Document:

Exhibit 10.4

 

PURCHASE AND SALE AGREEMENT

 

THIS PURCHASE AND
SALE AGREEMENT (this "Agreement") is made and entered into as of June 14, 2016 ("Effective Date"),
by and between STORE CAPITAL ACQUISITIONS, LLC, a Delaware limited liability company ("Purchaser") and MARQUIS
REAL ESTATE HOLDINGS, LLC, a Delaware limited liability company ("Seller"). Except as otherwise expressly defined herein,
capitalized terms will have the meanings set forth on Exhibit A attached hereto and incorporated herein by this reference.
For and in consideration of the mutual covenants and promises hereinafter set forth, the parties hereby mutually covenant and
agree as follows:

 

ARTICLE I

 

PURCHASE OF PROPERTIES

 

Section 1.01. Agreement
to Purchase. Purchaser agrees to purchase, and Seller agrees to sell, in accordance with the terms, conditions and stipulations
set forth in this Agreement (the "Transaction"), all of Seller's right, title and interest in and to (a) the
parcel or parcels of real property, as more particularly described on Exhibit B attached hereto (collectively, the "Real
Property"); (b) all mineral, oil and gas rights, water rights, sewer rights and other utility rights allocated to the
Real Property; and (c) all easements, licenses, privileges and other property interests belonging or appurtenant to the Real Property
(all of the foregoing items in clauses (a) through (c) above, now or hereafter existing, individually, a "Property",
and collectively, the "Properties"). Purchaser and Seller acknowledge and agree that this Agreement and
the terms "Properties" shall not include (1) any and all improvements on the Real Property; or (ii) any and all fixtures
related to the improvements on the Real Property (collectively, the "Improvements"); or (iii) any personal property
of Seller, including without limitation, equipment, machinery, tools and inventory. The parties acknowledge and agree that (i)
fee title to the Calhoun Property is currently owned by a third party ("Current Owner"); (ii) simultaneously
with this Transaction, Seller will exercise its option to purchase the Calhoun Property from the Current Owner; (iii) the obligations
of Seller under this Agreement with respect to the Calhoun Property may be satisfied by Current Owner; and (iv) unless otherwise
mutually agreed by Seller and Purchaser, Seller shall designate or nominate Purchaser to take title to the Calhoun Property simultaneous
with this Closing.

 

Section 1.02. Purchase
Price. The aggregate purchase price to be paid by Purchaser to Seller for the Properties is $644,479.00 (the "Purchase
Price"). The Purchase Price shall be paid by Purchaser in immediately available federal funds at Closing.

 

Section 1.03. Lease
of Properties. On or before the Closing Date, Lessee and Purchaser shall agree upon the Master Lease Agreement, pursuant to
which Purchaser shall lease the Properties to Lessee, at the rent and pursuant to the terms and conditions contained therein (the
"Lease"). At Closing, Lessee will enter into a separate lease (in form and substance substantially similar to
the Lease) (the "Property and Improvements Lease"), whereby Lessee will sublease (i) the Properties and the Improvements
to Guarantor (the "Sublessee"). The monthly rent due under the Property and Improvements Lease shall in the aggregate
be an amount in excess of the monthly payments due under the Lease and the Loan Documents, which amount shall be agreed upon by
Lessee and Purchaser.

 

 

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Section 1.04. Mortgage
Loan. At Closing, Purchaser or an Affiliate of Purchaser (the "Lender") shall fund a mortgage loan to Lessee
in the aggregate amount of $9,355,521.00 (the "Mortgage Loan") pursuant to the terms and conditions of the Loan
Agreement. The Mortgage Loan will be (i) evidenced by customary financing documents, including without limitation, the Loan Agreement,
a Promissory Note, Mortgages or Deeds of Trust, an Assignment of Leases and Rents, Pledge Agreement and such other documents as
are reasonably requested by Purchaser, (ii) guaranteed by Guarantor, (iii) secured by a first priority lien on the Improvements,
and (iv) secured by a pledge agreement relating to 100% of the ownership interests in Lessee (collectively, the "Loan
Documents"), with all said Loan Documents to be in form and substance reasonably satisfactory to Lender and Lessee.

 

Section 1.05. Prorations.
In view of the subsequent lease of the Properties to Lessee pursuant to the Lease and Lessee's obligations thereunder, there
shall be no proration of insurance, taxes, special assessments, utilities or any other costs related to the Properties between
Seller and Purchaser at Closing. All real and personal property and other applicable taxes and assessments, utilities and any
other charges relating to the Properties which are due and payable on or prior to the Closing Date shall be paid by Seller at
or prior to Closing, and all other taxes and assessments shall be paid by Lessee in accordance with the terms of the Lease.

 

Section 1.06. Transaction
Costs. Subject to Section 6.02(a) below, whether or not the Transaction closes, (a) Purchaser shall pay up to $100,000 (the
"Purchaser Cap") towards all Transaction Costs incurred by Seller and Purchaser in connection with the Transaction,
(b) Seller shall be responsible for the payment of all Transaction Costs in excess of the Purchaser Cap, and (c) Seller and Purchaser
shall each be responsible for the payment of the fees and expenses of their respective legal counsel, accountants and other professional
advisers ("Professional Fees").

 

The provisions of this Section shall survive
Closing or termination of this Agreement for any reason.

 

ARTICLE II

 

DUE DILIGENCE

 

Section 2.01. Title Insurance.

 

(a)Title Commitments and Title Policies.
Purchaser shall order owner's title insurance commitments (collectively, the "Title Commitments") with respect
to the Properties issued by the Title Company, for ALTA Owner's Extended Coverage Title Insurance Policies, together with any
endorsements, that Purchaser may reasonably require, (ii) ALTA Mortgagee's Extended Coverage Title Insurance Policies with respect
to Purchaser's financing of the acquisition of the Properties, and (iii) ALTA Mortgagee's Extended Coverage Title Insurance Policies
with respect to the Mortgage Loan, each together with any endorsements, that Purchaser or its lender may require (collectively,
the "Title Policies"). Purchaser shall cause copies of the Title Commitments to be delivered to Seller. All costs
related to the Title Policies, escrow fees and other closing costs shall be included in Transaction Costs, payable as set forth
in Section 1.06.

 

 

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(b)Title
Company. The Title Company is hereby employed by the parties to act as escrow agent in connection with this Transaction.
This Agreement shall be used as instructions to the Title Company, as escrow agent, which may provide its standard conditions
of acceptance of escrow; provided, however, that in the event of any inconsistency between such standard conditions of
acceptance and the terms of this Agreement, the terms of this Agreement shall prevail. The Title Company's receipt of this Agreement
and the opening of an escrow pursuant to this Agreement shall be deemed to constitute conclusive evidence of the Title Company's
agreement to be bound by the terms and conditions of this Agreement pertaining to the Title Company.

 

(c)Title
Company Actions. The Title Company is authorized to pay, from any funds held by it for each party's respective
credit, all amounts necessary to procure the delivery of any documents and to pay, on behalf of Purchaser and Seller, all charges
and obligations payable by them hereunder, respectively. Seller and Purchaser will pay all charges payable by them to the Title
Company. The Title Company shall not cause the Transaction to close unless and until it has received written instructions from
Purchaser and Seller to do so. The Title Company is authorized, in the event any conflicting demand is made upon it concerning
these instructions or the escrow, at its election, to hold any documents and/or funds deposited hereunder until an action shall
be brought in a court of competent jurisdiction to determine the rights of Seller and Purchaser or to interplead such documents
and/or funds in an action brought in any such court. Deposit by the Title Company of such documents and funds, after deducting
therefrom its reasonable charges, expenses and attorneys' fees incurred in connection with any such court action, shall relieve
the Title Company of all further liability and responsibility for such documents and funds.

 

(d)Title
Objections.

 

(i)Within seven (7)
days after the Purchaser's receipt of both a Title Commitment and the related Survey for each Property, Purchaser shall
notify Seller in writing of Purchaser's objection to any exceptions or other title matters shown on any Title Commitment or the
related Survey (each, a "Title Objection"). If any Title Objection is not removed or resolved by Seller to Purchaser's
satisfaction at least five (5) days prior to the Closing Date, then Purchaser shall have the option, as its sole remedy, upon written
notice to Seller on or before the Closing Date, to (A) terminate this Agreement, in which event neither party will have any further
obligations or liability hereunder, except for those obligations expressly stated to survive such termination; or (B) remove the
applicable Property or Properties from the Properties to be conveyed hereunder, with an appropriate adjustment to the Purchase
Price, and proceed to close with respect to the remaining Properties.

 

(ii)If
any supplement to a Title Commitment or the related Survey discloses any additional title defects which were not created by or
with the consent of Purchaser, and which are not acceptable to Purchaser, Purchaser shall notify Seller in writing of its objection
thereto (each, an "Additional Title Objection") within five (5) days following receipt of such supplement or
revision. If any Additional Title Objection is not removed or resolved by Seller to Purchaser's satisfaction at least five (5)
days prior to the Closing Date, then Purchaser shall have the option, as its sole remedy, to (A) terminate this Agreement upon
written notice to Seller on or before the Closing Date, in which event neither party will have any further obligations or liability
hereunder, except for those obligations expressly stated to survive such termination; or (B) remove the applicable Property or
Properties from the Properties to be conveyed hereunder, with an appropriate adjustment to the Purchase Price, and proceed to
close with respect to the remaining Properties.

 

 

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(iii)Purchaser's failure to timely deliver a Title Objection
or an Additional Title Objection shall be deemed Purchaser's acceptance of the matters disclosed by the Title Commitments and the
related Surveys. If Purchaser does not terminate this Agreement by reason of any Title Objection or Additional Title Objection,
as provided in this Section 2.01, then such Title Objection or Additional Title Objection shall be deemed waived and approved by
Purchaser and shall thereafter be deemed a Permitted Encumbrance.

 

Section 2.02. Seller
Documents. With reasonable promptness, but in no event later than three (3) Business Days following the Effective Date, Seller
shall deliver to Purchaser the following items to the extent the same exist and are in Seller's possession or under its control
(collectively, the "Seller Documents"): (a) "as-built" plans and specifications for each of the Properties
and/or the Improvements; (b) a certificate of occupancy (or its jurisdictional equivalent) for each of the Properties and/or the
Improvements; (c) all surveys related to the Properties and/or the Improvements; (d) all environmental reports related to the
Properties and/or the Improvements (including without limitation, Phase I and Phase II environmental investigation reports); (e)
all appraisals or valuations related to the Properties and/or the Improvements; (f) all guaranties and warranties in effect with
respect to all or any portion of the Properties and/or the Improvements; (g) full and complete copies of any existing leases and
current rent rolls related thereto and all other agreements related to the Properties and/or the Improvements, together with all
amendments and modifications thereof; (h) financial statements of the Seller Entities and unit-level financial statements for
the previous three years; (i) all property condition reports related to the Properties and/or the Improvements; and (j) all other
documents related to the ownership, lease and operation of the Properties and/or the Improvements, and reasonably requested by
Purchaser.

 

Section 2.03. Survey.
Purchaser shall order a current ALTAIACSM "as built" survey as required for each Property from one or more surveyors
selected by Purchaser (collectively, the "Surveys"), together with (a) evidence reasonably satisfactory to Purchaser
that each Property and/or the related Improvements fully comply with all zoning ordinances of the Governmental Authority having
jurisdiction over each Property ("Zoning Evidence"), and (b) evidence reasonably satisfactory to Purchaser
that none of the Properties is within a 100-year flood plain or a "Special Flood Hazard Area" as designated by the Federal
Emergency Management Agency. The Surveys shall show the Improvements and shall plot all exceptions shown on the applicable Title
Commitment (to the extent plottable), certified in favor of Purchaser, any requested Affiliate of Purchaser, Lender and Title
Company in a manner reasonably acceptable to Purchaser and prepared in accordance with the appropriate "ALTA/ACSM" minimum
standards. The cost of the Surveys shall be included in Transaction Costs, payable as set forth in Section 1.06.

 

Section
2.04. Environmental. Purchaser shall order a current complete Phase I environmental investigation report for each of the Properties,
and if any environmental investigation report recommends additional subsurface investigation of any Property, Seller shall permit
Purchaser to perform such additional subsurface investigation (each Phase I environmental investigation report and each additional
subsurface investigation report, an "Environmental Report"), from an environmental inspection company
selected by Purchaser, detailing and analyzing certain aspects of any such Property; provided, however, that, notwithstanding
the foregoing, if Seller fails or refuses to permit any such additional subsurface investigation or is unwilling to obtain environmental
insurance providing coverage acceptable to Purchaser in its sole discretion, Seller shall be deemed to have elected to terminate
this Agreement, in which event neither party will have any further obligations or liability hereunder, except for those obligations
expressly stated to survive such termination. The cost of the Environmental Reports shall be included in Transaction Costs, payable
as set forth in Section 1.06.

 

 

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Section 2.05. Valuation.
Purchaser shall order current site inspections and valuations of the Properties, separately stating values for the Property
and the Improvements for each of the Properties, from one or more parties selected by Purchaser (each a "Valuation",
and collectively, the "Valuations"). Each Valuation shall be in form and substance acceptable to Purchaser, and
shall be certified to Purchaser and any requested Affiliate of Purchaser. The cost of the Valuations shall be included in Transaction
Costs, payable as set forth in Section 1.06.

 

Section 2.06. Property
Condition Reports. Purchaser shall order current property condition assessments and limited compliance audits as required
for the Properties and the Improvements from one or more inspection companies selected by Purchaser (collectively, the "Property
Condition Reports"). Each Property Condition Report shall be in form and substance acceptable to Purchaser, and shall
be certified to Purchaser and any requested Affiliate of Purchaser. The cost of the Property Condition Reports shall be included
in Transaction Costs, payable as set forth in Section 1.06.

 

Section 2.07. Inspections.
From the Effective Date and for a period of thirty (30) days thereafter (the "Inspection Period"), (a) Purchaser
may perform whatever investigations, tests and inspections (collectively, the "Inspections") with respect to
any one or more of the Properties and the Improvements that Purchaser deems reasonably appropriate; and (b) Seller shall, at all
reasonable times, (i) provide Purchaser and Purchaser's officers, employees, agents, advisors, attorneys, accountants, architects,
and engineers with access to the Properties and the Improvements, all drawings, plans, specifications and all engineering reports
for and relating to the Properties and the Improvements in the possession or under the control of Seller, the files and correspondence
relating to the Properties and the Improvements, and the financial books and records relating to the ownership, lease (if applicable),
operation, and maintenance of the Properties and the Improvements, and (ii) allow such Persons to make such inspections, tests,
copies, and verifications as Purchaser considers necessary.

 

Section 2.08.
Purchaser's Right to Terminate.Notwithstanding any provision contained herein, in addition to its right to terminate
this Agreement as set forth in Section 2.01(d), if (a) Purchaser determines, in its sole discretion, that any Property is not
satisfactory, and Purchaser provides written notice thereof to Seller on or before expiration of the Inspection Period, or
(b) Purchaser and Lessee are unable to agree upon the terms and conditions of the Lease or the Loan Documents, or (c)
Purchaser fails to obtain the approval of any material change to the terms of the Transaction from Purchaser's Investment
Committee prior to Closing, then Purchaser shall have the option to (i) terminate this Agreement, in which event neither
party will have any further obligations or liability hereunder, except for those obligations expressly stated to survive such
termination, or (ii) remove the applicable Property or Properties from the Properties to be conveyed hereunder, with an
appropriate adjustment to the Purchase Price, and proceed to close with respect to the remaining Properties.

 

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ARTICLE III

CLOSING

 

Section 3.01. Closing
Date. Subject to the provisions of Article V of this Agreement, the closing date of the Transaction contemplated by this Agreement
(the "Closing") shall be set by mutual agreement of Seller and Purchaser (the "Closing Date");
provided, however, that the Closing Date shall not extend beyond the Closing Deadline. The parties shall deposit with the
Title Company all documents (including without limitation, the executed Transaction Documents) as necessary to comply with the
parties' respective obligations hereunder on or before the Closing Date or as otherwise mutually agreed upon by the parties. The
parties shall deposit all funds required hereunder with the Title Company on or before the Closing Date.

 

Section 3.02. Funding.
Notwithstanding any provision contained in this Agreement, funding of the Transaction by Purchaser shall be contingent upon
the delivery of the executed Transaction Documents, satisfaction of the conditions precedent set forth herein and in the other
Transaction Documents, and confirmation by Purchaser's counsel that it or the Title Company has possession of all Transaction
Documents required by Purchaser.

 

Section 3.03. Possession.
Possession of the Properties, free and clear of all tenants or other parties in possession, except in accordance with the
Lease and the Property and Improvements Lease, shall be delivered to Purchaser on the Closing Date.

 

ARTICLE IV

 

REPRESENTATIONS WARRANTIES AND COVENANTS

 

Section 4.01. Seller.
Seller represents and warrants to, and covenants with, Purchaser as follows:

 

(a)Organization
and Authority. Seller is duly organized or formed, validly existing and in good standing under the laws of its
state of incorporation, and is qualified as a foreign corporation to do business in any jurisdiction where such qualification
is required. Seller has all requisite corporate power and authority to own and operate the Properties and the Improvements, to
execute, deliver and perform its obligations under this Agreement and all of the other Transaction Documents, and to carry out
the Transaction. The Person who has executed this Agreement on behalf of Seller has been duly authorized to do so.

 

(b)Enforceability
of Documents. Upon execution by Seller, this Agreement and the other Transaction Documents to which it is a party,
shall constitute the legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective
terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium, or other
similar laws relating to or affecting the rights of creditors generally, or by general equitable principles.

 

 

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(c)No Other
Agreements and Options. None of the Seller Entities or any Property is subject to any commitment, obligation, or
agreement, including, without limitation, any right of first refusal, option to purchase or lease granted to a third party, which
could or would (i) prevent Seller from completing, or impair Seller's ability to complete, the safe of the Properties under this
Agreement or the subsequent lease of the Properties pursuant to the Lease, or (ii) bind Purchaser subsequent to consummation of
the Transaction. Except as otherwise disclosed by Seller in writing to Purchaser, there is no lease in place, nor has there been
any lease in place within the last twelve (12) months of the Effective Date, related to all or any part of any Property, even
if any such lease will be terminated upon Closing.

 

(d)No
Violations. The authorization, execution, delivery and performance of this Agreement and the other Transaction Documents
will not (i) violate any provisions of the articles of incorporation or other charter documents of Seller, (ii) result in a violation
of or a conflict with, or constitute a default (or an event which, with or without due notice or lapse of time, or both, would
constitute a default) under any other document, instrument or agreement to which Seller is a party or by which Seller, the Properties
or any of the property of Seller are subject or bound, (iii) result in the creation or imposition of any Lien, restriction, charge
or limitation of any kind, upon Seller or the Properties or the Improvements, or (iv) violate any law, statute, regulation, rule,
ordinance, code, rule or order of any court or Governmental Authority applicable to Seller or the Properties.

 

(e)Compliance.
Seller's, Lessee's and Sublessee's use and occupation of the Properties and the Improvements, and the condition thereof, comply
with (i) all applicable statutes, regulations, rules, ordinances, codes, licenses, permits, orders and approvals of each Governmental
Authority having jurisdiction over the Properties, including, without limitation, all health, building, fire, safety and other
codes, ordinances and requirements, the Americans With Disabilities Act of 1990, and all policies or rules of common law, in each
case, as amended, and any judicial or administrative interpretation thereof, including any judicial order, consent, decree or
judgment applicable to the Properties or the Seller Entities (collectively, the "Legal Requirements"), (ii) all
restrictions, covenants and encumbrances of record with respect to the Properties, and (iii) all agreements, contracts, insurance
policies (including, without limitation, to the extent necessary to prevent cancellation thereof and to insure full payment of
any claims made under such policies), agreements and conditions applicable to the Properties or the ownership, operation, use
or possession thereof. No Seller Entity has received any notification that it or any Property is in violation of any of the foregoing,
including without limitation, the Legal Requirements.

 

(f)Compliance
with Anti-Terrorism, Embargo, Sanctions and Anti-Money Laundering Laws. Without in any way limiting the provisions
of Section 4.01(e), Seller, and to the best of Seller's knowledge, each of the Seiler Entities is not currently identified on
the OFAC List, and is not a Person with whom a citizen of the United States is prohibited from engaging in transactions by any
trade embargo, economic sanction, or other prohibition of United States law, regulation, or executive order of the President of
the United States.

 

(g)Litigation.There
is no legal, administrative, arbitration or other proceeding, claim or action of any nature or investigation pending or involving
or, to the best of Seller's knowledge, threatened against, Seller, the Seller Entities or any of the Properties before any Governmental
Authority, except as has been disclosed in writing by Seller, which in any way adversely affects or may adversely affect any of
the Properties, the business performed and to be performed on the Properties, the condition, worth or operations of any of the
Seller Entities, or the ability of any of the Seller Entities to perform under this Agreement or any other Transaction Documents,
or which questions or challenges any of the Seller's Entities' participation in the Transaction contemplated by this Agreement
or any other Transaction Document.

 

 

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(h)No
Mechanics' Liens. There are no mechanics' liens, or rights to claim a mechanics' lien in favor of any materialman,
laborer, or any other Person in connection with labor or materials furnished to or performed on any portion of the Properties,
which will not have been fully paid for on or before the Closing Date or, to Seller's knowledge, which might provide the basis
for the filing of such liens against the Properties or any portion thereof. No work has been performed or is in progress nor have
materials been supplied to the Properties or agreements entered into for work to be performed or materials to be supplied to any
of the Properties prior to the date hereof, which might provide the basis for the filing of such liens against the Properties
or any portion thereof. Seller shall be responsible for any and all claims for mechanics' liens and accounts payable that have
arisen or may subsequently arise due to agreements entered into for and/or any work performed on, or materials supplied to any
of the Properties prior and subsequent to the Closing Date, and Seller shall and does hereby agree to defend, indemnify and forever
hold Purchaser and Purchaser's designees harmless from and against any and all such mechanics' lien claims, accounts payable or
other commitments relating to the Properties.

 

(i)Condemnation.
No condemnation or eminent domain proceedings affecting any Property have been commenced or, to the best of Seller's knowledge,
are contemplated.

 

(j)Licenses
and Permits. Seller possesses, and upon Closing, Lessee and Sublessee will possess, all required licenses, permits
and other authorizations, both governmental and private, presently required by applicable provisions of law, including statutes,
regulations and existing judicial decisions, and by the property and contract rights of third persons, necessary to permit the
operation of the business in the manner in which it presently is conducted at the Properties.

 

(k)Intellectual
Property. Seller possesses, and upon Closing, Lessee and Sublessee will possess and have the right to use all intellectual
property, licenses and other rights as are material and necessary for the conduct of business at the Properties.

 

(I)Environmental.

 

(i)The Properties
are not in violation of any Hazardous Materials Laws and there is no past or present non-compliance with Hazardous Materials Laws,
or with permits issued pursuant thereto, in connection with the Properties.

 

(ii)No
Seller Entity has received any written or oral notice or other communication from any Person (including but not limited to a
Governmental Authority) relating to Hazardous Materials or USTs, or remediation thereof, of possible liability of any Person
(including without limitation, Lessee and Sublessee) pursuant to any Hazardous Materials Law, other environmental conditions
in connection with the Properties, or any actual or potential administrative or judicial proceedings in connection with any
of the foregoing.

 

 

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(m)Financial
Statements. The financial statements concerning the Seller Entities delivered by or on behalf of Seller to Purchaser
are true, correct and complete in all respects, and no adverse change has occurred with respect to such financial statements,
since the date such financial statements were prepared or delivered to Purchaser. Seller understands that Purchaser is relying
upon such financial statements and Seller represents that such reliance is reasonable. All such financial statements were prepared
in accordance with generally accepted accounting principles consistently applied and accurately reflect, as of the date of this
Agreement and the Closing Date, the financial condition of each individual or entity to which they pertain.

 

(n)Solvency.
There is no contemplated, pending or threatened Insolvency Event or similar proceedings, whether voluntary or involuntary,
affecting the Seller Entities, or to Seller's knowledge, any of their respective members, partners, shareholders, or Affiliates.

 

(o)Satisfaction
of Conditions Precedent. From the Effective Date through the Closing Date, Seller shall use its best efforts to
satisfy all conditions set forth in Section 5.01 of this Agreement on or prior to the Closing Date.

 

(p)No
Bankruptcy Petition. Seller hereby agrees that it shall not institute against, or join any other Person in instituting
against, Purchaser, any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding, or any other proceeding
under any federal or state bankruptcy or similar law. The provisions of this Section shall survive the Closing or termination
of this Agreement. Notwithstanding the foregoing, the provisions of this Section shall in no way limit any other rights Seller
may have with respect to this Agreement, either at law or in equity.

 

(q)State
Bulk Sales Statutes. Seller represents and warrants to Purchaser that no bulk sales statutes promulgated by any
Governmental Authority ("Bulk Sales Statutes") apply as a result of the sale of any of the Properties. Seller
agrees to indemnify, defend and hold Purchaser harmless from and against any and all losses, costs, damages, expenses (including
without limitation, court costs and reasonable attorney's fees) and liabilities which may be sustained or incurred by Purchaser,
and/or any and all claims, demands, suits, proceedings and causes of action which may be brought or raised against Seller or Purchaser,
as a result of or arising from (i) any claim that Purchaser has any liability or obligations under the Bulk Sales Statutes (including
without limitation, any tax obligations or liabilities (or interest or penalties connected therewith) of Seller) by reason of
the transactions provided for herein; or (ii) the failure of Purchaser to withhold any of Seller's unpaid tax obligations, liabilities,
interest or penalties thereon from the Purchase Price or otherwise as required under any Bulk Sales Statutes; provided, however,
that Seller shall not be liable for and have no indemnification obligations to Purchaser hereunder for any taxes that are the
obligation of Lessee pursuant to the Lease.

 

 

 

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All representations and warranties of Seller
made in this Agreement shall be true as of the date of this Agreement, shall be deemed to have been made again at and as of the
Closing Date, shall be true at and as of the Closing Date, and, together with the covenants made by Seller herein, shall survive
Closing.

 

Section 4.02.
Purchaser. Purchaser represents and warrants to, and covenants with, Seller as follows:

 

(a)Organization
and Authority. Purchaser is duly organized, validly existing and in good standing under the laws of its state of
formation. Purchaser has all requisite power and authority to execute, deliver and perform its obligations under this Agreement
and all of the other Transaction Documents to which it is a party and to carry out the Transaction. The Person who has executed
this Agreement on behalf of Purchaser has been duly authorized to do so.

 

(b)Enforceability
of Documents. Upon execution by Purchaser, this Agreement and the other Transaction Documents to which it is a
party, shall constitute the legal, valid and binding obligations of Purchaser, enforceable against Purchaser in accordance with
their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, arrangement, moratorium,
or other similar laws relating to or affecting the rights of creditors generally, or by general equitable principles.

 

(c)Litigation.
There are no actions or proceedings pending against or involving Purchaser before any Governmental Authority which in
any way adversely affect or may adversely affect Purchaser or Purchaser's ability to perform under this Agreement and the other
Transaction Documents to which it is a party.

 

(d)Satisfaction
of Conditions Precedent. From the Effective Date through the Closing Date, Purchaser agrees to use its best efforts
to satisfy all conditions set forth in Section 5.02 of this Agreement on or prior to the Closing Date.

 

All representations and warranties of Purchaser
made in this Agreement shall be true as of the date of this Agreement, shall be deemed to have been made again at and as of the
Closing Date, shall be true at and as of the Closing Date, and, together with the covenants made by Purchaser herein, shall survive
Closing.

 

ARTICLE V

 

CONDITIONS PRECEDENT TO CLOSING

 

Section 5.01.
Purchaser's Conditions to Closing. Purchaser shall not be obligated to close and fund the Transaction until the fulfillment
(or written waiver by Purchaser) of all of the following conditions:

 

(a)Seller, Lessee,
Sublessee, and Guarantor, as appropriate, shall have delivered to Purchaser or the Title Company, as applicable, the following
items:

 

(i)The Deeds;

 

(ii)Such
documents evidencing the legal status and good standing of Seller, Lessee, Sublessee and Guarantor that may be required by
Purchaser and/or the Title Company for issuance of the Title Policies, including, without limitation, certificates of good
standing;

 

 

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(iii)Fully
executed originals of (A) the Lease, together with fully executed originals of memoranda thereof for all of the Properties (collectively,
the "Memoranda of Lease"), (B) the Loan Documents and (C) all of the other Transaction Documents;

 

(iv)Certificates
evidencing the insurance coverage, limits and policies to be carried by Lessee under and pursuant to the terms of the Lease, on
the forms and containing the information required by Purchaser, as landlord ("Lease Proof of Insurance");

 

(v)A certificate
of an officer, manager or general partner, as applicable, of each of Seller, Lessee, Sublessee, and Guarantor, together with copies
of each entity's (A) articles of organization or certificate of formation, as applicable, amended to date; (B) operating agreement,
bylaws or partnership agreement, as applicable, amended to date; (C) resolutions authorizing the Transaction and the execution
of this Agreement and the other Transaction Documents, and identifying the Person(s) authorized to execute this Agreement and the
other Transaction Documents; and (D) original certificates of good standing or similar documents from the states in which each
entity was organized or formed, and original certificates of qualification or similar documents from the state or states where
the Properties are located;

 

(vi)An Opinion
of Counsel, addressed to Purchaser and Purchaser's financial institution, if any;

 

(vii)A
duly executed affidavit from Seller stating that Seller is not a "foreign person" as defined in the Federal Foreign
Investment in Real Property Tax Act of 1980 and 1984 Tax Reform Act, in the form attached hereto as Exhibit C ("Non-Foreign
Seller Certificate");

 

(viii)Closing settlement
statements approved by Seller and Purchaser to reflect the credits, prorations, and adjustments contemplated by or specifically
provided for in this Agreement;

 

(ix)To the extent
not previously provided, the most recent financial statements available for the Seller Entities; and

 

(x)All documents
required to be delivered by this Agreement and the other Transaction Documents and as may otherwise be required in order to fully
and legally close this Transaction.

 

(b)The Mortgage
Loan shall close simultaneously with the Transaction contemplated under this Agreement.

 

(c)Purchaser shall
have received the Title Commitments and the Title Company's irrevocable commitment to insure title by means of the Title Policies.

 

 

    	 	11	 

     

    

 

(d)Purchaser's
lender, if any, shall have received from the Title Company an irrevocable commitment to issue the lender's Title Policies which
shall (i) insure title by means of an ALTA extended coverage policy of title insurance, (ii) show good and marketable title in
Seller, (iii) commit to separately insure lender's interest in the Properties and the Improvements subject only to Permitted Encumbrances,
and (iv) contain such endorsements as such lender may require.

 

(e)Purchaser shall
have determined, in its sole discretion, that no conditions exist regarding the financial markets that could reasonably be expected
to cause the rents and any other payments due under the Lease to become delinquent or to adversely affect the value or marketability
of the Transaction or the Properties. There shall have been no adverse change in the financial condition of Seller, Lessee, Sublessee,
Guarantor or the Properties from the Effective Date.

 

(f)All representations
and warranties of Seller set forth herein shall have been true and correct in all respects when made, and all covenants, agreements
and conditions required to be performed or complied with by Seller prior to or at the time of Closing in connection with the Transaction
shall have been duly performed or complied with by Seller prior to or at such time or waived in writing by Purchaser.

 

(g)No event shall
have occurred or condition shall exist which would, upon the Closing Date, or, upon the giving of notice and/or passage of time,
constitute a breach or default hereunder or under any other Transaction Document, or any other agreements between or among Purchaser,
Seller, Lessee, Sublessee or Guarantor.

 

(h)Seller and Lessee
shall have caused all leases and, unless otherwise agreed to in writing by Purchaser, all subleases of any or all of the Properties
and any other documents affecting the Properties existing at Closing, at Purchaser's sole option, to be cancelled as of the Closing
Date or subordinated to the Lease pursuant to subordination agreements in form and substance satisfactory to Purchaser.

 

Upon the fulfillment
or Purchaser's written waiver of all of the above conditions, Purchaser shall deposit funds necessary to close this Transaction
with the Title Company and this Transaction shall close in accordance with the terms and conditions of this Agreement. Unless otherwise
agreed, all of the documents to be delivered at Closing shall be dated as of the Closing Date.

 

Section 5.02.
Seller's Conditions Precedent to Closing. Seller shall not be obligated to close the Transaction until the fulfillment (or
written waiver by Seller) of all of the following conditions:

 

(a)Purchaser shall
have delivered to the Title Company the Purchase Price, as adjusted pursuant to the requirements of this Agreement;

 

(b)Purchaser shall
have caused to be executed and delivered to the appropriate Persons fully executed originals of all Transaction Documents, II of
the other Transaction Documents;

 

 

    	 	12	 

     

    

 

 

(c)Purchaser and
Seller shall have approved the Title Company settlement statements that reflect the credits, prorations, and adjustments contemplated
by or specifically provided for in this Agreement;

 

(d)Purchaser shall
have delivered to Seller and/or the Title Company such other documents as may reasonably be required in order to fully and legally
close this Transaction; and

 

(e)All covenants,
agreements and conditions required to be performed or complied with by Purchaser prior to or at the time of Closing in connection
with the Transaction shall have been duly performed or complied with by Purchaser or waived in writing by Seller prior to or at
such time.

 

(f)The Mortgage
Loan shall close simultaneously with the Transaction contemplated under this Agreement.

 

ARTICLE VI

 

DEFAULTS; REMEDIES

 

Section 6.01.
Default. Each of the following shall be deemed an event of default (each, an "Event of Default"):

 

(a)If any representation
or warranty of Seller or Purchaser set forth in this Agreement or any other Transaction Document is false in any material respect
or if Seller renders any materially false statement;

 

(b)If Seller or
Purchaser fails to perform any of its obligations under this Agreement; or

 

(c)If any Insolvency
Event shall occur with respect to any Seller Entity or Purchaser.

 

Section 6.02. Remedies.
Upon any Event of Default, the non-defaulting party shall be entitled to exercise, at its option and as its sole and exclusive
remedy, one of the following remedies:

 

(a)The non-defaulting
party may terminate this Agreement by giving written notice to the defaulting party and recover from the defaulting party all reasonable
and verified out-of-pocket costs and expenses incurred by the non-defaulting party hereunder (including without limitation, the
Transaction Costs, any other due diligence costs, and the reasonable and verified fees and costs of legal counsel or other advisors),
in which event neither party will have any further obligations or liability hereunder, except for those obligations expressly stated
to survive such termination; or

 

(b)The non-defaulting
party may waive the Event of Default and proceed with the Closing.

 

 

    	 	13	 

     

    

 

ARTICLE VII

 

MISCELLANEOUS

 

Section 7.01. Transaction Characterization.

 

(a)The parties
intend that (I) all components of the Transaction shall be considered a single integrated transaction and shall not be severable;
and (ii) the Lease shall constitute a single master lease of all, but not less than all, of the Properties, and is a unitary, unseverable
instrument pertaining to all, but not less than all, of the Properties, and none of the Lease or Lessee's rights, obligations or
duties may be divided or otherwise allocated by Lessee among the Properties.

 

(b)The parties
intend that the conveyance of the Properties to Purchaser be an absolute conveyance in effect as well as form, and that the instruments
of conveyance to be delivered at Closing shall not serve or operate as a mortgage, equitable mortgage, deed of trust, security
agreement, trust conveyance or financing or trust arrangement of any kind, nor as a preference or fraudulent conveyance against
any creditors of Seller. After the execution and delivery of the Deeds, Seller will have no legal or equitable interest or any
other claim or interest in the Properties, other than the interest, if any, set forth in the Lease. The parties also intend for
the Lease to be a true lease and not a transaction creating a financing lease, capital lease, equitable mortgage, mortgage, deed
of trust, security interest or other financing arrangement, and the economic realities of the Lease are those of a true lease.
Notwithstanding the existence of the Lease, neither party shall contest the validity, enforceability or characterization of the
sale and purchase of the Properties by Purchaser pursuant to this Agreement as an absolute conveyance, and both parties shall support
the intent expressed herein that the purchase of the Properties by Purchaser pursuant to this Agreement provides for an absolute
conveyance and does not create a joint venture, partnership, equitable mortgage, trust, financing device or arrangement, security
interest or the like, if, and to the extent that, any challenge occurs.

 

(c)Each of the
parties hereto agrees that it will not, nor will it permit any Affiliate to, at any time, take any action or fail to take any action
with respect to the preparation or filing of any statement or disclosure to Governmental Authority, including without limitation,
any income tax return (including an amended income tax return), to the extent that such action or such failure to take action would
be inconsistent with the intention of the parties expressed in this Section 7.01.

 

Section 7.02. Risk of Loss.

 

(a)Condemnation.
If, prior to Closing, action is initiated to take any of the Properties, or any portion thereof, by eminent domain proceedings
or by deed in lieu thereof, Purchaser may elect at or prior to Closing, to (i) terminate this Agreement, in which event neither
party will have any further obligations or liability hereunder, except for those obligations expressly stated to survive such
termination, (ii) remove the applicable Property or Properties from the Properties to be conveyed hereunder, with an appropriate
adjustment to the Purchase Price, and proceed to close with respect to the remaining Properties, or (iii)proceed to close, in
which event all of Seller's assignable right, title and interest in and to the award of the condemning authority shall be assigned
to Purchaser at the Closing and there shall be no reduction in the Purchase Price.

 

 

    	 	14	 

     

    

 

(b)Casualty.
Seller assumes all risks and liability for damage to or injury occurring to any of the Properties by fire, storm, accident,
or any other casualty or cause until the Closing has been consummated. If any of the Properties, or any part thereof, suffers any
damage prior to the Closing from fire or other casualty, which Seller, at its sole option, does not elect to fully repair, Purchaser
may elect at or prior to Closing, to (i) terminate this Agreement, in which event neither party will have any further obligations
or liability hereunder, except for those obligations expressly stated to survive such termination, (ii) remove the applicable Property
or Properties from the Properties to be conveyed hereunder, with an appropriate adjustment to the Purchase Price, and proceed to
close with respect to the remaining Properties, or (iii) consummate the Closing, in which event all of Seller's right, title and
interest in and to the proceeds of any insurance covering such damage (less an amount equal to any expense and costs reasonably
incurred by Seller to repair or restore the Properties, which shall be payable to Seller upon Seller's delivery to Purchaser of
satisfactory evidence thereof), to the extent that the amount of such insurance does not exceed the Purchase Price, shall be assigned
to Purchaser at Closing, and Purchaser shall be entitled to a credit in the amount of Seller's deductible at Closing.

 

(c)Maintenance
of the Properties and Insurance. From the Effective Date until Closing, Seller shall continue to maintain the Properties
or cause the Properties to be maintained in good condition and repair, and shall continue to maintain or cause to be maintained
all insurance for the Properties in the same or greater amounts, with the same or greater coverage, and subject to the same or
lower deductibles as in existence as of the Effective Date.

 

Section 7.03. Notices.
All notices, demands, designations, certificates, requests, offers, consents, approvals, appointments and other instruments
given pursuant to this Agreement (collectively called "Notices") shall be in writing and given by (a) hand delivery,
(b) express overnight delivery service, (c) email transmission, or (d) certified or registered mail, return receipt requested,
and shall be deemed to have been delivered upon (i) receipt, if hand delivered, (ii) the next Business Day, if delivered by a
reputable express overnight delivery service, (iii) receipt of confirmation of email, if delivered by email, or (iv) the third
Business Day following the day of deposit of such notice with the United States Postal Service, if sent by certified or registered
mail, return receipt requested. Notices shall be provided to the parties and addresses (or email addresses, as applicable) specified
below:

 

If to Seller:

 

Marquis Industries, Inc.

2743 Highway 76

Chatsworth, Georgia 30705

Attention: Tim Bailey

Email: tbailevmarouisind.com  

 

 

    	 	15	 

     

    

 

 

If to Purchaser:

 

 STORE Capital Acquisitions, LLC

8501 E. Princess Drive, Suite 190

Scottsdale, AZ 85255

Attention: Michael T. Bennett

Executive Vice President — General Counsel

Email: mbennett@storecapital.com

 

With a copy to: 

 

Kutak Rock LLP

1801 California Street, Suite 3000

Denver, CO 80202

Attention: Kelly Reynoldson, Esq.

Email: kelly.reynoldson@kutakrock.com

 

  

or to such other address or such other
Person as either party may from time to time hereafter specify to the other party in a notice delivered in the manner provided
above. Whenever in this Agreement the giving of Notice is required, the giving thereof may be waived in writing at any time by
the Person or Persons entitled to receive such Notice.

 

A copy of any Notice delivered pursuant
to this Section shall also contemporaneously be delivered in the manner herein specified to any mortgagee or assignee of Purchaser's
interest which shall have duly notified Seller in writing of its name and address.

 

Section 7.04. Assignment.
Purchaser may assign its rights under this Agreement in whole or in part at any time to an Affiliate of Purchaser. Upon any
unconditional assignment of Purchaser's entire right and interest hereunder to an Affiliate of Purchaser, Purchaser shall automatically
be relieved, from and after the date of such assignment, of liability for the performance of any obligation of Purchaser contained
herein. Seller shall not, without the prior written consent of Purchaser, which consent may be withheld in Purchaser's sole discretion,
sell, assign, transfer, mortgage, convey, encumber or grant any easements or other rights or interests of any kind in the Properties,
any of Seller's rights under this Agreement or any interest in Seller, whether voluntarily, involuntarily or by operation of law
or otherwise, including, without limitation, by merger, consolidation, dissolution or otherwise.

 

 

 

    	 	16	 

     

    

 

Section 7.05. Indemnity.

 

(a)Seller
shall indemnify, defend and hold harmless Purchaser and its Affiliates, and their respective officers, directors, shareholders,
managers, members, employees, representatives, successors and assigns, as applicable (collectively, the "Indemnified Parties"),
from and against any and all Losses of any nature arising from or connected with (i) breach of any of the representations, warranties,
covenants, agreements or obligations of Seller set forth in this Agreement, and (ii) the ownership and operation of the Properties
prior to the Closing Date. Without limiting the generality of the foregoing, such indemnity shall include, without limitation,
any Losses incurred with respect to any engineering, governmental inspection and attorneys' fees and expenses that the Indemnified
Parties may incur by reason of any environmental condition and/or any representation or warranty set forth in Section 4.01(n)
being false, or by reason of any investigation or claim of any Governmental Authority in connection therewith. The obligations
under this Section 7.05(a) shall survive Closing.

 

(b)Purchaser shall
indemnify, defend and hold harmless Seller from and against any and all Losses of any nature arising from or connected with (i)
breach of any of the representations, warranties, covenants, agreements or obligations of Purchaser set forth in this Agreement,
and (ii) the Inspections. The obligations under this Section 7.05(b) shall survive Closing.

 

Section 7.06. Brokerage
Commission. Each of the parties represents and warrants to the other that neither party has dealt with, negotiated through
or communicated with any broker in connection with this Transaction, except for Marcus & Millichap whose commission shall
be paid by Seller pursuant to a separate agreement between Seller and such broker. Each party shall indemnify, defend and hold
harmless the other party from and against any and all claims, loss, costs and expenses, including reasonable attorneys' fees,
resulting from any claims that may be made against the indemnified party by any broker claiming a commission or fee by, through
or under such indemnifying party. The parties' respective obligations under this Section 7.06 shall survive Closing or termination
of this Agreement.

 

Section 7.07. Reporting
Requirements. The parties agree to comply with any and all reporting requirements applicable to the Transaction which are
set forth in any law, statute, ordinance, rule, regulation, order or determination of any Governmental Authority, and further
agree upon request, to furnish the other party with evidence of such compliance.

 

Section 7.08. Disclosures.
Except as expressly set forth in Sections 7.07 and 7.16 and this Section 7.08 and as required by law or judicial action, prior
to Closing neither Seller nor Purchaser will make any public disclosure of this Agreement or the other Transaction Documents,
the Transaction or the provisions of the Transaction Documents without the prior consent of the other party hereto. The parties
further agree that, notwithstanding any provision contained in this Agreement, any party (and each employee, representative or
other agent of any party) may disclose to any and all Persons, without limitation of any kind, any matter required under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

 

Section 7.09. Time
is of the Essence. The parties hereto expressly agree that time is of the essence with respect to this Agreement.

 

 

 

    	 	17	 

     

    

 

Section 7.10. Non-Business
Days. If the Closing Date or the date for delivery of a notice or performance of some other obligation of a party falls on
a Saturday, Sunday or legal holiday in the state in which any Property is located, then the Closing Date or such notice or performance
shall be postponed until the next Business Day.

 

Section 7.11. Waiver
and Amendment. No provision of this Agreement shall be deemed waived or amended except by a written instrument unambiguously
setting forth the matter waived or amended and signed by the party against which enforcement of such waiver or amendment is sought.
Waiver of any matter shall not be deemed a waiver of the same or any other matter on any future occasion.

 

Section 7.12. Limitation
on Liability. Notwithstanding anything to the contrary provided in this Agreement, it is specifically understood and agreed,
such agreement being a primary consideration for the execution of this Agreement and the Lease, that (a) there shall be absolutely
no personal liability on the part of any director, officer, manager, member, employee or agent of either party with respect to
any of the terms, covenants and conditions of this Agreement, (b) each party waives all claims, demands and causes of action against
the other party's directors, officers, managers, members, employees and agents in the event of any breach by such other party
of any of the terms, covenants and conditions of this Agreement, and (c) each party shall look solely to the assets of the other
party for the satisfaction of each and every remedy in the event of any breach of any of the terms, covenants and conditions of
this Agreement, such exculpation of liability to be absolute and without any exception whatsoever.

 

Section 7.13. Headings;
Internal References. The headings of the various sections and exhibits of this Agreement have been inserted for reference
only and shall not to any extent have the effect of modifying the express terms and provisions of this Agreement. Unless stated
to the contrary, any references to any section, subsection, exhibit and the like contained herein are to the respective section,
subsection, exhibit and the like of this Agreement.

 

Section 7.14. Construction
Generally. This is an agreement between parties who are experienced in sophisticated and complex matters similar to the Transaction
and the other Transaction Documents, is entered into by both parties in reliance upon the economic and legal bargains contained
herein and therein, and shall be interpreted and construed in a fair and impartial manner without regard to such factors as the
party which prepared the instrument, the relative bargaining powers of the parties or the domicile of any party. Seller and Purchaser
were each represented by legal counsel competent in advising them of their obligations and liabilities hereunder.

 

Section 7.15. Further
Assurances. Each of the parties agrees, whenever and as often as reasonably requested so to do by the other party or the Title
Company, to execute, acknowledge, and deliver, or cause to be executed, acknowledged, or delivered, any and all such further conveyances,
assignments, confirmations, satisfactions, releases, instruments, or other documents as may be necessary, expedient or proper,
in order to complete any and all conveyances, transfers, sales and assignments herein provided and to do any and all other acts
and to execute, acknowledge and deliver any and all documents as so requested in order to carry out the intent and purpose of
this Agreement.

 

 

    	 	18	 

     

    

 

Section 7.16.
Securitizations and Other Transactions. As a material inducement to Purchaser's willingness to complete the transactions
contemplated by this Agreement and the other Transaction Documents, Seller hereby acknowledges and agrees that Purchaser may,
from time to time and at any time, (a) advertise, issue press releases, send direct mail or otherwise disclose information
regarding the Transaction for marketing purposes; and (b) engage in all or any combination of the following, or enter into
agreements in connection with any of the following or in accordance with requirements that may be imposed by applicable
securities, tax or other laws: (i) the sale, assignment, grant, conveyance, transfer, financing, refinancing, purchase or
re-acquisition of any Property, the Lease or any other Transaction Document, Purchaser's right, title and interest in any
Property, the Lease or any other Transaction Document, the servicing rights with respect to any of the foregoing, or
participations in any of the foregoing, or (ii) a securitization and related transactions. Seller agrees to use all
reasonable efforts and to cooperate fully with Purchaser with respect to all reasonable requests of Purchaser relating to the
foregoing, which includes without limitation, with respect to the activities described in subsection (b), providing financial
information, financial and other data, and other information and materials which would customarily be required by a
purchaser, transferee, assignee, servicer, participant, investor or rating agency involved with respect to any of the
foregoing. The provisions of this Section 7.16 shall survive the Closing.

 

Section 7.17. Attorneys'
Fees. In the event of any controversy, claim, dispute or proceeding between the parties concerning this Agreement, the prevailing
party shall be entitled to recover all of its reasonable attorneys' fees and other costs in addition to any other relief to which
it may be entitled.

 

Section 7.18. Entire
Agreement. This Agreement and all other Transaction Documents, and all other certificates, instruments or agreements to be
delivered hereunder and thereunder constitute the entire agreement between the parties with respect to the subject matter hereof,
and there are no other representations, warranties or agreements, written or oral, between Seller and Purchaser with respect to
the subject matter of this Agreement. Notwithstanding anything in this Agreement to the contrary, upon the execution and delivery
of this Agreement by Seller and Purchaser, (a) this Agreement shall supersede any previous discussions, letters of intent, agreements
and/or term or commitment letters relating to the Transaction, including without limitation, the Letter of Intent and any and
all agreements related to confidentiality, exclusivity, non-competition, non-solicitation of employees, non-solicitation or pursuit
of any business opportunity represented by the Transaction, or any other term or condition which restricts any business activity
of Purchaser or its affiliates, (b) the terms and conditions of this Agreement shall control notwithstanding that such terms are
inconsistent with or vary from those set forth in any of the foregoing agreements, and (c) this Agreement may only be amended
by a written agreement executed by Purchaser and Seller. The provisions of this Section shall survive the Closing.

 

Section 7.19. Forum
Selection; Jurisdiction; Venue. For purposes of any action or proceeding arising out of this Agreement, the parties hereto
expressly submit to the jurisdiction of all federal and state courts located in the State of Arizona. Seller consents that it
may be served with any process or paper by registered mail or by personal service within or without the State of Arizona in accordance
with applicable law. Furthermore, Seller waives and agrees not to assert in any such action, suit or proceeding that it is not
personally subject to the jurisdiction of such courts, that the action, suit or proceeding is brought in an inconvenient forum
or that venue of the action, suit or proceeding is improper. Nothing contained in this Section shall limit or restrict the right
of Purchaser to commence any proceeding in the federal or state courts located in the state or states in which the Properties
are located to the extent Purchaser deems such proceeding necessary or advisable to exercise remedies available under this Agreement.

 

 

    	 	19	 

     

    

 

 

Section 7.20. Separability;
Binding Effect; Governing Law. Each provision hereof shall be separate and independent, and the breach of any provision by
Purchaser shall not discharge or relieve Seller from any of its obligations hereunder. Each provision hereof shall be valid and
shall be enforceable to the extent not prohibited by law. If any provision hereof or the application thereof to any Person or
circumstance shall to any extent be invalid or unenforceable, the remaining provisions hereof, or the application of such provision
to Persons or circumstances other than those as to which it is invalid or unenforceable, shall not be affected thereby. Subject
to the provisions of Section 7.04, all provisions contained in this Agreement shall be binding upon, inure to the benefit of and
be enforceable by the successors and assigns of each party hereto, including, without limitation, any United States trustee, any
debtor-in-possession or any trustee appointed from a private panel, in each case to the same extent as if each successor and assign
were named as a party hereto. This Agreement shall be governed by, and construed with, the laws of the applicable state or states
in which the Properties are located, without giving effect to any state's conflict of laws principles.

 

Section 7.21. Survival.
Except for the conditions of Closing set forth in Article V, which shall be satisfied or waived in writing as of the Closing
Date, all representations, warranties, agreements, obligations and indemnities of Seller and Purchaser set forth in this Agreement
shall survive the Closing.

 

Section 7.22. Waiver
of Jury Trial and Certain Damages. THE PARTIES HERETO SHALL AND THEY HEREBY DO INTENTIONALLY WAIVE ANY AND ALL RIGHTS TO A
TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY MATTERS
WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT AND/OR ANY CLAIM OR INJURY OR DAMAGE RELATED THERETO. SELLER
FURTHER WAIVES THE RIGHT IT MAY HAVE TO SEEK PUNITIVE, CONSEQUENTIAL, SPECIAL AND INDIRECT DAMAGES FROM PURCHASER IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM WITH RESPECT TO ANY MATTER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT AND/OR ANY DOCUMENT
CONTEMPLATED HEREIN OR RELATED HERETO.

 

Section 7.23. Counterparts.
This Agreement may be executed in two or more counterparts, each of which shall be deemed an original: and all
such counterparts shall be deemed to constitute one and the same instrument.

 

[Remainder of page intentionally left
blank; signature page(s) to follow]

 

 

 

    	 	20	 

     

    

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the
date first set forth above.

 

	 	PURCHASER:
	 	 
	 	STORE CAPITAL ACQUISITIONS, LLC, a 

        Delaware limited liability company

	 	 
	 	 
	 	By: /s/ Michael T. Bennett
	 	Name: Michael T. Bennett
	 	Title: Executive Vice President, General Counsel

 

 

 

 

 

 

 

 

 

 

 

 

 

    	 	21	 

     

    

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed and delivered as of the
date first set forth above.

 

	 	SELLER:
		 
	 	MARQUIS INDUSTRIES ,INC., a Georgia Corporation

	 	 
	 	 
	 	By: /s/ Tim A Bailey
	 	Name: Tim A. Bailey
	 	Title: CEO

 

 

 

 

Exhibits:

 

A.   Defined Terms

B.   Property Addresses / Legal Descriptions

C.   Non-Foreign Seller Certificate

 

 

 

 

 

 

 

 

 

 

    	 	22	 

     

    

 

EXHIBIT A

 

DEFINED TERMS

 

The following terms shall have the following
meanings for all purposes of this Agreement: "Additional Title Objection" has the meaning set forth in Section
2.01(d)(ii).

 

"Affiliate"
or any derivation thereof, means any Person which directly or indirectly controls, is under common control with, or is controlled
by any other Person. For purposes of this definition, "controls", "under common control with" and "controlled
by" means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies
of such Person, whether through ownership of voting securities or otherwise.

 

"Bulk Sales Statutes" has the meaning set forth
in Section 4.01(q).

 

"Business Day'
means a day on which banks located in Scottsdale, Arizona are not required or authorized to remain closed.

 

"Calhoun Property" means
that certain property located at 716 River Street, Calhoun, GA 30701.

 

"Closing" shall
have the meaning set forth in Section 3.01.

 

"Closing Date" shall have the meaning set forth in Section 3.01.

 

"Closing Deadline"
means five (5) Business Days following the expiration of the Inspection Period or any other date mutually agreed upon by Seller
and Purchaser.

 

"Current Owner"
has the meaning set forth in Section 1.01.

 

"Deeds"
means, collectively, (i) those certain limited warranty deeds whereby Seller conveys to Lessee and Lessee conveys to Purchaser
all of Lessee's right, title and interest in and to the Properties, free and clear of all Liens, restrictions, encroachments and
easements, except the Permitted Encumbrances; and (ii) those certain limited warranty deeds whereby Seller conveys to Lessee all
of Seller's right, title and interest in and to the Improvements, free and clear of all Liens, restrictions, encroachments and
easements, except the Permitted Encumbrances.

 

"Effective
Date" has the meaning set forth in the introductory paragraph of this Agreement.

 

"Environmental
Liens" means all liens and other encumbrances imposed pursuant to any Hazardous Materials Law.

 

"Environmental Report" has
the meaning set forth in Section 2.04. 

 

"Event of Default" has the meaning set forth in Section 6.01.

 

 

    	 	A-1	 

     

    

 

 

"Faculty"
means a carpet mill and floor covering manufacturer, and uses incidental thereto.

 

"Governmental
Authority' means the United States of America, any state or other political subdivision thereof, any other entity exercising
executive, judicial, regulatory or administrative functions of or pertaining to government and any corporation or other entity
owned or controlled (through stock or capital ownership or otherwise) by any of the foregoing.

 

"Guarantor"
means, Marquis Industries, Inc., a Georgia corporation, or any additional or replacement guarantor(s) approved by Purchaser
(as landlord) in its sole and absolute discretion.

 

"Guaranty"
means an unconditional guaranty of payment and performance in form and substance acceptable to Lessor and Guarantor.

 

"Hazardous
Materials" includes: (a) oil, petroleum products, flammable substances, explosives, radioactive materials, hazardous
wastes or substances, toxic wastes or substances or any other materials, contaminants or pollutants, the presence of which causes
any of the Properties to be in violation of any local, state or federal law or regulation, (including without limitation, any Hazardous
Materials Law), or are defined as or included in the definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "toxic substances", "contaminants", "pollutants", or words of similar
import under any applicable local, state or federal law or under the regulations adopted, orders issued, or publications promulgated
pursuant thereto, including, but not limited to: (i) the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. §9601, et mg.; (ii) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. §1801,
et m.; (iii) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901, et mg.; and (iv) regulations adopted
and publications promulgated pursuant to the aforesaid laws; (b) asbestos in any form which is friable, urea formaldehyde foam
insulation, transformers or other equipment which contain dielectric fluid containing levels of polychlorinated biphenyls in excess
of fifty (50) parts per million; (c) underground storage tanks; and (d) any other chemical, material or substance, exposure to
which is prohibited, limited or regulated by any Governmental Authority.

 

"Hazardous
Materials Laws" includes any and all federal, state and local laws, rules, regulations, statutes, and requirements
pertaining or relating to the environmental condition of the Properties or to Hazardous Materials.

 

"Improvements" has
the meaning set forth in Section 1.01.

 

"Indemnified Parties" has the meaning set forth in Section 7.05.

 

"Insolvency
Event" means (a) a Person's (i) failure to generally pay its debts as such debts become due; (ii) admitting
in writing its inability to pay its debts generally; or (iii) making a general assignment for the benefit of creditors; (b)
any proceeding being instituted by or against any Person (i) seeking to adjudicate it a bankrupt or insolvent; (ii) seeking
liquidation, winding up, reorganization, arrangement, adjustment, protection, relief, or composition of it or its debts under
any law relating to bankruptcy, insolvency, or reorganization or relief of debtors; or (iii) seeking the entry of an order
for relief or the appointment of a receiver, trustee, or other similar official for it or for any substantial part of its
property, and in the case of any such proceeding instituted against any such Person, either such proceeding shall remain
undismissed for a period of 120 days or any of the actions sought in such proceeding shall occur; or (c) any Person taking
any corporate or other formal action to authorize any of the actions set forth above in this definition.

 

 

    	 	A-2	 

     

    

 

"Inspection Period' has
the meaning set forth in Section 2.07.

 

"Inspections" has
the meaning set forth in Section 2.07.

 

"Lease" has the meaning set forth in Section 1.03.

 

"Lease Proof of Insurance"
has the meaning set forth in Section 5.01(a)(iv).

 

"Legal Requirements"
has the meaning set forth in Section 4.01(e).

 

"Lender" has
the meaning set forth in Section 1.04.

 

"Lessee"
means a newly formed Delaware limited liability company separate and distinct from Seller and Guarantor, which entity
shall be a special purpose, bankruptcy-remote entity organized and structured in a manner acceptable to Purchaser and Lender and
confirmed by, among other things, Lessee representations and warranties and non-consolidation opinions rendered by legal counsel
to Seller and Lessee, and acceptable to Purchaser.

 

"Letter
of Intent" means that certain Letter of Intent dated May 3, 2016 between STORE Capital Corporation, on behalf of
Purchaser, and Seller with respect to the Transaction, and any amendments or supplements thereto.

 

"Lien"
means any mortgage, pledge, hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement or preferential arrangement of any kind or nature whatsoever (including without
limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under the Uniform Commercial Code or comparable law of
any jurisdiction).

 

"Loan
Agreement" means that certain loan agreement between Lessee, as borrower, and Lender, memorializing the Mortgage
Loan.

 

"Loan Documents"
shall have the meaning set forth in Section 1.04.

 

"Losses"
means any and all claims, lawsuits, suits, liabilities (including, without limitation, strict liabilities), actions,
proceedings, obligations, debts, damages, losses, costs, expenses, diminutions in value, fines, penalties, interest, charges, fees,
expenses, judgments, decrees, awards, amounts paid in settlement and damages of whatever kind or nature (including, without limitation,
attorneys' fees, court costs and costs incurred in the investigation, defense and settlement of claims).

 

"Memoranda
of Lease" has the meaning set forth in Section 5.01(a)(iii). "Mortgage Loan"
shall have the meaning set forth in Section 1.04.

 

"Non-Foreign
Seller Certificate" has the meaning set forth in Section 5.01(a)(vii).

 

    	 	A-3	 

     

    

 

"Notices" has the meaning set forth in Section
7.03.

 

"OFAC List"
means the list of specially designated nationals and blocked Persons subject to financial sanctions that is maintained by
the U.S. Treasury Department, Office of Foreign Assets Control and any other similar list maintained by the U.S. Treasury Department,
Office of Foreign Assets Control pursuant to any Legal Requirements, including, without limitation, trade embargo, economic sanctions,
or other prohibitions imposed by Executive Order of the President of the United States. The OFAC List currently is accessible
through the internet website www.treas.gov/ofac/tl1sdn. pdf.

 

"Opinion of
Counsel" means an opinion by legal counsel to the Seller Entities regarding due authority and execution and the enforceability
of the Transaction Documents, in form and substance and with such qualifications as are reasonably acceptable to Purchaser's counsel.

 

"Permitted
Encumbrances" means (a) the lien of any real estate taxes, water and sewer charges, not yet due and payable; (b) those
recorded easements, restrictions, liens and encumbrances set forth as exceptions in the Title Commitments and in the Title Policies
to be issued by Title Company to Purchaser and approved by Purchaser in its sole discretion in connection with this Agreement;
(c) the Lease and (d) the Property and Improvements Lease.

 

"Person"
means any natural person, firm, corporation, partnership, limited liability company, other entity, state, political subdivision
of any state, the United States of America, any agency or instrumentality of the United States of America, any other public body
or other organization or association.

 

"Professional Fees" has the meaning set forth
in Section 1.05.

 

"Property" or "Properties" has
the meaning set forth in Section 1.01.

 

"Property and Improvements Lease"
has the meaning set forth in Section 1.03.

 

"Property Condition Reports" has the meaning
set forth in Section 2.06.

 

"Purchase Price" means the amount specified
in Section 1.02.

 

"Real Property' has the meaning set forth in Section
1.01.

 

"Seller Documents" has the meaning set forth
in Section 2.02.

 

"Seller Entity"
or "Seller Entities" means individually or collectively, as the context may require, Seller, Lessee, Sublessee
and Guarantor and any Affiliate of Seller, Lessee, Sublessee and Guarantor.

 

"Sublessee" has the meaning set forth in Section
1.03.

 

"Surveys" has the meaning set forth in Section
2.03.

 

"Title Commitments" has the meaning set forth
in Section 2.01(a).

 

 

    	 	A-4	 

     

    

 

'Title Company'
means Fidelity National Title Insurance Company located at 1 E. Washington Street, Suite 450, Phoenix, AZ 85004, Attention:
Michelle Burton, or an alternative title insurance company selected by Purchaser.

 

"Title Objection" has the meaning set forth
in Section 2.01(d)(i).

 

"Title Policies" has the meaning set forth in Section 2.01(a).

 

"Transaction" has the meaning set forth in Section 1.01.

 

"Transaction
Costs" means all out-of-pocket costs and expenses incurred in connection with the Transaction, including but not limited
to (a) the procurement, or if the same is provided by Seller, the update of, any Property Condition Report, Environmental Report,
Survey, Title Commitments, Title Policies, all title policies required by Purchaser's lender, and all endorsements required by
Purchaser and its lender, (b) the Valuations, (c) any mortgagee's title insurance policies required by Purchaser's lender and any
mortgage taxes, (d) all taxes (including stamp taxes and transfer taxes), escrow, closing, transfer and recording fees. Transaction
Costs expressly exclude Professional Fees.

 

"Transaction
Documents" means this Agreement, the Lease, the Memoranda of Lease, the Guaranty, the Deeds, the Lease Proof of Insurance,
the Loan Documents, the Property and Improvements Lease, the Opinion of Counsel, the Non-Foreign Seller Certificate, the UCC Financing
Statements, any and all documents referenced herein and therein, and such other documents, payments, instruments and certificates
as are reasonably required by Purchaser and/or the Title Company.

 

"UCC Financing
Statements" means such UCC-1 Financing Statements as Purchaser and Lender shall require with respect to the Transaction.

 

"UST Regulations"
means 40 C.F.R. § 298 Subpart H — Financial Responsibility, or any equivalent state law, with respect to petroleum
underground storage tanks (as such term is defined under 40 C.F.R. § 290.12 or any equivalent state law).

 

"USTs"
means any one or combination of tanks and associated product piping systems used in connection with storage, dispensing and
general use of Hazardous Materials.

 

"Valuation" or "Valuations" has
the meaning set forth in Section 2.05. "Zoning Evidence" has the meaning set forth in Section 2.03.

 

“Zoning Evidence”
has the meaning set forth in Section 2.03.

 

    	 	A-5	 

     

    

 

EXHIBIT B

 

PROPERTY ADDRESSES
/ LEGAL DESCRIPTIONS

 

Street Addresses:

 

2743 Highway 78, Chatsworth, GA 30705

 

325 Smyrna Church Road, Chatsworth, GA
30705

 

242 Treadwell Road, Chatsworth, GA 30705

 

1978 Highway 52 ALT, Chatsworth, GA 30705

 

1642 Duvall Road, Chatsworth, GA 30705

 

1805 S. Hamilton, Dalton, GA 30720

 

2669 Lakeland Road, Dalton, GA 30721

 

716 River Street, Calhoun, GA 30701

 

 

Legal Descriptions: To be provided
by Seller or Title Company.

 

 

 

    	 	B-1	 

     

    

 

EXHIBIT C

 

 

 

 

 

NON-FOREIGN SELLER CERTIFICATE

 

 

 

	STATE OF _______	)
	 	) ss:
	COUNTY
    OF __________	)

 

 

__________, being first
duly sworn deposes and states under penalty of perjury:

 

	 	1.	That
he/she is a_________________of Marquis Industries, Inc., a Georgia corporation, the transferor of the Property described on Schedule I
attached hereto.

 

		2.	That the transferor's office address is at_______

 

		3.	That the United States taxpayer identification number for the transferor is

 

		4.	That the transferor is not a "foreign person"
as that term is defined in Section 1445(f) of the United States Internal Revenue Code of 1986, as amended (the "Code").

 

		5.	That the transferor is not a disregarded entity as defined in § 1.1445 2(b)(2)(iii) of the regulations promulgated under
the Code.

 

This affidavit is given to__________, a Delaware limited
liability company, the transferee of the Property described in paragraph 1 above, for the purpose of establishing and documenting
the non-foreign affidavit exemption to the withholding requirement of Section 1445 of the Code. The transferor understands that
this affidavit may be disclosed to the Internal Revenue Service by the transferee and that any false statement contained herein
could be punished by fine, imprisonment, or both.

 

 

	 	MARQUIS INDUSTRIES ,INC., a Georgia Corporation

	 	 
	 	 
	 	By: EXHIBIT - NOT FOR SIGNATURE
	 	Name: 
	 	Title: 

 

 

 

 

    	 	C-1	 

     

    

 

 

Subscribed and
sworn to before me this ____ day of _________, 2____.

 

Notary Public: ________________________

                                                                          (SEAL)

 

My Commission
Expires: ________________________

 

 

 

 

 

 

 

 

 

 

    	 	C-2	 

     

    

 

 

Schedule I

to Non-foreign Seller Certificate

 

Street Addresses:

 

2743 Highway 78, Chatsworth, GA 30705

 

325 Smyrna Church Road, Chatsworth, GA 30705

 

242 Treadwell Road, Chatsworth, GA 30705

 

1978 Highway 52 ALT, Chatsworth, GA 30705

 

1642 Duvall Road, Chatsworth, GA 30705

 

1805 S. Hamilton, Dalton, GA 30720

 

2669 Lakeland Road, Dalton, GA 30721

 

716 River Street, Calhoun, GA 30701

 

 

 

Legal Descriptions: To be provided by Seller or Title Company.

 

 

 

 

 

 

 

 

    	 	C-3Exhibit 10.8 Southridge Partners-Equity Purchase

EQUITY PURCHASE AGREEMENT

BY AND BETWEEN

MOMENTOUS ENTERTAINMENT GROUP, INC.

AND

SOUTHRIDGE PARTNERS II LP

Dated

July 28, 2016

THIS EQUITY PURCHASE AGREEMENT, entered into as of the 28 day of July, 2016 (this “AGREEMENT”), by and between SOUTHRIDGE PARTNERS II LP, a Delaware limited partnership (“INVESTOR”), and MOMENTOUS ENTERTAINMENT GROUP, INC., a Nevada corporation (the “COMPANY”).

WHEREAS, the parties desire that, upon the terms and subject to the conditions contained herein, the Company shall issue and sell to Investor, from time to time as provided herein, and Investor shall purchase up to Three Million Dollars ($3,000,000) of the Company’s Common Stock as defined below); and

NOW, THEREFORE, the parties hereto agree as follows:

ARTICLE I

CERTAIN DEFINITIONS

Section 1.1

DEFINED TERMS as used in this Agreement, the following terms shall have the following meanings specified or indicated (such meanings to be equally applicable to both the singular and plural forms of the terms defined)

“AGREEMENT” shall have the meaning specified in the preamble hereof. 

“BY-LAWS” shall have the meaning specified in Section 4.7.

“CLAIM NOTICE” shall have the meaning specified in Section 9.3(a).

“CLEAR ING DATE” shall be the date in which the Estimated Put Shares (as defined i n Section 2.2(a)) have been deposited into the Investor’s brokerage account.

“CLOSING” shall mean one of the closings of a purchase and sale of shares of Common Stock pursuant to Section 2.3.

“CLOSING CERTIFICATE” shall mean the closing certificate of the Company in the form of

Exhibit B hereto.

“CLOSING PRICE” shall mean the closing bid price for the Company’s common stock on the Principal Market on a Trading Day as reported by Bloomberg Finance L.P.

“COMMITMENT PERIOD” shall mean the period commencing on the Effective Date, and ending on the earlier of (i) the date on which Investor shall have purchased Put Shares pursuant to this Agreement for an aggregate Purchase Price of the Maximum Commitment Amount, or (ii) the date occurring twenty four (24) months from the date of commencement of the Commitment Period.

“COMMON STOCK” shall mean the Company’s common stock, $0.001 par value per share, and any shares of any other class of common stock whether now or hereafter authorized, having the right to participate in the distribution of dividends (as and when declared) and assets (upon liquidation of the Company).

“COMMON STOCK EQUIVALENTS” shall mean any securities that are convertible into or exchangeable for Common Stock or any options or other rights to subscribe for or purchase Common Stock or any such conve1tible or exchangeable securities.

“COMPANY” shall have the meaning specified in the preamble to this Agreement.

“DAMAGES” shall mean any loss, claim, damage, liability, cost and expense (including, without limitation, reasonable attorneys’ fees and disbursements and costs and expenses of expert witnesses and investigation).

“DISPUTE PERIOD” shall have the meaning specified in Section 9.3(a).

“DOLLAR VOLUME” shall mean the product of (a) the Closing Price multiplied by (b) the trading volume on the Principal Market on a Trading Day.

2

“DTC” shall have the meaning specified in Section 2.3. “DWAC” shall have the meaning specified in Section 2.3.

“EFFECTIVE DATE” shall mean the date that the Registration Statement is declared effective by the SEC.

“ESTIMATED PUT SHARES” shall have the meaning specified in Section 2.2(a)

“EXCHANGE ACT” shall mean the Securities Exchange Act of 1934 and the rules and regulations promulgated thereunder.

“EXCHANGE CAP” shall have the meaning specified in Section 7.1 (c) “FAST” shall have the meaning specified in Section 2.3.

“FINRA” shall mean the Financial Industry Regulatory Authority, Inc. “FLOOR PRICE” shall have the meaning specified in Section 2.2(c). “INDEMNIFIED PARTY” shall have the meaning specified in Section 9.3(a). “INDEMNIFYING PARTY” shall have the meaning specified in Section 9.3(a). “INDEMNITY NOTICE” shall have the meaning specified in Section 9.3(b).

“INVESTMENT AMOUNT” shall mean the dollar amount to be invested by Investor to purchase Put Shares with respect to any Put as notified by the Company to Investor in accordance with Section 2.2.

“INVESTOR” shall have the meaning specified in the preamble to this Agreement. “LEGEND” shall have the meaning specified in Section 8.1.

“MARKET PRICE” shall mean the lowest Closing Price on the Principal Market for any Trading Day during the Valuation Period, as reported by Bloomberg Finance L.P.

“MATERIAL ADVERSE EFFECT” shall mean any effect on the business, operations, properties, or financial condition of the Company that is material and adverse to the Company and/or any condition, circumstance, or situation that would prohibit or otherwise materially interfere with the ability of the Company to enter into and perform its obligations under any of this Agreement.

“MAXIMUM COMMITMENT AMOUNT” shall mean Three Million Dollars ($3,000,000). “PAR VALUE PAYMENT” shall have the meaning specified in Section 2.2(a).

“PERSON” shall mean an individual, a corporation, a partnership, an association, a trust or other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“PRINCIPAL MARKET” shall mean any of the national exchanges (i.e. NYSE, NYSE AMEX, Nasdaq), OTCQX, the OTC Bulletin Board, or other principal exchange which is at the time the principal trading exchange or market for the Common Stock.

“PURCHASE PRICE” shall mean 88% of the Market Price on such date on which the Purchase Price is calculated in accordance with the terms and conditions of this Agreement.

“PUT” shall mean the right of the Company to require the Investor to purchase shares of Common Stock, subject to the terms and conditions of this Agreement.

“PUT DATE” shall mean any Trading Day during the Commitment Period that a Put Notice is deemed delivered pursuant to Section 2.2(b).

“PUT NOTICE” shall mean a written notice, substantially in the form of Exhibit A hereto, to Investor setting forth the Investment Amount with respect to which the Company intends to require Investor to purchase shares of Common Stock pursuant to the terms of this Agreement.

“PUT SHARES” shall mean all shares of Common Stock issued or issuable pursuant to a Put that has been exercised or may be exercised in accordance with the terms and conditions of this Agreement.

3

“REGISTERED SECURITIES” shall mean the (a) Put Shares, and (b) any securities issued or issuable with respect to any of the foregoing by way of exchange, stock dividend or stock split or in connection with a combination of shares, recapitalization, merger, consolidation or other reorganization or otherwise. As to any particular Registered Securities, once issued such securities shall cease to be Registrable Securities when (i) a Registration Statement has been declared effective by the SEC and such Registrable Securities have been disposed of pursuant to a Registration Statement, (ii) such Registrable Securities have been sold under circumstances under which all of the applicable conditions of Rule 144 are met, (iii) such time as such Registrable Securities have been otherwise transferred to holders who may trade such shares without restriction under the Securities Act or (iv) in the opinion of counsel to the Company, which counsel shall be reasonably acceptable to Investor, such Registrable Securities may be sold without registration under the Securities Act or the need for an exemption from any such registration requirements and without any time, volume or manner limitations pursuant to Rule 144(b)(i) (or any similar provision then in effect) under the Securities Act.

“REGISTRATION STATEMENT” shall mean the Company’s effective registration statement on file with the SEC, and any follow up registration statement or amendment thereto.

“REGULATION D” shall mean Regulation D promulgated under the Securities Act.

“RULE 144” shall mean Rule 144 under the Securities Act or any similar provision then in force under the Securities Act.

“SEC” shall mean the Securities and Exchange Commission.

“SECURITIES ACT” shall have the meaning specified in the recitals of this Agreement.

“SEC DOCUMENTS” shall mean, as of a particular date, all reports and other documents filed by the Company pursuant to Section 13(a) or 15(d) of the Exchange Act since the end of the Company’s then most recently completed and reported fiscal year as of the time in question (provided that if the date in question is within ninety days of the beginning of the Company’s fiscal year, the term shall include all documents filed since the beginning of the preceding fiscal year).

“SHORT SALES” shall mean 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 DATE” shall mean the date on which this Agreement is executed and delivered by the Company and Investor.

“THIRD PARTY CLAIM” shall have the meaning specified in Section 9.3(a).

“TRADING DAY” shall mean a day on which the Principal Market shall be open for business.

“TRANSACTION DOCUMENTS” shall mean this Agreement and the Registration Rights Agreement.

“TRANSFER AGENT” shall mean the transfer agent for the Common Stock (and to any substitute or replacement transfer agent for the Common Stock upon the Company’s appointment of any such substitute or replacement transfer agent).

“UNDERWRITER” shall mean any underwriter participating in any disposition of the Registered Securities on behalf of Investor pursuant to the Registration Statement.

“VALUATION EVENT” shall mean an event in which the Company at any time during a Valuation Period takes any of the following actions:

(a)

subdivides or combines the Common Stock;

pays a dividend in shares of Common Stock or makes any other distribution of shares of Common Stock, except for dividends paid with respect to any series of preferred stock authorized by the Company, whether existing now or in the future;

4

(b)

issues any options or other rights to subscribe for or purchase shares of Common Stock other than pursuant to this Agreement, and other than options or stock grants issued or issuable to directors, officers and employees pursuant to a stock option program, whereby the price per share for which shares of Common Stock may at any time thereafter be issuable pursuant to such options or other rights shall be less than the Closing Price in effect immediately prior to such issuance;

(c)

issues any securities convertible into or exchangeable for shares of Common Stock and the consideration per share for which shares of Common Stock may at any time thereafter be issuable pursuant to the terms of such convertible or exchangeable securities shall be less than the Closing Price in effect immediately prior to such issuance;

(d)

issues shares of Common Stock otherwise than as provided in the foregoing subsections (a) through (d), at a price per share less, or for other consideration lower, than the Closing Price in effect immediately prior to such issuance, or without consideration; or

(e)

makes a distribution of its assets or evidences of indebtedness to the holders of Common Stock as a dividend in liquidation or by way of return of capital or other than as a dividend payable out of earnings or surplus legally available for dividends under applicable law or any distribution to such holders made in respect of the sale of all or substantially all of the Company’s assets (other than under the circumstances provided for in the foregoing subsections (a) through (e).

“VALUATION PERIOD” shall mean the period of ten (10) Trading Days immediately following the Clearing Date associated with the applicable Put Notice during which the Purchase Price of the Common Stock is valued; provided, however, that if a Valuation Event occurs during any Valuation Period, a new Valuation Period shall begin on the Trading Day immediately after the occurrence of such Valuation Event and end on the tenth (10th) Trading Day thereafter. Investor shall notify the Company in writing of the occurrence of the Clearing Date associated with a Put Notice. The Valuation Period shall begin the first Trading Day following such written notice from Investor.

ARTICLE II

PURCHASE AND SALE OF COMMON STOCK 

Section 2.1

INVESTMENTS.

(a)

PUTS. Upon the terms and conditions set forth herein (including, without limitation, the provisions of Article VII), on any Put Date the Company may exercise a Put by the delivery of a Put Notice. The number of Put Shares that Investor shall purchase pursuant to such Put shall be determined by dividing the Investment Amount specified in the Put Notice by the Purchase Price with respect to such Put Notice.

(b)

PROMISSORY NOTE. As a condition for the execution of this Agreement by the Investor, the Company shall issue to the Investor, or designated affiliate, a promissory note in the principal amount equal to $50,000.00 (the “Note”) on the Subscription Date. The Note shall have no registration rights.

Section 2.2

MECHANICS.

(a)

PUT NOTICE. At any time and from time to time during the Commitment Period, the Company may deliver a Put Notice to Investor, subject to the conditions set forth in Section 7.2; provided, however, that the Investment Amount identified in the applicable Put Notice, when taken together with all prior Put Notices, shall not exceed the Maximum Commitment Amount. On the Put Date the Company shall deliver to Investor’s brokerage account estimated put shares equal to the Investment Amount indicated in the Put Notice divided by the Closing Price on the Trading Day immediately preceding the Put Date, multiplied by one hundred twenty five percent (125%) (the “Estimated Put Shares”). On the Trading Date immediately following delivery of the Estimated Put Shares, Investor shall deliver payment by check or wire transfer to the Company an amount equal to the par value of the Estimated Put Shares (“Par Value Payment”).

(b)

DATE OF DELIVERY OF PUT NOTICE. A Put Notice shall be deemed delivered on (i) the Trading Day it is received by facsimile or otherwise by Investor if such notice is received on or prior to 12:00 noon New York time, or (ii) the immediately succeeding Trading Day if it is received by facsimile or otherwise after 12:00 noon New York time on a Trading Day or at any time on a day which is not a Trading Day.

5

(c)

FLOOR PRICE. In the event that, during a Valuation Period, the Closing Price on any Trading Day is less than seventy five percent (75%) of the average of the closing bid prices for the ten (10) trading days immediately preceding the date of the Company’s Put Notice (a “Low Bid Price”), for each such Trading Day, the parties shall have no right to sell and shall be under no obligation to purchase one tenth (1/10th) of the Investment Amount specified in the Put Notice, and the Investment Amount shall accordingly be deemed reduced by such amount. In the event that during a Valuation Period there exists a Low Bid Price for any three (3) Trading Days—not necessarily consecutive—then the balance of each party’s right and obligation to sell and purchase the Investment Amount under such Put Notice shall terminate on such third Trading Day (“Termination Day”), and the Investment Amount shall be adjusted to include only one-tenth (1/10th) of the initial Investment Amount for each Trading Day during the Valuation Period prior to the Termination Day that the Bid Price equals or exceeds the Low Bid Price.

Section 2.3

CLOSINGS. At the end of the Valuation Period the Purchase Price shall be established and the number of Put Shares shall be determined for a particular Put. If the number of Estimated Put Shares initially delivered to Investor is greater than the Put Shares purchased by Investor pursuant to such Put, then immediately after the Valuation Period the Investor shall deliver to Company any excess Estimated Put Shares associated with such Put. If the number of Estimated Put Shares delivered to Investor is less than the Put Shares purchased by Investor pursuant to a Put, then immediately after the Valuation Period the Company shall deliver to Investor the difference between the Estimated Put Shares and the Put Shares issuable pursuant to such Put. The Closing of a Put shall occur upon the first Trading Day following the completion of the Valuation Period, whereby Investor shall deliver the Investment Amount specified in the Put Notice, less the Par Value Payment, by wire transfer of immediately available funds to an account designated by the Company. In lieu of delivering physical certificates representing the Common Stock issuable in accordance with clause (a) of this Section 2.3, and provided that the Transfer Agent then is participating in the Depository Trust Company (“DTC”) Fast Automated Securities Transfer (“FAST”) program, upon request of Investor, but subject to the applicable provisions of Article VIII hereof, the Company shall use its commercially reasonable efforts to cause the Transfer Agent to electronically transmit, prior to the applicable Closing Date, the applicable Put Shares by crediting the account of the Investor’s prime broker with DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system, and provide proof satisfactory to the Investor of such delivery. In addition, on or prior to such Closing Date, each of the Company and Investor shall deliver to each other all documents, instruments and writings required to be delivered or reasonably requested by either of them pursuant to this Agreement in order to implement and effect the transactions contemplated herein.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF INVESTOR

Investor represents and warrants to the Company that:

Section 3.1

INTENT. Investor is entering into this Agreement for its own account and Investor has no present arrangement (whether or not legally binding) at any time to sell the Registered Securities to or through any person or entity; provided, however, that Investor reserves the right to dispose of the Registered Securities at any time in accordance with federal and state securities laws applicable to such disposition.

Section 3.2

NO LEGAL ADVICE FROM THE COMPANY. The Investor acknowledges that it has had the opportunity to review this Agreement and the transactions contemplated by this Agreement with its own legal counsel and investment and tax advisors. The Investor is relying solely on such counsel and advisors and not on any statements or representations of the Company or any of its representatives or agents for legal, tax or investment advice with respect to this investment, the transactions contemplated by this Agreement or the securities laws of any jurisdiction.

Section 3.3

SOPHISTICATED INVESTOR. Investor is a sophisticated investor (as described in Rule 506(b)(2)(ii) of Regulation D) and an accredited investor (as defined in Rule 501 of Regulation D), and Investor has such experience in business and financial matters that it is capable of evaluating the merits and risks of an investment in the Registered Securities. Investor acknowledges that an investment in the Registered Securities is speculative and involves a high degree of risk.

Section 3.4

AUTHORITY. (a) Investor has the requisite power and authority to enter into and perform its obligations under this Agreement and the transactions contemplated hereby in accordance with its terms; (b) the execution and delivery of this Agreement and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action and no further consent or authorization of Investor or its partners is required; and (c) this Agreement has been duly authorized and validly executed and delivered by Investor and constitutes a valid and binding obligation of Investor enforceable against it in accordance with its terms, subject to applicable bankruptcy, insolvency, or similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

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Section 3.5

NOT AN AFFILIATE. Investor is not an officer, director or “affiliate” (as that term is defined in Rule 405 of the Securities Act) of the Company.

Section 3.6

ORGANIZATION AND STANDING. Investor is a limited partnership duly organized. validly existing and in good standing under the laws of the State of Delaware and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now, being conducted. Investor is duly qualified and in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a material adverse effect on  Investor.

Section 3.7

ABSENCE OF CONFLICTS. The execution and delivery of this Agreement and any other document or instrument contemplated hereby, and the consummation of the transactions contemplated hereby and thereby, and compliance with the requirements hereof and thereof will not (a) violate any law, rule, regulation, order, writ, judgment, injunction, decree or award binding on Investor, (b) violate any provision or any indenture, instrument or agreement to which Investor is a party or is subject, or by which Investor or any of its assets is bound, or conflict with or constitute a material default thereunder, (c) result in the creation or imposition of any lien pursuant to the terms of any such indenture, instrument or agreement, or constitute a breach of any (fiduciary duty owed by Investor to any third party, or (d) require the approval of My third -party (that has not been obtained) pursuant to any material contract, instrument, agreement, relationship or legal obligation to which Investor is subject or to which any of its assets, operations or management may be subject.·

Section 3.8

DISCLOSURE; ACCESS TO INFORMATION. Investor had an opportunity to review copies of the SEC Documents filed on behalf of the Company and has had access to all publicly available information with respect to the Company.

Section 3.9

MANNER OF SALE. At no time was Investor presented with or solicited by or through any leaflet, public promotional meeting, television advertisement or any other form of general solicitation or advertising.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to Investor that, except as disclosed in the SEC Documents:

Section 4.1

ORGANIZATION OF THE COMPANY. The Company is a corporation duly organized and validly existing and in good standing under the laws of the State of Nevada and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted. The Company is duly qualified as a foreign corporation to do business and is in good standing in every jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, other than those in which the failure so to qualify would not have a Material Adverse Effect.

Section 4.2

AUTHORITY. (a) The Company has the requisite corporate power and authority to enter into and perform its obligations under this Agreement and to issue the Put Shares; (b) the execution and delivery or this Agreement by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary corporate action and no further consent or authorization of the Company or its Board of Directors or stockholders is required; and (c) each of this Agreement and has been duly executed and delivered by the Company and constitutes a valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy. insolvency, or, similar laws relating to, or affecting generally the enforcement of, creditors’ rights and remedies or by other equitable principles of general application.

Section 4.3

CAPITALIZATION. As of the date hereof, the authorized capital stock of the Company consists of 450,000,000 shares of Common Stock, $0.001 par· value per share, or which 87,237,435 shares were issued and outstanding as of [July 28], 2016, ____ preferred stock, 50,000,000 shares authorized, 1,000 shares issued and outstanding at [July 28], 2016.

Except as otherwise disclosed i n the SEC Documents or on Schedule 4.3, there are no outstanding securities which are convertible into shares of Common Stock, whether such conversion is currently exercisable or exercisable only upon some future date or the occurrence of some event in the future.

All of the outstanding shares of Common Stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable.

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Section 4.4

COMMON STOCK. The Company is in full compliance with all reporting requirements of the Exchange Act, and the Company has maintained all requirements for the continued listing or quotation of the Common Stock, and such Common Stock is currently listed or quoted on the Principal Market which is presently the OTCPK.

Section 4.5

SEC DOCUMENTS. The Company may make available to Investor true and complete copies of the SEC Documents (including, without limitation, proxy information and solicitation materials). To the Company’s knowledge, the Company has not provided to Investor any information that, according to applicable law, rule or regulation, should have been disclosed publicly prior to the date hereof by the Company, but which has not been so disclosed. As of their respective dates, the SEC Documents complied in all material respects with the requirements of the Exchange Act, and other federal laws, rules and regulations applicable to such SEC Documents, and none of the SEC Documents 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 light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Documents comply as to form and substance in all material respects with applicable accounting requirements and the published rules and regulations of the SEC or other applicable rules and regulations with respect thereto. Such financial statements have been prepared in accordance with generally accepted accounting principles applied on a consistent basis during the periods involved (except (a) as may be othcrwise indicated in such financial statements or the notes thereto or (b) in the case of unaudited interim statements, to the extent they may not include footnotes or may be condensed or summary statements) and fairly present in all material respects the financial position of the Company as of 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 year-end audit adjustments).

Section 4.6

VALID ISSUANCES. When issued and paid for as herein provided, the Put Shares shall be duly and validly issued, fully paid, and non-assessable. The sales of the Put Shares pursuant to this Agreement. and the Company’s performance of its obligations hereunder, shall not (a) result in the creation or imposition of any liens, charges, claims or other encumbrances upon the Put Shares, or any of the assets of the Company, or (b) entitle the holders of outstanding shares of Common Stock to preemptive or other rights to subscribe to or acquire the Common Stock or other securities of the Company. The Put Shares shall not subject Investor to personal liability, in excess of the subscription price by reason of the ownership thereof.

Section 4.7

NO CONFLICTS. The execution, delivery and performance of this Agreement by the Company and the consummation by the Company of the transactions contemplated hereby, including without limitation the issuance of the Put Shares, do not and will not (a) result in a violation of the Company’s Articles of Incorporation or By-Laws or (b) conflict with, or constitute a material default (or an event that with notice or lapse of time or both would become a material default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any material agreement, indenture, instrument or any “lock-up” or similar provision of any underwriting or similar agreement to which the Company is a party, or (c) result in a violation of any federal, state or local law, rule, regulation, order, judgment or decree (including federal and state securities laws and regulations) applicable to the Company or by which any property or asset of the Company is bound or affected (except for such conflicts, defaults, terminations, amendments, accelerations, cancellations and violations as would not, individually or in the aggregate, have a Material Adverse Effect) nor is the Company otherwise in violation of, conflict with or in default under any of the foregoing. The business of the Company is not being conducted in violation of any law, ordinance or regulation of any governmental entity, except for possible violations that either singly or in the aggregate do not and will not have a Material Adverse Effect. The Company is not required under federal, state or local law, rule or regulation to obtain any consent, authorization or order of, or make any filing or registration with, any court or governmental agency in order for it to execute, deliver or perform any of its obligations under this Agreement or issue and sell the Common Stock in accordance with the terms hereof (other than any SEC, FINRA or state securities filings that may be required to be made by the Company subsequent to any Closing, any registration statement that may be filed pursuant hereto); provided that, for purposes of the representation made in this sentence, the Company is assuming and relying upon the accuracy of the relevant representations and agreements of Investor herein.

Section 4.8

NO MATERIAL ADVERSE CHANGE. Since July 1, 2016 no event has occurred that would have a Material Adverse Effect on the Company.

Section 4.9

LITIGATION AND OTHER PROCEEDINGS. Except as disclosed in the Company’s SEC filings, there are no lawsuits or proceedings pending or to the knowledge of the Company threatened, against the Company, nor has the Company received any written or oral notice of any such action, suit, proceeding or investigation, which would have a Material Adverse Effect. No judgment, order, writ, injunction or decree or award has been issued by or, so far as is known by the Company, requested of any court, arbitrator or governmental agency which would have a Material Adverse Effect.

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Section 4.10

DILUTION. The number of shares of Common Stock issuable as Put Shares may increase substantially in certain circumstances, including, but not necessarily limited to, the circumstance wherein the trading price of the Common Stock declines during the period between the Effective Date and the end of the Commitment Period. The Company’s executive officers and directors have studied and fully understand the nature of the transactions contemplated by this Agreement and recognize that they have a potential dilutive effect. The board of directors of the Company has concluded in its good faith business judgment that such issuance is in the best interests of the Company. The Company specifically acknowledges that, subject to Section 2.2(c), its obligation to issue the Put Shares is binding upon the Company and enforceable regardless of the dilution such issuance may have on the ownership interests of other shareholders of the Company.

ARTICLE V

COVENANTS OF INVESTOR

Section 5.1

COMPLIANCE WITH LAW; TRADING IN SECURITIES. Investor’s trading activities with respect to shares of the Common Stock will be in compliance with all applicable state and federal securities laws, rules and regulations and the rules and regulations of FINRA and the Principal Market on which the Common Stock is listed or quoted.

Section 5.2

SHORT SALES AND CONFIDENTIALITY. Neither Investor nor any affiliate of the Investor acting on its behalf or pursuant to any understanding with it will execute any Short Sales during the period from the date hereof to the end of the Commitment Period. For the purposes hereof, and in accordance with Regulation SHO, the sale after delivery of a Put Notice of such number of shares of Common Stock reasonably expected to be purchased under a Put Notice shall not be deemed a Short Sale.

Other than to other Persons party to this Agreement, Investor has maintained the confidentiality of all disclosures made to it in connection with this transaction (including the existence and terms of this transaction).

ARTICLE VI

COVENANTS OF THE COMPANY

Section 6.1

RESERVATION OF COMMON STOCK. The Company will, from time to time as needed in advance of a Closing Date, reserve and keep available until the consummation of such Closing, free of preemptive rights sufficient shares of Common Stock for the purpose of enabling the Company to satisfy its obligation to issue the Put Shares to be issued in connection therewith. The number of shares so reserved from time to time, as theretofore increased or reduced as hereinafter provided, may be reduced by the number of shares actually delivered hereunder.

Section 6.2

LISTING OF COMMON STOCK. If the Company applies to have the Common Stock traded on any other Principal Market, it shall include in such application the Put Shares, and shall take such other action as is necessary or desirable in the reasonable opinion of Investor to cause the Common Stock to be listed on such other Principal Market as promptly as possible. The Company shall use its commercially reasonable efforts to continue the listing and trading of the Common Stock on the Principal Market (including, without limitation, maintaining sufficient net tangible assets) and will comply in all respects with the Company’s reporting, filing and other obligations under the bylaws or rules of the FINRA and the Principal Market.

Section 6.3

CERTAIN AGREEMENTS. So long as this Agreement remains in effect, the Company covenants and agrees that it will not, without the prior written consent of the Investor, enter into any other equity line of credit agreement with a third party during the Commitment Period having terms and conditions substantially comparable to this Agreement. For the avoidance of doubt, nothing contained in the Transaction Documents shall restrict, or require the Investor’s consent for, any agreement providing for the issuance or distribution of (or the issuance or distribution of) any equity securities pursuant to any agreement or arrangement that is not commonly understood to be an “equity line of credit.”

ARTICLE VII

CONDITIONS TO DELIVERY OF

PUT NOTICES AND CONDITIONS TO CLOSING

Section 7.1

CONDITIONS PRECEDENT TO THE OBLIGATION OF THE COMPANY TO ISSUE AND SELL COMMON STOCK. The obligation hereunder of the Company to issue and sell the Put Shares to Investor is subject to the satisfaction of each of the conditions set forth below.

(a)

ACCURACY OF INVESTOR’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of Investor shall be true and correct in all material respects as of the date of this Agreement and as of the date of each such Closing as though made at each such time.

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(b)

PERFORMANCE BY INVESTOR. Investor shall have performed, satisfied and complied in all respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by Investor at or prior to such Closing.

(c)

PRINCIPAL MARKET REGULATION. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put Shares, if the issuance of such shares would exceed the aggregate number of shares of Common Stock which the Company may issue without breaching the Company’s obligations under the rules or regulations of the Principal Market (the “EXCHANGE CAP”).

Section 7.2

CONDITIONS PRECEDENT TO THE RIGHT OF THE COMPANY TO DELIVER A PUT NOTICE AND THE OBLIGATION OF INVESTOR TO PURCHASE PUT SHARES. The right of the Company to deliver a Put Notice and the obligation of Investor hereunder to acquire and pay for the Put Shares is subject to the satisfaction of each of the following conditions:

(a)

EFFECTIVE REGISTRATION STATEMENT. The Registration Statement, and any amendment or supplement thereto, shall remain effective for the sale by Investor of the Registered Securities subject to such Put Notice, and (i) neither the Company nor Investor shall have received notice that the SEC has issued or intends to issue a stop order with respect to such Registration Statement or that the SEC otherwise has suspended or withdrawn the effectiveness of such Registration Statement, either temporarily or permanently, or intends or has threatened to do so and (ii) no other suspension of the use or withdrawal of the effectiveness of such Registration Statement or related prospectus shall exist.

(b)

ACCURACY OF THE COMPANY’S REPRESENTATIONS AND WARRANTIES. The representations and warranties of the Company shall be true and correct in all material respects (except for representations and warranties specifically made as of a particular date), except for any conditions which have temporarily caused any representations or warranties herein to be incorrect and which have been corrected with no continuing impairment to the Company or Investor.

(c)

PERFORMANCE BY THE COMPANY. The Company shall have performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by this Agreement to be performed, satisfied or complied with by the Company.

(d)

NO INJUNCTION. No statute, rule, regulation, executive order, decree, ruling or injunction shall have been enacted, entered, promulgated or adopted by any court or governmental authority of competent jurisdiction that prohibits or directly and materially adversely affects any of the transactions contemplated by this Agreement, and no proceeding shall have been commenced that may have the effect of prohibiting or materially adversely affecting any of the transactions contemplated by this Agreement.

(e)

ADVERSE CHANGES. Since the date of filing of the Company’s most recent SEC Document, no event that had or is reasonably likely to have a Material Adverse Effect has occurred.

(f)

NO SUSPENSION OF TRADING IN OR DELISTING OF COMMON STOCK. The trading of the Common Stock shall not have been suspended by the SEC, the Principal Market or the FINRA and the Common Stock shall have been approved for listing or quotation on and shall not have been delisted from the Principal Market.

(g)

[INTENTIONALLY OMITTED]

(h)

TEN PERCENT LIMITATION. On each Closing Date, the number of Put Shares then to be purchased by Investor shall not exceed the number of such shares that, when aggregated with all other shares of Common Stock then owned by Investor beneficially or deemed beneficially owned by Investor, would result in Investor owning more than 9.99% of all of such Common Stock as would be outstanding on such Closing Date, as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder. For purposes of this Section, in the event that the amount of Common Stock outstanding as determined in accordance with Section 16 of the Exchange Act and the regulations promulgated thereunder is greater on a Closing Date than on the date upon which the Put Notice associated with such Closing Date is given, the amount of Common Stock outstanding on such Closing Date shall govern for purposes of determining whether Investor, when aggregating all purchases of Common Stock made pursuant to this Agreement, would own more than 9.99% of the Common Stock following such Closing Date.

(i)

Principal Market Regulation. The Company shall not issue any Put Shares, and the Investor shall not have the right to receive any Put Shares, if the issuance of such shares would exceed the EXCHANGECAP.

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(j)

NO KNOWLEDGE. The Company shall have no knowledge of any event more likely than not to have the effect of causing such Registration Statement to be suspended or otherwise ineffective (which event is more likely than not to occur within the fifteen (15) Trading Days following the Trading Day on which such Put Notice is deemed delivered).

(k)

NO VIOLATION OF SHAREHOLDER APPROVAL REQUIREMENT. The issuance of shares of Common Stock with respect to the applicable Closing, if any, shall not violate the shareholder approval requirements of the Principal Market.

(l)

NO VALUATION EVENT. No Valuation Event shall have occurred since the Put Date.

(m)

OTHER. On the date of delivery of each Put Notice, Investor shall have received a certificate in substantially the form and substance of Exhibit B hereto, executed by an executive officer of the Company and to the effect that all the conditions to such Closing shall have been satisfied as at the date of each such certificate.

ARTICLE VIII

LEGENDS

Section 8.1

NO STOCK LEGEND OR STOCK TRANSFER RESTRICTIONS. Provided there is an effective REGISTRATION STATEMENT, no legend shall be placed on the share certificates representing the Put Shares.

Section 8.2

INVESTOR’S COMPLIANCE. Nothing in this Article VIII shall affect in any way Investor’s obligations under any agreement to comply with all applicable securities laws upon the sale of the Common Stock.

ARTICLE IX

NOTICES; INDEMNIFICATION

Section 9.1

NOTICES. All notices, demands, requests, consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified herein, shall be personally served, (b) deposited in the mail, registered or certified, return receipt requested, postage prepaid, (c) delivered by reputable air courier service with charges prepaid, or (d) transmitted by hand delivery, telegram, facsimile, or email as a PDF, addressed as set forth below or to such other address as such party shall have specified most recently by written notice given in accordance herewith. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (i) upon hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, or email as a PDF, at the address or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or the first business day following such delivery (if delivered other than on a business day during normal business hours where such notice is to be received) or (ii) on the second business day following the date of mailing by express courier service or on the fifth business day after deposited in the mail, in each case, fully prepaid, addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.

The addresses for such communications shall be:

If to the Company:

Momentous Entertainment Group. Inc.

P.O. Box 861

Sugar Land, Texas 77487-0861

Attn: Kurt Neubauer

Chief Executive Officer

Copy to (which shall not constitute notice):

_________________________

_________________________

_________________________

Attn: __________________

Tel: ___________________

Fax: ___________________

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If to Investor:

Southridge Partners II LP

c/o 90 Grove Street, Ste. 108

Ridgefield, CT 06877

Tel: 203-431-8300

Fax: 203-431-8301

Either party hereto may from time to time change its address or facsimile number for notices under this Section 9.1 by giving at least ten (10) days’ prior written notice of such changed address or facsimile number to the other part) hereto.

Section 9.2

INDEMNIFICATION. Each party (an “Indemnifying Party”) agrees to indemnify and hold harmless the other party along with its officers, directors, employees, and authorized agents, and each Person or entity, if any, who controls such party within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (an “Indemnified Party”) from and against any Damages, joint or several, and any action in respect thereof to which the Indemnified Party becomes subject to, resulting from, arising out of or relating to (i) any misrepresentation, breach of warranty or nonfulfillment of or failure to perform any covenant or agreement on the part of indemnifying Party contained in this Agreement, (ii) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or supplement thereto, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, (iii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented. if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading, or (iv) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law, as such Damages are incurred, except to the extent such Damages result primarily from Indemnified Party’s failure to perform any covenant or agreement contained in this Agreement or Indemnified Party’s negligence, recklessness or bad faith in performing its obligations under this Agreement; provided, however, that the foregoing indemnity agreement shall not apply to any Damages of an Indemnified Party to the extent, but only to the extent, arising out of or based upon any untrue statement or alleged untrue statement or omission or alleged omission made by an Indemnifying Party in reliance upon and in conformity with written information furnished to the Indemnifying Party by the Indemnified Party expressly for use in the Registration Statement, any post-effective amendment thereof or supplement thereto, or any preliminary prospectus or final prospectus (as amended or supplemented).

Section 9.3

METHOD OF ASSERTING INDEMNIFICATION CLAIMS. All claims for indemnification by any Indemnified Party (as defined below) under Section 9.2 shall be asserted and resolved as follows:

(a)

In the event any claim or demand in respect of which an Indemnified Party might seek indemnity under Section 9.2 is asserted against or sought to be collected from such Indemnified Party by a person other than a party hereto or an affiliate thereof (a “THIRD PARTY CLAIM”), the Indemnified Party shall deliver a written notification, enclosing a copy of all papers served, if any, and specifying the nature of and basis for such Third Party Claim and for the Indemnified Party’s claim for indemnification that is being asserted under any provision of Section 9.2 against an Indemnifying Party, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such Third Party Claim (a “CLAIM NOTICE”) with reasonable promptness to the Indemnifying Party. If the Indemnified Party fails to provide the Claim Notice with reasonable promptness after the Indemnified Party receives notice of such Third Party Claim, the Indemnifying Party shall not be obligated to indemnify the Indemnified Party with respect to such Third Party Claim to the extent that the Indemnifying Party’s ability to defend has been prejudiced by such failure of the Indemnified Party. The Indemnifying Party shall notify the Indemnified Party as soon as practicable within the period ending thirty (30) calendar days following receipt by the Indemnifying Party of either a Claim Notice or an Indemnity Notice (as defined below) (the “DISPUTE PERIOD”) whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party under Section 9.2 and whether the Indemnifying Party desires, at its sole cost and expense, to defend the Indemnified Party against such Third Party Claim.

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(i)

If the Indemnifying Party notifies the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Indemnified Party with respect to the Third Party Claim pursuant to this Section 9.3(a), then the Indemnifying Party shall have the right to defend, with counsel reasonably satisfactory to the Indemnified Party, at the sole cost and expense of the Indemnifying Party, such Third Party Claim by all appropriate proceedings, which proceedings shall be vigorously and diligently prosecuted by the Indemnifying Party to a final conclusion or will be settled at the discretion of the Indemnifying Party (but only with the consent of the Indemnified Party in the case of any settlement that provides for any relief other than the payment of monetary damages or that provides for the payment of monetary damages as to which the Indemnified Party shall not be indemnified in full pursuant to Section 9.2). The Indemnifying Party shall have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that the Indemnified Party may, at the sole cost and expense of the Indemnified Party, at any time prior to the Indemnifying Party’s delivery of the notice referred to in the first sentence of this clause (i), file any motion, answer or other pleadings or take any other action that the Indemnified Party reasonably believes to be necessary or appropriate to protect its interests; and provided further, that if requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnifying Party in contesting any Third Party Claim that the Indemnifying Party elects to contest. The Indemnified Party may participate in, but not control, any defense or settlement of any Third Party Claim controlled by the Indemnifying Party pursuant to this clause (i), and except as provided in the preceding sentence, the Indemnified Party shall bear its own costs and expenses with respect to such participation. Notwithstanding the foregoing, the Indemnified Party may take over the control of the defense or settlement of a Third Party Claim at any time if it irrevocably waives its right to indemnity under Section 9.2 with respect to such Third Party Claim.

(ii)

If the Indemnifying Party fails to notify the Indemnified Party within the Dispute Period that the Indemnifying Party desires to defend the Third Party Claim pursuant to Section 9.3(a), or if the Indemnifying Party gives such notice but fails to prosecute vigorously and diligently or settle the Third Party Claim, or if the Indemnifying Party fails to give any notice whatsoever within the

Dispute Period, then the Indemnified Party shall have the right to defend, at the sole cost and expense of the Indemnifying Party, the Third Party Claim by all appropriate proceedings, which proceedings shall be prosecuted by the Indemnified Party in a reasonable manner and in good faith or will be settled at the discretion of the Indemnified Party (with the consent of the Indemnifying Party, which consent will not be unreasonably withheld). The Indemnified Party will have full control of such defense and proceedings, including any compromise or settlement thereof; provided, however, that if requested by the Indemnified Party, the Indemnifying Party will, at the sole cost and expense of the Indemnifying Party, provide reasonable cooperation to the Indemnified Party and its counsel in contesting any Third Party Claim which the Indemnified Party is contesting. Notwithstanding the foregoing provisions of this clause (ii), if the Indemnifying Party has notified the Indemnified Party within the Dispute Period that the Indemnifying Party disputes its liability or the amount of its liability hereunder to the Indemnified Party with respect to such Third Party Claim and if such dispute is resolved in favor of the Indemnifying Party in the manner provided in clause (iii) below, the Indemnifying Party will not be required to bear the costs and expenses of the Indemnified Party’s defense pursuant to this clause (ii) or of the Indemnifying Party’s participation therein at the Indemnified Party’s request, and the Indemnified Party shall reimburse the Indemnifying Party in full for all reasonable costs and expenses incurred by the Indemnifying Party in connection with such litigation. The Indemnifying Party may participate in, but not control, any defense or settlement controlled by the Indemnified Party pursuant to this clause (ii), and the Indemnifying Party shall bear its own costs and expenses with respect to such participation.

(iii)

If the Indemnifying Party notifies the Indemnified Party that it does not dispute its liability or the amount of its liability to the Indemnified Party with respect to the Third Party Claim under Section 9.2 or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes its liability or the amount of its liability to the Indemnified Party with respect to such Third Party Claim, the amount of Damages specified in the Claim Notice shall be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

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(b)

In the event any Indemnified Party should have a claim under Section 9.2 against the Indemnifying Party that does not involve a Third Party Claim, the Indemnified Party shall deliver a written notification of a claim for indemnity under Section 9.2 specifying the nature of and basis for such claim, together with the amount or, if not then reasonably ascertainable, the estimated amount, determined in good faith, of such claim (an “INDEMNITY NOTICE”) with reasonable promptness to the Indemnifying Party. The failure by any Indemnified Party to give the Indemnity Notice shall not impair such party’s rights hereunder except to the extent that the Indemnifying Party demonstrates that it has been irreparably prejudiced thereby. If the Indemnifying Party notifies the Indemnified Party that it does not dispute the claim or the amount of the claim described in such Indemnity Notice or fails to notify the Indemnified Party within the Dispute Period whether the Indemnifying Party disputes the claim or the amount of the claim described in such Indemnity Notice, the amount of Damages specified in the Indemnity Notice will be conclusively deemed a liability of the Indemnifying Party under Section 9.2 and the Indemnifying Party shall pay the amount of such Damages to the Indemnified Party on demand. If the Indemnifying Party has timely disputed its liability or the amount of its liability with respect to such claim, the Indemnifying Party and the Indemnified Party shall proceed in good faith to negotiate a resolution of such dispute; provided, however, that if the dispute is not resolved within thirty (30) days after the Claim Notice, the Indemnifying Party shall be entitled to institute such legal action as it deems appropriate.

(c)

The Indemnifying Party agrees to pay the Indemnified Party, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim.

(d)

The indemnity provisions contained herein shall be in addition to (i) any cause of action or similar rights of the Indemnified Party against the Indemnifying Party or others, and (ii) any liabilities the Indemnifying Party may be subject to.

ARTICLE X

MISCELLANEOUS

Section 10.1

GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York County, New York with respect to any dispute arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.

Section 10.2

JURY TRIAL WAIVER. The Company and the Investor hereby waive a trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other in respect of any matter arising out of or in connection with the Transaction Documents.

Section 10.3

ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of the Company and Investor and their respective successors. Neither this Agreement nor any rights of Investor or the Company hereunder may be assigned by either party to any other person.

Section 10.4

THIRD PARTY BENEFICIARIES. This Agreement is intended for the benefit of the Company and Investor and their respective successors, and is not for the benefit of, nor may any provision hereof be enforced by, any other person.

Section 10.5

TERMINATION. The Company may terminate this Agreement at any time by written notice to the Investor. Additionally, this Agreement shall terminate at the end of Commitment Period or as otherwise provided herein; provided, however, that the provisions of Articles IX, and Sections 10.1 and 10.2 shall survive the termination of this Agreement for a period of twenty four (24) months.

Section 10.6

ENTIRE AGREEMENT, AMENDMENT; NO WAIVER. This Agreement and the instruments referenced herein contain the entire understanding of the Company and Investor with respect to the matters covered herein and therein and, except as specifically set forth herein or therein, neither the Company nor Investor makes any representation, warranty, covenant or undertaking with respect to such matters. This Agreement may not be amended.

Section 10.7

FEES AND EXPENSES. The Company agrees to pay its own expenses in connection with the preparation of this Agreement and performance of its obligations hereunder. The Company shall pay all stamp or other similar taxes and duties levied in connection with issuance of the Put Shares pursuant hereto.

14

Section 10.8

COUNTERPARTS. This Agreement may be executed in multiple counterparts, each of which may be executed by less than all of the parties and shall be deemed to be an original instrument which shall be enforceable against the parties actually executing such counterparts and all of which together shall constitute one and the same instrument. This Agreement may be delivered to the other parties hereto by facsimile transmission or email of a copy of this Agreement bearing the signature of the parties so delivering this Agreement.

Section 10.9

SEVERABILITY. In the event that any provision of this Agreement becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision; provided that such severability shall be ineffective if it materially changes the economic benefit of this Agreement to any party.

Section 10.10

FURTHER ASSURANCES. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as the other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

Section 10.11

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

Section 10.12

EQUITABLE RELIEF. The Company recognizes that in the event that it fails to perform, observe, or discharge any or all of its obligations under this Agreement, any remedy at law may prove to be inadequate relief to Investor. The Company therefore agrees that Investor shall be entitled to temporary and permanent injunctive relief in any such case without the necessity of proving actual damages.

Section 10.13

TITLE AND SUBTITLES. The titles and subtitles used in this Agreement are used for the convenience of reference and are not to be considered in construing or interpreting this Agreement.

Section 10.14

REPORTING ENTITY FOR THE COMMON STOCK. The reporting entity relied upon for the determination of the Closing Price for the Common Stock on any given Trading Day for the purposes of this Agreement shall be Bloomberg Finance L.P. or any successor thereto. The written mutual consent of Investor and the Company shall be required to employ any other reporting entity.

Section 10.15

PUBLICITY. The Company and Investor shall consult with each other in issuing any press releases or otherwise making public statements with respect to the transactions contemplated hereby and no party shall issue any such press release or otherwise make any such public statement without the prior written consent of the other parties, which consent shall not be unreasonably withheld or delayed, except that no prior consent shall be required if such disclosure is required by law, in which such case the disclosing party shall provide the other parties with prior notice of such public statement. Notwithstanding the foregoing, the Company shall not publicly disclose the name of Investor without the prior written consent of such Investor, except to the extent required by law. Investor acknowledges that this Agreement and all or part of the Transaction Documents may be deemed to be “material contracts” as that term is defined by Item 601(b)(10) of Regulation S-K, and that the Company may therefore be required to file such documents as exhibits to reports or registration statements filed under the Securities Act or the Exchange Act. Investor further agrees that the status of such documents and materials as material contracts shall be determined solely by the Company, in consultation with its counsel.

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[SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties hereto have caused this Equity Purchase Agreement to be executed by the undersigned, thereunto duly authorized, as of the date first set forth above.

SOUTHRIDGE PARTNERS II LP

By: ___________________________

Name: Stephen Hicks 

Title: Manager

MOMENTOUS ENTERTAINMENT GROUP, I NC.

By: /s/ Kurt E. Neubauer                   

Name: Kurt E. Neubauer

Title: Chief Executive Officer

16

Schedule 4.3 - Outstanding Securities

MMEG – Common

87,237,435

MMEG – Preferred

1,000 Series A

17

EXHIBITS

EXHIBIT A

Put Notice

EXHIBIT B

Closing Certificate

18

EXHIBIT A

FORM OF PUT NOTICE

TO: SOUTHRIDGE PARTNERS II LP

We refer to the Equity Purchase Agreement dated ____________, 2016 (the “Agreement”) entered into by MOMENTOUS ENTERTAINMENT GROUP, INC. (the “Company”) and you. Capitalized terms defined in the Agreement shall, unless otherwise defined, have the same meaning when used herein.

We hereby:

1.

Give you notice that we require you to purchase $_______ (the “Investment Amount”) in Put Shares;

2.

Determine the Floor Price for this Put, as defined in Section 2.2(c) of the Agreement, to be $_________; and

3.

Certify that, as of the date hereof, to the best of our knowledge, the conditions set forth in Section 7.2 of the Agreement are satisfied.

Date: _____________, 20__

MOMENTOUS ENTERTAINMENT GROUP, INC.

By: _________________________ 

Name:

Title: Chief Executive Officer

19

EXHIBIT B

FORM OF

CERTIFICATE OF THE CHIEF EXECUTIVE OFFICER OF

MOMENTOUS ENTERTAINMENT GROUP, INC.

Pursuant to Section 7.2(m) of that certain Equity Purchase Agreement dated ___________, 2016 (the “Agreement”) by and between the Company and Southridge Partners II LP (the “Investor”), the undersigned, in his capacity as the Chief Executive Officer of MOMENTOUS ENTERTAINMENT GROUP, INC. (the “Company”), and not in his individual capacity, ____________________hereby certifies, as of the date hereof (such date, the “Condition Satisfaction Date”), the following:

1.

The representations and warranties of the Company are true and correct in all material respects as of the Condition Satisfaction Date as though made on the Condition Satisfaction Date (except for representations and warranties specifically made as of a particular date) with respect to all periods, and as to all events and circumstances occurring or existing to and including the Condition Satisfaction Date, except for any conditions which have temporarily caused any representations or warranties of the Company set forth in the Agreement to be incorrect and which have been corrected with no continuing impairment to the Company or Investor; and

2.

All of the Company’s conditions to Closing set forth in Section 7.2 of the Agreement have been satisfied as of the Condition Satisfaction Date.

Capitalized terms used herein shall have the meanings set forth in the Agreement unless otherwise defined herein.

IN WITNESS WHEREOF, the undersigned has hereunto affixed his hand as of the ____ day of ____________, 20__.

By: _________________________________

________________Chief Executive Officer

20

REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (“Agreement”), dated July 28, 2016, is made by and between MOMENTOUS ENTERTAINMENT GROUP INC., a Nevada corporation (“Company”), and SOUTHRIDGE PARTNERS II LP, a Delaware limited partnership (the “Investor”).

RECITALS

WHEREAS, upon the terms and subject to the conditions of the Equity Purchase Agreement (“Purchase Agreement”), between the Investor and the Company, the Company has agreed to issue and sell to the Investor shares (the “Put Shares”) of its common stock, $0.00 I par value per share (the “Common Stock”) from time to time for an aggregate investment price of up to Three Million Dollars ($3,000,000) (the “Registered Securities”); and

WHEREAS, to induce the Investor to execute and deliver the Purchase Agreement, the Company has agreed to provide certain registration rights under the Securities Act of l 933, as amended, and the rules and regulations thereunder, or any similar successor statute (collectively, the “Securities Act”), and applicable state securities laws with respect to the Registered Securities;

NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and the Investor hereby agree as follows:

1.

Definitions.

(a)

As used i n this Agreement, the following terms shall have the following meaning:

(i)

“Subscription Date” means the date of this Agreement.

(ii)

“Investor” has the meaning set forth in the preamble to this Agreement.

(iii)

“Register,” “registered” and “registration” refer to a registration effected by preparing and filing a Registration Statement or Statements in compliance with the Securities Act and pursuant to Ru le 415 under the Securities Act or any successor rule providing for offering securities on a delayed or continuous basis (“Rule 415”), and the declaration or ordering of effectiveness of such Registration Statement by the United States Securities and Exchange Commission (the “SEC”).

(iv)

“Registered Securities” will have the same meaning as set forth in the Purchase Agreement.

(v)

“Registration Statement” means the Company’s registration statement on Form S- 1, or any similar registration statement of the Company filed with SEC under the Securities Act with respect to the Registered Securities.

(vi)

“EDGAR” means the SEC’s Electronic Data Gathering, Analysis and Retrieval System.

(vii)

“Exchange Act” means the Securities Exchange Act of 1934, as amended, or any similar federal statute, and the rules and regulations of the SEC thereunder, all as the same will then be in effect.

(b) Capitalized terms used herein and not otherwise defined herein shall have the respective meanings set forth in the Purchase Agreement.

2.

[RESERVED]

1

3.

Obligation of the Company. In connection with the registration of the Registered Securities, the Company shall do each of the following:

(a)

Prepare promptly and file with the SEC within one hundred twenty (120) days after the date hereof, a Registration Statement with respect to not less than the maximum allowable under Rule 415 of Registered Securities, and thereafter use all commercially reasonable efforts to cause such Registration Statement relating to the Registered Securities to become effective within five (5) business days after notice from the Securities and Exchange Commission that such Registration Statement may be declared effective, and keep the Registration Statement effective at all times prior to the termination of the Purchase Agreement until the earliest of (i) the date that is three months after the completion of the last Closing Date under the Purchase Agreement, (ii) the date when the Investor may sell all Registered Securities under Rule 144 without volume limitations, or (iii) the date the Investor no longer owns any of the Registered Securities (collectively, the “Registration Period”), which Registration Statement (including any amendments or supplements, thereto and prospectuses contained therein) shall not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;

(b)

Prepare and file with the SEC such amendments (including post-effective amendments) and supplements to the Registration Statement and the prospectus used in connection with the Registration Statement as may be necessary to keep the Registration Statement effective at all times during the Registration Period, and to comply with the provisions of the Securities Act with respect to the disposition of all Registered Securities of the Company covered by the Registration Statement until the expiration of the Registration Period.

(c)

With respect to the Registered Securities, permit counsel designated by Investor to review the Registration Statement and all amendments and supplements thereto a reasonable period of time (but not less than two (2) business days) prior to their filing with the SEC, and not file any document in a form to which such counsel reasonably objects.

(d)

As promptly as practicable after becoming aware of the following facts, the Company shall notify Investor and Investor’s legal counsel identified to the Company and (if requested by any such person) confirm such notice in writing no later than one (1) business day thereafter (i): (A) when a prospectus or any prospectus supplement or post-effective amendment to the Registration Statement is filed; (B) with respect to the Registration Statement or any post- effective amendment, when the same has become effective; (ii) of the issuance by the SEC of any stop order suspending the effectiveness of the Registration Statement covering any or all of the Registered Securities or the initiation of any proceedings for that purpose; and (iii) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registered Securities for sale in any jurisdiction, or the initiation or threatening of any proceeding for such purpose.

(e)

Unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, furnish to Investor, promptly after the same is prepared and publicly distributed, filed with the SEC, or received by the Company, one (1) copy of the Registration Statement, each preliminary prospectus and the prospectus, and each amendment or supplement thereto;

(f)

Use all commercially reasonable efforts to (i) register and/or qualify the Registered Securities covered by the Registration Statement under such other securities or blue sky laws of such jurisdictions as the Investor may reasonably request and in which significant volumes of shares of Common Stock are traded, (ii) prepare and file in those jurisdictions such amendments (including post-effective amendments) and supplements to such registrations and qualifications as may be necessary to maintain the effectiveness thereof at all times during the Registration Period, (iii) take such other actions as may be necessary to maintain such registrations and qualification in effect at all times during the Registration Period, and (iv) take all other actions reasonably necessary or advisable to qualify the Registered Securities for sale in such jurisdictions: provided, however, that the Company shall not be required in connection therewith or as a condition thereto to (A) qualify to do business in any jurisdiction where it would not otherwise be required to qualify but for this Section 3(f), (B) subject itself to general taxation in any such jurisdiction, (C) file a general consent to service of process in any such jurisdiction, (D) provide any undertakings that cause more than nominal expense or burden to the Company or (E) make any change in its charter or by-laws or any then existing contracts, which in each case the Board of Directors of the Company determines to be contrary to the best interests of the Company and its stockholders;

2

(g)

As promptly as practicable after becoming aware of such event, notify the Investor of the happening of any event of which the Company has knowledge, as a result of which the prospectus included in the Registration Statement, as then in effect, includes any untrue statement of a material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (“Registration Default”), and promptly prepare a supplement or amendment to the Registration Statement or other appropriate filing with the SEC to correct such untrue statement or omission, and take any other commercially reasonable steps to cure the Registration Default, and, unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, deliver a number of copies of such supplement or amendment to the Investor as the Investor may reasonably request.

(h)

[INTENTIONALLY OMITTED];

(i)

Use its commercially reasonable efforts, if eligible, either to (i) cause all the Registered Securities covered by the Registration Statement to be listed on a national securities exchange and on each additional national securities exchange on which securities of the same class or series issued by the Company are then listed, if any, if the listing of such Registered Securities is then permitted under the rules of such exchange, or (ii) secure designation of all the Registered Securities covered by the Registration Statement as a National Association of Securities Dealers Automated Quotations System (“Nasdaq”) security within the meaning of Rule 11Aa2-1 of the SEC under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the quotation of the Registered Securities on the Nasdaq Capital Market; or if, despite the Company’s commercially reasonable efforts to satisfy the preceding clause (i) or (ii), the Company is unsuccessful in doing so, to use its commercially reasonable efforts to secure authorization of the Financial Industry Regulatory Authority (“FINRA”) and quotation for such Registered Securities on the over-the-counter bulletin board and, without limiting the generality of the foregoing;

(j)

Provide a transfer agent for the Registered Securities not later than the Subscription Date under the Purchase Agreement;

(k)

Cooperate with the Investor to facilitate the timely preparation and delivery of certificates for the Registered Securities to be offered pursuant to the Registration Statement and enable such certificates for the Registered Securities to be in such denominations or amounts as the case may be, as the Investor may reasonably request and registration in such names as the Investor may request; and, within five (5) business days after a Registration Statement which includes Registered Securities is ordered effective by the SEC, the Company shall deliver, and shall cause legal counsel selected by the Company to deliver, to the transfer agent for the Registered Securities (with copies to the Investor) an appropriate instruction and opinion of such counsel, if so required by the Company’s transfer agent; and

(l)

Take all other commercially reasonable actions necessary to expedite and facilitate distribution to the Investor of the Registered Securities pursuant to the Registration Statement.

4.

Obligations of the Investor. In connection with the registration of the Registered Securities, the Investor shall have the following obligations;

(a)

It shall be a condition precedent to the obligations of the Company to complete the registration pursuant to this Agreement with respect to the Registered Securities of the Investor that the Investor shall timely furnish to the Company such information regarding itself, the Registered Securities held by it, and the intended method of disposition of the Registered Securities held by it, as shall be reasonably required to effect the registration of such Registered Securities and shall timely execute such documents in connection with such registration as the Company may reasonably request.

(b)

The Investor by such Investor’s acceptance of the Registered Securities agrees to cooperate with the Company as reasonably requested by the Company in connection with the preparation and filing of the Registration Statement hereunder; and

(c)

The Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(d)(ii) or (iii) or 3(g) above, the Investor will immediately discontinue disposition of Registered Securities pursuant to the Registration Statement covering such Registered Securities until the Investor receives the copies of the supplemented or amended prospectus contemplated by Section 3(d)(ii) or (iii) or 3(g) and, if so directed by the Company, the Investor shall deliver to the Company (at the expense of the Company) or destroy (and deliver to the Company a certificate of destruction) all copies in the Investor’s possession, of the prospectus covering such Registered Securities current at the time of receipt of such notice.

5.

Expenses of Registration. All reasonable expenses incurred in connection with registrations, filings or qualifications pursuant to Section 3, including, without limitation, all registration, listing, and qualifications fees, printers and accounting fees, the fees and disbursements of counsel for the Company shall be borne by the Company.

3

6.

Indemnification. After Registered Securities are included in a Registration Statement under this Agreement:

(a)

To the extent permitted by law, the Company will indemnify and hold harmless, the Investor, the directors, if any, of such Investor, the officers, if any, of such Investor, each person, if any, who controls the Investor within the meaning of the Securities Act or the Exchange Act (each, an “Indemnified Person”), against any losses, claims, damages, liabilities or expenses (joint or several) incurred (collectively, “Claims”) to which any of them may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such Claims (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon: (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or any post-effective amendment thereof or the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus or contained in the final prospectus (as amended or supplemented, if the Company files any amendment thereof or supplement thereto with the SEC) or the omission or alleged omission to state therein any material fact necessary to make the statements made therein, in the light of the circumstances under which the statements therein were made, not misleading or (iii) any violation or alleged violation by the Company of the Securities Act, the Exchange Act, any state securities law or any rule or regulation under the Securities Act, the Exchange Act or any state securities law (the matters in the foregoing clauses (i) through (iii) being collectively referred to as “Violations”). Subject to Section 6(b) hereof, the Company shall reimburse the Investor, promptly as such expenses are incurred and are due and payable, for any reasonable legal fees or other reasonable expenses incurred by them in connection with investigating or defending any such Claim. Notwithstanding anything to the contrary contained herein, the indemnification agreement contained in this Section 6(a) shall not (i) apply to any Claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of any Indemnified Person expressly for use in connection with the preparation of the Registration Statement or any such amendment thereof or supplement thereto, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (ii) with respect to any preliminary prospectus, inure to the benefit of any such person from whom the person asserting any such Claim purchased the Registered Securities that are the subject thereof (or to the benefit of any person controlling such person) if the untrue statement or omission of material fact contained in the preliminary prospectus was corrected in the prospectus, as then amended or supplemented, if such prospectus was timely made available by the Company pursuant to Section 3(b) hereof; (iii) be available to the extent such Claim is based on a failure of the Investor to deliver or cause to be delivered the prospectus made available by the Company; or (iv) apply to amounts paid in settlement of any Claim if such settlement is effected without the prior written consent of the Company, which consent shall not be unreasonably withheld. The Investor will indemnify the Company, its officers, directors and agents (including legal counsel) against any claims arising out of or based upon a Violation which occurs in reliance upon and in conformity with information furnished in writing to the Company, by or on behalf of the Investor, expressly for use in connection with the preparation of the Registration Statement, subject to such limitations and conditions set forth in the previous sentence.

(b)

Promptly after receipt by an Indemnified Person under this Section 6 of notice of the commencement of any action (including any governmental action), such Indemnified Person shall, if a Claim in respect thereof is to be made against any indemnifying party under this Section 6, deliver to the indemnifying party a written notice of the commencement thereof and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume control of the defense thereof with counsel mutually satisfactory to the indemnifying party and the Indemnified Person, as the case may be; provided, however, that an Indemnified Person shall have the right to retain its own counsel with the reasonable fees and expenses to be paid by the indemnifying party, if, in the reasonable opinion of counsel retained by the indemnifying party, the representation by such counsel of the Indemnified Person and the indemnifying party would be inappropriate due to actual or potential differing interests between such Indemnified Person and any other party represented by such counsel in such proceeding. In such event, the Company shall pay for only one separate legal counsel for the Investor selected by the Investor. The failure to deliver written notice to the indemnifying party within a reasonable time of the commencement of any such action shall not relieve such indemnifying party of any liability to the Indemnified Person under this Section 6, except to the extent that the indemnifying party is prejudiced in its ability to defend such action. The indemnification required by this Section 6 shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as such expense, loss, damage or liability is incurred and is due and payable.

7.

Contribution. To the extent any indemnification by an indemnifying party is prohibited or limited by law, the indemnifying party agrees to make the maximum contribution with respect to any amounts for which it would otherwise be liable under Section 6 to the fullest extent permitted by law; provided, however, that (a) no contribution shall be made under circumstances where the maker would not have been liable for indemnification under the fault standards set forth in Section 6; (b) no seller of Registered Securities guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any seller of Registered Securities who was not guilty of such fraudulent misrepresentation; and (c) contribution by any seller of Registered Securities shall be limited in amount to the net amount of proceeds received by such seller from the sale of such Registered Securities.

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8.

Reports under Exchange Act. With a view to making available to the Investor the benefits of Rule 144 promulgated under the Securities Act or any other similar rule or regulation of the SEC that may at any time permit the Investor to sell securities of the Company to the public without registration (“Rule 144”), the Company agrees to use its commercially reasonable efforts to:

(a)

make and keep public information available, as those terms are understood and defined in Rule 144;

(b)

file with the SEC in a timely manner all reports and other documents required of the Company under the Securities Act for so long as the Company remains subject to such requirements, and the filing of such reports is required for sales under Rule 144;

(c)

furnish to the Investor so long as the Investor owns Registered Securities, promptly upon request, (i) a written statement by the Company that it has complied with the reporting requirements of Rule 144, the Securities Act and the Exchange Act, (ii) unless available to the Investor without charge through EDGAR, the SEC’s website or the Company’s website, a copy of the most recent annual or quarterly report of the Company and such other reports and documents so filed by the Company, and (iii) such other information as may be reasonably requested to permit the Investors to sell such securities pursuant to Rule 144 without registration; and

(d)

at the request of any Investor of Registered Securities, give its Transfer Agent instructions (supported by an opinion of Company counsel, if required or requested by the Transfer Agent) to the effect that, upon the Transfer Agent’s receipt from such Investor of:

(i)

a certificate (a “Rule 144 Certificate”) certifying (A) that such Investor has held the shares of Registered Securities which the Investor proposes to sell (the “Securities Being Sold”) for a period of not less than (6) months and (B) as to such other matters as may be appropriate in accordance with Rule 144 under the Securities Act, and

(ii)

an opinion of counsel acceptable to the Company (for which purposes it is agreed that the initial Investor’s counsel shall be deemed acceptable if such opinion is not given by Company counsel) that, based on the Rule 144 Certificate, Securities Being Sold may be sold pursuant to the provisions of Rule 144, even in the absence of an effective Registration Statement,

the Transfer Agent is to effect the transfer of the Securities Being Sold and issue to the buyer(s) or transferee(s) thereof one or more stock certificates representing the transferred Securities Being Sold without any restrictive legend and without recording any restrictions on the transferability of such shares on the Transfer Agent’s books and records (except to the extent any such legend or restriction results from facts other than the identity of the Investor, as the seller or transferor thereof, or the status, including any relevant legends or restrictions, of the shares of the Securities Being Sold while held by the Investor). If the Transfer Agent requires any additional documentation at the time of the transfer, the Company shall deliver or cause to be delivered all such reasonable additional documentation as may be necessary to effectuate the issuance of an unlegended certificate.

9.

Miscellaneous.

(a)

Registered Owners. A person or entity is deemed to be a holder of Registered Securities whenever such person or entity owns of record such Registered Securities. If the Company receives conflicting instructions, notices or elections from two or more persons or entities with respect to the same Registered Securities, the Company shall act upon the basis of instructions, notice or election received from the registered owner of such Registered Securities.

(b)

Rights Cumulative; Waivers. The rights of each of the parties under this Agreement are cumulative. The rights of each of the parties hereunder shall not be capable of being waived or varied other than by an express waiver or variation in writing. Any failure to exercise or any delay in exercising any of such rights shall not operate as a waiver or variation of that or any other such right. Any defective or partial exercise of any of such rights shall not preclude any other or further exercise of that or any other such right. No act or course of conduct or negotiation on the part of any party shall in any way preclude such party from exercising any such right or constitute a suspension or any variation of any such right.

5

(c)

Benefit; Successors Bound. This Agreement and the terms, covenants, conditions, provisions, obligations, undertakings, rights, and benefits hereof, shall be binding upon, and shall inure to the benefit of, the undersigned parties and their successors.

(d)

Entire Agreement. This Agreement contains the entire agreement between the parties with respect to the subject matter hereof. There are no promises, agreements, conditions, undertakings, understandings, warranties, covenants or representations, oral or written, express or implied, between them with respect to this Agreement or the matters described in this Agreement, except as set forth in this Agreement and in the other documentation relating to the transactions contemplated by this Agreement. Any such negotiations, promises, or understandings shall not be used to interpret or constitute this Agreement.

(e)

Amendment. Any provision of this Agreement may be amended and the observance thereof may be waived (either generally or in a particular instance and either retroactively or prospectively), only with the written consent of the Company and Investor. Any amendment or waiver affected in accordance with this Section 9 shall be binding upon the Company.

(f)

Severability. Each part of this Agreement is intended to be severable. In the event that any provision of this Agreement is found by any court or other authority of competent jurisdiction to be illegal or unenforceable, such provision shall be severed or modified to the extent necessary to render it enforceable and as so severed or modified, this Agreement shall continue in full force and effect.

(g)

Notices. Notices required or permitted to be given hereunder shall be in writing and shall be deemed to be sufficiently given when personally delivered (by hand, by courier, by telephone line facsimile transmission, receipt confirmed, email or other means) or sent by certified mail, return receipt requested, properly addressed and with proper postage pre-paid (i) if to the Company, at its executive office and (ii) if to the Investor, at the address set forth under its name in the Purchase Agreement, with a copy to its designated attorney, or at such other address as each such party furnishes by notice given in accordance with this Section 9(g), and shall be effective, when personally delivered, upon receipt and, when so sent by certified mail, five (5) business days after deposit with the United States Postal Service.

(h)

Governing Law. This Agreement shall be governed by and interpreted in accordance with the laws of the State of New York without regard to the principles of conflicts of law. Each of the Company and Investor hereby submit to the exclusive jurisdiction of the United States Federal and state courts located in New York County, New York with respect to any dispute arising under this Agreement, the agreements entered into in connection herewith or the transactions contemplated hereby or thereby.

(i)

Consents. The person signing this Agreement on behalf of each party hereby represents and warrants that he has the necessary power, consent and authority to execute and deliver this Agreement on behalf of that party.

(j)

Further Assurances. In addition to the instruments and documents to be made, executed and delivered pursuant to this Agreement, the parties hereto agree to make, execute and deliver or cause to be made, executed and delivered, to the requesting party such other instruments and to take such other actions as the requesting party may reasonably require to carry out the terms of this Agreement and the transactions contemplated hereby.

(k)

Section Headings. The Section headings in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.

(l)

Construction. Unless the context otherwise requires, when used herein, the singular shall be deemed to include the plural, the plural shall be deemed to include each of the singular, and pronouns of one or no gender shall be deemed to include the equivalent pronoun of the other or no gender.

(m)

Execution in Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which shall constitute one and the same agreement. This Agreement, once executed by a party, may be delivered to the other party hereto by email of a .pdf or telephone line facsimile transmission of a copy of this Agreement bearing the signature of the party so delivering this Agreement. A facsimile transmission or email of a .pdf of this signed Agreement shall be legal and binding on all parties hereto.

[SIGNATURES ON FOLLOWING PAGE]

6

.

[SIGNATURE PAGE]

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed by their respective officers thereunto duly authorized as of the day and year first above written.

COMPANY:

MOMENTOUS ENTERTAINMENT GROUP, INC.

By: /s/ Kurt E. Neubauer                

Name: Kurt Neubauer

Title: CEO

INVESTOR:

SOUTHRIDGE PARTNERS II LP

By: _________________________

Name: ______________________

Title: _______________________

7

THIS SECURITY HAS NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THE SECURITY IS RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.

No.  ____________

US $50,000.00

MOMENTOUS ENTERTAINMENT GROUP, INC.

PROMISSORY NOTE DUE JANUARY 31, 2017

THIS Note is a duly authorized issuance of MOMENTOUS ENTERTAINMENT GROUP, INC., a Nevada corporation (the “Company”) designated as its July 2016 Note.

FOR VALUE RECEIVED, the Company promises to pay to SOUTHRIDGE ADVISORS II LLC, the registered holder hereof (the “Holder”), the principal sum of Fifty Thousand and 00/100 Dollars (US $50,000.00), plus interest in the amount of ten percent (10%) per annum on all outstanding principal on January 31, 2017 (the “Maturity Date”). The Company will pay the outstanding principal amount of this Note, plus accrued interest, in cash on the Maturity Date to the registered holder of this Note. The wire transfer of such amount shall constitute a payment hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the sum represented by wire transfer plus any amounts so deducted.

This Note is subject to the following additional provisions:

1.

[RESERVED]

2.

This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (the “Act”), and other applicable state and foreign securities laws.

3.

No provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Note plus accrued interest, at the time and place herein prescribed. This Note is a direct obligation of the Company.

4.

Presentment. Except as set forth herein, the Company waives presentment, demand and presentation for payment, notice of nonpayment and dishonor, protest and notice of protest and expressly agrees that this Note or any payment hereunder may be extended from time to time by the Holder without in any way affecting the liability of the Company.

5.

Maximum Rate. All provisions herein made are expressly limited so that in no event whatsoever, whether by reason of advancement of proceeds hereof, acceleration of maturity of the unpaid balance hereof or otherwise, shall the amount paid or agreed to be paid to Holder for the use of the money advanced or to be advanced hereunder exceed the maximum rate of interest allowed to be charged under applicable law (the “Maximum Rate”), regardless of whether or not there has been an acceleration of the payment of principal as set forth herein. If, from any circumstances whatsoever, the fulfillment of any provision of this Note or any other agreement or instrument now or hereafter evidencing, securing or in any way relating to the indebtedness evidenced hereby shall involve the payment of interest in excess of the Maximum Rate, then, ipso facto, the obligation to pay interest hereunder shall be reduced to the Maximum Rate; and if from any circumstance whatsoever, Holder shall ever receive interest, the amount of which would exceed the amount collectible at the Maximum Rate, such amount as would be excessive interest shall be applied to the reduction of the principal balance remaining unpaid hereunder and not to the payment of interest. This provision shall control every other provision in any and all other agreements and instruments existing or hereafter arising between the Maker and Holder with respect to the indebtedness evidenced hereby.

6.

This Note shall be governed by and construed in accordance with the laws of the State of New York. Each of the parties consents to the jurisdiction of the federal courts whose districts encompass any part of the City of New York or the state courts of the State of New York sitting in the City of New York in connection with any dispute arising under this Note and hereby waives, to the maximum extent permitted by law, any objection, including any objection based on forum non coveniens, to the bringing of any such proceeding in such jurisdictions. Each of the parties hereby waives the right to a trial by jury in connection with any dispute arising under this Note.

1

7.

The following shall constitute an “Event of Default”:

a.

The Company shall default in the payment of principal and interest on this Note and same shall continue for a period of five (5) days; or

b.

Any of the representations or warranties made by the Company herein, in any certificate or financial or other written statements heretofore or hereafter furnished by the Company in connection with the execution and delivery of this Note shall be false or misleading in any material respect at the time made; or

c.

The Company shall fail to perform or observe, in any material respect, any other covenant, term, provision, condition, agreement or obligation of any Note and such failure shall continue uncured for a period of thirty (30) days after written notice from the Holder of such failure; or

d.

[RESERVED]

e.

The Company shall (1) admit in writing its inability to pay its debts generally as they mature; (2) make an assignment for the benefit of creditors or commence proceedings for its dissolution; or (3) apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property or business; or

f.

A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its consent and shall not be discharged within sixty (60) days after such appointment; or

g.

Any governmental agency or any court of competent jurisdiction at the instance of any governmental agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company and shall not be dismissed within sixty (60) days thereafter; or

h.

Any money judgment, writ or warrant of attachment, or similar process in excess of Two Hundred Fifty Thousand ($250,000) Dollars in the aggregate shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of sixty (60) days or in any event later than five (5) days prior to the date of any proposed sale thereunder; or

i.

Bankruptcy, reorganization, insolvency or liquidation proceedings or other proceedings for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Company and, if instituted against the Company, shall not be dismissed within sixty (60) days after such institution or the Company shall by any action or answer approve of, consent to, or acquiesce in any such proceedings or admit the material allegations of, or default in answering a petition filed in any such proceeding; or

j.

The Company shall have its Common Stock suspended or delisted from an exchange or over-the-counter market from trading for in excess of five trading days.

Then, or at any time thereafter, and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder’s sole discretion, the Holder may consider all obligations under this Note immediately due and payable within five (5) days of notice, without presentment, demand, protest or notice of any kinds, all of which are hereby expressly waived, anything herein or in any note or other instruments contained to the contrary notwithstanding, and the Holder may immediately enforce any and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law.

Collection. In the event this Note is placed by Holder i n the hands of an attorney for collection, or if Holder incurs any costs incident to the col lection of the indebted ness evidenced hereby, the Company agrees to pay to Holder an amount equal to all such costs, including without l imitation al l reasonable attorneys’ fees and al l court costs.

2

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized.

Dated: July 28, 2016

MOMENTOUS ENTERTAINMENT GROUP, INC.

By: /s/ Kurt E. Neubauer                 

      Kurt E. Neubauer                       

(Print Name)

      CEO                                           

Title:

ATTESTOR

By: _____________________________

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