Document:

Unassociated Document

    

    Exhibit
10.1

    

    

    

    September
2, 2009

    

    

    

    VIA REGISTERED MAIL – RETURN
RECEIPT REQUESTED,

    OVERNIGHT MAIL AND FACSIMILE
(650) 588-2787

    

    

    Hana
Biosciences, Inc.

    7000
Shoreline Court, Suite 370

    South San
Francisco, CA  94080

    

    

    
      	
              Re:

            	
              Warrants
      to Purchase Common Stock of Hana Biosciences, Inc. (“Hana”) evidenced by
      Warrant Nos. 2007A-1, 2007A-2, 2007A-3, 2007A-4, 2007A-5, 2007A-6,
      2007A-7, 2007A-8, 2007B-1,
      2007B-2, 2007B-3 and 2007B-4 (collectively, the
      “Warrants”)

            	 

    

    

    Gentlemen:

    

    Reference
is made to:

    

    
      	
              ·  

            	
              the
      Notice, dated August 18, 2009, from Hana to Deerfield Private Design Fund,
      L.P., Deerfield Special Situations Fund L.P., Deerfield Special Situations
      Fund International Limited, and Deerfield Private Design International,
      L.P. (collectively, “Deerfield”) that Hana expects that the Nasdaq Stock
      Market (“NASDAQ”) will suspend and/or delist Hana’s Common Stock from the
      Nasdaq Capital Market as early as September 3, 2009;
  and

            

    

    

    
      	
              ·  

            	
              the
      Notice, dated August 24, 2009, from Deerfield to Hana that, in accordance
      with the terms of the Warrants, Deerfield is electing, upon the delisting
      of Hana’s Common Stock, to have Hana redeem all of each of the Warrants in
      cash at a price (the “Major Transaction Warrant Redemption Price”) equal
      to the “Black Scholes value” of each of the Warrants as determined in
      accordance with Schedule 1 of the
Warrants.

            

    

    

    Upon
countersignature of this letter agreement by Hana, this will confirm the
understanding and agreement between Hana and Deerfield that, notwithstanding
anything contained in the Warrants or the aforementioned Notices to the
contrary, Hana shall not be required to deposit the Major Transaction Warrant
Redemption Price in escrow.  Hana and Deerfield further agree that,
notwithstanding anything contained in the Warrants or such Notices to the
contrary, in lieu of cash, the Major Transaction Warrant Redemption Price will
be satisfied, at Deerfield’s election, by one of the following:

    

    
      
         

      

      
         

        
          

        

      

      
        
          Hana
Biosciences, Inc.

          September
2, 2009

          Page
2

        

      

       

       

       

    

    
      	
               
      

            	
              (i)

            	
              upon
      the completion by Hana of a Qualified Financing at any time or from time
      to time on or prior to June 30, 2010, by the issuance to Deerfield of the
      same type of securities that Deerfield would have received had the Major
      Transaction Warrant Redemption Price been invested in the Qualified
      Financing on the best terms provided to any other investor participating
      in the Qualified Financing; provided, however, that
      an election by Deerfield pursuant to this clause (i) shall be made no
      later than two (2) business days following the closing of any such
      Qualified Financing;

            

    

    

    
      	
               
      

            	
              (ii)

            	
              immediately
      prior to the occurrence of a Major Transaction that occurs prior to July
      1, 2010, as specified in a written notice by Deerfield to Hana, by the
      issuance to Deerfield of a number of shares of Hana Common Stock equal to
      the Major Transaction Warrant Redemption Price divided by the lesser of
      $.60 or  the Average Share Price during the ten (10) trading
      days immediately preceding the public announcement of the Major
      Transaction;

            

    

    
      

      
        	
                 
      

              	
                (iii)

              	
                      
                  on
      July 1, 2010, as specified in a written notice by Deerfield to Hana, by
      the issuance to Deerfield of shares of Hana Common Stock equal to the
      Major Transaction Warrant Redemption Price divided by the lesser of $.60
      or the Average Share Price during the ten (10) trading days immediately
      preceding July 1, 2010;
or

                

              

      

      
        

        
          	
                   
      

                	
                  (iv)

                	
                        
                    on
      any date prior to July 1, 2010 specified in a written notice by Deerfield
      to Hana, by the issuance to Deerfield of shares of Hana Common Stock equal
      to the Major Transaction Warrant Redemption Price divided by the lesser of
      $.60 or the Average Share Price during the ten (10) trading days
      immediately preceding the date such notice is received by
      Hana.

                  

                

        

         

      

    

    For
purposes herein, “Qualified Financing” shall mean the sale and issuance by Hana
of any securities to third parties in a transaction effected primarily for the
purposes of raising capital for Hana.

    

    As used
herein, the term “Average Share Price” as of any date means the closing sale
price of Hana’s Common Stock as reported by Bloomberg Financial L.P. (or if no
last closing sale price is reported by Bloomberg Financial L.P., the average of
the bid prices of any market makers that are listed in the over the counter
market by the Financial Industry Regulatory Authority, Inc. or in the pink
sheets maintained by the Pink OTC Market, Inc., or, if no such closing price is
available, the fair market value of Hana’s Common Stock as mutually determined
by Hana and Deerfield); provided, however, that in no
event shall the Average Share Price be less than $0.20.

    

    A Major
Transaction shall mean (A) a consolidation, merger, exchange of shares,
recapitalization, reorganization, business combination or other similar event
(1) following which the holders of Hana’s Common Stock immediately preceding
such consolidation, merger, exchange, recapitalization, reorganization,
combination or event either no longer hold a majority of the shares of Hana’s
Common Stock or no longer have the ability to elect a majority of the board of
directors of Hana or (2) as a result of which shares of Hana Common Stock shall
be changed into (or the shares of Hana Common Stock become entitled to receive)
the same or a different number of shares of the same or another class or classes
of stock or securities of Hana or another entity; (B) the direct or indirect
sale or transfer of all or substantially all of Hana’s assets or (C) the
liquidation, bankruptcy, insolvency, dissolution or winding up (or the
occurrence of any analogous proceeding) affecting Hana.

    

    
      
         

      

      
         

        
          

        

      

      
        
          Hana
Biosciences, Inc.

          September
2, 2009

          Page
3

        

      

       

       

       

    

    All
references herein to per share prices of Hana Common Stock, including without
limitation, those prices and formulae described or incorporated in clauses (ii)
through (iv), above, or in the definition of Average Share Price, shall be
adjusted appropriately to reflect any subdivision, combination or similar
reclassification of Hana Common Stock.

    

    Hana
agrees to register for resale under the Securities Act of 1933 any securities
issued to Deerfield pursuant to the terms of this agreement.

    

    Upon the
occurrence of the Major Transaction described in Hana’s Notice dated August 18,
2009, the Warrants shall be deemed redeemed by Hana and all of Deerfield’s
rights thereunder shall terminate.

    

    [SIGNATURE
PAGE FOLLOWS]

     

    
      
         

      

      
         

        
          

        

      

      
        
          Hana
Biosciences, Inc.

          September
2, 2009

          Page
4

        

      

    

     

     

     

    
      
        
          
            
              	 	Sincerely,	 
	 	 	 
	 	DEERFIELD
      PRIVATE DESIGN FUND, L.P.	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	
                      /s/ James
      E. Flynn    

                    	 
	 	Title: 	
                      General
      Partner 

                    	 
	 	 	 	 
	 	 	 	 

            

          

        

      

       

      
        
          
            	 	DEERFIELD
      SPECIAL SITUATIONS FUND L.P.	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	
                    /s/ James
      E. Flynn    

                  	 
	 	Title: 	
                    General
      Partner 

                  	 
	 	 	 	 
	 	 	 	 

          

        

         

        
          
            
              	 	      
                      DEERFIELD
      SPECIAL SITUATIONS FUND

                      INTERNATIONAL
      LIMITED

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	
                      /s/ James
      E. Flynn    

                    	 
	 	Title: 	
                      General
      Partner 

                    	 
	 	 	 	 
	 	 	 	 

            

          

           

          
            
              
                	 	DEERFIELD
      PRIVATE DESIGN INTERNATIONAL, L.P.	 
	 	 	 	 
	
                         

                      	
                        By:
      

                      	
                        /s/ James
      E. Flynn    

                      	 
	 	Title: 	
                        General
      Partner 

                      	 
	 	 	 	 
	 	 	 	 

              

            

          

        

      

    

     

    AGREED
TO AND ACCEPTED:

    

    HANA
BIOSCIENCES, INC.

    
      
        
          
            
              
                
                  
                    	 	 	 	 	 	 
	By: 	
                            /s/
      Steven R. Deitcher 

                          	 	Dated:	
                            9/3/2009 

                          	 
	 	
                            Steven
      R. DeitcherUnassociated Document

    Exhibit
10.1

     

    CONFIDENTIAL TREATMENT
REQUESTED

    Information
market by [***] has been omitted pursuant to a request for

    confidential
treatment.  The omitted portion has been separately filed
with

    the
Securities and Exchange Commission.

    

    SERVICE
AND PARTICIPATION AGREEMENT

     

    This
Service and Participation Agreement, dated as of September 3, 2009 (this “Agreement”), is made
by and between RedTag Live, Inc., a Delaware corporation (“RedTag”), Enable
Holdings, Inc., a Delaware corporation (“Parent”) and [[***]
(“[***]”)].

    

    RECITALS:

     

    WHEREAS,
RedTag has requested, and [***] has agreed, that [***] provide certain services
and advance certain funds to and on behalf of RedTag on the terms set forth
herein;

     

    WHEREAS,
RedTag desires to have [***] act as an agent to acquire the Merchandise and
Consigned Goods (in each case, as hereinafter defined) to be sold at an auction
event held approximately September 1, 2009 through September 15, 2009 (the
“Event”) at
6001 Powerline Road, Fort Lauderdale, Florida (the “Location”);

     

    WHEREAS,
[***] is willing to act as an agent to acquire the Merchandise and Consigned
Goods and advance certain funds on behalf of RedTag, in accordance with the
terms and conditions of this Agreement.

     

    NOW,
THEREFORE, in consideration of the mutual covenants and agreements hereinafter
set forth and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto agree as
follows:

     

    1.           DEFINITIONS

     

    For the
purposes of this Agreement, the terms listed in Exhibit A attached
hereto shall have the respective meanings indicated therein.

     

    2.           ADVANCES

     

    2.1            (a)           From
time to time until the Event has been concluded, [***] agrees, subject to the
terms and conditions set forth in this Agreement, to make Advances not to exceed
$[***]; provided that the
Advance Fee and any and all Advances shall be repaid to [***] prior to payment
of the Remaining Expenses and any other expenses, costs or profits other than
payments made for sales tax collected and warranties sold.  It is
acknowledged and agreed that, as of the date hereof, [***] has made aggregate
Advances described on Schedule 2.1
hereto.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (b)           RedTag
and Parent acknowledge and agree that any Advance requested by RedTag shall be
in writing and delivered to [***] at least two (2) business days prior to the
requested funding of each Advance and, notwithstanding anything to the contrary
set forth herein, any Advance may be refused by [***] in its sole
discretion.

     

    (c)           Other
than as included on Schedule 2.1, [***]
agrees that it shall not make any single payment as an Advance in an amount in
excess of $10,000 without RedTag or Parent approval.

     

    (d)           Advances
will not be evidenced by a promissory note, and a copy of [***]’s books and
records related to the Advances shall constitute prima facie evidence
of the outstanding amounts of the Advances.  In addition to the other
obligations of RedTag and Parent hereunder, the Advances shall be secured by all
of the Collateral.  All Advances shall be repaid to [***] from the
Designated Account.  If not sooner paid to [***] from the Designated
Account, and prior to any payment of the Net Collection Amount, the Advances
shall be due and payable, together with the Advance Fee, on the Termination
Date.  Other than the Advance Fee, the principal amount of the
Advances shall not bear interest.

     

    2.2            RedTag
and Parent acknowledge and agree that each Advance shall be subject to the
satisfaction of the following conditions precedent, in each case, in form and
substance satisfactory to [***]:

     

    (a)           This
Agreement and each of the other Transaction Documents shall have been duly
executed and delivered by the respective parties thereto, shall be in full force
and effect and shall be in form and substance satisfactory to
[***];

     

    (b)           This
Agreement (and any other Security Documents) shall be effective to create in
favor of [***], a legal, valid and enforceable first priority perfected security
interest in and lien upon the Collateral.  All filings, recordings,
deliveries of instruments and other actions necessary or desirable in the
opinion of [***] to protect and preserve such security interests shall have been
duly effected; and

     

    (c)           [***]
shall have received certificates of insurance from an independent insurance
broker dated no later than ten (10) days prior to the Event, naming [***] as
loss payee and/or additional insured, as applicable, identifying insurers, types
of insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of Section
9.

     

    3.           APPOINTMENT
OF [***] AS AGENT

     

    3.1            RedTag
hereby appoints [***], and [***] hereby agrees to serve, as RedTag’s agent for
the limited purpose of acquiring Merchandise and Consigned Goods for the Event
in accordance with the terms and conditions of this
Agreement.   

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

       

    

    3.2           RedTag
and [***] hereby agree that (i) [***] shall be authorized to take any and all
actions as may be necessary or desirable to implement this Agreement and each of
the transactions contemplated hereby; (ii) [***] shall be entitled to purchase
all Merchandise and obtain all Consigned Goods for the event; (iii) [***] shall
have the right to use and access the Location and all related services,
furniture, fixtures, equipment and other assets of RedTag as designated
hereunder for the purpose of delivering, or causing the delivery of, the
Merchandise and Consigned Goods; (iv) [***] shall be granted a limited license
and right to use until the Termination Date all trade names, logos and customer
lists relating to and used in connection with the operation of RedTag’s
business, solely for the purpose of advertising, purchasing, obtaining and
selling the Merchandise and Consigned Goods in accordance with the terms of this
Agreement; (v) RedTag shall use its best efforts to ensure that all utilities,
landlords, creditors and all persons acting for or on its behalf shall not
interfere with or otherwise impede the conduct of the purchase and/or sale of
the Merchandise and Consigned Goods, institute any action in any court which in
any way directly or indirectly interferes with or obstructs or impedes the
conduct of the purchase and/or sale of the Merchandise and the Consigned Goods
and (vi) neither RedTag, nor Parent, nor any party other than [***] shall
purchase any Merchandise or obtain any Consigned Goods (other than the Consigned
Goods described on Schedule 3.2 hereto)
for the event, except as consented to in writing by [***] in
advance.

     

    3.3           Purchases
of Merchandise by [***] may or may not be evidenced by a purchase order, receipt
or bill of sale and a copy of [***]’s books and records related to the purchase
of the Merchandise shall constitute prima facie evidence of the outstanding
amounts of the Merchandise.  In addition to the other obligations of
RedTag and Parent hereunder, the purchase price of the Merchandise shall be
secured by all of the Collateral.  If not sooner paid by set off
against the proceeds of the Merchandise prior to payment of the Net Collection
Amount, as provided herein, the purchase price of the Merchandise shall be due
and payable, together with all fees and costs related thereto, if any, on the
Termination Date.  The parties anticipate that [***] will acquire
Merchandise in an aggregate amount of approximately $[***].

     

    4.           DISPOSITION
OF THE MERCHANDISE; PRICING

     

    4.1           RedTag,
Parent and [***] agree that they will cooperate in the advertisement and sale of
the Merchandise and Consigned Goods, whether for the Event or
thereafter.  In disposing of the Merchandise and Consigned Goods,
RedTag and Parent agree that they shall provide:

     

    (a)           all
customer lists and mailing lists of RedTag and Parent, computer hardware and
software, existing supplies located at the Location, intangible assets
(including RedTag’s name and logo), and keys required to gain access to and
operate the Location, and any other assets of RedTag or Parent located at the
Location (whether owned, leased, or licensed);

     

    (b)           the
use of Parent’s central office facilities, central administrative services and
personnel to provide services necessary for the sale of the Merchandise and
Consigned Goods to the extent that such services are normally provided by Parent
to RedTag in connection with events similar to the Event;

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

       

    

    (c)           such
personnel, cashier, staff and supervisors as necessary to run the Event and
perform such other services necessary or appropriate in connection with the sale
of the Merchandise and Consigned Goods (“Event Employees”);
and

     

    (d)           as
needed for shipping, receiving and storing the Merchandise and Consigned Goods,
the provision of temporary labor resources.

     

    4.2           RedTag
acknowledges and agrees that [***] may continue to purchase and sell inventory
unrelated to this Agreement and not included as “Merchandise” or “Consigned
Goods” hereunder.  

     

    4.3           [***]
acknowledges and agrees that RedTag and Parent may continue to purchase and sell
inventory unrelated to this Agreement and not included as “Merchandise” or
“Consigned Good” hereunder.

     

    5.           EXPENSES

     

    5.1           Notwithstanding
anything contained herein, all expenses incurred by [***] in connection with the
purchase and sale of the Merchandise and Consigned Goods (collectively, the
“[***]
Expenses”) shall be paid to [***] in the priority set forth in Section 6.2,
including, without limitation (but excluding legal expenses incurred by [***] in
connection with the negotiation, execution and performance of this Agreement,
which shall be paid by [***]):

     

    (a)
advertising expenses, if such advertising is paid for by [***], (including
direct media costs, agency fees and production costs);

     

    (b) all
Advances made by [***] not otherwise included in this Section 5.1 (and as
contemplated by Section 2
hereof);

     

    (c) any
and all costs relating to shipping of the Merchandise and Consigned Goods
(including supplies); and

     

    (d) any
and all other expenses incurred by [***] in connection with the Event and, to
the extent any single expense is greater than $10,000, approved by RedTag or
Parent.

     

    5.2           All
other expenses incurred in connection with the Event and approved by [***] after
consultation between RedTag and [***] (collectively, the “Remaining Expenses”),
shall be paid in the priority set forth in Section 6.2,
including, without limitation (but excluding legal expenses incurred by RedTag
or Parent in connection with the negotiation, execution and performance of this
Agreement, which shall be paid by RedTag or Parent):

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

       

    

    (a)
payroll and related employee benefits of any Event Employees,

     

    (b) any
finder’s fee and sales commissions to third parties;

     

    (c)
security costs;

     

    (d) all
occupancy costs (e.g. rent, percentage rent, CAM charges, HVAC charges, real
estate taxes, etc.) relative to the Locations;

     

    (e)
insurance;

     

    (f)
telephone and utilities charges; and

     

    (g) any
and all costs relating to shipping, receiving and storing the Merchandise and
Consigned Goods (including supplies).

     

    5.3           [***]
and RedTag shall mutually agree on an accepted bonus pool, if any, for the Event
Employees based upon the Net Collection Amount.

     

    6.           SALE
PROCEEDS; SETTLEMENT;

     

    6.1           All
proceeds of sales of Merchandise and Consigned Goods shall be deposited, on a
daily basis, in a deposit account established by [***] (the “Designated
Account”).

     

    6.2           Immediately
following the conclusion of the Event, [***] and RedTag shall cooperate
reasonably and reconcile the results of sales of Merchandise and Consigned Goods
for the Event.  As promptly as practicable, and in any event within
five (5) business days, following such reconciliation, [***] shall make the
following payments from the Designated Account, in the following order of
priority and to the extent not already paid from the Designated
Account:

     

    (a)           first,
to [***], the Advance Fee and the aggregate amount of all Advances;

     

    (b)           next,
to [***], the aggregate cost of the Merchandise purchased by [***] pursuant to
Section 3
hereof, including, sales, excise, or gross receipts taxes, sales commissions,
customer returns, shortages, and customer allowances;

     

    (c)           next,
to [***] fifty percent (50%) of the [***] Service Fee;

     

    (d)           next,
to the respective consignors of the Consigned Goods, fifty percent (50%) of the
Required Consignor Payments;

     

    (e)           next,
to the extent not yet paid, because such Event Employees shall be paid on an
ongoing basis during the Event, to those Event Employees and other individuals,
and in such proportion and amount, as mutually agreed by RedTag and [***], the
Agreed Employee Wages (if any);

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

       

    

    (f)           next,
to [***], the aggregate amount of all [***] Expenses which, to the extent
subject to approval, have been approved by RedTag;

     

    (g)          next,
to RedTag, the Remaining Expenses which have been approved by
[***];

     

    (h)          next,
to [***], the remaining fifty percent (50%) of the [***] Service
Fee;

     

    (i)           
next, to the respective consignors of the Consigned Goods, the remaining fifty
percent (50%) of the Required Consignor Payments; and

     

    (j)           
next, to each of RedTag and [***], fifty percent (50%) of the Net Collection
Amount.

     

    7.           REDTAG
AND PARENT EMPLOYEES

     

    All
employees of RedTag, Parent and their affiliates shall be and remain employees
of RedTag, Parent and such affiliates, and [***] shall have no liability to any
such employees (including any former employees) of any kind or nature
whatsoever, including without limitation, with respect to severance pay,
termination pay, vacation pay, pay in lieu of reasonable notice of termination,
or any other expenses or liability arising from the employment of such employees
prior to, during, and subsequent to the transactions contemplated by this
Agreement.

     

    
      	
               
      

            	
              8.

            	
              REPRESENTATIONS,
      WARRANTIES AND COVENANTS

              OF REDTAG

            

    

     

    8.1           RedTag
hereby represents, warrants and covenants in favor of [***] as
follows:

     

    (a)           RedTag
(i) is a corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware; (ii) has all corporate power and
authority to own, lease and operate its assets and properties and to carry on
its business as presently conducted; and (iii) is and will continue to be, duly
authorized and qualified to do business and in good standing in each
jurisdiction where the nature of its business or properties requires such
qualification, including Florida, except, in each case, to the extent that the
failure to be in good standing or so qualified could not reasonably be expected
to have a material adverse effect on the ability of RedTag to execute and
deliver this Agreement and perform fully its obligations hereunder.

     

    (b)           RedTag
has the right, power and authority to execute and deliver the Transaction
Documents and each other document and agreement contemplated hereby or thereby
and to perform fully its obligations hereunder and thereunder.  RedTag
has taken all necessary actions required to authorize the execution, delivery
and performance of the Transaction Documents, and no further consent or approval
on the part of RedTag is required for RedTag to enter into and deliver the
Transaction Documents, to perform its obligations thereunder, and to consummate
the transactions contemplated by this Agreement. Each of the Transaction
Documents has been duly executed and delivered by RedTag and constitutes the
legal, valid and binding obligation of RedTag enforceable in accordance with its
terms.  No court order or decree of any federal, state, local, or
provincial governmental authority or regulatory body is in effect that would
prevent or materially impair, or is required for RedTag’s consummation of, the
transactions contemplated by this Agreement, and no consent of any third party
which has not been obtained is required therefor.  No contract or
other agreement to which RedTag is a party or by which RedTag is otherwise bound
will prevent or materially impair the consummation of the transactions
contemplated by this Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

       

    

    (c)           Except
for any liens granted under the Transaction Documents, RedTag shall not create,
incur, assume or suffer to exist any security interest, lien or other charge or
encumbrance upon or with respect to any of the Merchandise or Consigned Goods or
the proceeds thereof.

     

    (d)           RedTag
has not transferred to or from the Location, any merchandise or goods outside
the ordinary course in anticipation of the transactions contemplated by this
Agreement, except that Merchandise and Consigned Goods which have been or will
be moved to the Location.

     

    (e)           During
the Event, [***] shall have the right to the unencumbered use and occupancy of,
and peaceful and quiet possession of, the Location and any other storage
locations of the Merchandise, the assets currently located at such locations,
and the services provided at such locations.  RedTag shall throughout
maintain or cause to be maintained in a manner consistent with its customary and
historic practices, at its sole expense, all heating systems, air conditioning
systems, elevators, escalators, alarm systems, and all other mechanical devices
used in the ordinary course of operation of the Location.

     

    (f)           RedTag
had paid and will continue to pay, all self-insured or RedTag funded employee
benefit programs for RedTag employees, including health and medical benefits and
insurance and all proper claims made or to be made in accordance with such
programs.

     

    (g)           There
are no actions, suits, proceedings or investigations of any kind pending, or, to
the knowledge of RedTag, threatened against RedTag or Parent before any court,
tribunal or administrative agency or board, which if adversely determined would
have a material adverse effect on the transactions contemplated by this
Agreement and the other Transaction Documents.

     

    (h)           RedTag
is in material compliance with all laws and regulations applicable to it, its
business and properties, including, but not limited to any laws or regulations
promulgated by U.S. Department of Homeland Security and relating to U.S. Customs
and any law or regulation relating to import and exports.  RedTag has
all licenses, permits, orders and approvals that are required under any
governmental law or regulation in connection with RedTag’s business and
properties (the “Permits”).  No
notice of any violation has been received with respect of any Permits and no
proceeding is pending or, to RedTag’s knowledge, threatened to terminate, revoke
or limit any such Permits.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

       

    

    (i)           All
filings, assignments, pledges and deposits of documents or instruments have been
made and all other actions have been taken that are necessary or advisable,
under applicable law, to establish and perfect [***]’s first priority lien and
security interest in the Collateral.  The Collateral and [***]’s
rights with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses.  The Collateral is free from any lien,
except for the liens granted therein to [***] pursuant to the Security
Documents.

     

    (j)           RedTag
will duly and punctually pay or cause to be paid when due all of the Remaining
Expenses, if not originally incurred and paid for by
RedTag.  Notwithstanding the foregoing, if RedTag shall fail to pay or
cause to be paid when due any of the Remaining Expenses, [***] may, in its sole
discretion, from the Designated Account pay or cause to be paid on behalf of
RedTag any of the Remaining Expenses, in which case such amount shall be
deducted from RedTag’s allocation of the Net Collection Amount.

     

    (k)           RedTag
shall permit [***] and any of its agents or employees, to visit, inspect and
conduct examinations and verifications of the Merchandise and the contents of
the Location, all at such reasonable times and intervals and with prior written
notice as [***] shall reasonably request.

    

    
      	
               
      

            	
              9.

            	
              REPRESENTATIONS,
      WARRANTIES AND COVENANTS

              OF [***]

            

    

     

    9.1           [***]
hereby represents, warrants and covenants in favor of [***] as
follows:

     

    (a)           [***]
(i) is a limited liability company duly organized, validly existing and in good
standing under the laws of the State of Florida; (ii) has all requisite limited
liability company power and authority to own, lease and operate its assets and
properties and to carry on its business as presently conducted; and (iii) is and
will continue to be, duly authorized and qualified to do business and in good
standing in each jurisdiction where the nature of its business or properties
requires such qualification, including Florida, except, in each case, to the
extent that the failure to be in good standing or so qualified could not
reasonably be expected to have a material adverse effect on the ability of [***]
to execute and deliver this Agreement and perform fully its obligations
hereunder.

     

    (b)           [***]
has the right, power and authority to execute and deliver the Transaction
Documents and each other document and agreement contemplated hereby or thereby
and to perform fully its obligations hereunder and thereunder.  [***]
has taken all necessary actions required to authorize the execution, delivery
and performance of the Transaction Documents, and no further consent or approval
on the part of [***] is required for [***] to enter into and deliver the
Transaction Documents, to perform its obligations thereunder, and to consummate
the transactions contemplated by this Agreement. Each of the Transaction
Documents has been duly executed and delivered by [***] and constitutes the
legal, valid and binding obligation of [***] enforceable in accordance with its
terms.  No court order or decree of any federal, state, local, or
provincial governmental authority or regulatory body is in effect that would
prevent or materially impair, or is required for [***]’s consummation of, the
transactions contemplated by this Agreement, and no consent of any third party
which has not been obtained is required therefor.  No contract or
other agreement to which [***] is a party or by which [***] is otherwise bound
will prevent or materially impair the consummation of the transactions
contemplated by this Agreement.

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

       

    

    (c)           Except
for any liens granted under the Transaction Documents, [***] shall not create,
incur, assume or suffer to exist any security interest, lien or other charge or
encumbrance upon or with respect to any of the Merchandise or Consigned Goods or
the proceeds thereof.

     

    (d)           [***]
has not transferred to or from the Location, any merchandise or goods outside
the ordinary course in anticipation of the transactions contemplated by this
Agreement, except that Merchandise and Consigned Goods which have been or will
be moved to the Location.

     

    (e)           There
are no actions, suits, proceedings or investigations of any kind pending, or, to
the knowledge of [***], threatened against [***] before any court, tribunal or
administrative agency or board, which if adversely determined would have a
material adverse effect on the transactions contemplated by this Agreement and
the other Transaction Documents.

     

    (f)           [***]
is in material compliance with all laws and regulations applicable to it, its
business and properties, including, but not limited to any laws or regulations
promulgated by U.S. Department of Homeland Security and relating to U.S. Customs
and any law or regulation relating to import and exports.  [***] has
all Permits that are required under any governmental law or regulation in
connection with [***]’s business and properties.  No notice of any
violation has been received with respect of any Permits and no proceeding is
pending or, to [***]’s knowledge, threatened to terminate, revoke or limit any
such Permits.

     

    10.           INSURANCE

     

    10.1           RedTag
shall continue, in such amounts as it currently has in effect, all of its
liability insurance policies including, but not limited to, products liability,
comprehensive public liability, auto liability and umbrella liability insurance,
covering injuries to persons and property in, or in connection with the Location
and its other premises, and shall cause [***] to be named an additional named
insured with respect to all such policies.  Pursuant to Section 2.2(c),
RedTag shall deliver to [***] certificates evidencing such insurance setting
forth the duration thereof and naming [***] as an additional insured, in form
reasonably satisfactory to [***].  All such policies shall require at
least thirty (30) days prior notice to [***] of cancellation, non-renewal or
material change.  In the event of a claim under any such policies
RedTag shall be responsible for the payment of all deductibles, retentions or
self-insured amounts to the extent said claim
arises from or relates to the alleged acts or omissions of RedTag or its
employees, agents or independent contractors.

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

       

    

    10.2           RedTag
shall continue, in an amount not less than Two Million Dollars ($2,000,000),
fire, flood, theft and extended coverage casualty insurance covering the
Merchandise and Consigned Goods in a total amount equal to no less than the cost
value thereof.  All such policies shall name [***] as loss
payee.  In the event of a loss to the Merchandise or the Consigned
Goods on or after the date of this Agreement, the proceeds of such insurance
attributable to the Merchandise and Consigned Goods (plus the amount
of  any deductible) shall constitute proceeds of sales of Merchandise
and Consigned Goods.  Pursuant to Section 2.2(c),
RedTag shall deliver to [***] certificates evidencing such insurance setting
forth the duration thereof and naming [***] as loss payee, in form and substance
reasonably satisfactory to [***].  All such policies shall require at
least thirty (30) days prior notice to [***] of cancellation, non-renewal or
material change.  RedTag shall not make any change in the amount of
any deductibles or self-insurance amounts prior to the Termination Date without
[***]’s prior written consent.

     

    10.3           RedTag
shall continue until the Termination Date, in such amounts as it currently has
in effect, worker’s compensation insurance (including employer liability
insurance) covering all Event Employees in compliance with all statutory
requirements.

     

    11.           INDEMNIFICATION

     

    11.1           RedTag
and Parent, jointly and severally, shall indemnify and hold [***] and its
officers, directors, employees, agents and independent contractors
(collectively, “[***]
Indemnified Parties”) harmless from and against all claims, demands,
penalties, losses, liability or damage, including, without limitation,
reasonable attorneys’ fees and expenses, suffered directly or indirectly by
[***] resulting from, or related to:

     

    (a)           RedTag’s
breach of or failure to comply with any of its agreements, covenants,
representations or warranties contained in any Transaction
Document;

     

    (b)           any
and all claims, actions and suits, including, but not limited to any product
liability claim, action or suit, whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of or relating to RedTag’s previous dealings with any
third party relative to the potential sale of any Merchandise or Consigned Goods
and any commissions owed to sales agents or brokers from sales of the
Merchandise or Consigned Goods;

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

       

    

    (c)           any
failure of RedTag to pay to RedTag employees or Event Employees any wages,
salaries or benefits due to such employees, or other claims asserted against
[***] by RedTag employees or Event Employees;

     

    (d)           any
failure by RedTag to pay any taxes to the proper taxing authorities or to
properly file with any taxing authorities any reports or documents required by
applicable law to be filed in respect thereof;

     

    (e)           any
failure by RedTag to pay the Remaining Expenses; and

     

    (f)           the
gross negligence or willful misconduct of RedTag or any of its officers,
directors, employees, agents (other than [***]) or representatives.

     

    11.2           [***]
shall indemnify and hold RedTag and its officers, directors, employees, agents
and representatives harmless from and against all claims, demands, penalties,
losses, liability or damage, including, without limitation, reasonable
attorneys’ fees and expenses, suffered directly or indirectly by RedTag
resulting from, or related to:

     

    (a)           [***]’s
material breach of any of its agreements, covenants, representations or
warranties contained in any Transaction Document;

     

    (b)           any
and all claims, actions and suits, including, but not limited to any product
liability claim, action or suit, whether groundless or otherwise, and from and
against any and all liabilities, losses, damages and expenses of every nature
and character arising out of or relating to [***]’s previous dealings with any
third party relative to the potential sale of any Merchandise or Consigned Goods
and any commissions owed to sales agents or brokers from sales of the
Merchandise or Consigned Goods;

     

    (c)           the
gross negligence or willful misconduct of [***] or any of its officer,
directors, employees, agents or representatives.

     

    12.           TERMINATION;
SETOFF

     

    12.1           This
Agreement shall terminate upon the earlier of (i) in the event of a breach of
the Transaction Documents by RedTag, by written notice from [***] to RedTag,
(ii) in the event of a breach of the Transaction Documents by [***], by written
notice from RedTag to [***] and (iii) the mutual agreement of RedTag and [***]
((i), (ii), and (iii) as applicable, the “Termination
Date”).  In the event this Agreement is Terminated, on the
Termination Date, all amounts set forth in Sections 6.2(a)-(c),
6.2(f) and
6.2(h), plus
any amounts payable to [***] from the Net Collection Amount shall become
immediately due and payable.  If, as of the Termination Date or the
conclusion of the Event, [***] has not received payment in full of the amounts
required to be paid pursuant to Sections 6.2(a)-(c),
6.2(f) and
6.2(h) (such
remaining amounts due, the “Outstanding
Payments”), then RedTag and Parent shall exercise best efforts to sell as
promptly as practicable any remaining Merchandise and Consigned Goods (in the
case of Consigned Goods, to the extent not returned to the respective
consignors) and shall pay to [***] the Outstanding Payments from the proceeds of
such sales; provided that, to the extent any proceeds from such future sales of
Merchandise and Consigned Goods (in the case of Consigned Goods, to the extent
not returned to the respective consignors) exceed the Outstanding Payments,
[***] and RedTag shall split such proceeds evenly following payment to [***] of
the Outstanding Payments.  

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

       

    

    13.           MISCELLANEOUS

     

    13.1           Any
notice or other communication under this Agreement shall be in writing and may
be delivered personally or sent by facsimile or by prepaid registered or
certified mail.

     

    13.2           This
Agreement shall be governed by and interpreted in accordance with the internal
laws of the State of Florida, without reference to any conflict of laws
provisions.  The parties hereto agree that only courts sitting in
Broward County Florida and Federal Courts of the United States of America
located in Broward County, Florida shall retain jurisdiction to hear and finally
determine any disputes arising from or under this Agreement, and by execution of
this Agreement each party hereby irrevocably accepts and submits to the
jurisdiction of such courts with respect to any actions or proceeding and no
service of process by certified mail, return receipt requested to the address
listed above for each party.

     

    13.3           In
the event any term or provision contained within this Agreement shall be deemed
illegal or unenforceable, then such offending term or provision shall be
considered deleted from this Agreement and the remaining terms shall continue to
be in full force and effect.

     

    13.4           This
Agreement, together with the Transaction Documents, constitutes the entire
agreement between the parties with respect of the subject matter hereof and
supersedes all prior negotiations and understandings, and can only be modified
by a writing signed by RedTag and [***].

     

    13.5           RedTag
shall not assign this Agreement without the express written consent of
[***].  This Agreement shall inure to the benefit of, and be binding
upon, the parties and their respective successors and permitted
assigns.

     

    13.6           This
Agreement may be executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts, together,
shall constitute one and the same instrument.  Delivery by facsimile
of this Agreement or an executed counterpart hereof shall be deemed a good and
valid execution and delivery hereof or thereof.

     

    [SIGNATURES
TO FOLLOW]

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    IN WITNESS WHEREOF, the undersigned
parties have executed this Service and Participation Agreement as of the date
above first written.

     

    
      	 	

              [***]

               

              By:__________________________

              Name:                      [***]

              Title:   Manager

              

              

              

              REDTAG
      LIVE, INC.

               

              By:__________________________

              Name:

              Title:

              

              

              ENABLE
      HOLDINGS, INC.

               

              By:__________________________

              Name:

              Title:

            

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    EXHIBIT
A

    

    Definitions

    

    “Advance” shall mean
any and all funds provided by [***] on behalf of RedTag and/or Parent to pay
expenses related to the Event, which shall be subject to the prior approval of
[***].

     

    “Advance Fee” shall
mean an amount equal to $[***].

     

    “Agreed Employee
Wages” shall mean reasonable and customary wages for Event Employees
payable for services provided in connection with the Event.

     

    “Collateral” means all property and
rights of RedTag and Parent in the Merchandise and Consigned Goods, including
proceeds from the sale thereof.

     

    “Consigned Goods”
shall mean each item of goods and inventory which have been acquired through
[***] and have been accepted for consignment and presented for sale at the
Event, whether or not sold at the Event.

     

    “[***] Service Fee”
shall mean an amount equal to $[***] in consideration of the services provided
by [***] pursuant to this Agreement.

     

    “Merchandise” shall
mean each item of goods and inventory presented for sale at the Event, whether
or not sold at the Event, excluding Consigned Goods.

     

    “Net Collection
Amount” shall mean (i) the total amount (in dollars) of all proceeds of
sales of Merchandise, plus (ii) the total
amount (in dollars) of all proceeds of sale of Consigned Goods, plus (iii) all
proceeds of fire, flood or other insurance covering the Merchandise, the
Consigned Goods, the Event and/or the Location in the event of a casualty event
affecting the Merchandise, the Consigned Goods, the Location or otherwise, plus (iv) the total
amount (in dollars) of all proceeds of sales of warranties for Merchandise and
Consigned Goods, less (v) the cost of
the Merchandise purchased by [***] pursuant to Section 3 hereof,
including, sales, excise, or gross receipts taxes, sales commissions, customer
returns, shortages, warranty reserves and customer allowances, less (vi) the
Required Consignor Payments, less (vii) the [***] Expenses, less (viii) the
Remaining Expenses, less (ix) the [***]
Service Fee, less (x) all Advances
and the Advance Fee and less (xi) Agreed
Employee Wages.

     

    “Obligations” shall
mean all indebtedness, obligations and liabilities of RedTag and/or Parent to
[***], whether existing on the date of this Agreement or arising thereafter,
direct or indirect, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other
Transaction Documents.

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

       

    

    “Required Consignor
Payments” shall mean collectively the total amount (in dollars) required
to be paid to the consignors of Consigned Goods as a result of the sale of such
Consigned Goods.

     

    “Security Documents”
shall mean collectively, any and all instruments and documents, including
without limitation Uniform Commercial Code financing statements, and other
equivalent registrations and personal property security filings with respect to
any other applicable jurisdiction, control agreements and the like, required to
be executed or delivered pursuant to, or in connection with, this Agreement or
any other Transaction Document.

     

    “Transaction
Documents” means, collectively, this Agreement, all landlord waivers,
bailee agreements, assignments, other encumbrances or agreements which now or
hereafter secure or relate to the collateral security for the Obligations, any
guaranties of the Obligations, and any other agreements entered into between or
among RedTag, Parent or any other guarantor of the Obligations and [***]
relating to or in connection with this Agreement.

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

       

    

    Schedule
2.1

    

    [***]

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

       

    

    Schedule
3.2

    

    [***]

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