Document:

EXHIBIT 10.1

 

FORM OF PREFUNDING AGREEMENT

 

_____________________, 2015

 

Re: Abtech Holdings, Inc. Pre-Closing Funds

 

Dear Purchaser:

 

Reference is made to that certain Financing
Agreement by and among Abtech Holdings, Inc., a Nevada corporation (the “Company”), _____________________ (“Purchaser”),
and such other purchasers and debt holders set forth on Exhibit A thereto (the “Financing Agreement”). Capitalized
terms used but not defined herein have the meanings assigned to them under the Financing Agreement.

 

Pursuant to Section 2.3 of the Financing
Agreement, on the date hereof Purchaser shall provide the Company with $__________.00 (the “Pre-Closing
Funds”) to be applied towards the Minimum Offering Amount. The funds due to the Company by Purchaser at the Stage One
Closing, if it occurs, shall be credited by the Pre-Closing Funds.

 

In consideration for providing the Pre-Closing
Funds, Purchaser will receive the Company common stock at the Closing Share Price. In the event that neither the execution of the
Financing Agreement nor the Stage One Closing occurs, the Company shall, at its option, either (i) refund the Pre-Closing Funds
to Purchaser; or (ii) give Purchaser the option to either (a) receive common stock for the amount provided at a purchase price
equal to the average closing price of the Company’s common stock for the 5 trading days prior to the date that such amount
was provided to the Company; or (b) receive a junior secured promissory note from the Company for the prepayment amount with such
note having an interest rate of 7.5% and a term of one year. Further, if the Company accepts the Pre-Closing Funds more than 5
business days before the Stage One Closing, the Company shall issue to Purchaser a three-year warrant for the purchase of one (1)
share of the Company’s common stock for each dollar of the Pre-Closing Funds, with such warrant having an exercise price
equal to two times the average closing price of the Company’s common stock for the 5 trading days prior to the date such
amount was provided to the Company.

 

*****

 

Kindly acknowledge your agreement with
the foregoing by signing this letter below and returning a signed copy to me.

 

	 	Very truly yours,	 
	 	 	 
	 	ABTECH HOLDINGS, INC.,	 
	 	a Nevada corporation	 
	 	 	 
	 	By:	       	 
	 	Name:	 	 
	 	Title:	 	 

 

Accepted and agreed to this _______ day of ______________, 2015:

 

PURCHASER

 

Signature: ___________________________________________

 

    	 	1EXHIBIT 10.2

DEBT CONVERSION AGREEMENT

 

THIS DEBT CONVERSION AGREEMENT (this “Agreement”)
is entered into as of November 10, 2015, by and between Abtech Holdings, Inc., a Nevada corporation (the “Company”),
and Golden Properties Ltd (“Lender”).

 

RECITALS

 

A.           The
Lender issued a Convertible Promissory Note dated December 6, 2013, in the principal amount of $3,300,000 U.S. Dollars (the “Note”)
to the Company.

 

B.           The
parties to this Agreement have agreed to convert the $3,719,648.80 of principal and interest owed to Lender under the Note (the
“Outstanding Debt”) into shares of the Company’s common stock as herein described, according to the terms and
subject to the conditions hereinafter set forth.

 

C.           Upon
such conversion of the Outstanding Debt, the parties agree that the Note shall be cancelled and of no further force or effect.

 

NOW, THEREFORE, in consideration for the
mutual promises and covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the parties hereby agree as follows:

 

1.           Debt
Conversion.

 

(a)          Lender
agrees, subject to the conditions set forth herein, to convert the full amount of the Outstanding Debt into 123,988,294 shares
of the Company’s common stock (the “Conversion Shares”) at a conversion price of $0.03 per share (the “Conversion
Price”). Upon receipt of the Conversion Price, Lender agrees that the Note is cancelled and of no further force and effect.
Lender agrees to promptly file any necessary UCC termination statements or other documentation that may be needed to terminate
any security interests that may have been granted to Lender that are related to the Note. Lender further authorizes borrower to
take any action needed to reflect the cancellation of the Note and the termination of any related security interests.

 

(b)          Subject
to the terms and conditions of this Agreement, the consummation of the transaction contemplated by this Agreement shall take place
at a closing (the “Closing”) to be held at 10:00 a.m., local time, on October 27, 2015, at the offices of the Company,
or at such other time, date or place as the parties may agree upon in writing. At the Closing, Lender shall deliver a certificate
of an officer acknowledging the retirement of the Outstanding Debt and the Company shall deliver a certificate evidencing ownership
of the Conversion Shares and which shall include a restrictive legend.

 

2.           Legends.
All certificates representing any shares subject to the provisions of this Agreement shall have endorsed thereon the following
legends:

 

(a)          
“THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”), AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT
UNDER SUCH ACT COVERING SUCH SECURITIES. THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT, OR THE COMPANY RECEIVES AN
OPINION OF COUNSEL FOR THE HOLDER OF THESE SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH SALE, TRANSFER,
ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF THE ACT.”

 

(b)          Any
other legend required to be placed thereon under applicable state securities laws.

 

3.          Representations
and Warranties. In connection with the proposed conversion, Lender hereby agrees, represents and warrants as follows:

 

    	 	1	 

     

    

 

(a)          Lender
has full legal power and capacity to execute and deliver this Agreement and to perform its obligations hereunder. All acts required
to be taken by Lender to enter into this Agreement and to carry out the transaction contemplated hereby have been properly taken;
and this Agreement constitutes a legal, valid and binding obligation of Lender enforceable in accordance with its terms.

 

(b)          Lender
is receiving the Conversion Shares solely for Lender’s own account for investment and not with a view to, or for resale in
connection with, any distribution thereof within the meaning of the Securities Act. Lender has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and risks of an investment in the Company’s securities.

 

(c)          Lender
realizes that acceptance of the Conversion Shares at the Conversion Price is an investment in the Company, which is a highly speculative
investment, and Lender is able, without impairing Lender’s financial condition, to hold the Conversion Shares for an indefinite
period of time and to suffer a complete loss of Lender’s investment.

 

(d)          THE
OFFERING OF THE CONVERSION SHARES IS LIMITED TO PERSONS WHO ARE “ACCREDITED INVESTORS,” AS THAT TERM IS DEFINED IN
REGULATION D UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), AND WHO HAVE THE FINANCIAL MEANS AND THE BUSINESS,
FINANCIAL AND INVESTMENT EXPERIENCE AND ACUMEN TO CONDUCT AN INVESTIGATION AS TO THE MERITS AND RISKS OF THIS INVESTMENT. THE INVESTOR
HEREBY REPRESENTS THAT HE/SHE/IT HAS READ, IS FAMILIAR WITH AND UNDERSTANDS RULE 501 OF REGULATION D UNDER THE ACT. THE INVESTOR
IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(A) OF REGULATION D, AS AMENDED.

 

(e)          The
information in any documents delivered by the Lender in connection with this Agreement, including, but not limited to the Investor
Questionnaire attached as Exhibit A, is true, correct and complete in all respects as of the effective date hereof. The Lender
agrees promptly to notify the Company in writing of any change in such information after the date hereof.

 

(f)          Lender
is relying solely on the representations and warranties contained herein in making its decision to enter into this Agreement and
to consummate the transactions contemplated hereby, and no oral representations or warranties of any kind have been made by the
Company or its officers, directors, employees or agents to Lender.

 

(g)          Lender
has been given an opportunity to ask questions and receive answers from the officers and directors of the Company and to obtain
additional information from the Company. The Lender has had full access to all the information which the Lender (or the Lender’s
advisor) considers necessary or appropriate to make an informed decision with respect to the transaction contemplated by this Agreement.
The Lender acknowledges that the Company has made available to the Lender and the Lender’s advisors the opportunity to examine
and copy any contract, matter or information which the Lender considers relevant or appropriate in connection with this investment
and to ask questions and receive answers relating to any such matters including, without limitation, the financial condition, management,
employees, business, obligation, corporate books and records, budgets, business plans of and other matters relevant to the Company.
To the extent the Lender has not sought information regarding any particular matter, the Lender represents that he or she had and
has no interest in doing so and that such matters are not material to the Lender in connection with the transaction contemplated
by this Agreement. The Lender has accepted the responsibility for conducting the Lender’s own investigation and obtaining
for itself such information as to the foregoing and all other subjects as the Lender deems relevant or appropriate in connection
with the transaction contemplated by this Agreement. The Lender is not relying on any representation, by the Company or otherwise,
other than that contained herein. The Lender acknowledges that no representation regarding projected financial performance or a
projected rate of return has been made to it by any party.

 

    	 	2	 

     

    

 

(h)          The
Lender acknowledge that on May 28, 2015, the Company received a subpoena from the SEC that stated that the staff of the SEC is
conducting an investigation In the Matter of Abtech Holdings, Inc.(NY-9262). The Lender has reviewed the Company’s related
public disclosures on this matter, has had the opportunity to investigate the matter, and understands generally that the SEC's
subpoena has asked for all documents, agreements, and communications concerning (i) the Company's Contract for Services with Nassau
County, New York, dated October 8, 2013; (ii) Adam Skelos, Dean Skelos, and their related entities; (iii) SLC Clean Water, LLC,
Axiom, Glenwood Management, and a number of other listed individuals and entities; (iv) certain Board and Board committee minutes
and related materials; (v) certain policies, procedures, and internal controls in effect at the Company; (vi) certain communications
with the Company's independent registered accounting firm, transfer agent, potential and current investors, broker-dealers, investment
advisors, and finders; and (vii) certain other organizational and financial account information of the Company. The Company has
advised the Lender that it believes the SEC's subpoena is a result of the complaint announced on May 4, 2015 that was filed by
Federal authorities against Dean and Adam Skelos. The Company has advised the Lender that it is not a target of the Skelos’
criminal proceedings and has fully cooperated with federal investigators in that matter.

 

(i)          The
Lender recognizes that an investment in the Conversion Shares involves significant risks, including the risks described herein
and in the Risk Factors annexed hereto as Exhibit B. Lender has read and understands such risks and that such risks, and others,
can result in the loss of the Lender’s entire investment in the Conversion Shares.

 

(j)          The
Company has disclosed to Lender that:

 

(i)          The
Conversion Shares have not been registered under the Securities Act and the Conversion Shares must be held indefinitely unless
a transfer is subsequently registered under the Securities Act, or an exemption from such registration is available, and that the
Company is under no obligation to register the Conversion Shares;

 

(ii)         The
Company will make a notation in its records of the aforementioned restrictions on transfer and legends.

 

(k)          Lender
has sought such independent legal, tax and accounting advice and counsel as it has deemed necessary and appropriate and Lender
is relying on the advice and counsel of his own legal, tax and accounting advisors.

 

(l)          Without
in any way limiting Lender’s representations and warranties set forth above, Lender further agrees that Lender shall in no
event make any disposition of all or any portion of the Conversion Shares which Lender is acquiring unless and until:

 

(i)          There
is then in effect a registration statement under the Securities Act (a “Registration Statement”) covering such proposed
disposition and such disposition is made in accordance with said Registration Statement; or

 

(ii)         Lender
shall have notified the Company of the proposed disposition and the Company agrees that such disposition is exempt from the registration
requirements of applicable state and federal securities laws.

 

4.           Transfers
in Violation of Agreement. The Company shall not be required to (i) transfer on its books any Conversion Shares of the Company
which shall have been sold or transferred in violation of any of the provisions set forth in this Agreement, or (ii) treat as owner
of such shares or to accord the right to vote as such owner or to pay dividends to any transferee to whom such shares shall have
been so transferred.

 

5.           Conditions.

 

(a)          The
obligations of the Company to consummate the transactions contemplated by this Agreement shall be subject to the fulfillment of
the following conditions:

 

(i)          The
representations and warranties of Lender set forth in Section 3 hereof shall be true and correct on and as of the Closing date.

 

(ii)         All
proceedings to be taken by Lender in connection with the consummation of the transactions contemplated by this Agreement shall
have been duly and validly taken and all necessary consents, approvals or authorizations of any governmental or regulatory authority
or other third party required to be obtained by the Company or Lender shall have been obtained in form and substance reasonably
satisfactory to the Company.

 

    	 	3	 

     

    

 

(iii)        Lender
has delivered to the Company a certificate acknowledging the conversion of the Outstanding Debt and that there are no other obligations
of the Company to Lender.

 

(iv)        The
Company has enough authorized shares of common stock to issue the Conversion Shares.

 

(b)          The
obligations of Lender to consummate the transaction contemplated by this Agreement shall be subject to the fulfillment of the following
conditions:

 

(i)          The
representations and warranties of the Company set forth herein shall be true and correct on and as of the Closing date.

 

(ii)         All
proceedings, corporate or otherwise, to be taken by the Company in connection with the consummation of the transactions contemplated
by this Agreement shall have been duly and validly taken and all necessary consents, approvals or authorizations of any governmental
or regulatory authority or other third party required to be obtained by the Company or Lender shall have been obtained in form
and substance reasonably satisfactory to Lender.

 

6.           Termination.
This Agreement may be terminated no later than the Closing:

 

(a)          At
the option of any party if any other party has materially breached a term of this Agreement and has not cured such breach within
five (5) days after notice of such breach;

 

(b)          At
the option of any party if any competent regulatory authority shall have issued an order making illegal or otherwise restricting,
preventing, prohibiting or refusing to approve the transactions contemplated hereby, and such order shall have become final and
non-appealable; or

 

(c)          At
the option of the Company in the event of a failure to meet a condition set forth in Section 5 hereof.

 

7.           Miscellaneous.

 

(a)          Further
Instruments. The parties agree to execute such further instruments and to take such further action as may reasonably be necessary
to carry out the intent of this Agreement.

 

(b)          Notice.
All notices required or permitted hereunder shall be in writing and shall be deemed effectively given (i) upon personal delivery,
(ii) when sent by confirmed facsimile, if sent during normal business hours of recipient, or if not, then on the next business
day, (iii) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written
verification of receipt, or (iv) when sent by confirmed email if sent during normal business hours of recipient, or if not, then
on the next business day. All communications shall be sent to the party to be notified at the address set forth on the signature
pages hereof, or at such other address as such party may designate by giving ten (10) days’ advance written notice to the
other party hereto.

 

(c)          Successors
and Assigns. This Agreement shall inure to the benefit of the successors and assigns of the Company and, subject to the restrictions
on transfer herein set forth, be binding upon Lender, Lender’s heirs, executors, administrators, successors and assigns.

 

(d)          Applicable
Law; Entire Agreement; Amendments. This Agreement shall be governed by and construed in accordance with the laws of the State of
Nevada, entered into and to be performed entirely within Nevada, and constitutes the entire agreement of the parties with respect
to the subject matter hereof superseding all prior written or oral agreements, and no amendment or addition hereto shall be deemed
effective unless agreed to in writing by the parties hereto.

 

    	 	4	 

     

    

 

(e)          Severability.
If any provision of this Agreement is held by a court to be invalid, void or unenforceable, the remaining provisions shall nevertheless
continue in full force and effect without being impaired or invalidated in any way and shall be construed in accordance with the
purposes and tenor and effect of this Agreement.

 

(f)          Counterparts.
This Agreement may be executed by facsimile or other electronic signature, in counterparts, which, when taken together, shall constitute
one and the same original.

 

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

COMPANY:

 

	ABTECH HOLDINGS, INC., a Nevada corporation	 
	 	 	 
	By:	/s/ Glenn R. Rink	 
	Name:	Glenn R. Rink	 
	Title:	President, C.E.O.	 
	 	 
	LENDER:	 
	 	 
	GOLDEN PROPERTIES LTD.	 
	 	 	 
	By:	/s/ Alexander Lau	 
	Name:	Alexander Lau	 
	Title:	Vice President	 

 

    	 	5	 

     

    

 

EXHIBIT A TO DEBT CONVERSION AGREEMENT

INVESTOR QUESTIONNAIRE

 

ABTECH HOLDINGS, INC.

Confidential Investor Questionnaire

 

		To:	ABTECH HOLDINGS, INC.

 

I.           The
Investor represents and warrants that he or it comes within one category marked below, and that for any category marked,
he or it has truthfully set forth, where applicable, the factual basis or reason the Investor comes within that category. ALL INFORMATION
IN RESPONSE TO THIS SECTION WILL BE KEPT STRICTLY CONFIDENTIAL EXCEPT AS NECESSARY FOR THE COMPANY AND/OR THE PLACEMENT AGENT TO
COMPLY WITH LAW AND/OR ANY RULES PROMULGATED BY ANY REGULATORY AGENCY. The undersigned shall furnish any additional information
which the Company deems necessary in order to verify the answers set forth below.

 

		Category A ___	The undersigned is an individual (not a partnership,
corporation, etc.) whose individual net worth, or joint net worth with his or her spouse, presently exceeds $1,000,000, excluding
the value of the primary residence of such individual, calculated by subtracting from the estimated fair market value of the property
the amount of debt secured by the property, up to the estimated fair market value of the property.

 

Explanation. In calculating
net worth you may include equity in personal property and real estate (other than Investor’s principal residence which may
not be included in such net worth calculation), cash, short-term investments, stock and securities. Equity in personal property
and real estate should be based on the fair market value of such property less debt secured by such property.

 

		Category B ___	The undersigned is an individual (not a partnership,
corporation, etc.) who had an individual income in excess of $200,000 in each of the two most recent years, or joint income with
his or her spouse in excess of $300,000 in each of those years (in each case including foreign income, tax exempt income and full
amount of capital gains and losses but excluding any income of other family members and any unrealized capital appreciation) and
has a reasonable expectation of reaching the same income level in the current year.

 

		Category C ___	The undersigned is a director or executive officer of
the Company which is issuing and selling the Securities (“Securities”).

 

		Category D ___	The undersigned is a bank; a savings and loan association;
insurance company; registered investment company; registered business development company; licensed small business investment
company; or employee benefit plan within the meaning of Title 1 of ERISA and (a) the investment decision is made by a plan fiduciary
which is either a bank, savings and loan association, insurance company or registered investment advisor, or (b) the plan has
total assets in excess of $5,000,000 or is a self directed plan with investment decisions made solely by persons that are accredited
investors.
	 	 	_____________________________________________________
	 	 	_____________________________________________________
	 	 	(describe entity)

  

		Category E ___	The undersigned is a private business development company
as defined in section 202(a)(22) of the Investment Advisors Act of 1940.
	 	 	_____________________________________________________
	 	 	_____________________________________________________
	 	 	(describe entity)

 

    	 	6	 

     

    

 

		Category F ___	The undersigned is either a corporation, partnership,
Massachusetts business trust, or non-profit organization within the meaning of Section 501(c)(3) of the Internal Revenue Code,
in each case not formed for the specific purpose of acquiring the Securities and with total assets in excess of $5,000,000.
	 	 	_____________________________________________________
	 	 	_____________________________________________________
	 	 	(describe entity)

 

		Category G ___	The undersigned is a trust with total assets in excess
of $5,000,000, not formed for the specific purpose of acquiring the Securities, where the purchase is directed by a “sophisticated
person” as defined in Regulation 506(b)(2)(ii) under the Securities Act of 1933.

 

		Category H ___	The undersigned is an entity (other than a trust) all
the equity owners of which are “accredited investors” within one or more of the above categories. If relying upon
this Category alone, each equity owner must complete a separate copy of this Agreement.
	 	 	_____________________________________________________
	 	 	_____________________________________________________
	 	 	(describe entity)

 

		Category I ___	The undersigned is not within any of the categories above
and is therefore not an accredited investor.

 

For purposes hereof, “individual
income” means adjusted gross income less any income attributable to a spouse or to property owned by a spouse, increased
by the following amounts (but not including any amounts attributable to a spouse or to property owned by a spouse): (i) the amount
of any interest income received which is tax-exempt under Section 103 of the Internal Revenue Code of 1986, as amended (the “Code”),
(ii) the amount of losses claimed as a limited partner in a limited partnership (as reported on Schedule E of Form 1040), (iii)
any deduction claimed for depletion under Section 611 et seq. of the Code, and (iv) any amount by which income from long-term capital
gains has been reduced in arriving at adjusted gross income pursuant to the provisions of Section 12.02 of the Code.

 

The undersigned agrees that the undersigned
will notify the Company at any time on or prior to the execution of this Agreement in the event that the representations and warranties
in this Agreement shall cease to be true, accurate and complete.

 

II.          SUITABILITY
(please answer each question)

 

(a)          For
an individual Investor, please describe your current employment, including the company by which you are employed and its principal
business:

	 
	 
	 
	 	 

 

(b)          For
an individual Investor, please describe any college or graduate degrees held by you:

	 
	 
	 	 

 

 

(c)          For
all Investors, please list types of prior investments:

______________________________________________________________________________

	 
	 
	 	 

 

(d)          For
all Investors, please state whether you have you participated in other private placements before:

	YES_______	NO_______

 

    	 	7	 

     

    

 

(e)          If
your answer to question (d) above was “YES”, please indicate frequency of such prior participation in private placements
of:

 

	 	 	Public	 	Private	 
	 	 	Companies	 	Companies	 
	 	 	 	 	 	 
	 	Frequently		 		 
	 	Occasionally		 		 
	 	Never		 		 

 

(f)          For
individual Investors, do you expect your current level of income to significantly decrease in the foreseeable future:

	YES_______	NO_______

 

(g)          For
trust, corporate, partnership and other institutional Investors, do you expect your total assets to significantly decrease in the
foreseeable future:

	YES_______	NO_______

 

(h)          For
all Investors, do you have any other investments or contingent liabilities which you reasonably anticipate could cause you to need
sudden cash requirements in excess of cash readily available to you:

	YES_______	NO_______

 

(i)          For
all Investors, are you familiar with the risk aspects and the non-liquidity of investments such as the Securities for which you
seek to subscribe?

	YES_______	NO_______

 

(j)          For
all Investors, do you understand that there is no guarantee of financial return on this investment and that you run the risk of
losing your entire investment?

	YES_______	NO_______

 

III.         MANNER
IN WHICH TITLE IS TO BE HELD. (circle one)

		(a)	Individual Ownership

		(b)	Community Property

		(c)	Joint Tenant with Right of Survivorship (both parties
must sign)

		(d)	Partnership*

		(e)	Tenants in Common

		(f)	Corporation*

		(g)	Trust*

		(h)	Limited Liability Company*

		(i)	Other

 

*If Securities are
being subscribed for by an entity, the attached Certificate of Signatory must also be completed.

 

IV.          FINRA
AFFILIATION.

 

Are you affiliated or associated with an
FINRA member firm (please check one):

Yes _________             No
__________

 

If Yes, please describe:

_________________________________________________________

_________________________________________________________

 

    	 	8	 

     

    

 

*If Investor is a Registered Representative
with an FINRA member firm, have the following acknowledgment signed by the appropriate party:

 

The undersigned FINRA member firm acknowledges
receipt of the notice required by Rule 3050 of the NASD Conduct Rules.

_________________________________

Name of FINRA Member Firm

 

By: ______________________________

Authorized Officer

 

Date: ____________________________

 

V.         The undersigned is informed of the
significance to the Company of the foregoing representations and answers contained in the Confidential Investor Questionnaire contained
herein and such answers have been provided under the assumption that the Company will rely on them.

 

VI.          In
furnishing the above information, the undersigned acknowledges that the Company will be relying thereon in determining, among other
things, whether there are reasonable grounds to believe that the undersigned qualifies as a Purchaser under Section 4(2) and/or
Regulation D of the Securities Act of 1933 and applicable State Securities laws for the purposes of the proposed investment.

 

VII.         The
undersigned understands and agrees that the Company may request further information of the undersigned in verification or amplification
of the undersigned’s knowledge of business affairs, the undersigned’s assets and the undersigned’s ability to
bear the economic risk involved in an investment in the securities of the Company.

 

VIII.         The
undersigned represents to you that (a) the information contained herein is complete and accurate on the date hereof and may be
relied upon by you and (b) the undersigned will notify you immediately of any change in any such information occurring prior to
the acceptance of the subscription and will promptly send you written confirmation of such change. The undersigned hereby certifies
that he, she or it has read and understands the Agreement related hereto.

 

IX.          In
order for the Company to comply with applicable anti-money laundering/U.S. Treasury Department Office of Foreign Assets Control
(“OFAC”) rules and regulations, Investor is required to provide the following information:

 

1.          Payment
Information

 

(a) Name and address
(including country) of the bank from which Investor’s payment to the Company is being wired (the “Wiring Bank”):

 

    ______________________________________

   _______________________________________

   _______________________________________

 

(b)          Investor’s
wiring instructions at the Wiring Bank:

 

   _______________________________________

   _______________________________________

   _______________________________________

 

    	 	9	 

     

    

 

(c)          Is
the Wiring Bank located in the U.S. or another “FATF Country”*?

_____ Yes        ______ No

 

(d)          Is
Investor a customer of the Wiring Bank?

_____ Yes        ______ No

 

2.          Additional
Information

 

For Individual Investors:

____ A government issued form of picture identification
(e.g., passport or drivers license).

____ Proof of the individual’s current
address (e.g., current utility bill), if not included in the form of picture identification.

 

For Funds of Funds or Entities that Invest on Behalf
of Third Parties:

 

		_____	A certificate of due formation and organization and continued authorization to conduct business
in the jurisdiction of its organization (e.g., certificate of good standing).

 

		_____	An “incumbency certificate” attesting to the title of the individual executing these
subscription materials on behalf of the prospective investor.

 

		_____	A completed copy of a certification that the entity has adequate anti-money laundering policies
and procedures (“AML Policies and Procedures”) in place that are consistent with the USA PATRIOT Act, OFAC and
other relevant federal, state or non-U.S. anti-money laundering laws and regulations (with a copy of the entity’s current
AML Policies and Procedures to which such certification relates).

 

		_____	A letter of reference any entity not located in the U.S. or other FATF country, from the entity’s
local office of a reputable bank or brokerage firm that is incorporated, or has its principal place of business located, in the
U.S. or other FATF Country certifying that the prospective investor maintains an account at such bank/brokerage firm for a length
of time and containing a statement affirming the prospective investor’s integrity.

 

For all other Entity Investors:

 

		_____	A certificate of due formation and organization and continued authorization to conduct business
in the jurisdiction of its organization (e.g., certificate of good standing).

 

		_____	An “incumbency certificate” attesting to the title of the individual executing these
subscription materials on behalf of the prospective investor.

 

		_____	A letter of reference from the entity’s local office of a reputable bank or brokerage firm
that is incorporated, or has its principal place of business located, in the U.S. or other FATF Country certifying that the prospective
investor maintains an account at such bank/brokerage firm for a length of time and containing a statement affirming the prospective
investor’s integrity.

 

 

* As of the date hereof, countries that
are members of the Financial Action Task Force on Money Laundering (“FATF Country”) are: Argentina, Australia,
Austria, Belgium, Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg,
Mexico, Kingdom of the Netherlands, New Zealand, Norway, Portugal, Russian Federation, Singapore, South Africa, Spain, Sweden,
Switzerland, Turkey, United Kingdom and the United States of America.

    	 	10	 

     

    

 

		_____	If the prospective investor is a privately-held entity, a certified list of the names of every
person or entity who is directly or indirectly the beneficial owner of 25% or more of any voting or non-voting class of equity
interests of the Investor, including (i) country of citizenship (for individuals) or principal place of business (for entities)
and, (ii) for individuals, such individual’s principal employer and position.

 

		_____	If the prospective investor is a trust, a certified list of (i) the names of the current beneficiaries
of the trust that have, directly or indirectly, 25% or more of any interest in the trust, (ii) the name of the settlor of the trust,
(iii) the name(s) of the trustee(s) of the trust, and (iv) the country of citizenship (for individuals) or principal place of business
(for entities).

 

X.           ADDITIONAL
INFORMATION.

 

A TRUST MUST ATTACH
A COPY OF ITS DECLARATION OF TRUST OR OTHER GOVERNING INSTRUMENT, AS AMENDED, AS WELL AS ALL OTHER DOCUMENTS THAT AUTHORIZE THE
TRUST TO INVEST IN THE SECURITIES. ALL RESOLUTIONS AND DOCUMENTATION MUST BE COMPLETE AND CORRECT AS OF THE DATE HEREOF.

 

XI.          INFORMATION
VERIFICATION CONSENT.

 

BY
SIGNING THIS SUBSCRIPTION AGREEMENT, SUBSCRIBER HEREBY GRANTS THE PLACEMENT AGENT PERMISSION TO REVIEW ALL PUBLICLY AVAILABLE INFORMATION
REGARDING SUBSCRIBER, INCLUDING, BUT NOT LIMITED TO INFORMATION PROVIDED BY The Office of Foreign Assets Control (“OFAC”)
FOR THE PURPOSE OF VERIFYING INFORMATION PROVIDED BY SUBSCRIBER HEREIN.

 

INVESTOR QUESTIONNAIRE EXECUTION PAGE

 

	 	 	 	 
	Signature	 	Signature (if purchasing jointly)	 
	 	 	 	 
	 	 	 	 
	Name Typed or Printed	 	Name Typed or Printed	 
	 	 	 	 
	 	 	 	 
	Entity Name	 	Entity Name	 
	 	 	 	 
	 	 	 	 
	Address	 	Address	 
	 	 	 	 
	 	 	 	 
	City, State and Zip Code	 	City, State and Zip Code	 

 

    	 	11	 

     

    

 

EXHIBIT B TO DEBT CONVERSION AGREEMENT

 

RISK FACTORS

 

Our business and an investment in our
common stock is subject to a variety of risks. The following risk factors describe the most significant events, facts or circumstances
that could have a material adverse effect upon our business, financial condition, results of operations, ability to implement our
business plan and the market price for our common stock. Many of these events are outside of our control. If any of these risks
actually occurs, our business, financial condition or results of operations may be materially adversely affected. In such case,
the trading price of our common stock could decline and investors in our common stock could lose all or part of their investment.

 

The risk factors discussed below relate
to our business and operations following the consummation of the Merger and, accordingly, relate primarily to Abtech Holdings and
its subsidiaries, AbTech Industries and AEWS. As used in this “Risk Factors” section, the terms “Company,”
“we,” our” and like words mean Abtech Holdings together with Abtech Industries, unless the context otherwise
requires.

 

Risks Relating to Our Business

Our ability to generate revenue to support
our operations is uncertain.

 

We are in the early growth stage of our
business and have a limited history of generating revenues. We have a limited operating history upon which you can evaluate our
potential for future success, and we are subject to the additional risks affecting early-stage businesses. Rather than relying
on historical information, financial or otherwise, to evaluate our Company, you should evaluate our Company in light of your assessment
of the growth potential of our business and the expenses, delays, uncertainties, and complications typically encountered by early-stage
businesses, many of which will be beyond our control. Early-stage businesses in rapidly evolving markets commonly face risks, such
as the following:

 

	 	•	unanticipated problems, delays, and expenses relating to the development and implementation of their business plans;
	 	•	operational difficulties;
	 	•	lack of sufficient capital;
	 	•	competition from more advanced enterprises; and
	 	•	uncertain revenue generation.

 

Our limited operating history may make
it difficult for us to forecast accurately our operating results.

 

Our planned expense levels are, and will
continue to be, based in part on our expectations, which are difficult to forecast accurately based on our stage of development
and factors outside of our control. We may be unable to adjust spending in a timely manner to compensate for any unexpected developments.
Further, business development expenses may increase significantly as we expand operations. To the extent that any unexpected expenses
precede, or are not rapidly followed by, a corresponding increase in revenue, our business, operating results, and financial condition
may be materially and adversely affected.

 

We have a history of losses that may
continue, which may negatively impact our ability to achieve our business objectives.

 

We have incurred net losses since our inception.
The Company had a net loss of approximately $6.5 million during the fiscal year ended December 31, 2014. We cannot assure you that
we can achieve or sustain profitability on a quarterly or annual basis in the future. There can be no assurance that future operations
will be profitable. We may not achieve our business objectives and the failure to achieve such goals would have an adverse impact
on us.

 

Our success depends on our ability to
expand, operate, and manage successfully our operations.

 

Our success depends on our ability to expand,
operate, and manage successfully our operations. Our ability to expand successfully will depend upon a number of factors, including
the following:

 

	•	 	signing with strategic partners, dominant in their field;
	•	 	the continued development of our business;

 

    	 	12	 

     

    

 

	•	 	the hiring, training, and retention of additional personnel;
	•	 	the ability to enhance our operational, financial, and management systems;
	•	 	the availability of adequate financing;
	•	 	competitive factors;
	•	 	general economic and business conditions; and
	•	 	the ability to implement methods for revenue generation.

 

If we are unable to obtain additional
capital, our business operations could be harmed.

 

The development and expansion of our business
will require additional funds. In the future, we may seek additional equity or debt financing to provide capital for our Company.
Such financing may not be available or may not be available on satisfactory terms. If financing is not available on satisfactory
terms, we may be unable to expand our operations. While debt financing will enable us to expand our business more rapidly than
we otherwise would be able to do, debt financing increases expenses and we must repay the debt regardless of our operating results.
Future equity financings could result in dilution to our stockholders.

 

The recent global financial crisis, which
has included, among other things, significant reductions in available capital and liquidity from banks and other providers of credit,
substantial reductions or fluctuations in equity and currency values worldwide, and concerns that the worldwide economy may enter
into a prolonged recessionary period, may make it difficult for us to raise additional capital or obtain additional credit, when
needed, on acceptable terms or at all.

 

Our inability to obtain adequate capital
resources, whether in the form of equity or debt, to fund our business and growth strategies, may require us to delay, scale back,
or eliminate some or all of our operations, which may adversely affect our financial results and ability to operate as a going
concern.

 

You may suffer significant dilution
if we raise additional capital.

 

If we raise additional capital, we expect
it will be necessary for us to issue additional equity or convertible debt securities. If we issue equity or convertible debt securities,
the price at which we offer such securities may not bear any relationship to our value, the net tangible book value per share may
decrease, the percentage ownership of our current stockholders would be diluted, and any equity securities we may issue in such
offering or upon conversion of convertible debt securities issued in such offering, may have rights, preferences, or privileges
with respect to liquidation, dividends, redemption, voting, and other matters that are senior to or more advantageous than our
common stock.

 

We have completed debt financings and
face risks associated with financing our operations.

 

The Company has completed several debt
financings and is subject to the normal risks associated with debt financing, including the risk that our cash flow will be insufficient
to meet required payments of principal and interest and the risk that we will not be able to renew, repay, or refinance our debt
when it matures or that the terms of any renewal or refinancing will not be as favorable as the existing terms of that debt. As
of December 31, 2014, the Company had approximately $8.7 million of outstanding debt that matures in 2015 and accrued interest
payable of $462,356.

 

We have debt outstanding that is secured
by all of the assets of the Company.

 

During 2014 and 2013, we issued promissory
notes that are secured by all of the assets of the Company, including its intellectual property. As of December 31, 2014, seven
secured promissory notes, having a senior security interest in the assets of the Company and an aggregate principal amount of $2,000,000,
were outstanding. In addition, twelve other secured promissory notes, having a junior security interest in the assets of the Company
and an aggregate principal amount of $6,516,979, were outstanding. If we are unable to pay our obligations to our secured lenders,
they could proceed against any or all of the collateral securing our indebtedness to them which could prevent the Company from
continuing its operations in whole or in part.

 

You may suffer dilution if the Secured
Notes are converted to common stock.

 

As of December 31, 2014, the Company had
approximately $4.85 million of convertible notes outstanding that, if converted, would require the company to issue approximately
9.5 million shares of common stock. Such conversion would cause the percentage ownership of our current stockholders to be diluted.

 

    	 	13	 

     

    

 

Our independent auditors have expressed
substantial doubt about the Company’s ability to continue as a going concern, which may hinder our ability to obtain future
financing. 

 

In their report dated March 31, 2015, our
independent registered public accounting firm included an emphasis-of-matter paragraph with respect to our financial statements
for the fiscal year ended December 31, 2014 concerning the Company’s assumption that it will continue as a going concern.
Our ability to continue as a going concern is an issue raised as a result of recurring losses from operations. To date, each of
Abtech Holdings and AbTech Industries has only incurred net operating losses resulting in a significant accumulated deficit. Our
ability to continue as a going concern is subject to our ability to obtain necessary funding from outside sources, including obtaining
additional funding from the sale of our securities. Our continued net operating losses increase the difficulty in meeting such
goals and there can be no assurances that such methods will prove successful. The Company plans to raise additional capital in
the near term and is currently considering the various options available for raising such capital.

 

We depend on our officers and key employees
who would be difficult to replace, and our business will likely be harmed if we lose their services or cannot hire additional qualified
personnel.

 

Our success depends substantially on the
efforts and abilities of our officers and other key employees. AbTech Industries has employment agreements with its chief executive
officer, its chief financial officer, and certain key employees, but we do not think those agreements limit any employee’s
ability to terminate his or her employment. We have key person life insurance on Glenn R. Rink, our president, chief executive
officer and a director, but we do not have key person life insurance covering any of our other officers or other key employees.
The loss of services of one or more of our officers or key employees or the inability to add key personnel could have a material
adverse effect on our business. Competition for experienced personnel in our industry is substantial. Our success depends in part
on our ability to attract, hire, and retain qualified personnel. In addition, if any of our officers or other key employees join
a competitor or form a competing company, we may lose some of our customers.

	 

We depend on the recruitment and retention
of qualified personnel, and our failure to attract and retain such personnel could seriously harm our business.

 

Due to the specialized nature of our business,
our future performance is highly dependent upon the continued services of current and future key personnel and managers. Our future
business depends upon our ability to attract and retain qualified engineering, manufacturing, marketing, sales, and management
personnel for our operations. We may also have to compete with the other companies in our industry in the recruitment and retention
of qualified managerial and technical employees. Competition for personnel is intense and confidentiality and non-compete agreements
may restrict our ability to hire individuals employed by other companies. Therefore, we may not be successful in attracting or
retaining qualified personnel. Our failure to attract and retain qualified personnel could seriously harm our business, results
of operations, and financial condition. Furthermore, we may not be able to accurately forecast our needs for additional personnel,
which could adversely affect our ability to grow.

 

The effects of the recent global economic
downturn may adversely impact our business, operating results, or financial condition. 

 

The recent global economic downturn has
caused disruptions and volatility in global financial markets and increased rates of default and bankruptcy and has impacted levels
of consumer and commercial spending. We are unable to predict the duration, severity or pace of recovery of this global economic
and financial crisis. There can be no assurance that any actions we may take in response to further deterioration in general economic
and financial conditions will be sufficient. A protracted continuation or worsening of the global economic downturn or disruptions
in the financial markets could have a material adverse effect on our business, financial condition, or results of operations.

 

If we do not achieve broad market acceptance
of our products and services, we may not be successful.

 

Although our products and services will
serve existing needs, our delivery of these products and services is unique and subject to broad market acceptance. As is typical
of any new product or service, the demand for and market acceptance of these products and services are highly uncertain. We cannot
assure you that any of our products and services will be commercialized on a widespread basis. The commercial acceptance of our
products and services may be affected by a number of factors, including the willingness of municipalities and other commercial
and industrial entities to use our products and services to control the quality of water and other fluids. If the markets for our
products and services fail to develop on a meaningful basis, if they develop more slowly than we anticipate, or if our products
and services fail to achieve sufficient market acceptance, our business and future results of operations could be adversely affected.

 

    	 	14	 

     

    

 

Because our products may be designed
to provide a solution which competes with existing methods, we are likely to face resistance to change, which could impede our
ability to commercialize this business.

 

Our products may be designed to provide
a solution to environmental challenges created by contaminated water and other fluids. Currently, large and well capitalized companies
provide services in these areas. These competitors have strong relationships with their customers’ personnel, and there is
a natural reluctance for businesses to change to new technologies, particularly in such industries as the oil and gas industries
where our future products may be relevant. This reluctance is increased when potential customers make significant capital investments
in competing technologies. Because of these obstacles, we may face substantial barriers to commercializing our business.

 

If we experience rapid growth and we
are not able to manage this growth successfully, this inability to manage the growth could adversely affect our business, financial
condition, and results of operations.

 

Rapid growth places a significant strain
on financial, operational, and managerial resources. While we engage in strategic and operational planning to adequately manage
anticipated growth, there can be no assurance that we will be able to implement and subsequently improve operations and financial
systems successfully and in a timely manner to fully manage our growth. There can be no assurance that we will be able to manage
our growth and any inability to successfully manage growth could materially adversely affect our business, financial condition,
and results of operation.

 

We have no experience in manufacturing
or assembling products on a large scale basis and, if we do not develop adequate manufacturing and assembly processes and capabilities
to do so in a timely manner, we may be unable to achieve our growth and profitability objectives.

 

We have no experience manufacturing or
assembling products on a large scale. We do not know whether our current or future manufacturing arrangements will be able to develop
efficient, low-cost manufacturing capabilities and processes that will enable us to meet the quality, price, engineering, design
and production standards, or production volumes required to successfully mass market such products. Even if we are successful in
developing manufacturing capabilities and processes, we do not know whether we will do so in time to meet our product commercialization
schedule or to satisfy the requirements of our target market. Our failure to develop these manufacturing processes and capabilities,
if necessary, in a timely manner, could prevent us from achieving our growth and profitability objectives.

 

If we fail to continue to develop or
acquire new products, adapt to rapid and significant technological change, and respond to introductions of new products, we will
not be competitive.

 

Our growth strategy includes significant
investment in and expenditures for product development. We intend to sell products, primarily in the water clean-up sector, which
are characterized by rapid and significant technological changes, frequent new product and service introductions, and enhancements
and evolving industry standards. Without the timely introduction of new products, services, and enhancements, our products and
services may become technologically obsolete over time, in which case our revenue and operating results would suffer.

 

In addition, our competitors may adapt
more quickly to new technologies and changes in customers’ requirements than we can. The products that we are currently developing
or those that we will develop in the future may not be technologically feasible or accepted by the marketplace, and our products
or technologies could become uncompetitive or obsolete.

 

The market for our products is highly
competitive, and there can be no assurance that competitors will not emerge in the near to medium term with comparable products
or technologies. 

 

The markets for our products and services
are expected to remain highly competitive. While we believe our products are unique and have, or will have, adequate patent protection
for the underlying technologies, or unique trade secrets, there can be no assurance that competitors will not emerge in the near
to medium term with comparable products or technologies. There are a number of large companies involved in the same businesses
as us, but with larger more established sales and marketing organizations, technical staff, and financial resources. We may establish
marketing and distribution partnerships or alliances with some of these companies, but there can be no assurance that such alliances
will be formed.

 

    	 	15	 

     

    

 

Our business may become substantially
dependent on contracts that are awarded through competitive bidding processes.

 

We may sell a significant portion of our
products pursuant to contracts that are subject to competitive bidding, including contracts with municipal authorities. Competition
for, and negotiation and award of, contracts present varied risks, including, but not limited to:

 

	 	•	investment of substantial time and resources by management for the preparation of bids and proposals with no assurance that a contract will be awarded to us;
	 	•	the requirement to certify as to compliance with numerous laws (for example, socio-economic, small business, and domestic preference) for which a false or incorrect certification can lead to civil and criminal penalties;
	 	•	the need to estimate accurately the resources and cost structure required to service a contract; and
	 	•	the expenses and delays that we might suffer if our competitors protest a contract awarded to us, including the potential that the contract may be terminated and a new bid competition may be conducted.

 

If we are unable to win contracts awarded
through the competitive bidding process, we may not be able to operate in the market for products and services that are provided
under those contracts for a number of years. If we are unable to consistently win new contract awards over any extended period,
or if we fail to anticipate all of the costs and resources that will be required to secure and perform such contract awards, our
growth strategy and our business, financial condition, and results of operations could be materially and adversely affected.

 

We will sell products and services to
companies in industries which tend to be extremely cyclical; downturns in those industries would adversely affect our results of
operations.

 

The growth and profitability of our business
will depend on sales to industries that are subject to cyclical downturns. Slowdowns in these industries may adversely affect sales
by our businesses, which in turn would adversely affect our revenues and results of operations. In particular, our products may
be sold to and used by the oil and gas industry, which historically has realized significant shifts in activity and spending due
to fluctuations in commodity prices. Our revenues may be dependent upon spending by oil and gas producers; therefore, a reduction
in spending by producers may have a materially adverse effect on our business, financial conditions, and results of operations.

 

The industries in which we may sell
our products are heavily regulated and costs associated with such regulation could reduce our profitability. 

 

Federal, state, and local authorities extensively
regulate the stormwater and oil and gas industries, which are primary industries in which we may sell our products and offer our
services. Legislation and regulations affecting the industries are under constant review for amendment or expansion. State and
local authorities regulate various aspects of stormwater and oil and gas activities that ultimately affect how customers use our
products and how we develop and market our products. The overall regulatory burden on the industries increases the cost of doing
business, which, in turn, decreases profitability.

 

International sales are also subject to
rules and regulations promulgated by regulatory bodies within foreign jurisdictions, and there can be no assurance that such foreign
regulatory bodies will not adopt laws or regulatory requirements that could adversely affect our Company.

 

If chemical companies engage in predatory
pricing, we may lose customers, which could materially and adversely affect us.

 

Municipalities and other commercial and
industrial entities traditionally have used chemicals to control the quality of water and other fluids. The chemical companies
represent a significant competitive factor. The chemical companies who supply chemicals to such municipalities and other commercial
and industrial entities may, in order to maintain their business relationship, drastically reduce their price and seek to undercut
the pricing at which we can realistically charge for our products and services. While predatory pricing that is designed to drive
us out of business may be illegal under the United States anti-trust and other laws, we may lose customers as a result of any future
predatory pricing and be required to file lawsuits against any companies who engage in such improper tactics. Any such litigation
may be very expensive which will further impact us and affect their financial condition. As a result, predatory pricing by chemical
companies could materially and adversely affect us.

 

    	 	16	 

     

    

 

We are, or in the future may be, subject
to substantial regulation related to quality standards applicable to our manufacturing and quality processes. Our failure to comply
with applicable quality standards could have an adverse effect on our business, financial condition, or results of operations.

 

The EPA regulates the registration, manufacturing,
and sales and marketing of products in our industry, and those of our distributors and partners, in the United States. Significant
government regulation also exists in overseas markets. Compliance with applicable regulatory requirements is subject to continual
review and is monitored through periodic inspections and other review and reporting mechanisms.

	 

Failure by us or our partners to comply
with current or future governmental regulations and quality assurance guidelines could lead to temporary manufacturing shutdowns,
product recalls or related field actions, product shortages, or delays in product manufacturing. Specifically, with regard to the
EPA’s conditional approval of the registration of our Smart Sponge Plus products under FIFRA, if the EPA makes additional
information requests in the future that we are unable comply with, the EPA’s conditional approval of our registration of
Smart Sponge Plus products under FIFRA could be suspended and the Company would then not be able to sell Smart Sponge Plus products.
However, the expiration of the conditional approval of Smart Sponge Plus products would not affect our ability to continue to sell
the regular Smart Sponge products that do not include an antimicrobial agent. (see Item 1. “BUSINESS – Regulatory”
on page 16 of this Annual Report on Form 10-K). Efficacy or safety concerns and/or manufacturing quality issues with respect to
our products or those of our partners could lead to product recalls, fines, withdrawals, declining sales, and/or our failure to
successfully commercialize new products or otherwise achieve revenue growth.

 

If a natural or man-made disaster strikes
our or a third-party’s manufacturing facility that we may use, we may be unable to manufacture our products for a substantial
amount of time and our sales and profitability will decline.

 

The manufacturing facility and manufacturing
equipment we use to produce our products will be costly to replace and could require substantial lead-time to repair or replace.
Our facility or a third-party’s facility that we use may be affected by natural or man-made disasters. In the event they
were affected by a disaster, we would be forced to set up alternative production capacity, or rely on third-party manufacturers
to whom we would have to disclose our trade secrets. Although we possess insurance for damage to our property and the disruption
of our business from casualties, such insurance may not be sufficient to cover all of our potential losses, may not continue to
be available to us on acceptable terms, or at all, and may not address the marketing and goodwill consequences of our inability
to provide products for an extended period of time.

 

We may decide to outsource manufacturing
in the future. Dependence on contract manufacturing and outsourcing other portions of our supply chain may adversely affect our
ability to bring products to market and damage our reputation. 

 

As part of our efforts to streamline operations
and to cut costs in the future, we may decide to outsource aspects of our manufacturing processes and other functions. If our contract
manufacturers or other outsourcers fail to perform their obligations in a timely manner or at satisfactory quality levels, our
ability to bring products to market and our reputation could suffer. For example, during a market upturn, our contract manufacturers
may be unable to meet our demand requirements, which may preclude us from fulfilling our customers’ orders on a timely basis.
The ability of these manufacturers to perform is largely outside of our control. Additionally, outsourcing may take place in developing
countries and, as a result, may be subject to geopolitical uncertainty.

 

    	 	17	 

     

    

 

The success of our businesses will depend
on our ability to effectively develop and implement strategic business initiatives.

 

We are currently implementing various strategic
business initiatives. In connection with the development and implementation of these initiatives, we will incur additional expenses
and capital expenditures to implement the initiatives. The development and implementation of these initiatives also requires management
to divert a portion of its time from day-to-day operations. These expenses and diversions could have a significant impact on our
operations and profitability, particularly if the initiatives prove to be unsuccessful. Moreover, if we are unable to implement
an initiative in a timely manner, or if those initiatives turn out to be ineffective or are executed improperly, our business and
operating results would be adversely affected.

 

Failure to successfully reduce our current
or future production costs may adversely affect our financial results.

 

A significant portion of our strategy will
rely upon our ability to successfully rationalize and improve the efficiency of our operations. In particular, our strategy relies
on our ability to reduce our production costs in order to remain competitive. If we are unable to continue to successfully implement
cost reduction measures, especially in a time of a worldwide economic downturn, or if these efforts do not generate the level of
cost savings that we expect going forward or result in higher than expected costs, there could be a material adverse effect on
our business, financial condition, results of operations, or cash flows.

 

If we are unable to make necessary capital
investments or respond to pricing pressures, our business may be harmed.

 

In order to remain competitive, we need
to invest in research and development, manufacturing, customer service and support, and marketing. From time to time, we may have
to adjust the prices of our products and services to remain competitive. We may not have available sufficient financial or other
resources to continue to make investments necessary to maintain our competitive position.

 

Failure to obtain sufficient supply
of component materials to conduct our business may have an adverse effect on our production and revenue targets.

 

Our component and materials’ suppliers
may fail to meet our needs. We intend to manufacture our products using materials and components procured from a limited number
of third-party suppliers. We do not currently have long-term supply contracts with our suppliers. This generally serves to reduce
our commitment risk, but does expose us to supply risk and to price increases that we may have to pass on to our customers. In
some cases, supply shortages and delays in delivery may result in curtailed production or delays in production, which can contribute
to an increase in inventory levels and loss of profit. We expect that shortages and delays in deliveries of some components will
occur from time to time. If we are unable to obtain sufficient components on a timely basis, we may experience manufacturing delays,
which could harm our relationships with current or prospective customers and reduce our sales. We may also not be able to obtain
competitive pricing for some of our supplies compared to our competitors. We also cannot assure that the component and materials
from domestic suppliers will be of similar quality or quantity as those imported component and materials, which may lead to rejections
of component and materials by our customers. In the event the domestic component and materials do not perform as well as the imported
component and materials or do not perform at all, our business, financial condition, and results of operations could be adversely
affected.

 

We have limited product distribution
experience and we expect to rely on third parties who may not successfully sell our products.

 

We have limited product distribution experience
and currently rely and plan to rely on product distribution arrangements with third parties. We may also license our technology
to certain third parties for commercialization of certain applications. We expect to enter into distribution agreements and/or
licensing agreements in the future, and we may not be able to enter into these agreements on terms that are favorable to us, if
at all. In addition, we may have limited or no control over the distribution activities of these third parties. These third parties
could sell competing products and may devote insufficient sales efforts to our products. As a result, our future revenues from
sales of our products, if any, will depend on the success of the efforts of these third parties.

 

    	 	18	 

     

    

 

We could face significant liabilities
in connection with our technology, products, and business operations, which if incurred beyond any insurance limits, would adversely
affect our business and financial condition. 

 

We are subject to a variety of potential
liabilities connected to our technology development and business operations, such as potential liabilities related to environmental
risks. As a business which manufactures and/or markets products for use by consumers and institutions, we may become liable for
any damage caused by our products, whether used in the manner intended or not. Any such claim of liability, whether meritorious
or not, could be time-consuming and/or result in costly litigation. Although we have obtained insurance against certain of these
risks, no assurance can be given that such insurance will be adequate to cover related liabilities or will be available in the
future or, if available, that premiums will be commercially justifiable. If we were to incur any substantial liability and related
damages were not covered by our insurance or exceeded policy limits, or if we were to incur such liability at a time when we are
not able to obtain liability insurance, our business, financial conditions, and results of operations could be materially adversely
affected.

 

Our failure to protect our intellectual
property rights may undermine our competitive position, and litigation to protect our intellectual property rights or defend against
third-party allegations of infringement may be costly.

 

Our success will depend in part on our
ability to develop patentable products and obtain and enforce patent protection for our products in the United States and other
countries. We intend to file applications, as appropriate, for patents covering our products. Patents may not be issued for any
pending or future patent applications owned by or licensed to us, and the claims allowed under any issued patents may not be sufficiently
broad to protect our technology. Any issued patents owned by or licensed to us may be challenged, invalidated, or circumvented,
and the rights under these patents may not provide us with competitive advantages. In addition, competitors may design around our
technology or develop competing technologies. Intellectual property rights may also be unavailable or limited in some foreign countries,
which could make it easier for competitors to capture increased market position. We could incur substantial costs to defend suits
brought against us or suits in which we may assert our patent rights against others. An unfavorable outcome of any such litigation
could materially adversely affect our business and results of operations.

 

We may also rely on trade secrets and proprietary
know-how with which we seek to protect our products, in part by confidentiality agreements with our collaborators, employees, and
consultants. Nevertheless, these agreements afford only limited protection, and the actions we take to protect our intellectual
property rights may not be adequate. These agreements may be breached, and we may not have adequate remedies for any breach. In
addition, our trade secrets may otherwise become known or be independently developed by our competitors. As a result, third parties
may infringe or misappropriate our proprietary technologies or other intellectual property rights, which could have a material
adverse effect on our business, financial condition, or operating results.

 

In addition, policing unauthorized use
of proprietary technology can be difficult and expensive. Litigation may be necessary to enforce our intellectual property rights,
protect our trade secrets, or determine the validity and scope of the proprietary rights of others. We cannot assure you that the
outcome of any litigation will be in our favor. Intellectual property litigation may be costly and may divert management attention,
as well as expend our other resources away from our business. An adverse determination in any such litigation will impair our intellectual
property rights and may harm our business, prospects, and reputation. In addition, we have no insurance coverage against litigation
costs and would have to bear all costs arising from such litigation to the extent we are unable to recover them from other parties.
The occurrence of any of the foregoing could have a material adverse effect on our business, results of operations, and financial
condition.

 

Operational and Structural Risks

We can provide no assurances as to our
future financial performance or the investment result of a purchase of our common stock.

 

Any projected results of operations involve
significant risks and uncertainty, should be considered speculative, and depend on various assumptions which may not be correct.
The future performance of our Company and the return on our common stock depends on a complex series of events that are beyond
our control and that may or may not occur. Actual results for any period may or may not approximate any assumptions that are made
and may differ significantly from such assumptions. We can provide no assurance or prediction as to our future profitability or
to the ultimate success of an investment in our common stock.

 

    	 	19	 

     

    

 

The compensation we pay to our executive
officers and employees will likely increase, which will affect our future profitability.

 

We believe that the compensation we have
historically paid to our executive officers is within the lower quartile of compensation paid by peer companies. An increase in
compensation and bonuses payable to our executive officers and employees could decrease our net income.

 

As a public reporting company, we are
subject to corporate governance and internal control reporting requirements, and our costs related to compliance with, or our failure
to comply with existing and future requirements, could adversely affect our business.

 

We may face new corporate governance requirements
under the Sarbanes-Oxley Act of 2002 (“SOX”), as well as new rules and regulations subsequently adopted by the SEC
and the Public Company Accounting Oversight Board. These laws, rules, and regulations continue to evolve and may become increasingly
stringent in the future. We are required to evaluate our internal control over financial reporting under Section 404 of SOX (“Section
404”). We are a smaller reporting company as defined in Rule 12b-2 under the Exchange Act. Section 404 requires us to include
an internal control report with our Annual Report on Form 10-K. The report must include management’s assessment of the effectiveness
of our internal control over financial reporting as of the end of the fiscal year. This report must also include disclosure of
any material weaknesses in internal control over financial reporting that we have identified. Failure to comply, or any adverse
results from such evaluation, could result in a loss of investor confidence in our financial reports and have an adverse effect
on the trading price of our securities. We strive to continuously evaluate and improve our control structure to help ensure that
we comply with Section 404. The financial cost of compliance with these laws, rules, and regulations is expected to remain substantial.
We cannot assure you that we will be able to fully comply with these laws, rules, and regulations that address corporate governance,
internal control reporting, and similar matters. Failure to comply with these laws, rules, and regulations could materially adversely
affect our reputation, financial condition, and the value of our securities.

 

As a public company, we will have significant
operating costs relating to compliance requirements and our management is required to devote substantial time to compliance initiatives.

 

Our management has only limited experience
operating the Company as a public company. To operate effectively, we will be required to continue to implement changes in certain
aspects of our business and develop, manage, and train management level and other employees to comply with on-going public company
requirements. Failure to take such actions, or delay in the implementation thereof, could have a material adverse effect on our
business, financial condition, and results of operations.

 

SOX, as well as rules subsequently implemented
by the SEC, imposes various requirements on public companies, including requiring establishment and maintenance of effective disclosure
and financial controls and changes in corporate governance practices. Our management and other personnel will need to devote a
substantial amount of time to these compliance initiatives. Moreover, these rules and regulations will increase our legal and financial
compliance costs and will make some activities more time-consuming and costly.

 

Risks Related to our Common Stock

A limited public trading market exists
for our common stock, which makes it more difficult for our stockholders to sell their common stock in the public markets.

 

Although our common stock is quoted on
the OTCQB under the symbol “ABHD,” there is a limited public market for our common stock. No assurance can be given
that an active market will develop or that a stockholder will ever be able to liquidate its shares of common stock without considerable
delay, if at all. Many brokerage firms may not be willing to effect transactions in the securities. Even if a purchaser finds a
broker willing to effect a transaction in these securities, the combination of brokerage commissions, state transfer taxes, if
any, and any other selling costs may exceed the selling price. Furthermore, our stock price may be impacted by factors that are
unrelated or disproportionate to our operating performance. These market fluctuations, as well as general economic, political,
and market conditions, such as recessions, interest rates, or international currency fluctuations may adversely affect the market
price and liquidity of our common stock.

 

Our stock price may be volatile.

 

The market price of our common stock is
likely to be highly volatile and could fluctuate widely in price in response to various factors, many of which are beyond our control,
including the following:

	 	•	limited “public float” in the hands of a small number of persons whose sales (or lack of sales) could result in positive or negative pricing pressure on the market price for our common stock;

 

    	 	20	 

     

    

 

	 	•	actual or anticipated variations in our quarterly operating results;
	 	•	changes in our earnings estimates;
	 	•	our ability to obtain adequate working capital financing;
	 	•	changes in market valuations of similar companies;
	 	•	publication (or lack of publication) of research reports about us;
	 	•	changes in applicable laws or regulations, court rulings, enforcement and legal actions;
	 	•	loss of any strategic relationships;
	 	•	additions or departures of key management personnel;
	 	•	actions by our stockholders (including transactions in our shares);
	 	•	speculation in the press or investment community;
	 	•	increases in market interest rates, which may increase our cost of capital;
	 	•	changes in our industry;
	 	•	competitive pricing pressures;
	 	•	our ability to execute our business plan; and
	•	 	economic and other external factors.

 

In addition, the securities markets have
from time to time experienced significant price and volume fluctuations that are unrelated to the operating performance of particular
companies. These market fluctuations may also materially and adversely affect the market price of our common stock.

 

Our common stock may be subject to the
penny stock rules which may make it more difficult to sell our common stock.

 

The SEC has adopted regulations which generally
define a “penny stock” to be any equity security that has a market price, as defined, less than $5.00 per share or
an exercise price of less than $5.00 per share, subject to certain exceptions. Our securities may be covered by the penny stock
rules, which impose additional sales practice requirements on broker-dealers who sell to persons other than established customers
and accredited investors, such as institutions with assets in excess of $5,000,000 or an individual with net worth in excess of
$1,000,000 or annual income exceeding $200,000 or $300,000 jointly with his or her spouse. For transactions covered by this rule,
the broker-dealers must make a special suitability determination for the purchase and receive the purchaser’s written agreement
of the transaction prior to the sale. Consequently, the rule may affect the ability of broker-dealers to sell our securities and
also affect the ability of our stockholders to sell their shares in the secondary market.

 

FINRA sales practice requirements may
also limit a shareholder’s ability to buy and sell our stock. 

 

In addition to the “penny stock”
rules described above, the Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require
that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment
is suitable for that customer. Prior to recommending speculative, low priced securities to their non-institutional customers, broker-dealers
must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives,
and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative,
low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers
to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse
effect on the market for our shares.

 

Our common shares are currently traded
at low volume, and you may be unable to sell at or near ask prices or at all if you need to sell or liquidate a substantial number
of shares at one time. 

 

We cannot predict the extent to which an
active public market for our common stock will develop or be sustained. Our common shares are currently traded, but currently with
low volume, based on quotations on the OTCQB, meaning that the number of persons interested in purchasing our common shares at
or near bid prices at any given time may be relatively small or non-existent. This situation is attributable to a number of factors,
including the fact that we are a small company which is still relatively unknown to stock analysts, stock brokers, institutional
investors, and others in the investment community that generate or influence sales volume, and that even if we came to the attention
of such persons, they tend to be risk-averse and would be reluctant to follow an unproven company such as ours or purchase or recommend
the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several
days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large
and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We
cannot give you any assurance that a broader or more active public trading market for our common stock will develop or be sustained,
or that trading levels will be sustained.

 

    	 	21	 

     

    

 

Shareholders should be aware that, according
to SEC Release No. 34-29093, the market for “penny stocks” has suffered in recent years from patterns of fraud and
abuse. Such patterns include: (1) control of the market for the security by one or a few broker-dealers that are often related
to the promoter or issuer; (2) manipulation of prices through prearranged matching of purchases and sales and false and misleading
press releases; (3) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced
sales persons; (4) excessive and undisclosed bid-ask differential and markups by selling broker-dealers; and (5) the wholesale
dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with
the resulting inevitable collapse of those prices and with consequent investor losses. Our management is aware of the abuses that
have occurred historically in the penny stock market, and we do not expect to be in a position to dictate the behavior of the market
or of broker-dealers who participate in the market. The occurrence of these patterns or practices could increase the future volatility
of our share price.

 

We have historically not paid dividends
and do not intend to pay dividends for the foreseeable future.

 

We have historically not paid dividends
to our stockholders, and management does not anticipate paying any cash dividends on our common stock to our stockholders for the
foreseeable future. Any determination we make regarding dividends will be at the discretion of our Board of Directors and will
depend on our results of operations, our financial condition, contractual restrictions, restrictions imposed by applicable law,
and other factors our Board of Directors deem relevant. Even if the funds are legally available for distribution, we may nevertheless
decide not to pay any dividends. We presently intend to retain future earnings, if any, for use in the operation and expansion
of our business.

 

The elimination of monetary liability
against our directors, officers, and employees under Nevada law and the existence of indemnification rights to our directors, officers,
and employees may result in substantial expenditures by our Company and may discourage lawsuits against our directors, officers,
and employees. 

 

Our articles of incorporation contain a
provision permitting us to eliminate the personal liability of our directors to our Company and shareholders for damages for breach
of fiduciary duty as a director or officer to the extent provided by Nevada law. We may also have contractual indemnification obligations
under our employment agreements with our officers. The foregoing indemnification obligations could result in our Company incurring
substantial expenditures to cover the cost of settlement or damage awards against directors and officers, which we may be unable
to recoup. These provisions and resultant costs may also discourage our Company from bringing a lawsuit against directors and officers
for breaches of their fiduciary duties, and may similarly discourage the filing of derivative litigation by our shareholders against
our directors and officers even though such actions, if successful, might otherwise benefit our Company and shareholders.

 

FURTHER INFORMATION

 

The statements contained in this Agreement
constitute only a brief summary of certain provisions of the documents referred to herein and the transactions contemplated hereby
and thereby. The statements contained herein do not purport to be a complete description of every term and condition of such documents
and are qualified in their entirety by reference to such documents. As with any summary, some details and exceptions have been
omitted. If any of the statements herein are in conflict with any of the terms of any of such documents, the terms of such documents
will govern. Reference is made to the actual documents for a compete understanding of what they contain. Copies of all documents
in connection with the transactions described herein are available for inspection at our offices, including our Certificate of
Incorporation, as amended, with the transactions described in this memorandum and Bylaws, as amended. In addition, the Company
is subject to the periodic reporting requirements of the Securities and Exchange Act of 1934, as amended and files reports with
the Securities and Exchange Commission. Such periodic reports can be accessed at www.sec.gov. The Investor and his or her
advisor are invited and encouraged to ask questions of the Company with respect to the terms and conditions of the Offering and
our business and request additional information necessary to verify information contained herein. We will seek to provide answers
and such information to the extent possessed or obtainable without unreasonable effort or expense. For further information contact
Lane J. Castleton, Chief Financial Officer, Abtech Holdings, Inc., 4110 N. Scottsdale Road, Suite 235, Scottsdale, Arizona, 85251.

 

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