respect to any fees or with
respect to any claims made by or on behalf of other Persons for fees of a type contemplated in this Section that may be due in
connection with the transactions contemplated by the Transaction Documents.

 

(t)           Private
Placement.    Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2, no registration
under the Securities Act is required for the offer and sale of the Securities by the Company to the Purchasers as contemplated
hereby. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of the Trading Market.

 

(u)          Investment
Company.    The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities, will
not be or be an Affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as
amended. The Company shall conduct its business in a manner so that it will not become an “investment company” subject
to registration under the Investment Company Act of 1940, as amended.

 

(v)          Registration
Rights.    No Person has any right to cause the Company to effect the registration under the Securities Act of any securities
of the Company or any Subsidiaries.

 

(w)         Listing
and Maintenance Requirements.    The Common Stock is registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the
Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration
of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating
such registration. The Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on
which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or
maintenance requirements of such Trading Market. The Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible
for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current
in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such
electronic transfer.

 

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(x)          Application
of Takeover Protections.    The Company and the Board of Directors have taken all necessary action, if any, in order to render
inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement)
or other similar anti-takeover provision under the Company’s certificate of incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to the Purchasers as a result of the Purchasers and
the Company fulfilling their obligations or exercising their rights under the Transaction Documents, including without limitation
as a result of the Company’s issuance of the Securities and the Purchasers’ ownership of the Securities.

 

(y)          Disclosure.    Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
confirms that neither it nor any other Person acting on its behalf has provided any of the Purchasers or their agents or counsel
with any information that it believes constitutes or might constitute material, non-public information. The Company understands
and confirms that the Purchasers will rely on the foregoing representation in effecting transactions in securities of the Company.
All of the disclosure furnished by or on behalf of the Company to the Purchasers regarding the Company and its Subsidiaries, their
respective businesses and the transactions contemplated hereby is true and correct and does not contain any untrue statement of
a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The press releases disseminated by the Company during the twelve months preceding
the date of this Agreement taken as a whole do not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which
they were made and when made, not misleading. The Company acknowledges and agrees that no Purchaser makes or has made any representations
or warranties with respect to the transactions contemplated hereby other than those specifically set forth in Section 3.2 hereof.

 

(z)          No
Integrated Offering.    Assuming the accuracy of the Purchasers’ representations and warranties set forth in Section 3.2,
neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made
any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering
of the Securities to be integrated with prior offerings by the Company for purposes of (i) the Securities Act which would require
the registration of any such securities under the Securities Act, or (ii) any applicable shareholder approval provisions of any
Trading Market on which any of the securities of the Company are listed or designated.

 

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(aa)        Solvency.    Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the
Company of the proceeds from the sale of the Securities hereunder: (i) the fair saleable value of the Company’s assets exceeds
the amount that will be required to be paid on or in respect of the Company’s existing debts and other liabilities (including
known contingent liabilities) as they mature, (ii) the Company’s assets do not constitute unreasonably small capital to
carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular
capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability
thereof, and (iii) the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate
all of its assets, after taking into account all anticipated uses of the cash, would be sufficient to pay all amounts on or in
respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability
to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt).
The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation
under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date. The SEC Reports set forth
as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company
or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities
for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of
business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or
not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties
by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business;
and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance
with GAAP. Neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(bb)        Tax
Status.     Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result
in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed all United States federal, state and
local income and all foreign income and franchise tax returns, reports and declarations required by any jurisdiction to which
it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined
to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the
payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There
are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of
the Company or of any Subsidiary know of no basis for any such claim.

 

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(cc)         No
General Solicitation.    Neither the Company nor any person acting on behalf of the Company has offered or sold any of the Securities
by any form of general solicitation or general advertising. The Company has offered the Securities for sale only to the Purchasers
and certain other “accredited investors” within the meaning of Rule 501 under the Securities Act.

 

(dd)        Foreign
Corrupt Practices.    Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent
or other person acting on behalf of the Company or any Subsidiary, has: (i) directly or indirectly, used any funds for unlawful
contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any
unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns
from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person
acting on its behalf of which the Company is aware) which is in violation of law or (iv) violated in any material respect any
provision of FCPA.

 

(ee)        Accountants.    The Company’s accounting firm is set forth in the SEC Reports. To the knowledge and belief of the Company, such accounting
firm: (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect
to the financial statements to be included in the Company’s Annual Report for the fiscal year ended December 31, 2014.

 

(ff)          Seniority.    As of the Closing Date, no Indebtedness or other claim against the Company is senior to the Debentures in right of payment, whether
with respect to interest or upon liquidation or dissolution, or otherwise, other than indebtedness secured by security interests
(which is senior only as to underlying assets covered thereby) and capital lease obligations (which is senior only as to the property
covered thereby).

 

(gg)        No
Disagreements with Accountants and Lawyers.    There are no disagreements of any kind presently existing, or reasonably anticipated
by the Company to arise, between the Company and the accountants and lawyers formerly or presently employed by the Company and
the Company is current with respect to any fees owed to its accountants and lawyers which could affect the Company’s ability
to perform any of its obligations under any of the Transaction Documents.

 

(hh)        Acknowledgment
Regarding Purchasers’ Purchase of Securities.    The Company acknowledges and agrees that each of the Purchasers is acting
solely in the capacity of an arm’s length purchaser with respect to the Transaction Documents and the transactions contemplated
thereby. The Company further acknowledges that no Purchaser is acting as a financial advisor or fiduciary of the Company (or in
any similar capacity) with respect to the Transaction Documents and the transactions contemplated thereby and any advice given
by any Purchaser or any of their respective representatives or agents in connection with the Transaction Documents and the transactions
contemplated thereby is merely incidental to the Purchasers’ purchase of the Securities. The Company further represents
to each Purchaser that the Company’s decision to enter into this Agreement and the other Transaction Documents has been
based solely on the independent evaluation of the transactions contemplated hereby by the Company and its representatives.

 

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(ii)          Acknowledgment
Regarding Purchaser’s Trading Activity.    Anything in this Agreement or elsewhere herein to the contrary notwithstanding
(except for Sections 3.2(f) and 4.15 hereof), it is understood and acknowledged by the Company that: (i) none of the Purchasers
has been asked by the Company to agree, nor has any Purchaser agreed, to desist from purchasing or selling, long and/or short,
securities of the Company, or “derivative” securities based on securities issued by the Company or to hold the Securities
for any specified term, (ii) past or future open market or other transactions by any Purchaser, specifically including, without
limitation, Short Sales or “derivative” transactions, before or after the closing of this or future private placement
transactions, may negatively impact the market price of the Company’s publicly-traded securities, (iii) any Purchaser, and
counter-parties in “derivative” transactions to which any such Purchaser is a party, directly or indirectly, may presently
have a “short” position in the Common Stock and (iv) each Purchaser shall not be deemed to have any affiliation with
or control over any arm’s length counter-party in any “derivative” transaction. The Company further understands
and acknowledges that (y) one or more Purchasers may engage in hedging activities at various times during the period that the
Securities are outstanding, and (z) such hedging activities (if any) could reduce the value of the existing stockholders’
equity interests in the Company at and after the time that the hedging activities are being conducted. The Company acknowledges
that such aforementioned hedging activities do not constitute a breach of any of the Transaction Documents.

 

(jj)          Regulation
M Compliance.    The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly,
any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to
facilitate the sale or resale of any of the Securities, (ii) sold, bid for, purchased, or paid any compensation for soliciting
purchases of, any of the Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase
any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Company’s
placement agent in connection with the placement of the Securities.

 

(kk)        Stock
Option Plans.    Each stock option granted by the Company under the Company’s stock option plan was granted (i) in accordance
with the terms of the Company’s stock option plan and (ii) with an exercise price at least equal to the fair market value
of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted
under the Company’s stock option plan has been backdated. The Company has not knowingly granted, and there is no and has
been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of
stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries
or their financial results or prospects.

 

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(ll)          Office
of Foreign Assets Control.    Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer,
agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office
of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

(mm)      U.S.
Real Property Holding Corporation.    The Company is not and has never been a U.S. real property holding corporation within the
meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon Purchaser’s
request.

 

(nn)        Bank
Holding Company Act.    Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company
Act of 1956, as amended (the “BHCA”) and to regulation by the Board of Governors of the Federal Reserve System
(the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly
or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or
more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither
the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank
or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

(oo)        Money
Laundering.    The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970,
as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money
Laundering Laws”), and no action, suit or proceeding by or before any court or governmental agency, authority or body
or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge
of the Company or any Subsidiary, threatened.

 

3.2         Representations
and Warranties of the Purchasers.    Each Purchaser, for itself and for no other Purchaser, hereby represents and warrants as
of the date hereof and as of the Closing Date to the Company as follows (unless as of a specific date therein):

 

(a)          Organization;
Authority.    Such Purchaser is either an individual or an entity duly incorporated or formed, validly existing and in good standing
under the laws of the jurisdiction of its incorporation or formation with full right, corporate, partnership, limited liability
company or similar power and authority to enter into and to consummate the transactions contemplated by the Transaction Documents
and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of the Transaction Documents and
performance by such Purchaser of the transactions contemplated by the Transaction Documents have been duly authorized by all necessary
corporate, partnership, limited liability company or similar action, as applicable, on the part of such Purchaser. Each Transaction
Document to which it is a party has been duly executed by such Purchaser, and when delivered by such Purchaser in accordance with
the terms hereof, will constitute the valid and legally binding obligation of such Purchaser, enforceable against it in accordance
with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization,
moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by
laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

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(b)          Own
Account.    Such Purchaser understands that the Securities are “restricted securities” and have not been registered
under the Securities Act or any applicable state securities law and is acquiring the Securities as principal for its own account
and not with a view to or for distributing or reselling such Securities or any part thereof in violation of the Securities Act
or any applicable state securities law, has no present intention of distributing any of such Securities in violation of the Securities
Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons
to distribute or regarding the distribution of such Securities in violation of the Securities Act or any applicable state securities
law (this representation and warranty not limiting such Purchaser’s right to sell the Securities pursuant to the Registration
Statement or otherwise in compliance with applicable federal and state securities laws). Such Purchaser is acquiring the Securities
hereunder in the ordinary course of its business.

 

(c)         Purchaser
Status.    At the time such Purchaser was offered the Securities, it was, and as of the date hereof it is, an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under the Securities Act.

 

(d)         Experience
of Such Purchaser.    Such Purchaser, either alone or together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment
in the Securities, and has so evaluated the merits and risks of such investment. Such Purchaser is able to bear the economic risk
of an investment in the Securities and, at the present time, is able to afford a complete loss of such investment.

 

(e)         General
Solicitation.    Such Purchaser is not purchasing the Securities as a result of any advertisement, article, notice or other communication
regarding the Securities published in any newspaper, magazine or similar media or broadcast over television or radio or presented
at any seminar or any other general solicitation or general advertisement.

 

(f)         Certain
Transactions and Confidentiality.    Other than consummating the transactions contemplated hereunder, such Purchaser has not directly
or indirectly, nor has any Person acting on behalf of or pursuant to any understanding with such Purchaser, executed any purchases
or sales, including Short Sales, of the securities of the Company during the period commencing as of the time that such Purchaser
first received a term sheet (written or oral) from the Company or any other Person representing the Company setting forth the material
terms of the transactions contemplated hereunder and ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio managers manage separate portions
of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment decisions made by the portfolio
managers managing other portions of such Purchaser’s assets, the representation set forth above shall only apply with respect
to the portion of assets managed by the portfolio manager that made the investment decision to purchase the Securities covered
by this Agreement. Other than to other Persons party to this Agreement, such Purchaser has maintained the confidentiality of all
disclosures made to it in connection with this transaction (including the existence and terms of this transaction). Notwithstanding
the foregoing, for avoidance of doubt, nothing contained herein shall constitute a representation or warranty, or preclude any
actions, with respect to the identification of the availability of, or securing of, available shares to borrow in order to effect
Short Sales or similar transactions in the future.

 

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The Company acknowledges and agrees that the
representations contained in Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on the Company’s
representations and warranties contained in this Agreement or any representations and warranties contained in any other Transaction
Document or any other document or instrument executed and/or delivered in connection with this Agreement or the consummation of
the transaction contemplated hereby.

 

ARTICLE IV. 

OTHER AGREEMENTS OF THE PARTIES

 

4.1        Transfer Restrictions.

 

(a)          The Securities
may only be disposed of in compliance with state and federal securities laws. In connection with any transfer of Securities other
than pursuant to an effective registration statement or Rule 144, to the Company or to an Affiliate of a Purchaser or in connection
with a pledge as contemplated in Section 4.1(b), the Company may require the transferor thereof to provide to the Company an opinion
of counsel selected by the transferor and reasonably acceptable to the Company, the form and substance of which opinion shall be
reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred Securities
under the Securities Act. As a condition of transfer, any such transferee shall agree in writing to be bound by the terms of this
Agreement and shall have the rights and obligations of a Purchaser under this Agreement.

 

(b)         The Purchasers
agree to the imprinting, so long as is required by this Section 4.1, of a legend on any of the Securities in the following form:

 

THIS SECURITY HAS NOT BEEN REGISTERED
WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION
NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE
TO THE COMPANY. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER
LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT
OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

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The Company acknowledges
and agrees that a Purchaser may from time to time pledge pursuant to a bona fide margin agreement with a registered broker-dealer
or grant a security interest in some or all of the Securities to a financial institution that is an “accredited investor”
as defined in Rule 501(a) under the Securities Act and who agrees to be bound by the provisions of this Agreement and, if required
under the terms of such arrangement, such Purchaser may transfer pledged or secured Securities to the pledgees or secured parties.
Such a pledge or transfer would not be subject to approval of the Company and no legal opinion of legal counsel of the pledgee,
secured party or pledgor shall be required in connection therewith. Further, no notice shall be required of such pledge. At the
appropriate Purchaser’s expense, the Company will execute and deliver such reasonable documentation as a pledgee or secured
party of Securities may reasonably request in connection with a pledge or transfer of the Securities, including, if the Securities
are subject to registration, the preparation and filing of any required prospectus supplement under Rule 424(b)(3) under the Securities
Act or other applicable provision of the Securities Act to appropriately amend the list of selling stockholder table thereunder.

 

(c)         Certificates
evidencing the Underlying Shares shall not contain any legend (including the legend set forth in Section 4.1(b) hereof): (i) while
a registration statement covering the resale of such security is effective under the Securities Act, (ii) following any sale of
such Underlying Shares pursuant to Rule 144, (iii) if such Underlying Shares are eligible for sale under Rule 144 or (iv) if such
legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements
issued by the staff of the Commission). The Company shall cause its counsel to issue a legal opinion to the Transfer Agent promptly
if required by the Transfer Agent to effect the removal of the legend hereunder. If all or any portion of a Debenture is converted
at a time when there is an effective registration statement to cover the resale of the Underlying Shares, or if such Underlying
Shares may be sold under Rule 144 or if such legend is not otherwise required under applicable requirements of the Securities Act
(including judicial interpretations and pronouncements issued by the staff of the Commission) then such Underlying Shares shall
be issued free of all legends. The Company agrees that following such time as such legend is no longer required under this Section
4.1(c), it will, no later than three Trading Days following the delivery by a Purchaser to the Company or the Transfer Agent of
a certificate representing Underlying Shares, issued with a restrictive legend (such third Trading Day, the “Legend Removal
Date”), deliver or cause to be delivered to such Purchaser a certificate representing such shares that is free from all
restrictive and other legends. In addition, the Company shall deliver such Purchaser a copy of such legal opinion, the instruction
letter to the Transfer Agent, the resolution of the Board of Directors authorizing the Transaction Documents and any additional
supporting documentation requested by the Purchaser as may be requested by the Purchaser in order to deposit Underlying Shares
in accounts with its prime broker (or other brokerage account). The Company may not make any notation on its records or give instructions
to the Transfer Agent that enlarge the restrictions on transfer set forth in this Section 4. Certificates for Underlying Shares
subject to legend removal hereunder shall be transmitted by the Transfer Agent to the Purchaser by crediting the account of the
Purchaser’s prime broker with the Depository Trust Company System as directed by such Purchaser.

 

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(d)         In addition
to such Purchaser’s other available remedies, the Company shall pay to a Purchaser, in cash, as partial liquidated damages
and not as a penalty, for each $1,000 of Underlying Shares (based on the VWAP of the Common Stock on the date such Securities are
submitted to the Transfer Agent) delivered for removal of the restrictive legend and subject to Section 4.1(c), $10 per Trading
Day (increasing to $20 per Trading Day five (5) Trading Days after such damages have begun to accrue) for each Trading Day after
the second Trading Day following the Legend Removal Date until the later of (i) such Trading Day that such certificate is delivered
without a legend and (ii) the Trading Day on which the Company shall have delivered a copy of the opinion of its counsel and other
supporting documentation requested by the Purchaser (including, without limitation, any instruction letter to the Company’s
transfer agent) as may be requested by the Purchaser in order to deposit Underlying Shares in accounts with its prime broker (or
other brokerage account). Nothing herein shall limit such Purchaser’s right to pursue actual damages for the Company’s
failure to deliver certificates representing any Securities as required by the Transaction Documents, and such Purchaser shall
have the right to pursue all remedies available to it at law or in equity including, without limitation, a decree of specific performance
and/or injunctive relief.

 

(e)         Each Purchaser,
severally and not jointly with the other Purchasers, agrees with the Company that such Purchaser will sell any Securities pursuant
to either the registration requirements of the Securities Act, including any applicable prospectus delivery requirements, or an
exemption therefrom, and that if Securities are sold pursuant to a Registration Statement, they will be sold in compliance with
the plan of distribution set forth therein, and acknowledges that the removal of the restrictive legend from certificates representing
Securities as set forth in this Section 4.1 is predicated upon the Company’s reliance upon this understanding.

 

4.2        Acknowledgment
of Dilution.    The Company acknowledges that the issuance of the Securities may result in dilution of the outstanding shares
of Common Stock, which dilution may be substantial under certain market conditions. The Company further acknowledges that its obligations
under the Transaction Documents are unconditional and absolute and not subject to any right of set off, counterclaim, delay or
reduction, regardless of the effect of any such dilution or any claim the Company may have against any Purchaser and regardless
of the dilutive effect that such issuance may have on the ownership of the other stockholders of the Company.

 

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4.3        Furnishing of
Information.    If the Common Stock is not registered under Section 12(b) or 12(g) of the Exchange Act on the date hereof, the
Company agrees to cause the Common Stock to be registered under Section 12(g) of the Exchange Act on or before the 60th
calendar day following the date hereof. Until the earliest of the time that no Purchaser owns Securities, the Company covenants
to maintain the registration of the Common Stock under Section 12(b) or 12(g) of the Exchange Act and to timely file (or obtain
extensions in respect thereof and file within the applicable grace period) all reports required to be filed by the Company after
the date hereof pursuant to the Exchange Act even if the Company is not then subject to the reporting requirements of the Exchange
Act.

 

4.4        Integration.    The Company shall not sell, offer for sale or solicit offers to buy or otherwise negotiate in respect of any security (as defined
in Section 2 of the Securities Act) that would be integrated with the offer or sale of the Securities in a manner that would require
the registration under the Securities Act of the sale of the Securities or that would be integrated with the offer or sale of the
Securities for purposes of the rules and regulations of any Trading Market such that it would require shareholder approval prior
to the closing of such other transaction unless shareholder approval is obtained before the closing of such subsequent transaction.

 

4.5        Conversion Procedures.    The form of Notice of Conversion included in the Debentures set forth the totality of the procedures required of the Purchasers
in order to convert the Debentures. Without limiting the preceding sentences, no ink-original Notice of Exercise or Notice of Conversion
shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Conversion form
be required in order to convert the Debenture. No additional legal opinion, other information or instructions shall be required
of the Purchasers to convert their Debentures. The Company shall honor conversions of the Debentures and shall deliver Underlying
Shares in accordance with the terms, conditions and time periods set forth in the Transaction Documents.

 

4.6       Securities Laws
Disclosure; Publicity.    The Company shall file a Current Report on Form 8-K, including the Transaction Documents as exhibits
thereto, with the Commission within the time required by the Exchange Act. From and after the filing of such Current Report on
Form 8-K, the Company represents to the Purchasers that it shall have publicly disclosed all material, non-public information delivered
to any of the Purchasers by the Company or any of its Subsidiaries, or any of their respective officers, directors, employees or
agents in connection with the transactions contemplated by the Transaction Documents. The Company and each Purchaser shall consult
with each other in issuing any press releases with respect to the transactions contemplated hereby, and neither the Company nor
any Purchaser shall issue any press release nor otherwise make any such public statement without the prior consent of the Company,
with respect to any press release of any Purchaser, or without the prior consent of each Purchaser, with respect to any press release
of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which
case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. Notwithstanding
the foregoing, the Company shall not publicly disclose the name of any Purchaser, or include the name of any Purchaser in any filing
with the Commission or any regulatory agency or Trading Market, without the prior written consent of such Purchaser, except to
the extent such disclosure is required by law or Trading Market regulations, in which case the Company shall provide the Purchasers
with prior notice of such disclosure permitted under this clause.

 

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4.7       Shareholder Rights
Plan.    No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Purchaser
is an “Acquiring Person” under any control share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any
Purchaser could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the Purchasers.

 

4.8       Non-Public Information.    Except with respect to the material terms and conditions of the transactions contemplated by the Transaction Documents, the Company
covenants and agrees that neither it, nor any other Person acting on its behalf, will provide any Purchaser or its agents or counsel
with any information that the Company believes constitutes material non-public information, unless prior thereto such Purchaser
shall have entered into a written agreement with the Company regarding the confidentiality and use of such information. The Company
understands and confirms that each Purchaser shall be relying on the foregoing covenant in effecting transactions in securities
of the Company.

 

4.9        Use of Proceeds.    The Company shall use the net proceeds from the sale of the Securities hereunder for working capital purposes and shall not use
such proceeds: (a) for the satisfaction of any portion of the Company’s debt (other than payment of trade payables in the
ordinary course of the Company’s business and prior practices), (b) for the redemption of any Common Stock or Common Stock
Equivalents, (c) for the settlement of any outstanding litigation or (d) in violation of FCPA or OFAC regulations.

 

4.10      Indemnification
of Purchasers.    Subject to the provisions of this Section 4.10, the Company will indemnify and hold each Purchaser and its directors,
officers, shareholders, members, partners, employees and agents (and any other Persons with a functionally equivalent role of a
Person holding such titles notwithstanding a lack of such title or any other title), each Person who controls such Purchaser (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, shareholders,
agents, members, partners or employees (and any other Persons with a functionally equivalent role of a Person holding such titles
notwithstanding a lack of such title or any other title) of such controlling persons (each, a “Purchaser Party”)
harmless from any and all losses, liabilities, obligations, claims, contingencies, damages, costs and expenses, including all judgments,
amounts paid in settlements, court costs and reasonable attorneys’ fees and costs of investigation that any such Purchaser
Party may suffer or incur as a result of or relating to (a) any breach of any of the representations, warranties, covenants or
agreements made by the Company in this Agreement or in the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective Affiliates, by any stockholder of the Company who is not
an Affiliate of such Purchaser Party, with respect to any of the transactions contemplated by the Transaction Documents (unless
such action is based upon a breach of such Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with any such stockholder or any violations by such
Purchaser Party of state or federal securities laws or any conduct by such Purchaser Party which constitutes fraud, gross negligence,
willful misconduct or malfeasance). If any action shall be brought against any Purchaser Party in respect of which indemnity may
be sought pursuant to this Agreement, such Purchaser Party shall promptly notify the Company in writing, and the Company shall
have the right to assume the defense thereof with counsel of its own choosing reasonably acceptable to the Purchaser Party. Any
Purchaser Party shall have the right to employ separate counsel in any such action and participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such Purchaser Party except to the extent that (i) the employment
thereof has been specifically authorized by the Company in writing, (ii) the Company has failed after a reasonable period of time
to assume such defense and to employ counsel or (iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the position of such Purchaser Party, in which case the
Company shall be responsible for the reasonable fees and expenses of no more than one such separate counsel. The Company will not
be liable to any Purchaser Party under this Agreement (y) for any settlement by a Purchaser Party effected without the Company’s
prior written consent, which shall not be unreasonably withheld or delayed; or (z) to the extent, but only to the extent that a
loss, claim, damage or liability is attributable to any Purchaser Party’s breach of any of the representations, warranties,
covenants or agreements made by such Purchaser Party in this Agreement or in the other Transaction Documents. The indemnification
required by this Section 4.10 shall be made by periodic payments of the amount thereof during the course of the investigation or
defense, as and when bills are received or are incurred. The indemnity agreements contained herein shall be in addition to any
cause of action or similar right of any Purchaser Party against the Company or others and any liabilities the Company may be subject
to pursuant to law.

 

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4.11       Reservation
and Listing of Securities.

 

(a)          Within
six (6) months from the date hereof, the Company agrees to use reasonable best efforts to establish (and once the Company has
available authorized but unissued and unreserved shares of Common Stock available, to thereafter maintain) a reserve of shares
of Common Stock from its duly authorized shares of Common Stock that is equal to the Required Minimum for the issuance of shares
of Common Stock pursuant to (i) the Transaction Documents and (ii) the exercise or conversion of any other securities of the Company
exercisable or exchangeable for or convertible into shares of Common Stock that are outstanding and held by the Purchasers (such
reservation, the “Share Reservation” and the date of the Share Reservation, the “Share Reservation
Date”).[PLEASE CONFIRM STATUS OF AVAILABLE SHARES/NEED FOR FURTHER INCREASE]

 

(b)         If, on
any date after the Share Reservation Date, the number of authorized but unissued (and otherwise unreserved) shares of Common Stock
is less than the Required Minimum on such date, then the Board of Directors shall use commercially reasonable efforts to amend
the Company’s certificate or articles of incorporation to increase the number of authorized but unissued shares of Common
Stock to at least the Required Minimum at such time, as soon as possible and in any event not later than the 75th day after such
date.

 

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(c)        The Company
shall, if applicable: (i) in the time and manner required by the principal Trading Market, prepare and file with such Trading Market
an additional shares listing application covering a number of shares of Common Stock at least equal to the Required Minimum on
the date of such application, (ii) take all steps necessary to cause such shares of Common Stock to be approved for listing or
quotation on such Trading Market as soon as possible thereafter, (iii) provide to the Purchasers evidence of such listing or quotation
and (iv) maintain the listing or quotation of such Common Stock on any date at least equal to the Required Minimum on such date
on such Trading Market or another Trading Market.

 

4.12       Participation
in Future Financing.

 

(a)           Subject only to the
rights granted to the purchasers pursuant to that certain securities purchase agreement dated January 21, 2015, April 2, 2015,
April 28, 2015, June 30, 2015, July 2015, October 21, 2015 and January 29, 2016 from the date hereof until the date that is the
12 month anniversary of the Closing Date, upon any issuance by the Company or any of its Subsidiaries of Common Stock or Common
Stock Equivalents for cash consideration, Indebtedness or a combination of units thereof (a “Subsequent Financing”),
each Purchaser shall have the right to participate in up to an amount of the Subsequent Financing equal to 100% of the Subsequent
Financing (the “Participation Maximum”) on the same terms, conditions and price provided for in the Subsequent
Financing.

 

(b)           At least five (5)
Trading Days prior to the closing of the Subsequent Financing, the Company shall deliver to each Purchaser a written notice of
its intention to effect a Subsequent Financing (“Pre-Notice”), which Pre-Notice shall ask such Purchaser if
it wants to review the details of such financing (such additional notice, a “Subsequent Financing Notice”).
Upon the request of a Purchaser, and only upon a request by such Purchaser, for a Subsequent Financing Notice, the Company shall
promptly, but no later than one (1) Trading Day after such request, deliver a Subsequent Financing Notice to such Purchaser. The
Subsequent Financing Notice shall describe in reasonable detail the proposed terms of such Subsequent Financing, the amount of
proceeds intended to be raised thereunder and the Person or Persons through or with whom such Subsequent Financing is proposed
to be effected and shall include a term sheet or similar document relating thereto as an attachment.

 

(c)           Any Purchaser desiring
to participate in such Subsequent Financing must provide written notice to the Company by not later than 5:30 p.m. (New York City
time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice that such Purchaser is
willing to participate in the Subsequent Financing, the amount of such Purchaser’s participation, and representing and warranting
that such Purchaser has such funds ready, willing, and available for investment on the terms set forth in the Subsequent Financing
Notice. If the Company receives no such notice from a Purchaser as of such fifth (5th) Trading Day, such Purchaser shall
be deemed to have notified the Company that it does not elect to participate.

 

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(d)         If by 5:30 p.m. (New
York City time) on the fifth (5th ) Trading Day after all of the Purchasers have received the Pre-Notice, notifications
by the Purchasers of their willingness to participate in the Subsequent Financing (or to cause their designees to participate)
is, in the aggregate, less than the total amount of the Participation Maximum, then the Company may effect the remaining portion
of such Subsequent Financing on the terms and with the Persons set forth in the Subsequent Financing Notice.

 

(e)           If by 5:30 p.m. (New
York City time) on the fifth (5th) Trading Day after all of the Purchasers have received the Pre-Notice, the Company
receives responses to a Subsequent Financing Notice from Purchasers seeking to purchase more than the aggregate amount of the Participation
Maximum, each such Purchaser shall have the right to purchase its Pro Rata Portion (as defined below) of the Participation Maximum.
“Pro Rata Portion” means the ratio of (x) the Subscription Amount of Securities purchased on the Closing Date
by a Purchaser participating under this Section 4.12 and (y) the sum of the aggregate Subscription Amounts of Securities purchased
on the Closing Date by all Purchasers participating under this Section 4.12.

 

(f)          The Company must provide
the Purchasers with a second Subsequent Financing Notice, and the Purchasers will again have the right of participation set forth
above in this Section 4.12, if the Subsequent Financing subject to the initial Subsequent Financing Notice is not consummated for
any reason on the terms set forth in such Subsequent Financing Notice within thirty (30) Trading Days after the date of the initial
Subsequent Financing Notice.

 

(g)         The
Company and each Purchaser agree that if any Purchaser elects to participate in the Subsequent Financing, the transaction documents
related to the Subsequent Financing shall not include any term or provision whereby such Purchaser shall be required to agree to
any restrictions on trading as to any of the Securities purchased hereunder or be required to consent to any amendment to or termination
of, or grant any waiver, release or the like under or in connection with, this Agreement, without the prior written consent of
such Purchaser.

 

(h)         Notwithstanding
anything to the contrary in this Section 4.12 and unless otherwise agreed to by such Purchaser, the Company shall either confirm
in writing to such Purchaser that the transaction with respect to the Subsequent Financing has been abandoned or shall publicly
disclose its intention to issue the securities in the Subsequent Financing, in either case in such a manner such that such Purchaser
will not be in possession of any material, non-public information, by the tenth (10th) Business Day following delivery of the Subsequent
Financing Notice. If by such tenth (10th) Business Day, no public disclosure regarding a transaction with respect to the Subsequent
Financing has been made, and no notice regarding the abandonment of such transaction has been received by such Purchaser, such
transaction shall be deemed to have been abandoned and such Purchaser shall not be deemed to be in possession of any material,
non-public information with respect to the Company or any of its Subsidiaries.

 

(i)          Notwithstanding the
foregoing, this Section 4.12 shall not apply in respect of an Exempt Issuance.

 

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4.13      Variable Rate
Transactions.    From the date hereof until such time as no Purchaser holds any of the Debentures, the Company shall be prohibited
from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or
Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. “Variable Rate Transaction”
means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable
or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise
price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares
of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or
exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or
upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market
for the Common Stock or (ii) enters into any agreement, including, but not limited to, an equity line of credit, whereby the Company
may issue securities at a future determined price. Any Purchaser shall be entitled to obtain injunctive relief against the Company
to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

 

4.14      Equal Treatment
of Purchasers.    No consideration (including any modification of any Transaction Document) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of this Agreement unless the same consideration is also offered
to all of the parties to this Agreement. Further, the Company shall not make any payment of principal or interest on the Debentures
in amounts which are disproportionate to the respective principal amounts outstanding on the Debentures at any applicable time.
For clarification purposes, this provision constitutes a separate right granted to each Purchaser by the Company and negotiated
separately by each Purchaser, and is intended for the Company to treat the Purchasers as a class and shall not in any way be construed
as the Purchasers acting in concert or as a group with respect to the purchase, disposition or voting of Securities or otherwise.

 

4.15      Certain Transactions
and Confidentiality.    Each Purchaser, severally and not jointly with the other Purchasers, covenants that neither it, nor any
Affiliate acting on its behalf or pursuant to any understanding with it will execute any purchases or sales, including Short Sales,
of any of the Company’s securities during the period commencing with the execution of this Agreement and ending at such time
that the transactions contemplated by this Agreement are first publicly announced pursuant to the Current Report on Form 8-K as
described in Section 4.6. Each Purchaser, severally and not jointly with the other Purchasers, covenants that until such time as
the transactions contemplated by this Agreement are publicly disclosed by the Company pursuant to the Current Report on Form 8-K
as described in Section 4.6, such Purchaser will maintain the confidentiality of the existence and terms of this transaction and
the information included in the Transaction Documents. Notwithstanding the foregoing, and notwithstanding anything contained in
this Agreement to the contrary, the Company expressly acknowledges and agrees that (i) no Purchaser makes any representation, warranty
or covenant hereby that it will not engage in effecting transactions in any securities of the Company after the time that the transactions
contemplated by this Agreement are first publicly announced pursuant to the Current Report on Form 8-K as described in Section
4.6, (ii) no Purchaser shall be restricted or prohibited from effecting any transactions in any securities of the Company in accordance
with applicable securities laws from and after the time that the transactions contemplated by this Agreement are first publicly
announced pursuant to the Current Report on Form 8-K as described in Section 4.6 and (iii) no Purchaser shall have any duty of
confidentiality to the Company or its Subsidiaries after the filing of the Current Report on Form 8-K as described in Section 4.6.
Notwithstanding the foregoing, in the case of a Purchaser that is a multi-managed investment vehicle whereby separate portfolio
managers manage separate portions of such Purchaser’s assets and the portfolio managers have no direct knowledge of the investment
decisions made by the portfolio managers managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio manager that made the investment decision to purchase
the Securities covered by this Agreement.

 

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4.16       Form D; Blue
Sky Filings.    The Company agrees to timely file a Form D with respect to the Securities as required under Regulation D and to
provide a copy thereof, promptly upon request of any Purchaser. The Company shall take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for, or to qualify the Securities for, sale to the Purchasers at the Closing
under applicable securities or “Blue Sky” laws of the states of the United States, and shall provide evidence of such
actions promptly upon request of any Purchaser.

 

4.17       Capital Changes.    Until the one year anniversary of the Closing Date, the Company shall not undertake a reverse or forward stock split or reclassification
of the Common Stock without the prior written consent of the Purchasers holding a majority in principal amount outstanding of the
Debentures.

 

4.16      [Reserved]

 

4.17      Oil Production
Reports.    While the Debentures remain outstanding, the Company shall deliver to each Purchaser written copies of each gauge
report produced by the Company’s independent field operator setting forth the production volumes of each Producing Lease,
unless instructed in writing by a Purchaser and the Company will no longer be required to deliver such reports to such Purchaser.
These reports will be provided to each Purchaser as soon as practicable but, in any event, within two Business Days of receipt
by the Company. While the Debentures remain outstanding, the Company will also deliver each Purchaser as soon as practicable but,
in any event, within two business days of receipt by the Company, each Monthly Operator’s Run Statements showing sales volumes
of produced oil on the Producing Leases, unless instructed in writing by a Purchaser and the Company will no longer be required
to deliver such reports to such Purchaser.

 

ARTICLE V.

MISCELLANEOUS

 

5.1         Termination.    This Agreement may be terminated by any Purchaser, as to such Purchaser’s obligations hereunder only and without any effect
whatsoever on the obligations between the Company and the other Purchasers, by written notice to the other parties, if the Closing
has not been consummated on or before March ___, 2016; provided, however, that such termination will not affect the
right of any party to sue for any breach by any other party (or parties).

 

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5.2        Fees and Expenses.    At the Closing, the Company has agreed to reimburse Hillair Capital Management LLC (“Hillair”) the non-accountable
sum of $15,000 for Hillair’s due diligence expenses and legal fees and expenses Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its advisers, counsel, accountants and other experts,
if any, and all other expenses incurred by such party incident to the negotiation, preparation, execution, delivery and performance
of this Agreement. The Company shall pay all Transfer Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company), stamp taxes and other taxes and duties levied in connection with
the delivery of any Securities to the Purchasers.

 

5.3        Entire Agreement.    The Transaction Documents, together with the exhibits and schedules thereto, contain the entire understanding of the parties with
respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect
to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules.

 

5.4         Notices.    Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and
shall be deemed given and effective on the earliest of: (a) the date of transmission, if such notice or communication is delivered
via facsimile at the facsimile number or e-mail at the e-mail address set forth on the signature pages attached hereto at or prior
to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the date of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or e-mail at the e-mail address set forth on the signature pages
attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second
(2nd) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or
(d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications
shall be as set forth on the signature pages attached hereto.

 

5.5        Amendments; Waivers.    No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case
of an amendment, by the Company and the Purchasers holding at least 67% in interest of the Securities then outstanding or, in the
case of a waiver, by the party against whom enforcement of any such waived provision is sought. No waiver of any default with respect
to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver
of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission
of any party to exercise any right hereunder in any manner impair the exercise of any such right.

 

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

 

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5.7         Successors and
Assigns.    This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder without the prior written consent of each Purchaser
(other than by merger). Any Purchaser may assign any or all of its rights under this Agreement to any Person to whom such Purchaser
assigns or transfers any Securities, provided that such transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the “Purchasers.”

 

5.8         No Third-Party
Beneficiaries.    This Agreement is intended for the benefit of the parties hereto and their respective successors and permitted
assigns and is not for the benefit of, nor may any provision hereof be enforced by, any other Person, except as otherwise set forth
in Section 4.10.

 

5.9        Governing Law.    All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of
conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense
of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto
or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively
in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement
of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding,
any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper
or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents
to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight
delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action,
suit or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company
under Section 4.10, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action
or proceeding.

 

5.10       Survival.    The representations and warranties contained herein shall survive the Closing and the delivery of the Securities.

 

5.11       Execution.    This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being
understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission
or by e-mail delivery of a “.pdf” format data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or “.pdf”
signature page were an original thereof.

 

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5.12      Severability.    If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full
force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially
reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated
by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that
they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be
hereafter declared invalid, illegal, void or unenforceable.

 

5.13      Rescission and
Withdrawal Right.    Notwithstanding anything to the contrary contained in (and without limiting any similar provisions of) any
of the other Transaction Documents, whenever any Purchaser exercises a right, election, demand or option under a Transaction Document
and the Company does not timely perform its related obligations within the periods therein provided, then such Purchaser may rescind
or withdraw, in its sole discretion from time to time upon written notice to the Company, any relevant notice, demand or election
in whole or in part without prejudice to its future actions and rights.

 

5.14      Replacement
of Securities.    If any certificate or instrument evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon cancellation thereof (in the case of mutilation), or
in lieu of and substitution therefor, a new certificate or instrument, but only upon receipt of evidence reasonably satisfactory
to the Company of such loss, theft or destruction. The applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity) associated with the issuance of such replacement Securities.

 

5.15      Remedies.    In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, each of
the Purchasers and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that
monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the
Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation
the defense that a remedy at law would be adequate.

 

5.16      Payment Set
Aside.    To the extent that the Company makes a payment or payments to any Purchaser pursuant to any Transaction Document or
a Purchaser enforces or exercises its rights thereunder, and such payment or payments or the proceeds of such enforcement or exercise
or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside, recovered from, disgorged
by or are required to be refunded, repaid or otherwise restored to the Company, a trustee, receiver or any other Person under any
law (including, without limitation, any bankruptcy law, state or federal law, common law or equitable cause of action), then to
the extent of any such restoration the obligation or part thereof originally intended to be satisfied shall be revived and continued
in full force and effect as if such payment had not been made or such enforcement or setoff had not occurred.

 

    33

     

    

  

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

 

5.18      Independent
Nature of Purchasers’ Obligations and Rights.    The obligations of each Purchaser under any Transaction Document are several
and not joint with the obligations of any other Purchaser, and no Purchaser shall be responsible in any way for the performance
or non-performance of the obligations of any other Purchaser under any Transaction Document. Nothing contained herein or in any
other Transaction Document, and no action taken by any Purchaser pursuant hereto or thereto, shall be deemed to constitute the
Purchasers as a partnership, an association, a joint venture or any other kind of entity, or create a presumption that the Purchasers
are in any way acting in concert or as a group with respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Purchaser shall be entitled to independently protect and enforce its rights, including, without limitation, the
rights arising out of this Agreement or out of the other Transaction Documents, and it shall not be necessary for any other Purchaser
to be joined as an additional party in any proceeding for such purpose. Each Purchaser has been represented by its own separate
legal counsel in its review and negotiation of the Transaction Documents. For reasons of administrative convenience only, each
Purchaser and its respective counsel have chosen to communicate with the Company through EGS. EGS does not represent any of the
Purchasers and only represents Hillair. The Company has elected to provide all Purchasers with the same terms and Transaction Documents
for the convenience of the Company and not because it was required or requested to do so by any of the Purchasers.

 

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5.19      Liquidated Damages.    The Company’s obligations to pay any partial liquidated damages or other amounts owing under the Transaction Documents is
a continuing obligation of the Company and shall not terminate until all unpaid partial liquidated damages and other amounts have
been paid notwithstanding the fact that the instrument or security pursuant to which such partial liquidated damages or other amounts
are due and payable shall have been canceled.

 

5.20      Saturdays, Sundays,
Holidays, etc.    If the last or appointed day for the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business
Day.

 

5.21      Construction.    The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction
Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting
party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and
every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse
and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after
the date of this Agreement.

 

5.22      WAIVER OF
JURY TRIAL.    IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES
EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY
AND EXPRESSLY WAIVES FOREVER TRIAL BY JURY.

 

(Signature Pages Follow)

 

    35

     

    

  

IN WITNESS WHEREOF, the
parties hereto have caused this Securities Purchase Agreement to be duly executed by their respective authorized signatories as
of the date first indicated above.

 

	legend oil and gas, ltd.	 	Address for Notice:
	 	 	 
	By:	 	 	Fax:
	 	Name:	 	 	E-Mail Address:
	 	Title: 	 	 	 

 

With a copy to (which shall not constitute notice):

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE
PAGE FOR PURCHASER FOLLOWS]

 

    36

     

    

 

[PURCHASER
SIGNATURE PAGES TO

LOGL SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the
undersigned have caused this Securities Purchase and Exchange Agreement to be duly executed by their respective authorized signatories
as of the date first indicated above.

 

	Name of Purchaser:	 
	 	 
	Signature of Authorized Signatory of Purchaser:	 
	 	 
	Name of Authorized Signatory:	 
	 	 
	Title of Authorized Signatory:	 
	 	 
	Email Address of Authorized Signatory:	 
	 	 
	Facsimile Number of Authorized Signatory:	 
	 	 
	Address for Notice to Purchaser:	 
	 	 
	 	 
	Address for Delivery of Securities to Purchaser (if not same as
address for notice):
	 

  

	Subscription Amount in Cash: $	 	 

 

	Principal Amount (Subscription Amount * 1.095433789): $	 	 

 

	EIN Number:	 	 

 

[SIGNATURE PAGES CONTINUE]

 

    37

     

    

 

Annex A 

 

CLOSING STATEMENT

 

Pursuant to the attached Securities Purchase
Agreement, dated on or about the date hereto, the purchasers shall purchase Debentures from Legend Oil and Gas, Ltd., a Colorado
corporation (the “Company”). All funds will be wired into an account maintained by the Company. All funds will
be disbursed in accordance with this Closing Statement.

 

	Disbursement Date:	March ___, 2016	 
	 	 	 

 

	I.	PURCHASE PRICE	 	 	 	 
	 	 	 	 	 	 
	 	 	Gross Proceeds to be Received	 	$375,000.00	 
	 	 	 	 	 	 
	II.	DISBURSEMENTS	 	 	 	 
	 	 	 	 	 	 
	 	 	Legend Oil & Gas Ltd.	 	$360,000.00	 
	 	 	Hillair Capital Management LLC (expense reimbursement)	 	$ 15,000.00	 
	 	 	 	 	 	 
	Total Amount Disbursed:	 	 	$375,000.00	 
	 	 	 	 	 
	WIRE INSTRUCTIONS:	 	 	 	 
	 	 	 	 	 
	See attached	 	 	 	 
	 	 	 	 	 
	Acknowledged and agreed to

this ___ day of March 2016	 

 	 

 	 

 	 

 

  

	LEGEND OIL AND GAS, LTD.	 
	 	 
	By:	 	 
	Name:	 	 
	Title:	 	 

 

38Exhibit

 

Exhibit 10.1

TRANSITIONAL SERVICES EMPLOYMENT AGREEMENT

THIS AGREEMENT is made, effective as of March 28, 2016, by and between Gibraltar Industries, Inc., a Delaware corporation, with offices at 3556 Lake Shore Road, Buffalo, New York 14219 (the “Company”), and Paul M. Murray, an individual residing at                      , (the “Executive”).

RECITALS:

Prior to March 28, 2016, the Executive has been the Senior Vice President – Human Resources of the Company.  In connection with the anticipated retirement of the Executive and related succession planning that has been under development by the Company, the Company and the Executive have agreed that the Executive will resign from his position as an officer of the Company, effective as of March 28, 2016, and that, thereafter, the Executive will provide assistance to the Company’s senior management team in the transition of the duties of Senior Vice President – Human Resources to a successor until the Executive’s retirement which will occur on or before March 1, 2017.
 
The Company and the Executive desire to set forth in writing the terms and conditions upon which the Executive will be continue to be employed by the Company until his retirement or earlier termination.
  
    
CONSIDERATION:

NOW, THEREFORE, in consideration of the conditions and covenants set forth in this Agreement, the parties hereto agree as follows:

ARTICLE 1.

Employment and Duties

1.01    Relinquishment of Officer Status.  Effective as of the date hereof, the Executive hereby resigns from his position as an elected officer of the Company holding the title Senior Vice President – Human Resources and from his position as an elected officer of each of the Company’s direct and indirect wholly owned subsidiaries and limited liability companies and the Company hereby accepts such resignation, effective as of the date hereof.  

1.02    Continued Employment.  During the period beginning on the date of this Agreement and continuing until March 1, 2017, or, if earlier, the termination of the Executive’s employment, the Company hereby agrees to continue to employ the Executive in a capacity in which he is not an elected officer of the Company but holds the title Senior Vice President – Administration for the Company.  Subject to the provisions of Article 3 hereof, the Executive will continue to be employed by the Company, serving as Senior Vice President – Administration 

1

 

through March 1, 2017, which day, unless his employment with the Company has been terminated earlier pursuant to Article 3 hereof, will be the last day of his employment with the Company and on March 2, 2017, the Executive shall be deemed to have retired from his employment with the Company.  For purposes of this Agreement, the termination of the Executive’s employment at the close of business on March 1, 2017 is sometimes hereinafter referred to as his “Retirement”.  

1.03    Duties. During the period of his employment under this Agreement the Executive shall report to the Company’s Chief Executive Officer and shall perform duties and responsibilities which have been developed by the Chief Executive Officer in consultation with the Executive and which are designed to facilitate the transitioning of the duties of the Company’s senior human resources executive to a newly elected officer of the Company as well as to implement administrative policies and processes designed to enhance the efficiency of the Company’s human resource functions.   

ARTICLE 2. 
Compensation and Fringe Benefits

2.01    Transitional Services Salary and Benefits.  (a)  For and in consideration of the Executive’s agreement to provide the transitional services contemplated by this Agreement, subject to the provisions of Section 6.01, Section 6.02 and Section 6.03 hereof, the Company shall pay the Executive an aggregate amount, excluding any incentive compensation which the Executive may become entitled to pursuant to the following provisions of this Article 2, equal to the amount which the Executive would be entitled to receive at his current base salary over the period beginning April 1, 2016 and ending December 31, 2017 (such period being hereinafter the “Transitional Services Payment Period”), which amount is equal to Four Hundred Forty One Thousand Dollars ($441,000.00) (such amount being hereinafter the “Transitional Services Salary Payment”).  Subject to the provisions of Section 6.01, Section 6.02 and Section 6.03 hereof, the Transitional Services Salary Payment shall be payable to the Executive in substantially equal installments, less applicable withholding taxes, over the Transitional Services Payment Period.  Except as provided in Section 6.02(a), the dates on which the installments of the Transitional Services Salary Payment are made to the Executive shall be the same dates during the Transitional Services Payment Period that salaried employees employed by the Company at its Buffalo, New York corporate headquarters receive regularly scheduled payments of their base salaries.  The Executive acknowledges and agrees that, effective as of April 1, 2016, he will no longer be entitled to receive payment of his base salary and, instead of payment of his base salary, he will, subject to the provisions of Section 6.01, Section 6.02 and Section 6.03 hereof, be entitled to payment of the Transitional Services Salary Payment.    

(a)    In addition to the payment of the Transitional Services Salary Payment, during the period beginning on the date of this Agreement and ending on March 1, 2017 or, if earlier, the date the Executive’s employment with the Company is terminated, the Company shall make available to the Executive the group medical insurance coverage which is available to all executives employed by the Company at its Buffalo, New York, corporate headquarters on the same terms (including co-pays, deductibles and employee paid premiums) that such group 

2

 

medical insurance coverage is available to all executives employed by the Company at its Buffalo, New York, corporate headquarters (the right of the Executive to receive such group medical insurance coverage on such terms being hereinafter the “Transitional Group Medical Benefit”).  

2.02    Incentive Compensation. (a)  Subject to the following provisions of this Section 2.02, the Executive shall continue to be entitled to participate in the Company’s annual cash incentive compensation program known as the Management Incentive Compensation Plan (the “MICP”) for the 2016 calendar year and the annual cash incentive compensation which shall be payable to the Executive  for the achievement by the Company of the targeted level of performance as established by the Compensation Committee for 2016 under the MICP shall be equal to thirty five percent (35%) of the Executive’s Two Hundred Fifty Two Thousand Dollar ($252,000.00) 2016 base salary.   In connection with the Executive’s participation in the MICP, the Executive shall also be entitled to participate in and receive awards of restricted stock units under the management stock purchase plan (“MSPP”), a feature of the Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the “Omnibus Plan”).  In addition, for the period January 1, 2017 through March 1, 2017, the Executive shall be eligible to receive a pro-rata payment of the amount which he would have earned under the MICP had he remained in the employ of the Company through December 31, 2017 at an annual base salary equal to his 2016 base salary, which pro-rata payment shall be made to the Executive at the same time that payment of annual incentive compensation with respect to the 2017 calendar year, if any, is paid to executive employees of the Company.  For the avoidance of doubt, the Executive shall be permitted to defer his receipt of any portion of any MICP payment for the 2017 calendar year and purchase restricted stock units with such deferred amounts and, if the Executive makes any such deferral, to receive matching restricted stock units at the same percentage that the Executive received with respect to his deferral of his 2015 MICP payment.   

(a)    The Executive shall retain the rights he has acquired under the terms of awards of restricted stock units and performance stock units which he has received under the Company’s equity based long term incentive plan (the “LTIP”).  

(b)    Payment of the amount, if any, of any bonus the Executive may become entitled to receive pursuant to the terms of the MICP shall be made to the Executive in accordance with the terms of the MICP.  The amount and timing of payment of any cash compensation which the Executive may be entitled to receive as a result of his participation in the MSPP shall be determined pursuant to the terms of the MSPP.   The issuance of shares of common stock of the Company to which he may be entitled with respect to restricted stock units awarded to the Executive under the terms of the LTIP and the payment to the Executive of cash to which he may be entitled with respect performance stock units awarded to the Executive under the terms of the LTIP shall be made to the Executive in accordance with the terms of the applicable restricted stock unit awards and performance stock unit awards made to the Executive under the LTIP. 

2.03    Change in Control Benefits.  The Company and the Executive are parties to a Change in Control Agreement dated February 20, 2009 (hereinafter the “Change in Control 

3

 

Agreement”) providing certain benefits to the Executive upon the occurrence of a Change in Control (as defined in the Change in Control Agreement).  Capitalized terms used but not otherwise defined in this Section 2.03 shall have the meaning ascribed to such terms under the Change in Control Agreement.  The Company and the Executive hereby agree that, except as expressly provided by this Section 2.03, upon the occurrence of a Change in Control, the Executive shall have all the rights provided by the Change in Control Agreement, including, but not limited to, the right to receive a lump sum payment of all installments of the Transitional Services Salary Payments provided for by this Agreement which are unpaid at the time the Change in Control occurs (as provided for by Section 3(a)(ii) of the Change in Control Agreement) due to the fact that the Transitional Services Salary Payments provided for by this Agreement constitute “compensation which is payable at a time and in a manner which constitutes a ‘deferral of compensation’ as described in Section 3(a)(ii) of the Change in Control Agreement.  Notwithstanding the foregoing or anything to the contrary contained in the Change in Control Agreement, if a Change in Control occurs and the Executive’s employment is terminated by the Company without “Cause” or by the Executive for a “Good Reason” then:

(a)     If the date on which such termination occurs is on or prior to December 31, 2016, the Executive shall not be entitled to receive payment of his Annual Compensation as provided for in Section 4(b)(ii) of the Change in Control Agreement; and  

(b)      If the date on which such Termination occurs is at any time on or after January 1, 2017 and prior to March 2, 2017, the Executive shall not be entitled to payment of his Annual Compensation as provided for in Section 4(b)(ii) of the Change in Control Agreement and, instead the Executive shall receive a lump sum payment, at the time provided for by Section 4(b) of the Change in Control Agreement, in an amount equal to: (i) Forty Two Thousand Dollars ($42,000.00) if the date on which the Executive’s employment occurs prior to February 1, 2017; or (ii) Twenty One Thousand dollars ($21,000.00) if the date on which the Executive’s employment is terminated occurs after February 1, 2017 and prior to March 2, 2017.     

2.04    Reimbursement of Expenses. The Company shall reimburse the Executive for all reasonable expenses which the Executive may, from time to time, incur on behalf of the Company in the performance of his responsibilities and duties under this Agreement, provided that the Executive accounts to the Company for such expenses in the manner prescribed by the Company.  In addition, the Company shall reimburse the Executive for, or pay directly, the reasonable fees of Colligan Law LLP incurred by Executive in connection with the review of this Agreement.  The Company and the Executive acknowledge and agree that the foregoing shall not give the Company any power to direct the legal representation provided by Colligan Law LLP to Executive. 

2.05    Tax Qualified Plans.  For as long as the Executive remains an employee of the Company, the Executive shall be entitled to participate in the tax qualified 401(k) plan maintained by the Company for employees of the Company who are employed at the Company’s corporate offices and any other tax qualified plans which the Company may, from time to time, maintain for employees of the Company who are employed at the Company’s corporate headquarters.  After his retirement, the Executive shall be permitted to maintain an account under 

4

 

the terms of the tax qualified 401(k) plan as permitted by such 401(k) plan. 

2.06    Group Welfare Benefits.  For as long as the Executive remains an employee of the Company, the Executive shall, in addition to his right to receive the Transitional Group Medical Benefit, be eligible to participate in any other group health and welfare benefits plans and programs which are maintained by the Company for exempt salaried employees employed at the Company’s corporate offices.  Notwithstanding the foregoing, the Company shall have no obligation to maintain or provide such group welfare benefits to the Executive unless the Executive pays to the Company, on a monthly basis, the employee portion of any costs associated with the maintenance and provision of such benefits by the Company, which such costs shall be determined on the same basis as for other plan participants who are employed by the Company at the Company’s corporate headquarters.  In addition, during the period of the Executive’s employment under the terms of this Agreement, the Executive shall be eligible to participate in the group health and welfare plans and programs on the same basis as may be provided or maintained by the Company for its executive officers. 

2.07    Vacation.  During the 2016 calendar year, the Executive shall be entitled to five (5) weeks of paid vacation in addition to U.S. holidays on which salaried employees employed at the Company’s corporate offices are not required to report to work; provided that, consistent with the vacation policy of the Company in effect for salaried employees of the Company employed at the Company’s corporate headquarters (such policy being hereinafter the “Vacation Policy”), the Executive shall pre-clear the days on which he intends to take vacation with the Company’s Chief Executive Officer.  If the Executive’s employment with the Company is terminated prior to December 31, 2016, the number of weeks of paid vacation which the Executive is entitled to receive shall, to the extent not previously used by the Executive, be adjusted in a manner which is consistent with the Vacation Policy.  If the Executive is employed by the Company on and after January 1, 2017, the Executive shall earn vacation days for any such period of employment consistent with the Vacation Policy based on an annual vacation accrual of five (5) weeks.  The Executive’s rights to payment of any unused vacation pay shall be determined by the Vacation Policy. 

2.08    Perquisites.  Prior to the date hereof, the Executive, by virtue of his status as Senior Vice President – Human Resources is entitled to receive annual perquisites including, but not limited to, club dues, financial and tax planning advice, executive physical and personal use of a Company automobile.  During the period of his employment hereunder, the Executive shall be entitled to the same perquisites that he was entitled to as of the date of this Agreement and, with respect to the period January 1, 2017 through March 1, 2017, the Executive shall be entitled to such perquisites on a pro rata basis.  Without limiting the foregoing, with respect to the Company’s automobile, the Executive shall be entitled to  be reimbursed for the use of such automobile for the entire period of his employment to the same extent that he was entitled to such reimbursement prior to the date hereof and, subject to the provisions of Section 6.02(b) hereof, following the termination of his employment, his rights to the Company’s automobile shall be determined under the Company’s automobile policy as applicable to retiring executives.  

5

 

ARTICLE 3. 
Term and Termination

3.01    Term. The period of employment of the Executive under this Agreement (hereinafter the “Term”) shall begin on the date hereof and continue until the Executive’s Retirement, or, if earlier, the Executive’s death, the Executive’s Disability (as hereinafter defined) or a termination of the Executive’s employment by the Company, with “Cause” (as hereinafter defined). 

3.02    Termination For Cause.  The Company may terminate the Executive's employment hereunder at any time for Cause (as defined below), by delivering to the Executive a written notice of termination setting forth the date on which such termination is to be effective and specifying in reasonable detail the facts and circumstances claimed to provide a basis for the termination.  For purposes of this Agreement, the Company shall have “Cause” to terminate the Executive's employment hereunder if: (a) the Executive is indicted for a felony involving moral turpitude; or (b) the Executive engages in egregious acts or omissions which result or are likely to result in material injury to the Company or its reputation. 

3.03    Disability.  If, at any time prior to the date the Executive’s employment with the Company is terminated, it is determined by either the Company or the Executive that the Executive suffers from a Total and Permanent Disability, the party that makes the determination that the Executive suffers from a Total and Permanent Disability shall provide thirty (30) days written notice to the other party of such determination and, unless such determination is disputed by the receiving party, effective as of the last day of the calendar month in which such notice period expires, the Executive’s employment with the Company hereunder shall be deemed to be terminated.  For purposes of this Agreement, the Executive shall be deemed to suffer from a Total and Permanent Disability if the Executive is unable to perform the material and substantial duties of the Executive’s position due to any medically determinable physical or mental impairment that is reasonably expected to result in death or reasonably expected to last for a continuous period of not less than twelve (12) months.  

ARTICLE 4. 
Confidentiality; Non-Compete Provisions

4.01    Confidentiality.  During the period of the Executive's employment hereunder and for a period of three (3) years following a termination, for any reason whatsoever, of the Executive's employment hereunder, the Executive agrees that he will not, without the written consent of the Company’s Chief Executive Officer, disclose to any person (other than a person to whom disclosure is reasonably necessary or appropriate in connection with the performance by the Executive of his duties as an executive of the Company or to a person as required by any order or process of any court or regulatory agency) any confidential information obtained by the Executive while in the employ of the Company with respect to any management strategies, policies or techniques or with respect to any products, improvements, formulae, designs or styles, processes, customers, methods of distribution, or methods of manufacture of the Company or any of its subsidiaries; provided, however, that confidential information shall not include any 

6

 

information generally available to the public (other than as a result of unauthorized disclosure by the Executive) or any information of a type not otherwise considered confidential by persons engaged in the same business or a business similar to that conducted by the Company. 

4.02    Non-Compete.  During a period of three (3) years after the date of any termination of the Executive's employment hereunder, the Executive will not, directly or indirectly, own, manage, operate, control or participate in the ownership, management, operation or control of, or be connected as an officer, employee, partner, director or otherwise with, or have any financial interest in, or aid or assist anyone else in the conduct of, any business which competes with any “Company Business” (as defined in Section 4.03 below) in any geographic area where such Company Business is being conducted at the time of such termination.  Ownership by the Executive of 2% or less of the voting stock of any publicly held Company shall not constitute a violation of this Section 4.02. 

4.03    Company Business.  For purposes of Section 4.02 hereof “Company Business” shall mean any business conducted by the Company or by any group, division or subsidiary of the Company at the time of Executive’s termination provided, however, that:  (a)  a business shall not be deemed to be a Company Business unless: (i) 10% or more of the consolidated gross sales and operating revenues of the Company is derived from such business; or (ii) 10% or more of the consolidated assets of the Company are devoted to such business; and (b) a business which is conducted by the Company at the time of the Executive's termination and which subsequently is sold or discontinued by the Company shall not, subsequent to the date of such sale or discontinuance, be deemed to be a Company Business within the meaning of Section 4.02 hereof. 

4.04    Non-solicitation of Employees.  During a period of three (3) years after the date of any termination of the Executive’s employment hereunder, the Executive will not, solicit or offer to employ any individuals that are employees of the Company or any of its subsidiaries or wholly owned limited liability companies (including any executive officers of the Company) at the time the Executive’s employment is terminated; provided that, the limitation on the right of the Executive to solicit or offer to employ individuals as contained in this Section shall not apply to any such individuals who, either before or after the termination of the Executive’s employment hereunder, have terminated their employment with the Company, its subsidiaries and its wholly owned limited liability companies. 

ARTICLE 5. 
Death and Disability Benefits

5.01    Death Benefits.      If: (a) the Executive dies during the Transitional Services Payment Period; then (b) the Company shall continue to pay the beneficiary of the Executive (or, if none, the personal representative of the Executive’s estate) the remaining amount of any unpaid portion of the Transitional Services Salary Payment according to the same terms that such payments would have been made to the Executive; and (c) the Company shall pay the Executive’s spouse the Supplemental Payment provided for by Section 6.03(b) hereof as adjusted by Section 6.03(c) hereof; and (d) the Company shall cause the beneficiary of the Executive (or, 

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if none, the personal representative of the Executive’s estate) to be paid any benefits payable to the beneficiaries of the Executive on account of the Executive’s death as provided for by the terms of: (i) any life insurance policies maintained by the Company for the benefit of the Executive; (ii) the Company’s 401(k) plan; (iii) any cash payments the Executive may be entitled to receive as a result of his participation in the MSPP (including the Management Stock Purchase Plan that was established by the Company in connection with the Gibraltar Industries, Inc. 2005 Equity Incentive Plan (the “2005 Omnibus Plan”); (iv) any equity based incentive compensation awards granted to the Executive under the Omnibus Plan and the 2005 Omnibus Plan in connection with the LTIP; (v) any awards of restricted stock, restricted stock units, performance stock units, options or other equity type awards granted to the Executive under the terms of the Omnibus Plan, the 2005 Omnibus Plan or otherwise granted to the Executive; and (vi) any tax qualified retirement plans maintained by the Company.  

5.02    Disability Benefits.        If: (a) the Executive’s employment is terminated as a result of his suffering of a Total and Permanent Disability; then (b) the Company shall cause the Executive to be paid any benefits payable to the Executive on account of his suffering of a Total and Permanent Disability under the terms of: (i) any disability insurance policies maintained by the Company for the benefit of the Executive; (ii) the Company’s 401(k) plan; and (iii) any other tax qualified retirement plans maintained by the Company; and (c) subject to the provisions of Section 6.02(a) and (b) hereof: (i) the Company shall continue to pay the Executive the remaining amount of any unpaid portion of the Transitional Services Salary Payment; and (ii) in the event of the death of the Executive prior to payment of the remaining amount of the Transitional Services Salary Payment, following the Executive’s death, the Company shall pay the  beneficiary of the Executive (or, if none, the personal representative of the Executive’s estate) the remaining amount of any unpaid portion of the Transitional Services Salary Payment according to the same terms that such payments would have been made to the Executive; and (iii) the Company shall pay the Executive and, if applicable, the Executive’s spouse, the Supplemental Payment provided for by Section 6.03(b) hereof as adjusted, if applicable by Section 6.03(c) hereof; and (d) subject to the provisions of Section 6.02(a) and (b) hereof, the Company shall cause the Executive to be paid any benefits payable to the Executive on account of his suffering of a Total and Permanent Disability under the terms of: (i) the MSPP established under the Omnibus Plan and the 2005 Omnibus Plan; (ii) any equity based incentive compensation awards granted to the Executive under the Omnibus Plan and the 2005 Omnibus Plan in connection with the LTIP; and (iii) any awards of restricted stock, restricted stock units, performance stock units, options or other equity type awards granted to the Executive under the Omnibus Plan, the 2005 Omnibus Plan or otherwise granted to the Executive.  

ARTICLE 6. 
Severance and Effects of Termination

6.01    Effect of Termination for Cause.    In the event the Executive's employment with the Company is terminated by the Company for Cause (as permitted by Section 3.02 hereof) on the first date following the effective date of such termination that employees of the Company who are employed at the Company’s corporate headquarters are paid a regular installment of their base salary (any such date that employees of the Company who are employed at the 

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Company’s corporate headquarters are paid a regular installment of their base salary being hereinafter a “Pay Date”), the Company shall pay to the Executive, less applicable payroll and withholding taxes, any installment of his the Transitional Services Salary Payment which is accrued and unpaid as of the date the termination of the Executive’s employment becomes effective.  After the amount required to be paid to the Executive by the preceding sentence has been paid, the Company shall have no further obligation to pay the Executive any additional installments of the Transitional Services Salary Payment, compensation or bonuses and, except as otherwise provided in Section 6.03, no further obligation to pay to or provide the Executive any other benefits. For purposes of this Agreement, installments of the Executive’s Transitional Services Salary Payment shall not be deemed to be “accrued” if they are scheduled to be paid on a Pay Date that occurs after the date on which the termination of the Executive’s employment is effective. 

6.02    Effect of Termination Due to Disability or Retirement.  (a)  In the event that the Executive’s employment is terminated due to his Disability or his Retirement; provided that, within forty five (45) days following the date the Company delivers to the Executive a waiver and release in the form of Exhibit A attached hereto (hereinafter the “Waiver and Release”), the Executive executes and delivers such Waiver and Release to the Company and does not revoke the Waiver and Release as permitted by the terms of the Waiver and Release, in addition to any payments which the Executive may be entitled to receive in connection with his Disability or his Retirement under the terms of the tax qualified 401(k) plan maintained by the Company and Gibraltar Deferred Compensation Plan: (i) the Company shall pay to the Executive or issue shares of common stock of the Company to the Executive, as the case may be, the amount of the cash payments that the Executive is entitled to receive and the number of shares of common stock of the Company that the Executive is entitled to receive, each at the time and in the amount, determined, as applicable, under the terms of the MSPP, under the terms of any restricted stock unit awards issued to the Executive prior to the date hereof and under the terms of any performance stock unit awards issued to the Executive prior to the date hereof; and (ii) the Company shall, at the time that payments are made to other executives of the Company under the terms of the MICP for the calendar year in which the Executive’s employment is terminated, pay the Executive a pro rata portion of the amount of any cash payment the Executive would otherwise have been entitled to receive with respect to the MICP for the year in which the Executive’s employment with the Company is terminated, based on the date on which the Executive’s employment is terminated; and (iii) the Company shall recommence the payment of installments of  the Transitional Services Salary Payment beginning with the first Pay Date occurring after the period in which the Executive has the right to revoke the Waiver and Release has expired and such installments shall continue to be paid to the Executive through the end of the Transitional Services Payment Period; and (iv) the Company shall pay the Executive the Supplemental Payment provided for by Section 6.03(b) hereof.  In connection with the foregoing, during the period beginning on the date of the Executive’s Retirement or, if applicable, the date the Executive’s employment is terminated due to his Disability and ending on the first day following the last date that the Executive has the right to revoke the Waiver and Release, the installments of the Transitional Services Salary Payment and any payments which the Executive is entitled to receive under the terms of the Gibraltar Deferred Compensation Plan shall be suspended pending the receipt of the executed Waiver and Release from the Executive 

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and the expiration of the period within which the Waiver and Release is able to be revoked.  In addition, at the time the installments of the Transitional Services Salary Payment are re-commenced, the Company shall include with the first payment, the aggregate amount of the installments of the Transitional Services Salary Payment that were suspended, less applicable withholding taxes and, to the extent required by the terms of the Gibraltar Deferred Compensation Plan, the aggregate amount, if any, of payments the Executive was entitled to receive under the terms of the Gibraltar Deferred Compensation Plan that were suspended, less applicable withholding taxes.  In connection with the termination of the Executive’s employment due to his Retirement or, if applicable, his Disability, the Company shall promptly, but in no event more than twenty (20) days following the termination of the Executive’s employment  

(a)    In the event that the Executive fails or refuses to execute and return within the forty five (45) day period following the date the Company delivers the Waiver and Release to the Executive, or if the Executive revokes the Waiver and Release after it has been executed and delivered to the Company and prior to the expiration of the period within which the Waiver and Release may be revoked: (i) the Executive shall not be entitled to issuance of any shares of common stock of the Company; and (ii) the Executive shall not be entitled to payment of any amount from the Company, including, but not limited to, payments otherwise due under the terms of any restricted stock unit awards issued to the Executive, payments otherwise due under the terms of any performance stock units issued to the Executive, the Transitional Services Salary Payment, any amount which the Executive would otherwise have been entitled to receive under the terms of the MICP or any amount which the Executive would be entitled to receive under the terms of the Gibraltar Deferred Compensation Plan; and (iii) the Executive shall not be entitled to receive the Supplemental Payment provided for by Section 6.03(b) hereof; and (iv) the Executive shall not be entitled to receive any perquisites he would otherwise be entitled to receive.    

(b)     After the amounts required to be paid to the Executive by Section 6.02(a) have been paid, the Company shall have no further obligation to pay the Executive any additional compensation or bonuses and, except as otherwise provided in Section 6.03 hereof, no further obligation to pay to or to provide the Executive any other benefits. 

6.03    Obligations Which Survive Termination.  (a)  Nothing in this Agreement shall be deemed to limit the Executive's rights to receive or the obligation of the Company to pay or provide for the Executive and his beneficiaries any benefits accrued by the Executive at any time under the terms of the Company’s 401(k) plan.  In addition, nothing in this Agreement shall be deemed to limit the right of the Executive or the Executive’s spouse to receive continuation coverage under the applicable provisions of the Consolidated Omnibus Budget Reconciliation Act (“COBRA”). 

(a)    In the event the Executive’s employment with the Company is terminated due to his Retirement or, if earlier, due to his suffering of a Total and Permanent Disability, for each calendar month beginning with the month of March, 2017, in the case of the Executive’s Retirement, or, in the case the Executive’s employment is terminated due to his suffering of a Total and Permanent Disability, beginning with the first calendar month following the date the 

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Executive’s employment is terminated due to his suffering of a Total and Permanent Disability, and ending with the month of December, 2017, the Executive shall, subject to the following provisions of this Section 6.03(b), be entitled to payment from the Company of the amount by which the monthly premium payable by the Executive to receive COBRA continuation coverage with respect to the group medical insurance coverage which was in effect for the Executive immediately prior to the termination of his employment exceeds the monthly amount which the Executive was required to pay to the Company to maintain such group medical insurance coverage for the calendar month immediately preceding the date the Executive’s employment is terminated (such amount, adjusted, if applicable, pursuant to Section 6.03(c) below in the case of the death of the Executive, being hereinafter the “Monthly Supplemental Payment” and the aggregate amount of the Monthly Supplemental Payments which the Executive would be entitled to receive from the Company for the period described in this sentence being hereinafter the “Supplemental Payment”).  In the event that the Executive’s employment is terminated due to his death, beginning with the first calendar month following the calendar month in which the Executive’s death occurs, and continuing through the month of December, 2017, the Company shall pay to the Executive’s spouse, an amount equal to the Supplemental payment, adjusted in the manner provided for by Section 6.03(c) below.  In the event that he Executive fails or refuses to execute and return the Waiver and Release to the Company within the forty five (45) day period following the date the Company delivers the Waiver and Release to the Executive, or if the Executive revokes the Waiver and Release after it has been executed and delivered to the Company and prior to the expiration of the period within which the Waiver and Release may be revoked, the Executive shall not be entitled to receive any Monthly Supplemental Payment or the Supplemental Payment provided for by this Section 6.03(b).  In the event that the Executive executes and delivers the Waiver and Release to the Company within the forty five (45) day period following the date the Company delivers the Waiver and Release to the Executive and does not revoke the Waiver and Release, in the first calendar month following the end of the six (6) month period which begins on the effective date of the termination of the Executive’s employment or, if earlier, in the first calendar month following the date of  death of the Executive (such calendar month being hereinafter the “Supplemental Payment Commencement Month”) the Company shall pay to the Executive (or, in the case of the Executive’s death, to the Executive’s spouse), in one lump sum payment, an amount equal to the Monthly Supplemental Payment multiplied by the sum of one (1) and the number of calendar months which elapse during the period beginning with March, 2017 or, if earlier, the first calendar month following the calendar month in which the Executive’s death occurs and ending with the calendar month preceding the Supplemental Payment Commencement Month.  Thereafter, for each calendar month during the period beginning with the first calendar month following the Supplemental Payment Commencement Month and ending with the month of December, 2017, the Company shall pay to the Executive (or, in the case of the Executive’s death, to the Executive’s Spouse), in one lump sum payment, an amount equal to the Monthly Supplemental Payment. 

(b)    In the event that: (i) the Executive’s employment is terminated as a result of his death; or (ii) the death of the Executive occurs after the termination of the Executive’s employment but prior to the Supplemental Payment Commencement Month; or (iii) after the Supplemental Payment Commencement Month, the amount of each Monthly Supplemental Payment which is payable following the death of the Executive shall be reduced to reflect any 

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reduction in the monthly amount of the premium payable to provide “employee + 1” coverage under COBRA to the Executive and the Executive’s spouse as compared to the monthly amount of the premium payable to provide “single” coverage under COBRA to the Executive’s spouse.  

ARTICLE 7. 
Miscellaneous

7.01    Amendments.  This Agreement may not be amended or modified orally, and no provision hereof may be waived, except in a writing signed by the parties hereto. 

7.02    Assignment.  This Agreement cannot be assigned by either party hereto except with the written consent of the other. 

7.03    Binding Effect.  This Agreement shall be binding upon and inure to the benefit of the personal representatives and successors in interest of the Executive and any successors in interest of the Company. 

7.04    Applicable Law.  This Agreement shall be governed and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed wholly within such State except with respect to the internal affairs of the Company and its respective stockholders, which shall be governed by the General Company Law of the State of Delaware. 

7.05    Notices.  All notices and other communications given pursuant to this Agreement shall be deemed to have been properly given and received: (a) if delivered in person, on the date delivered to the Executive or, in the case of the Company,  on the date delivered to the Senior Vice President – Human Resources; (b) if delivered by mail, five (5) business days following the deposit of any such notice in the U.S. mail system for mailing by certified mail or registered mail, postage prepaid, addressed to the Executive at the address first above written or if to the Company, at its address first above written, attention Senior Vice President – Human Resources; and (c) if delivered by nationally recognized overnight delivery service, one (1) business day following the date that such notice is deposited with such nationally recognized overnight delivery service postage prepaid, addressed to the Executive at the address first above written or if to the Company, at its address first above written, attention Senior Vice President – Human Resources.  From time to time, any party hereto may designate by written notice any other address or party to which such notice or communication or copies thereof shall be sent. 

7.06    Severability of Provisions.  In case any one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby and this Agreement shall be interpreted as if such invalid, illegal or unenforceable provision was not contained herein. 

7.07    409A Savings Clause.  (a)    Payment of the Transitional Services Salary Payment is intended to satisfy the provisions of Section 409A of the Internal Revenue Code of 1986, as amended (hereinafter “Section 409A”) as payments made at a fixed time pursuant to a fixed 

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schedule.  Any other payments contemplated by this Agreement that may be excluded from Section 409A either as separation pay due to an involuntary separation from service or as a short-term deferral shall be excluded from Section 409A to the maximum extent possible. For purposes of Section 409A, each installment payment provided under this Agreement shall be treated as a separate payment. All provisions shall, to the maximum extent possible, be construed and interpreted in a manner which will cause such provisions to be implemented in a manner which complies with the applicable requirements of Section 409A and the regulations promulgated thereunder so as to avoid subjecting the Executive to taxation under Section 409A(a)(i)(A) of the Internal Revenue Code of 1986, as amended.  Notwithstanding the provisions of Section 6.02(a)(iii), in the event that the Executive’s employment is terminated due to Disability and the date the termination is effective occurs on or after October 31, 2016, payment of the suspended Transitional Services Salary Payment shall not begin until the later of the first Pay Date occurring in 2017 and the first Pay Date occurring after the last date on which the Waiver and Release is permitted to be revoked.   

(a)    Any payments to be made under this Agreement which is conditioned upon a termination of employment shall only be made if such termination of employment constitutes a "separation from service" under Section 409A.”  Notwithstanding any other provision of this Agreement, if at the time of the Executive's termination of employment, he is a "specified employee", determined in accordance with Section 409A, any payments and benefits provided under this Agreement that are conditioned upon a separation from service shall not be paid until the first payroll date to occur following the six-month anniversary of the Executive's termination date ("Specified Employee Payment Date"). The aggregate amount of any payments that would otherwise have been made during such six-month period shall be paid in a lump sum on the Specified Employee Payment Date without interest and thereafter, any remaining payments shall be paid without delay in accordance with their original schedule. If the Executive dies during the six-month period, any delayed payments shall be paid to the Executive's estate in a lump sum upon the Executive's death.

(b)    To the extent required by Section 409A, each reimbursement or in-kind benefit provided under this Agreement shall be provided in accordance with the following:

(i)    the amount of expenses eligible for reimbursement, or in-kind benefits provided, during each calendar year cannot affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year.

(ii)    any reimbursement of an eligible expense shall be paid to the Executive on or before the last day of the calendar year following the calendar year in which the expense was incurred; and

(iii)    any right to reimbursements or in-kind benefits under this Agreement shall not be subject to liquidation or exchange for another benefit. 

7.08    Headings.    The headings of the Sections and Articles of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the 

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meaning or interpretation of this Agreement. 
 
IN WITNESS WHEREOF, the Executive and the Company have caused this Agreement to be executed as of the day and year first above written. 

GIBRALTAR INDUSTRIES, INC.
By: /s/ Frank G. Heard                /s/ Paul M. Murray
Name: Frank G. Heard                Paul M. Murray     
Title: President & Chief Executive Officer
 

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EXHIBIT A

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WAIVER AND RELEASE AGREEMENT

This Waiver and Release Agreement (“Agreement”) is made as of this _____ day of _____________, 201_, by Paul M. Murray, an individual residing at ___________________ (“Mr. Murray”). 

RECITALS:

Mr. Murray was employed by Gibraltar Industries, Inc., a Delaware corporation with offices at 3556 Lake Shore Road, Buffalo, New York 14219 (the “Company”) as its Senior Vice-President – Human Resources through March 28, 2016 and thereafter as Senior Vice-President – Administration through ___________, 201_.  On _________, 201_, Mr. Murray retired from his employment with the Company.  In connection with the transitioning by Mr. Murray from his role as Senior Vice-President – Human Resources to his role as Senior Vice-President – Administration and the transitional services provided by Mr. Murray in connection with his transitioning from such employment roles, the Company has, subject to the terms and conditions of a Transitional Services Employment Agreement made by and between Mr. Murray and the Company effective as of March 28, 2016 (the “Transitional Services Employment Agreement”), agreed to continue to pay Mr. Murray his base salary and to provide Mr. Murray his group medical insurance coverage through December 31, 2017.

In connection with the Company’s agreement to continue to pay Mr. Murray his base salary and to continue to provide Mr. Murray his group medical insurance coverage, the Company has requested that Mr. Murray provide the Company a waiver and release.  

CONSIDERATION:

NOW, THEREFORE, in consideration of the Company’s agreement to continue payment to Mr. Murray of his base salary and the Company’s agreement to continue to provide Mr. Murray his group medical insurance coverage and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Mr. Murray hereby agrees as follows:

1.Retirement.   Mr. Murray hereby confirms his retirement from his employment with the Company effective as of ________________, 201_.  Mr. Murray hereby further confirms his resignation, effective as of March 28, 2016, from his position as Senior Vice-President – Human Resources for the Company and from all positions or offices he held as of such date as an elected officer of any subsidiary or affiliated limited liability company of the Company.  Mr. Murray hereby further confirms that, effective as of the date of his retirement set forth above in this Section 1, he shall be deemed to have resigned from any position he may hold with the Company or any of the Company’s Affiliates (as hereinafter defined), whether as an officer, Director, employee or member of any committee, board or administrative body.  Following the date hereof, Mr. Murray agrees to execute and deliver any documents or instruments which may reasonably be requested by the Company to formalize his resignations provided for by this Section 1, effective as of the date of his retirement set forth above.  For purposes of this Agreement, the term “Affiliates” means each corporation, limited liability 

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company or other entity which is directly or indirectly controlled by the Company.  For purposes of the preceding sentence, the phrase “controlled by the Company” means that the Company possesses, directly or indirectly, the power to direct or cause the direction of the management policies of such corporation, limited liability company or other entity, whether through the ownership of securities, the ownership of partnership or limited liability company interests, control over the Board of Directors or other governing body of such corporation, limited liability company or other entity, by contract or otherwise.   

2.Waiver and Complete Release.   (a)    Mr. Murray, for himself and his heirs, successors and assigns, in consideration of the sums and benefits to which he is entitled under the terms of the Transitional Services Employment Agreement does hereby forever discharge and release the Company and each of its Affiliates and each of their respective agents, officers, shareholders, directors, employees, successors and assigns, from any and all claims, demands, causes of action, damages, complaints, expenses and compensation which he now has or may in the future have, or which any person or entity may have on his behalf, on account of or arising out of any matter or thing which has happened, developed or occurred before the date hereof, known or unknown, including, without limitation, all claims, demands, causes of action, damages, complaints, expenses and compensation arising from: (i) Mr. Murray’s employment with the Company; or (ii) any and all officerships, positions and authorities held by Mr. Murray with the Company and any of its Affiliates; or (iii) the resignation of Mr. Murray from his position as Senior Vice-President – Human Resources; or (iv) the termination of Mr. Murray’s employment with the Company in connection with his retirement on the date set forth above; or (v) the termination of any officerships, positions and authorities held by Mr. Murray with the Company and any of its Affiliates.  Mr. Murray hereby waives any and all such claims, causes of action, demands, damages, complaints, expenses and compensation of any type or description that he has or might have against the Company and each of its Affiliates and each of their respective agents, officers, shareholders, directors, employees, successors and assigns.  This release, discharge and waiver includes, but is not limited to, any claims, demands, causes of action, damages, complaints, expenses and compensation (collectively called "claims") arising out of or under the following:

(i)The Federal Age Discrimination in Employment Act of 1967, as amended, which, among other things, prohibits discrimination in employment on account of a person's age.

(ii)The Federal Title VII of the Civil Rights Act of 1964, as amended, which, among other things, prohibits discrimination in employment on account of a person's race, color, religion, sex, or national origin.

(iii)The Federal Employee Retirement Income Security Act of 1974, as amended, which, among other things, regulates pension and welfare plans and, which, among other things, prohibits interference with individual rights protected under the statute.

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(iv)The Americans With Disabilities Act, as amended, which, among other things, prohibits discrimination relating to employment on account of a person's handicap or disability.

(v)The Rehabilitation Act of 1973, as amended (applicable to Federal Government contractors and subcontractors), which, among other things, requires affirmative action for and prohibits discrimination against individuals by reason of handicap.

(vi)The New York State Human Rights Law, as amended, which, among other things, prohibits discrimination in employment on account of a person's age, race, creed, color, religion, national origin, sex, disability, arrest record, marital status, status as an ex-offender, genetic predisposition or carrier status.

(vii)Section 201-d of the New York State Labor Law, as amended, which, among other things, prohibits discrimination on account of a person's political activities outside of working hours, a person's legal use of consumable products, an individual's legal recreational activities outside of working hours and an individual's membership in a labor organization or exercise of rights under the National Labor Relations Act, as amended.

(viii)Section 740 of the New York State Labor Law, as amended, which, among other things, prohibits retaliatory action against an employee because of whistle-blower activity.

(ix)Any Federal, State or local law or rule, regulation, executive order or guideline, including, but not limited to, those laws specifically described above.

(x)All constitutional violations, defamation, wrongful discharge, attorney fees, costs, breach of contract, breach of implied contract, negligence of any kind, including, but not limited to, negligent performance of contractual obligations, breach of the covenant of good faith and fair dealing, tortious interference with business and/or contractual relationship (or prospective relationship), violation of the penal statutes, retaliatory discharge, whistle-blower's claims, estoppel of any kind, loss of consortium, exemplary damages, negligent and/or intentional infliction of mental or emotional distress, discrimination, harassment and/or retaliation or wrongful action which has been or could have been alleged under the common law, any civil rights or equal opportunity employment law, or any other federal, state or local statute, ordinance, regulation or rule.

(xi)Any oral or written contract of employment or other engagement or authority with or on behalf of the Company or any of its Affiliates, express or implied, or any oral or written agreement, express or implied, purporting to establish terms and conditions of employment or other engagement or authority or addressing termination of same.

(a)Mr. Murray specifically understands and agrees that the termination of his employment and all positions and authorities with or on behalf of the Company and its Affiliates 

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does not violate or disregard any oral or written promise or agreement, of any nature whatsoever, express or implied.  If any contracts or agreements exist concerning the employment of Mr. Murray by the Company, concerning other positions or authorities held by Mr. Murray with or on behalf of the Company or concerning the terms and conditions of such employment or other positions or authorities or the termination of same, whether oral or written, express or implied, such contracts or agreements are hereby terminated and are null and void, effective as of the date hereof.

(b)The waiver and release contained in this Section 2 includes, but is not limited to, a waiver, discharge and release by Mr. Murray of each of the Company, the Company’s Affiliates and each of their respective agents, officers, shareholders, directors, employees, successors and assigns, from any damages or relief of whatever nature or description, including, but not limited to, compensatory and punitive damages and equitable forms of relief, as well as any claim for attorneys fees or costs, which may arise from any of the claims waived, discharged or released.

(c)Mr. Murray agrees that the waiver and release contained in this Section 2 may be enforced in any federal, state or local court and before any federal, state or local administrative agency or body.

(d)Subject to the provisions of Section 3 hereof, Mr. Murray agrees not to commence or continue any action or proceeding in any federal, state or local court, concerning his employment with the Company or officerships, positions or authorities held with the Company or Mr. Murray’s separation from such employment, officerships, positions or authorities, or anything else included in the waiver and release contained in this Section 2.

3.Preservation of Certain Rights.    (a)   Notwithstanding the provisions of Section 2 above, nothing in this Agreement shall be deemed or construed to constitute a waiver or release by Mr. Murray of: (i) any rights he has to payment of any amounts due to him in connection with his retirement under the terms of the Transitional Services Employment Agreement; (ii) any rights he has to payment of any amounts due him under the terms of the Gibraltar Deferred Compensation Plan; and (iii) any rights to indemnification he has as provided under the Certificate of Incorporation of the Company and under applicable law as in effect as of the date of his retirement set forth above. 

(a)    In addition to the rights preserved by Mr. Murray as described in Section 3(a) above and notwithstanding anything to the contrary contained in this Agreement, Mr. Murray expressly reserves all of the following rights he has (as such rights have been confirmed in the Transitional Services Employment Agreement): (i) the right to continue to receive payment of his base salary through December 31, 2017, in substantially equal installments in accordance with the payroll policies of the Company applicable to salaried employees of the Company employed at the Company’s Buffalo, New York, corporate headquarters; and (ii) the right, as provided for by the Transitional Services Employment Agreement, to receive the Supplemental Payment 

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(b)    In addition to the rights preserved by Mr. Murray as described in Sections 3(a) and 3(b) above and notwithstanding anything to the contrary contained in this Agreement, Mr. Murray expressly reserves all rights he has to payment of all amounts which he is entitled to receive pursuant to the terms of the Company’s Management Stock Purchase Plan  as amended and restated effective as of June 27, 2012 (the “ 2012 MSPP”) and the Company’s Management Stock Purchase Plan as adopted effective May 7, 2015 (the 2015 MSPP”), including, but not limited to, rights to payment for amounts deferred by Mr. Murray and rights to payment of amounts attributable to matching restricted stock units allocated by the Company to Mr. Murray based on his deferrals prior to his retirement (all amounts which Mr. Murray is entitled to receive under the terms of the 2012 MSPP and the 2015 MSPP, including amounts attributable to Mr. Murray’s deferrals and amounts attributable to matching restricted units allocated by the Company to Mr. Murray being hereinafter the being hereinafter the “MSPP Payment Entitlement”).  For the avoidance of doubt, the rights reserved by Mr. Murray pursuant to this Section 3(c) includes and is intended to include the right to receive the MSPP Payment Entitlement and the right to bring legal proceedings against the Company to enforce his right to receive the MSPP Payment Entitlement. 

(c)    In addition to the rights preserved by Mr. Murray as described in Sections 3(a), 3(b) and 3(c) above and notwithstanding anything to the contrary contained in this Agreement, Mr. Murray expressly reserves all rights he has: (i) to payment of all amounts, if any, which he is entitled to receive pursuant to the terms of  any performance stock unit awards he has received prior to the date hereof pursuant to the Gibraltar Industries, Inc. 2005 Equity Incentive Plan (hereinafter the “2005 Omnibus Plan”) and pursuant to the Gibraltar Industries, Inc. 2015 Equity Incentive Plan (the “2015 Omnibus Plan”); and (ii) to issuance of any shares of common stock of the Company pursuant to the terms of any restricted stock unit awards granted to Mr. Murray prior to the date hereof pursuant to the terms of the 2005 Omnibus Plan and pursuant to the 2015 Omnibus Plan (Mr. Murray’s rights to payment for such performance stock units and Mr. Murray’s rights to issuance of shares of common stock of the Company for such restricted stock units being hereinafter the “Equity Incentive Award Entitlement”).  For the avoidance of doubt, the rights reserved by Mr. Murray pursuant to this Section 3(d) includes and is intended to include the right to receive the Equity Incentive Award Entitlement and the right to bring legal proceedings against the Company to enforce his right to receive the Equity Incentive Award Entitlement.  

(d)    Notwithstanding the provisions of Section 2(e) above, Mr. Murray shall not be prohibited from filing a charge or complaint against the Company or any of its Affiliates with the U.S. Equal Employment Opportunity Commission (the “EEOC”) or from participating in any investigation or proceeding which may be brought by the EEOC or any other governmental agency or authority against the Company or any of its Affiliates; provided that Mr. Murray shall not be permitted to participate in or receive any monetary damages or assessments made by the EEOC or any other such governmental agency or authority against the Company or any of its Affiliates.  Finally, the provisions of Section 2(e) above shall not prohibit Mr. Murray from challenging the validity of the waiver and release of claims Mr. Murray may have under Section 2(a)(i) above. 

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4.Restrictive Covenants.   

5.Non-Disparagement.   Mr. Murray shall not disparage the Company or any of its Affiliates, their products or services, or their shareholders, officers, directors or employees, in any way orally or in writing. 

6.No Disability.   Mr. Murray acknowledges that, to the best of his knowledge, he has not sustained any disabling personal injury and/or occupational disease which has resulted in a loss of wage earning capacity during his employment with the Company or due to the separation from that employment and that he has no personal injury and/or occupational disease which has been contributed to, or aggravated or accelerated in a significant manner by his employment with the Company and/or the separation from that employment.

7.Advice of Counsel.   Mr. Murray represents and warrants that the Company has encouraged and advised Mr. Murray, prior to signing this Agreement, to consult with an attorney of Mr. Murray’s choosing concerning all of the terms of this Agreement and Mr. Murray’s retirement from employment with the Company.

8.Employee Review and Delivery of Agreement.  (a) Mr. Murray represents and warrants that the Company has given Mr. Murray a reasonable period of time, of at least twenty-one (21) days, for Mr. Murray to consider all the terms of this Agreement and for the purpose of consulting with an attorney if Mr. Murray so chose.  A copy of this Agreement was presented to Mr. Murray, in person on ____________ 201_.  If this Agreement has been executed by Mr. Murray prior to the end of the twenty-one (21) day period beginning on such date, Mr. Murray represents that he has freely and willingly elected to do so.

(a)    Mr. Murray represents and warrants that he has carefully read each and every provision of this Agreement and that he fully understands all of the terms and conditions of this Agreement. 

(b)    Mr. Murray represents and warrants that he enters into this Agreement voluntarily, of his own free will, without any pressure or coercion from any person or entity, including, but not limited to, the Company, any of the Company’s Affiliates or any of their representatives.

9.Employee Revocation Rights.       This Agreement may be revoked by Mr. Murray within seven (7) calendar days after the date this Agreement is signed by Mr. Murray, by giving written notice of revocation to the Company’s Senior Vice-President of Human Resources.  This Agreement shall not become effective or enforceable until the revocation period has expired.  

10.Interpretation.   Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.  In case any one or 

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more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein shall not in any way be affected or impaired thereby and this Agreement shall be interpreted as if such invalid, illegal or unenforceable provision was not contained herein.

11.Acknowledgments.   MR. MURRAY HEREBY EXPRESSLY WARRANTS AND REPRESENTS THAT, BEFORE ENTERING INTO THIS AGREEMENT, HE HAS RECEIVED A REASONABLE PERIOD OF TIME WITHIN WHICH TO CONSIDER ALL OF THE PROVISIONS CONTAINED IN THIS AGREEMENT, THAT HE HAS FULLY READ, INFORMED HIMSELF OF AND UNDERSTANDS ALL THE TERMS, CONTENTS, CONDITIONS AND EFFECTS OF ALL PROVISIONS OF THIS AGREEMENT, AND THAT HE CONSIDERS ALL SUCH PROVISIONS TO BE SATISFACTORY.

MR. MURRAY FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT NO PROMISE OR REPRESENTATION OF ANY KIND HAS BEEN MADE, EXCEPT THOSE EXPRESSLY STATED IN THIS AGREEMENT.

MR. MURRAY FURTHER EXPRESSLY WARRANTS AND REPRESENTS THAT HE ENTERS INTO THIS AGREEMENT KNOWINGLY AND VOLUNTARILY. 
 
12.Binding Effect.   This Agreement shall be binding upon and inure to the benefit of the personal representatives and successors in interest of Mr. Murray and shall be binding upon and inure to the benefit of any successors in interest of the Company.

13.Applicable Law.   This Agreement shall be governed and construed in accordance with the internal laws of the State of New York without reference to its conflicts of laws principles.

14.Notices.   All notices and other communications given pursuant to this Agreement shall be deemed to have been properly given or delivered and received, when delivered if delivered by hand in person, or, if mailed, five (5) business days following the deposit of any such notice in the U.S. mail system by certified mail or registered mail postage prepaid, addressed to Mr. Murray at the address first above written, or if to the Company, to the attention of the Company’s Chief Executive Officer at the address of the Company first above written.  From time to time, any party hereto may designate by written notice any other address or party to which such notice or communication or copies thereof shall be sent.

15.Headings.   The headings of the Sections of this Agreement are inserted for convenience only and shall not constitute a part hereof or affect in any way the meaning or interpretation of this Agreement.

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[Remainder of Page Intentionally Left Blank; Signature Page Follows]

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

GIBRALTAR INDUSTRIES, INC.

By: _________________________________

_____________________________________
PAUL M. MURRAY

Signature Page to Waiver and Release

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