Document:

Exhibit

FIRST AMENDMENT TO EMPLOYMENT AGREEMENT

THIS FIRST AMENDMENT TO EMPLOYMENT AGREEMENT (this “Amendment”), is made and entered into on the 15th day of October, 2018, to be effective immediately, by and between World Acceptance Corporation (the “Company”), a South Carolina corporation, and Daniel Clinton Dyer (the “Executive”), an individual residing at Greenville, South Carolina.

The Company and the Executive previously entered into an Employment Agreement, effective as of September 1, 2016 (the “Employment Agreement”).  Contemporaneously herewith, the Board has approved a series of managerial changes to better align and reorganize the Company’s executive team, and the Committee and the Board have approved and adopted a new long-term incentive program that seeks to motivate and reward certain employees and to align management’s interest with shareholders by focusing executives on the achievement of long-term results.  In connection with the foregoing, the parties now desire to amend certain provisions of the Employment Agreement.  Capitalized terms used and not defined in this Amendment shall have the respective meanings ascribed to them in the Employment Agreement.

NOW, THEREFORE, for and in consideration of the mutual covenants and obligations contained herein and in the Employment Agreement, of the Executive’s potential participation in the Company’s 2018 Long-Term Incentive Program and related treatment of unvested equity awards upon certain termination events, and of other good and valuable consideration, the receipt of which is hereby acknowledged, the Company and the Executive hereby agree as follows:

1.    The Employment Agreement is hereby amended by deleting prior Section 8.1.3 in its entirety, by replacing prior Section 8.1.3 with the following new Sections 8.1.3, 8.1.4 and 8.1.5, and by re-numbering prior Sections 8.1.4 and 8.1.5 as Sections 8.1.6 and 8.1.7, respectively: 

“8.1.3    subject to Section 8.1.4 and this Section 8.1.3, (a) any of the Executive’s unvested stock options and other unvested equity incentives or other unvested incentive awards (collectively, “Equity Awards”) that are subject solely to time-based vesting shall accelerate, fully vest and become exercisable as of the Date of Termination, and (b) all vested time-based stock options held by the Executive shall be exercisable for a period of one year from the Date of Termination, but not beyond the original expiration of their term.  For the avoidance of doubt, (i) no portion of any Equity Awards that are subject to time-based vesting and granted under the Company’s 2018 Long-Term Incentive Program will vest under this Section 8.1.3, and (ii) no portion of any Equity Awards that are subject to performance-based vesting and granted under any Stock Plan (including, without limitation, any Equity Awards that are subject to performance-based vesting and granted under the Company’s 2018 Long-Term Incentive Program) will vest under this Section 8.1.3.  For purposes of this Agreement, the term “Stock Plan” means and includes, collectively, the World Acceptance Corporation 2008 Stock Option Plan, 2011 Stock Option Plan, 2017 Stock Incentive Plan (the “2017 Plan”) and/or successor plan(s) thereto, in each case as may be amended from time to time; and 

8.1.4    (a) any of the Executive’s unvested Equity Awards that (i) are subject solely to time-based vesting, (ii) are granted under the Company’s 2018 Long-Term Incentive Program, and (iii) would have vested on or before the last day of the LTIP Year (as defined below) during which the Executive’s employment terminates, shall accelerate, fully vest and become exercisable as of the Date of Termination, and (b) all vested time-based stock options held by the Executive that are granted under the Company’s 2018 Long-Term Incentive Program shall be exercisable for a period of one year from the Date of Termination, but not beyond the original expiration of their term.  For the avoidance of doubt, (1) any unvested Equity Awards that are subject solely to time-based vesting, are granted under the Company’s 2018 Long-Term Incentive Program, and would have vested after the expiration of the LTIP Year during which the Executive’s employment terminates, shall be forfeited, and (2) no portion of any Equity Awards that are subject to performance-based vesting and granted under any Stock Plan (including, without limitation, any Equity Awards that are subject to performance-based vesting and granted under the Company’s 2018 Long-Term Incentive Program) will vest under this Section 8.1.4.  For purposes of this Section 8.1.4, the term “LTIP Year” shall mean with respect to the first LTIP Year, the twelve (12)-month period commencing on October 15, 2018 and ending on October 14, 2019; and, with respect to each subsequent LTIP Year, the twelve (12)-month period commencing on the next day following the previous LTIP Year; and 

8.1.5    (a) a pro-rata portion (based upon the period of time from October 15, 2018 through the Date of Termination) of any of the Executive’s unvested Equity Awards that (i) are subject solely to performance-based vesting, (ii) are granted under the Company’s 2018 Long-Term Incentive Program, and (iii) are scheduled to vest within one hundred eighty (180) days after the Date of Termination, and for which (iv) the Committee certifies that the applicable performance metrics have been achieved within such 180-day period, shall vest and become exercisable upon such certification, and (b) all vested performance-based stock options held by the Executive that are granted under the Company’s 2018 Long-Term Incentive Program shall be exercisable for a period of one year from the Date of Termination, but not beyond the original expiration of their term; provided, however, that all performance-based stock options held by the Executive that are granted under the Company’s 2018 Long-Term Incentive Program and that vest during the 180-day period beginning on the day after the Date of Termination shall be exercisable for a period of eighteen (18) months from the Date of Termination, but not beyond the original expiration of their term.  For the avoidance of doubt, (1) any unvested Equity Awards that are subject solely to performance-based vesting, are granted under the Company’s 2018 Long-Term Incentive Program, and are scheduled to vest more than one hundred eighty (180) days after the Date of Termination, shall be forfeited, and (2) no portion of any Equity Awards that are subject to time-based vesting and granted under any Stock Plan (including, without limitation, any Equity Awards that are subject to time-based vesting and granted under the Company’s 2018 Long-Term Incentive Program) will vest under this Section 8.1.5; and”

2.    The Employment Agreement is hereby amended by deleting prior Section 9.1 in its entirety and by replacing prior Section 9.1 with the following new Section 9.1: 

“9.1    “Termination for Cause” means termination of the Executive’s employment by the Company due to (i) the Executive’s failure to substantially perform his duties hereunder (other than as a result of death or Disability or absence due to temporary illness or incapacity protected by law); (ii) the Executive’s dishonesty in the performance of his duties (other than de minimis acts or omissions); (iii) the Executive’s indictment, conviction or entering of a plea of any type (including, but not limited to, a plea of nolo contendere) for a crime constituting a felony or a misdemeanor involving moral turpitude; (iv) the Executive’s willful malfeasance or willful misconduct in connection with the performance of his duties hereunder (other than de minimis acts or omissions); (v) any illicit or unauthorized act or omission which is materially injurious to the financial condition or business reputation of the Company; (vi) the Executive’s breach of any of his duties and obligations set forth in Section X; (vii) conduct by the Executive which violates the Company’s then existing internal policies or procedures, including, but not limited to, the Company’s Code of Business Conduct and Ethics; (viii) the Executive’s knowing and intentional failure to comply with applicable laws; (ix) the Executive’s falsification of Company records or engaging in theft, fraud, embezzlement or other conduct which is detrimental to the business, reputation, character or standing of the Company or any of its Affiliates; (x) the Executive’s failure to comply with reasonable written directives of the Board; (xi) the Executive’s failure to reasonably cooperate with any investigation authorized by the Board; or (xii) the Executive’s engaging in any conduct that is or could be materially damaging to the Company or any of its Affiliates; provided, however, that termination of the Executive’s employment by the Company pursuant to clauses (i), (vi), (vii) or (x) will not constitute a “Termination for Cause” unless the Executive has received written notice from the Company stating the nature of such breach and affording him an opportunity to correct fully the act(s) or omission(s), if such breach is capable of correction, described in such notice within ten (10) days following his receipt of such notice.  Notwithstanding the foregoing, (a) no conduct shall be considered “willful” or “intentional” if the Executive acted in good faith and in a manner he reasonably believed to be in the best interests of the Company and had no reasonable cause to believe that his conduct was in violation of the relevant policy, directive, regulation or law; and (b) any act or failure to act that is based upon a directive of the Board, or the advice of counsel for the Company, shall be conclusively presumed to be done, or omitted to be done, by the Executive in good faith and in the best interests of the Company.”

3.    The Employment Agreement is hereby amended by deleting prior Section 10.1 in its entirety and replacing prior Section 10.1 with the following new Section 10.1:

“10.1    During the Period of Employment, the Executive will comply with all Company policies (including, but not limited to, the Company’s Code of Business Conduct and Ethics) and with all applicable laws.  In addition, without limiting the effect of the foregoing, the Executive agrees that he shall abide by any forfeiture/compensation recovery policy, equity retention policy, stock ownership guidelines, compensation plan and/or award agreement provisions and/

or other policies that may be adopted by the Company or its Affiliates, each as in effect from time to time and to the extent applicable to the Executive.  Further, the Executive agrees that he shall be subject to any such compensation recovery, recoupment, forfeiture or other similar provisions as may apply to the Executive under applicable laws.  The Executive further agrees that all compensation recovery, forfeiture, clawback and other related provisions in this Agreement or in any policy, plan, program, award or award notice of the Company which applies to the Executive shall continue in full force and effect after the Date of Termination, including to the extent necessary to comply with applicable law as such may be adopted or modified after the Date of Termination.”

4.    The Employment Agreement is hereby amended by inserting the following new Section 10.7 and by re-numbering prior Sections 10.7 and 10.8 as Sections 10.8 and 10.9, respectively:

“10.7    Nothing herein shall prevent the Executive from cooperating with any investigation or inquiry conducted by the Equal Employment Opportunity Commission regarding any employment practice or policy of the Employers.  In addition, pursuant to Section 7 of the Defend Trade Secrets Act of 2016 (which added 18 U.S.C. § 1833(b)), the Executive acknowledges that he shall not have criminal or civil liability under any federal or state trade secret law for, and nothing herein prohibits, the disclosure of a trade secret or Confidential Information that (a) is made (i) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (b) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.  Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of trade secrets that are expressly allowed by such Section.  Further, notwithstanding anything in this Agreement to the contrary, (i) nothing in this Agreement, including but not limited to any release, or other agreement prohibits the Executive from reporting possible violations of law or regulation to any governmental agency or entity, including but not limited to the Department of Justice, the Securities and Exchange Commission, the Congress and any agency Inspector General (the “Government Agencies”), or communicating with Government Agencies or otherwise participating in any investigation or proceedings that may be conducted by Government Agencies, including providing documents or other information; (ii) the Executive does not need the prior authorization of the Company to take any action described in (i), and the Executive is not required to notify the Company that he has taken any action described in (i); and (iii) neither this Agreement nor any release limits the Executive’s right to receive an award for providing information relating to a possible securities law violation to the Securities and Exchange Commission.”  

5.    The Employment Agreement is hereby amended by inserting the following new Section 10.10 and by re-numbering prior Section 10.9 as Section 10.11:

“10.10    Notwithstanding anything in this Agreement to the contrary, and without limiting the effect of the provisions of Section 10.1 or of Section 10.9 herein, if, at any time during or after the Period of Employment (regardless of whether the Executive’s employment is terminated by the Company or by the Executive and whether the Executive’s employment is terminated due to a Termination for Cause, a Termination with Good Reason or a Without Cause Termination), (i) the Executive files any claim, suit or legal proceeding which has been released by the Executive pursuant to Section XVII, or (ii) the Company determines that the Executive has breached or otherwise failed to comply with the covenants contained in Sections 10.2, 10.3, 10.4, 10.5 and/or 10.6 of this Agreement and, if such breach or failure is capable of being remedied, the Executive has not remedied such breach or failure to the satisfaction of the Company within ten (10) days of receipt of written notice from the Company of its determination that the Executive has breached or otherwise failed to comply with any of such Sections, or (iii) the Executive materially violates any of the Company’s policies, as determined by the Committee in its discretion, or (iv) the Executive violates any federal, state or other law, rule or regulation which is detrimental to the business, reputation, character or standing of the Company and/or any of its Affiliates, as determined by the Committee in its discretion, or (v) the Executive is indicted or convicted of, or enters a plea of any type (including, but not limited to, a plea of nolo contendere) for, a crime constituting a felony or a misdemeanor involving moral turpitude, which involves or relates in any way to the Executive’s actions or omissions during the Period of Employment and/or to events affecting the Company (and/or any of its Affiliates) that occur during the Period of Employment, or (vi) the Executive falsifies Company records or engages in theft, fraud, embezzlement or other criminal conduct detrimental to the business, reputation, character or standing of the Company and/or any of its Affiliates, as determined by the Committee in its discretion, or (vii) the Executive commits any illicit or unauthorized act or omission which is detrimental to the business, reputation, character or standing 

of the Company and/or any of its Affiliates, as determined by the Committee in its discretion, then, unless the Committee determines otherwise, and in addition to any other remedy available to the Company (on a non-exclusive basis): (a) any Equity Awards shall immediately be terminated and forfeited in their entirety; (b) any shares of stock subject to the Equity Awards (whether vested or unvested) shall immediately be forfeited and returned to the Company (without the payment by the Company of any consideration for such shares); (c) all payments and benefits to the Executive otherwise due pursuant to Section VIII and/or Section XI of this Agreement shall immediately terminate; and (d) no later than ten (10) days after receipt of a written request for repayment from the Company, the Executive shall repay to the Company all payments made and to return or reimburse the Company for all awards or shares issued and benefits provided to the Executive pursuant to Section VIII and/or Section XI of this Agreement.  To the extent permitted by law, the payments otherwise payable pursuant to Section VIII and/or Section XI of the Agreement may be reduced to enforce any repayment obligation of Executive to the Company.  For the avoidance of doubt, in each and every instance the Committee shall have the sole and absolute discretion to determine if any of the activities described in clauses (i) through (vii) of this Section 10.10 has occurred.”

6.    The Employment Agreement is hereby amended by deleting prior Section 11.3 (including prior Sections 11.3.1 through 11.3.4) in its entirety and by replacing prior Section 11.3 with the following new Section 11.3:

“11.3    “Change in Control” shall have the meaning given the term in the 2017 Plan (or any successor Stock Plan).

The Board shall have full and final authority, in its discretion (subject to any considerations under Section 409A of the Internal Revenue Code), to determine whether a Change in Control has occurred, the date of the occurrence of such Change in Control and any incidental matters relating thereto.”

7.    The Employment Agreement is hereby amended by deleting prior Sections XIV and XV in their entirety, by replacing prior Sections XIV and XV with the following new Section XIV, and by re-numbering prior Sections XVI and XVII as Sections XV and XVI, respectively:

“SECTION XIV 
MODIFICATION; ASSIGNMENT

This Agreement may not be modified or amended except in writing signed by both parties.  No term or condition of this Agreement will be deemed to have been waived except in writing by the party charged with waiver.  A waiver shall operate only as to the specific term or condition waived and will not constitute a waiver for the future or act on anything other than that which is specifically waived.  Neither the Agreement nor any right or interest under the Agreement shall be assignable by the Executive, his beneficiaries or his legal representatives without the prior written consent of the Company; provided, however, that nothing in this Section XIV shall preclude (a) the Executive from designating a beneficiary to receive any benefits payable hereunder upon his death or (b) the executors, administrators or other legal representatives of the Executive or his estate from assigning any rights hereunder to the person or persons entitled thereto.  The Company may assign the Agreement without the consent of the Executive or any other person.” 

8.    The Employment Agreement is hereby amended by re-numbering prior Section XVIII as Section XVII and by deleting prior Section XVIII in its entirety and replacing prior Section XVIII with the following new Section XVII:

“SECTION XVII 
WAIVER AND RELEASE

In consideration for the payments and benefits provided hereunder, the Executive agrees that Executive will, upon termination of employment and in no event later than sixty (60) days after the Date of Termination, as a condition to the Company’s obligation to pay any severance benefits under this Agreement (including, but not limited to, those benefits set forth Sections 8.l.1, 8.1.2, 8.1.3, 8.1.4, 8.1.5, 8.1.6 and 8.1.7), deliver to the Company a fully executed release, in form acceptable to the Company, that fully and irrevocably releases and discharges the Company, its Affiliates and each of their directors, officers, agents and employees from any and all claims, charges, complaints, liabilities of any kind, known or unknown, owed to the Executive, except for obligations arising under the provisions of this 

Agreement, to vested benefits under the Company’s benefit plans, obligations arising under stock option, restricted stock or other equity compensation agreements, or such claims that may not be released by law.”

9.    This Amendment may be executed simultaneously in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.  Except as otherwise provided in this Amendment, the terms and provisions of the Employment Agreement shall continue in effect.  In the event of any conflict between the terms of the Employment Agreement and the terms of this Amendment, the terms of this Amendment shall govern.  This Amendment has been executed and delivered in the State of South Carolina and its validity, interpretation, performance and enforcement shall be governed by the laws of the State of South Carolina.  

10.    The parties agree that there shall be no presumption that any ambiguity in this Amendment or the Employment Agreement is to be construed against the drafter.  No provision of this Amendment or the Employment Agreement will be interpreted in favor of, or against, any of the parties hereto by reason of the extent to which any such party or his or its counsel participated in the drafting thereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof.  The Executive acknowledges and confirms that he has reviewed this Amendment and the Employment Agreement in their entirety, has had an opportunity to obtain the advice of counsel, and fully understands all provisions of this Amendment and the Employment Agreement.

[Signature Page To Follow]

IN WITNESS WHEREOF, the Company has caused this Amendment to be executed as of the 15th day of October, 2018 by its duly authorized officer and the Executive has hereunto set his hand.
COMPANY:

WORLD ACCEPTANCE CORPORATION

By:                         /s/ R. Chad Prashad    

Title:                         President and CEO    

EXECUTIVE:

/s/ Daniel Clinton Dyer    
Daniel Clinton DyerExhibit 10.5

 

NOTE PURCHASE AND SALE AGREEMENT

This Note Purchase and Sale Agreement (the “Agreement”) is entered into as of December 16, 2016, by and between Ammo, Inc., a Delaware corporation ("Buyer") and Mansfield, LLC, a Delaware limited liability company ("Seller") with reference to the following:

RECITALS

A. Advanced Tactical Armament Concepts, LLC, a Nevada limited liability company ("Borrower") previously entered into a Loan Agreement with Seller dated November 30, 2016 and effective October 23, 2016 (the "Loan Agreement").

B. In connection with the Loan Agreement, Borrower executed that certain Promissory Note dated November 30, 2016 and effective October 23, 2016 (the "Promissory Note").

C. In connection with the Loan Agreement and Promissory Note, Seller was granted a security interest in all of the assets of Borrower (the "Collateral"), including but not limited to all of Borrower's intellectual property, all furnishings and fixtures, all contracts, all licenses, all equipment, all trademarks, all packaging and promotional materials, all machinery and vehicles, and all ledgers and documents (the "Security Interest").

D. In connection with the Loan Agreement and Promissory Note, UCC-1 financing statements have been filed or are in the process of being filed to perfect the Security Interest in Arizona and Nevada (the "Security Documents").

E. Buyer wishes to purchase the Loan Agreement, the Promissory Note, and the Security Interest from Seller and Seller wishes to sell its rights under the Loan Agreement and Promissory Note and the Security Interest to Buyer.

Now, therefore, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Buyer and Seller hereby agree as follows:

AGREEMENT

I.  LOAN

Subject to the terms and conditions stated in this Agreement, Seller agrees to sell, assign and transfer to Buyer, without recourse, warranty or retained liability of any kind, and Buyer agrees to purchase from Seller on December 16, 2016 (the "Closing Date"), all of Seller's right, title and interest in and to the Loan Agreement, the Promissory Note, the Security Interest and the Security Documents together with all of Seller's rights relating thereto.  Buyer hereby agrees, for its own account and risk, to accept the assignment of the Loan Agreement, the Promissory Note, the Security Agreement and the Security Documents and to assume, comply with and perform as of and after the Closing Date, all of Seller's duties, liabilities, obligations and responsibilities of every type or nature whatsoever and howsoever arising under or as a result of the Loan Agreement, the Promissory Note, the Security Interest and the Security Documents. This Assignment to Buyer upon the Closing Date is made without recourse to Seller.

 

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II.  PAYMENT

Buyer shall pay to Seller the sum of One Million Thirty-Five Thousand Dollars ($1,035,000) (the "Purchase Price") on or before the Closing Date.  If such amount is received on or before the Closing Date, Seller shall deliver to Buyer the following documents:

(a) The original Loan Agreement and Promissory Note, together with an Allonge in the form attached hereto as Exhibit A, duly executed and endorsed by Seller to the order of Buyer;

(b) An Assignment and Assumption Agreement in the form attached hereto as Exhibit B duly executed by Seller.

III.  NO WARRANTY

BUYER FURTHER ACKNOWLEDGES AND AGREES, AND SPECIFICALLY ACKNOWLEDGES SELLER'S EXPRESS RELIANCE HEREON, THAT EXCEPT AS SET FORTH BELOW, (A) SELLER HAS MADE NO WARRANTIES OR REPRESENTATIONS OF ANY TYPE OR NATURE TO BUYER OR ANY AGENT OF BUYER, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OR REPRESENTATIONS WITH RESPECT TO: (I) THE COLLATERAL OR THE CONDITION OR VALUE OF THE COLLATERAL; THE PROMISSORY NOTE, THE LOAN AGREEMENT, OR ANY OR ALL OF THE SECURITY THEREFOR; (III) ANY OF THE OTHER LOAN DOCUMENTS OR INSTRUMENTS RELATING TO OR SECURING THE PROMISSORY NOTE; (IV) THE COLLECTABILITY OR ENFORCEABILITY OF THE OBLIGATIONS EVIDENCED BY THE PROMISSORY NOTE; OR (V) THE BORROWER OR THE FINANCIAL CONDITION OR CREDITWORTHINESS OF BORROWER; (B) BUYER HAS CONDUCTED AN D  WILL CONTINUE TO CONDUCT ITS OWN EXAMINATION AND INVESTIGATION OF THE COLLATERAL AND THE CONDITION OF THE COLLATERAL, THE PROMISSORY NOTE AND THE LOAN AGREEMENT, AND BUYER IS NOT RELYING AND WILL NOT RELY UPON SELLER IN ANY MANNER OR TO ANY EXTENT WITH RESPECT TO BUYER'S PURCHASE OF THE PROMISSORY NOTE AND THE OTHER  LOAN DOCUMENTS; AND (C) SELLER'S SALE OF THE PROMISSORY NOTE AND OTHER LOAN DOCUMENTS TO BUYER IS AND SHALL BE WITHOUT RECOURSE TO SELLER AND WITHOUT ANY REPRESENTATIONS OR WARRANTIES, WHETHER EXPRESS OR IMPLIED. BUYER SHALL RELY EXCLUSIVELY UPON ITS OWN ATTORNEYS, ACCOUNTANTS, CONSULTANTS, AND OTHER PROFESSIONS FOR ANY LEGAL, TAX, COLLATERAL CONDITION, DU E DILIGENCE OR OTHER EXPERT.

 

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IV.  ADDITIONAL REPRESENTATIONS

(a) Buyer acknowledges and agrees that Seller remains the owner of the Loan Agreement, the Promissory Note and Security Interest until Buyer has satisfied all terms and conditions under this Agreement, including without limitation, the payment in full to Seller of the Purchase Price.

(b) Buyer acknowledges  that all risk of loss in connection with the Loan Agreement, the Promissory Note and Security Interest shall be borne by Buyer upon Closing including, without limitation, any casualty involving the Collateral, provided, that any casualty insurance proceeds paid to Seller on account of a loss which occurs after the Closing Date shall be assigned to Buyer and forwarded to Buyer immediately upon receipt thereof by Seller.

(c) Seller hereby represents and warrants to Buyer that:

i.  Seller is currently the owner of the Promissory Note, the Loan Agreement, and the Security Interest;

ii. Seller has obtained  all necessary authorization  and/or consents to consummate the transactions contemplated hereby; and

iii.   Seller  has not previously transferred the transferred the Promissory Note, the Loan Agreement, and the Security Interest.

(d) Buyer hereby represents and warrants to Seller that:

i.  Buyer is familiar with Borrower and all other matters regarding the Promissory Note, the Loan Agreement, and the Security Interest;

ii. Buyer is a sophisticated investor with knowledge and experience in financial and business matters sufficient to evaluate the merits and risks of the transaction contemplated by this Agreement and has conducted an independent investigation of the Borrower with respect to the Promissory Note, the Loan Agreement, and the Security Interest and has reviewed the Promissory Note, the Loan Agreement, and the Security Interest and is not relying on Seller (except as to the accuracy of Seller's express representations herein);

iii. Buyer has conducted its own review and analysis in making the decision to purchase the Promissory Note, the Loan Agreement, and the Security Interest;

iv. Buyer has made such decision without any advice or encouragement from Seller.

 

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(e) Buyer is not relying on any representations, warranties or other statements made at any time by Seller or any of the Seller's present  or former employees, agents or representatives ("Representatives") except for those representations and warranties expressly stated in this Agreement.  Buyer is voluntarily undertaking its obligations under this Agreement with full awareness of the significance and risks; and

(f) When executed and delivered by Buyer, this Agreement shall constitute a legal, valid and binding agreement of Buyer, enforceable in accordance with its express terms. The person executing this Agreement on behalf of Buyer has full power and authority to bind Buyer to this Agreement.

(g) Seller shall have no duty or obligation to notify the Borrower or any third party regarding the sale and transfer of the Loan and the Lease to Buyer or the assignment of the Promissory Note, the Loan Agreement, and the Security Interest.

(h) This Agreement shall be governed by and construed under the laws of the State of Arizona. This Agreement may be executed in one or more counterparts, each and all of which shall constitute but one agreement. EACH OF THE PARTIES HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(i) IN THE EVENT THIS TRANSACTION IS NOT CONSUMMATED BY REASON OF BUYER'S DEFAULT HEREUNDER THEN SELLER, IN ADDITION TO ANY OTHER RIGHTS AND REMEDIES AVAILABLE TO IT AT LAW OR IN EQUITY, MAY RETAIN ALL DEPOSITS PAID AND TERMINATE    THIS    AGREEMENT     BY    NOTIFYING     BUYER    THEREOF.  BUYER ACKNOWLEDGES AND AGREES THAT NO TECHNICAL OR NON-MATERIAL DEFAULT BY SELLER UNDER THIS AGREEMENT SHALL IN ANY WAY AFFECT ANY RIGHTS OR REMEDIES OF SELLER AGAINST BUYER HEREUNDER. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED IN THIS SECTION, IF BUYER BRINGS AN ACTION AGAINST SELLER FOR AN ALLEGED BREACH OR DEFAULT BY SELLER OF ITS OBLIGATIONS UNDER THIS AGREEMENT, AND, IN CONNECTION  WITH THAT ACTION, ENJOINS OR RESTRICTS SELLER'S ABILITY TO SELL OR TRANSFER THE PROMISSORY NOTE, LOAN AGREEMENT OR SECURITY INTEREST ("BUYER'S ACTION"), SELLER SHALL NOT BE RESTRICTED BY THE PROVISIONS OF THIS SECTION FROM SEEKING EXPUNGEMENT OR RELIEF FROM THAT INJUNCTION OR THE RESTRAINT, AND RECOVERING DAMAGES, COSTS OR EXPENSES (INCLUDING ATTORNEYS' FEES) WHICH SELLER MAY SUFFER OR INCUR AS A RESULT OF BUYER'S ACTION. FURTHERMORE, IN NO EVENT SHALL THIS SECTION HAVE ANY APPLICATION TO OR LIMIT SELLER'S RIGHTS AGAINST BUYER IN CONNECTION WITH ANY OF THE FOLLOWING: (I) ANY DUTY OR OBLIGATION OF BUYER TO INDEMNIFY SELLER AS PROVIDED IN THIS AGREEMENT, OR (II) ANY MISREPRESENTATIONS BY BUYER.

 

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(j) By its respective execution and delivery of this Agreement, each of Buyer and Seller respectively represent and warrant that the execution, delivery and performance of this Agreement has been duly authorized, as applicable, by all necessary corporate action.

(k) Buyer shall not institute or prosecute (or, except to the extent required by law, in any way aid, assist, or cooperate with the institution or prosecution of) any action, suit, hearing or other proceeding of any kind, nature or character at law, admiralty or in equity against Seller in order to collect, enforce, declare, assert, establish or otherwise raise any defense, claim, cause of action, contract, liability, indebtedness or obligation related to the Promissory Note, Loan Agreement or Security Interest, or which arises out of any fact, contract, condition, claim, cause of action, indebtedness, liability, obligation, event, action, omission, circumstance, or other matter or reason of any kind which is the basis for any such defense, claim, cause of action, liability, indebtedness or obligation under Promissory Note, Loan Agreement or Security Interest.

(l) Except for the breach of any agreements of Seller hereunder, Buyer does hereby  fully, forever and irrevocably release, discharge and acquit Seller and its respective past and present parent, subsidiary, and affiliate corporations, and the respective past and present officers, directors, shareholders, agents, attorneys and employees of each  and all of the foregoing entities, and its and  their respective successors, heirs, assigns and any other person or entity now, previously, or hereafter affiliated with the same (Seller, together with each and all said parent, subsidiary and affiliated corporations, officers, directors, shareholders, agents, attorneys and employees, shall be collectively referred to hereinbelow as the "Released Parties" and each such reference shall refer jointly and severally to each and all of Seller and such other persons and entities), of and from any and all rights, claims, demands, obligations, liabilities, indebtedness, breaches of contract, breaches of duty of any relationship, acts, omissions, misfeasance, malfeasance, cause or causes of action, debts, sums of money, accounts, compensations, contracts, controversies, promises, damages, costs, losses and expenses of every type, kind, nature, description or character, and irrespective of how, why, or by reason of what facts, whether heretofore or now existing, or that could, might, or may be claimed to exist, of whatever kind or name, whether known or unknown, suspected or unsuspected, liquidated or unliquidated, claimed or unclaimed, whether based on contract, tort, breach of any duty, or other legal or equitable theory of recovery, each as though fully set forth herein at length ("Released Claims") including, but not limited to those that in any way arise from or out of, are connected with, or relate to the Promissory Note, Loan Agreement or Security Interest. In consideration of Seller entering into this Agreement, this general release shall be effective as of the date of this Agreement. In addition, it is Buyer's intentions that upon the occurrence of the Closing, this general release shall include all Released Claims up to the date of the Closing. In the event the Closing does not occur, for any reason, Buyer understands and agrees that Buyer's general release of the Released Parties, as of the date of this Agreement, shall remain in full force and effect.

 

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(m) Buyer hereby agrees to and hereby does indemnify, defend and hold harmless Seller and its directors, officers, agents, attorneys and employees (collectively, the "Seller") of, for, from and against (a) any and all claims, demands, actions and causes of action that are asserted against Seller by any person or entity (other than the Seller) if the claim, demand, action or cause of action directly or indirectly relates to a claim, demand, action or cause of action that such person or entity has or asse1is against Buyer or any officer, director or shareholder of Buyer; (b) any and all claims, demands, actions and causes of action that are asserted against Seller if the claim, demand, action or cause of action directly or indirectly relates to the relationship between Buyer and the Seller under this Agreement, the Promissory Note, Loan Agreement or Security Interest, or to the transactions contemplated hereby or thereby; (c) any administrative or investigative proceeding by any governmental authority directly or indirectly related to a claim, demand, action or cause of action described in clauses (a) or (b) above; (d) any and all claims, demands, actions and causes of action that are asserted against  Seller by Borrower; and (e) any and all liabilities, losses, costs and expenses (including attorneys' fees, any disbursements and other professional services) that the Seller suffers or incurs as a result of the assertion of any of the foregoing. The Seller is authorized to employ counsel of its own choosing in enforcing its rights hereunder and in defending against any claim, demand, action, cause of action or administrative or investigative proceeding covered by this section. Any obligation or liability of Buyer to the Seller under this section shall survive the expiration or termination of this Agreement and the repayment of the amounts covered by the Loan Agreement and Promissory Note. All amounts covered under this indemnity shall be due and payable to the Seller from Buyer immediately upon demand by the Seller.

 

 

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V.  MISCELLANEOUS

(a) Non-Assignability.  Borrower may not assign its rights and/or obligations under this Agreement.  Lender may freely assign all of its rights and obligations under this Agreement and the note attached as Exhibit A.

(b) Successors and Assigns.  This Agreement will be binding upon and inure to the benefit of Borrower, Lender, and their respective successors, assigns (to the extent assignees are otherwise permitted under this Agreement), devisees, and beneficiaries.

(c) Modification.  This Agreement may not be modified except in writing signed by Borrower and Lender.

(d) Time of Essence.  Time is of the essence with regard to each and every term, condition and obligation of this Agreement.

(e) Non-Waiver.  Failure or delay in exercising any right or option hereunder given to Lender will not constitute a waiver of any such right or option or waiver of any other right or option held by Lender under this Agreement.

(f) Applicable Venue.  Sole and exclusive jurisdiction and venue of any dispute or claim related to this Agreement shall be in the State or Federal courts in Phoenix, Arizona.

(g) Severability.  If at any time any provision of this Agreement is or becomes illegal, invalid, or unenforceable in any respect, the legality, validity, and enforceability of the remaining provisions of this Agreement will not be affected and such remaining provisions will remain in full force and effect.

(h) Attorneys’ Fees.  The prevailing party in any litigation, arbitration, or other proceedings arising out of this Agreement shall be reimbursed by the other party for all costs and expenses incurred in such proceedings, including reasonable attorneys’ fees.

(i) Notice.  Any and all notices required under this Agreement shall be sent by certified mail, return receipt requested, addressed to the party at the address set forth herein or at such other address as the party may designate to the other party in accordance with this paragraph.  A notice shall be deemed effective two (2) days after the date on which the notice is mailed.

(j) Merger.  This Agreement sets out the entire agreement of the parties.

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In witness hereof, the parties have executed this Agreement:

Date:  December 16, 2016      

SELLER:

Mansfield, LLC, a Delaware limited liability company,

By  /s/ Tod Wagenhals                  

     Tod Wagenhals, Managing Member

Date: December 16, 2016      

BUYER:

Ammo, Inc., a Delaware corporation,

By:  /s/ Fred Wagenhals                   

      Fred Wagenhals, President

Date: December 16, 2016      

Attachments

Exhibit A:  Allonge

Exhibit B:  Assignment and Assumption Agreement

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EXHIBIT A

ALLONGE

Pay to the order of AMMO, INC., a Delaware corporation, WITHOUT RECOURSE TO THE UNDERSIGNED AND WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, BY THE UNDERSIGNED.

DATED: December 16, 2016

MANSFIELD, LLC,

a Delaware limited liability company

By: /s/ Tod Wagenhals                  

                   Tod Wagenhals, its Managing Member

This Allonge is to be attached to a form a part of that certain Promissory Note dated as of November 30, 2016 in the original maximum principal amount of $900,000.00, executed by Advanced Tactical Armament Concepts, LLC, a Nevada limited liability company.

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EXHIBIT B

ASSIGNMENT AND ASSUMPTION AGREEMENT

THIS ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of the 16th day of December, 2016, is executed by and between MANSFIELD, LLC, a Delaware limited liability company (“Assignor”), and AMMO, INC., a Delaware corporation (“Assignee”).

Section 1. Assignment. Assignor hereby grants, sells, assigns and transfers WITHOUT RECOURSE AND WITHOUT REPRESENTATION OR WARRANTY OF ANY KIND, EXPRESS OR IMPLIED all of Assignor’s right, title and interest in, to and arising under that certain Promissory Note dated as of November 30, 2016, in the original maximum principal amount of $900,000.00, executed by Advanced Tactical Armament Concepts, L.L.C., a Nevada limited liability company (the “Borrower”) in favor of Assignor (the “Note”), and the Loan Agreement, Security Interest and all other related documents (as defined in that certain Note Purchase and Sale Agreement dated on or about the date hereof between Assignor and Assignee).

Section 2. Assumption. Assignee hereby assumes and promises to perform in accordance with the terms thereof each and all of the duties and obligations of the Assignor arising from, in connection with, in respect of or under the Loan Agreement, Promissory Note and Security Interest. Assignee agrees to indemnify, defend and hold Assignor harmless from and against any and all liability for performance or nonperformance of such duties and obligations and any and all claims, actions, suits, costs, demands and causes of action which may be asserted against Assignor in respect of, in connection with or otherwise relating to or arising under the Loan Agreement, Promissory Note and Security Interest.

Section 3. Further Assurances. Each party agrees that from time to time it will execute and deliver all further instruments and documents, and take all further action, that may be necessary or desirable, or that the other party may request, in order to perfect and confirm the Assignment effected by this Assignment and Assumption Agreement.

Section 4. Governing Law. This Assignment and Assumption Agreement shall be governed by and interpreted in accordance with the laws of the State of Arizona and shall be binding upon and shall inure to the benefit of the parties and their successors and assigns.

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

[SIGNATURES ON THE FOLLOWING PAGE]

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Signature page to Assignment and Assumption Agreement

The parties have executed this Assignment and Assumption Agreement as of the date first set forth above.

 

	

ASSIGNOR:

 

MANSFIELD, LLC,

a Delaware limited liability company

	
 

	
ASSIGNEE:

 

AMMO, INC.,

a Delaware corporation

	
 

	
 

	
 

	
By: /s/ Tod Wagenhals                  

	
 

	
By:  /s/ Fred Wagenhals        

	
Tod Wagenhals, its Managing Member

	
 

	
 

	
 

	
 

	
 

	
Date: December 16, 2016

	
 

	
Its: President       

	
 

	
 

	
Date:  December 16, 2016

 

 

 

  

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