Document:

EX-10.1

 Exhibit 10.1 
  

 
 EMPLOYEE NONQUALIFIED STOCK OPTION AWARD AGREEMENT 

 

					
	Grantee:	 	  
	 	
			
	Grant Date:	 	  
	 	
			
	Total Number of Shares Subject to Option:	 	  
	 	
			
	Exercise Price per Share:	 	$    .    	 	
			
	Expiration Date:	 	  
	 	

 AWARD OF NONQUALIFIED STOCK OPTION 

Geospace Technologies Corporation (the “Company”), pursuant to the Geospace Technologies Corporation 2014 Long-Term Incentive Plan
(the “Plan”), hereby awards to you, the above-named Grantee, effective as of the Grant Date set forth above, a nonqualified stock option (the “Option”) to purchase
                shares (the “Shares”) of the Company’s Common Stock, $0.01 par value per share (the “Common Stock”) for the
exercise price set forth above for each Share subject to the Option, subject to adjustment as provided in the Plan. The Option is exercisable in installments upon the satisfaction of both (1) the performance based vesting conditions set forth
in the performance based vesting conditions schedule below (the “Performance Based Vesting Conditions”) and (2) the service based vesting conditions set forth in the service based vesting conditions schedule below (the
“Service Based Vesting Conditions”) (provided that you do not incur a Termination of Employment prior to the applicable anniversary of the Grant Date) with the exercise price payable at the time of exercise. To the extent not
exercised, installments shall be cumulative so that any portion of the Option that is exercisable shall remain exercisable until the earlier of the Expiration Date or the close of the period of exercisability upon your Termination of Employment
specified in the attached Terms and Conditions of Employee Nonqualified Stock Option Award Agreements (the “Terms and Conditions”). 

 Performance Based Vesting Conditions 

 

			
	 Performance Target
	 	 Percentage of Total Number of Shares Subject to the Option For Which a
Performance
Condition Has Been Satisfied (Inclusive of the Percentage of
Total Number of Shares Subject to the Option for Which a Performance
Condition Was Previously Satisfied)

	Below Tier I Performance Target	 	    0%
	Tier I Level Performance Target	 	  33%
	Tier II Level Performance Target	 	  67%
	Tier III Level Performance Target	 	100%

 For purposes of this Award Agreement: 

“Applicable Closing Stock Price” means the average closing price of one share of Common Stock for any twenty
(20) consecutive trading days during the Performance Period. 
 “Initial Stock Price” means the average
closing price of one share of Common Stock for the twenty (20) consecutive trading days immediately preceding the first day of the Performance Period, $            . 

“Performance Period” means the five-year period commencing on the Grant Date and ending on the fifth anniversary of
the Grant Date. 
 “Tier I Performance Target” means the achievement of a TSR of [X]% or more. 

“Tier II Performance Target” means the achievement of a TSR of [Y]% or more. 

“Tier III Performance Target” means the achievement of a TSR of [Z]% or more. 

“Total Shareholder Return” or “TSR” means the total percentage return per share of Common Stock
during the Performance Period based on the Initial Stock Price and the Applicable Closing Stock Price, and assuming contemporaneous reinvestment in the Common Stock of all dividends and other distributions at the closing price of one share of Common
Stock on the date such dividend or other distribution was paid.  

 Service Based Vesting Conditions 

 

			
	 Anniversary of Grant Date
	 	 Percentage of Total Number of Shares Subject to the Option For Which a
Service
Condition Has Been Satisfied (Inclusive of the Percentage of Total
Number of Shares for Which a Service Condition Was Previously Satisfied)

	 Before First Anniversary
	 	    0%
	 First Anniversary
	 	  33%
	 Second Anniversary
	 	  67%
	 Third Anniversary
	 	100%

 Illustrative Examples 

If a Tier II Performance Target is achieved before the first anniversary of the Grant Date then (1) on the first anniversary of the Grant
Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to 33% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution
provisions of the Plan) and (2) on the second anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to an additional 34% of the shares of
Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan). Assuming that no further performance conditions are satisfied during the Performance Period, the remaining shares of Common Stock
subject to the Option would be forfeited. 
 If a Tier I Performance Target is achieved before the first anniversary of the Grant Date and a
Tier III Performance Target is achieved before the second anniversary of the Grant Date, then (1) on the first anniversary of the Grant Date (assuming you have not previously incurred a Termination of Employment) you will be entitled to
exercise the Option with respect to 33% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of the Plan) and (2) on the second anniversary of the Grant Date (assuming you have not
previously incurred a Termination of Employment) you will be entitled to exercise the Option with respect to the remaining 67% of the shares of Common Stock originally subject to the Option (as adjusted pursuant to the anti-dilution provisions of
the Plan). Assuming that no further performance conditions are satisfied during the Performance Period, the remaining shares of Common Stock subject to the Option would be forfeited. 

 If a Tier I Performance Target is not achieved during the five-year Performance Period, the
Option will forfeited and will never be exercisable even if the service based vesting condition has been satisfied in full. 
 General

 The Option will expire and may not be exercised after the Expiration Date. 

If a Change of Control of the Company occurs or you incur a Termination of Employment, your rights under the Option will be determined as
provided in the Terms and Conditions. 
 Upon your exercise of the Option the Company shall cause to be issued to you the Shares for which
the Option is exercised, and such Shares shall be transferable by you (except to the extent that any proposed transfer would, in the opinion of counsel satisfactory to the Company, constitute a violation of applicable federal or state securities
law). 
 The Shares that may be issued under the Plan are registered with the Securities and Exchange Commission under a Registration
Statement on Form S-8. You may obtain a copy of the Plan Prospectus by requesting it from the Company. 
 Capitalized terms that are not
defined herein shall have the meaning ascribed to such terms in the Plan or the Terms and Conditions. 
 In accepting the award of the
Option set forth in this Agreement you accept and agree to be bound by all the terms and conditions of the Plan, this Agreement and the Terms and Conditions. 

 

	
	GEOSPACE TECHNOLOGIES CORPORATION
	
	  

	
	ACCEPTED
	
	  

	Employee

 GEOSPACE TECHNOLOGIES CORPORATION 

TERMS AND CONDITIONS 
 OF

 EMPLOYEE NONQUALIFIED STOCK OPTION AWARD AGREEMENTS 

These Terms and Conditions are applicable to an award of a nonqualified stock option (the “Option”) granted pursuant to the
Geospace Technologies Corporation 2014 Long-Term Incentive Plan (the “Plan”) that is not intended to be an incentive stock option that satisfies the requirements of section 422 of the Internal Revenue Code of 1986, as amended (the
“Code”). These Terms and Conditions are incorporated as part of the Nonqualified Stock Option Award Agreement setting forth the terms of the Option (the “Agreement”). 

 

	1.	TERMINATION OF EMPLOYMENT. The following provisions will apply in the event you incur a Termination of Employment before the fifth anniversary of the Grant Date (the “Fifth Anniversary Date”)
specified in the Agreement: 

 1.1 Termination of Employment Generally. If you incur a Termination of Employment on or
before the Fifth Anniversary Date for any reason other than one of the reasons described in Sections 1.2 and 1.3 below, then on the date you incur a Termination of Employment, the Option will be forfeited as to the number of Shares then subject
to the Service Based Vesting Conditions and the Performance Based Vesting Conditions that have not been satisfied. For the avoidance of doubt, if you incur a Termination of Employment for any reason, the Option will not continue to vest after your
Termination of Employment. The Committee shall determine, in its sole discretion, whether you have incurred a Termination of Employment. 

1.2 Disability. Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you incur a
Termination of Employment due to your Disability before the Fifth Anniversary Date, all remaining Service Based Vesting Conditions shall immediately be fully satisfied on the date of your Termination of Employment due to your Disability and the
Option will be fully exercisable only with respect to the number of Shares then subject to the Option for which the Performance Based Vesting Conditions have been satisfied as of the date of your Termination of Employment. The Option will be
forfeited as to the number of Shares then subject to the Performance Based Vesting Conditions that have not been satisfied as of the date of your Termination of Employment due to your Disability. 

1.3 Death. Notwithstanding any other provision of the Agreement or these Terms and Conditions to the contrary, if you die before the
Fifth Anniversary Date and before you otherwise incur a Termination of Employment, all remaining Service Based Vesting Conditions shall immediately be fully satisfied on the date of your death and the Option will be fully exercisable only with
respect to the number of Shares then subject to the Option for which the Performance Based Vesting Conditions have been satisfied as of the date of your death. The Option will be forfeited as to the number of Shares then subject to the Performance
Based Vesting Conditions that have not been satisfied as of the date of your death. 

  
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 2. PERIOD OF EXERCISABILITY FOLLOWING TERMINATION OF EMPLOYMENT. The Option, to the extent vested
and exercisable, will terminate on the earlier of (1) the Expiration Date of the Option or (2) one day less than three months after the date you incur a Termination of Employment for any reason other than your death or Disability. During
this period, you may exercise the Option in respect of the number of shares that were vested on the date of your Termination of Employment. If you incur a Termination of Employment due to your death or Disability before the Expiration Date, the
Option will terminate on the earlier of (1) the Expiration Date of the option or (2) the first anniversary of the date on which you incur a Termination of Employment. During this period you or your executors, administrators or any person
to whom the Option may be transferred by will or by the laws of descent and distribution, as the case may be, may exercise the Option. 
 3. CHANGE OF
CONTROL. Notwithstanding any other provision of the Agreement or these Terms and Conditions relating to vesting, if a Change of Control occurs before the the earlier to occur of (1) the Fifth Anniversary Date or (2) your
Termination of Employment prior to the date of a Change of Control, then the Option will be fully exercisable and shall remain exercisable until the earlier of the Expiration Date or the close of the period of exercisability upon your Termination of
Employment specified in Section 2 above. 
 5. EXERCISE. When the Option is exercisable, you may exercise the Option by delivering this
original Agreement and an exercise notice to the Company in a form acceptable to the Committee that specifies the number of Shares with respect to which the Option is being exercised and contains such other representations and agreements as may be
required by the Committee. The exercise notice must be accompanied by cash payment of the exercise price for the exercised shares or other form of payment in accordance with Section 6 below. You must also make provision to satisfy applicable
tax withholding obligations (if any). 
 6. METHOD OF PAYMENT. When you exercise the Option, you may pay the exercise price by any combination
of the following: (a) cash, certified check, bank draft or postal or express money order, (b) an election to make a cashless exercise through a registered broker-dealer (if approved in advance by the
Committee or an executive officer of the Company), or (c) any other form of payment acceptable to the Committee in its sole discretion. 
 7. TAXES
AND TAX WITHHOLDING. You should consult with your tax advisor concerning the tax consequences of exercising the Option. To the extent that the receipt of the Option or the Agreement, the vesting of the Option or the exercise of the Option
results in income to you for federal, state or local income, or other tax purposes with respect to which the Company or an Affiliate has a withholding obligation, You must deliver to the Company at the time of such exercise such amount of money as
the Company or an Affiliate may require to meet its obligation under applicable tax laws or regulations, and, if you fail to do so, the Company is authorized to withhold from the Shares subject to the Option or from any cash or stock remuneration
then or thereafter payable to you any tax required to be withheld by reason of such taxable income, including (without limitation) shares subject to the Option sufficient to satisfy the withholding obligation. 

  
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 8. NONTRANSFERABILITY. The Option and the Agreement are not transferable or assignable by you other
than by will or the laws of descent and distribution, and the Option shall be exercisable during your lifetime only by you. 
 9. CAPITAL ADJUSTMENTS AND
REORGANIZATIONS. The existence of the Option shall not affect in any way the right or power of the Company or any company the stock of which is awarded pursuant to the Agreement to make or authorize any adjustment, recapitalization,
reorganization or other change in its capital structure or its business, engage in any merger or consolidation, issue any debt or equity securities, dissolve or liquidate, or sell, lease, exchange or otherwise dispose of all or any part of its
assets or business, or engage in any other corporate act or proceeding. 
 10. NO RIGHTS AS A STOCKHOLDER. You will not have any rights as a
stockholder of the Company with respect to any Shares covered by the Option until the date of the issuance of the Shares following exercise of the Option pursuant to the Agreement and the Terms and Conditions and payment for the Shares. No
adjustment shall be made for dividends or other rights for which the record date is prior to the date such Shares are issued. 
 11. SECURITIES ACT
LEGEND. You consent to the placing on any certificate for the Shares of an appropriate legend restricting resale or other transfer of the Shares except in accordance with the Securities Act of 1933 and all applicable rules thereunder.

 12. LIMIT OF LIABILITY. Under no circumstances will the Company or any Affiliate be liable for any indirect, incidental, consequential or
special damages (including lost profits) of any form incurred by any person, whether or not foreseeable and regardless of the form of the act in which such a claim may be brought, with respect to the Plan. 

13. DATA PRIVACY. The Company’s Treasury Department in Houston, Texas (U.S.A.) administers and maintains the data regarding the Plan, the
grantees and the nonqualified stock options granted for all employees, Employees and directors in the Company and its Affiliates worldwide. 

The data administered and maintained by the Company includes information that may be considered personal data, including the name of the
awardee, the award granted and the number of shares of stock subject to any award (“Personal Data”). From time to time the Company may transfer certain of your Personal Data to Affiliates as necessary for the purpose of
implementation, administration and management of your participation in the Plan (the “Purposes”), and the Company and its Affiliates may each further transfer your Personal Data to any third parties assisting the Company in the
implementation, administration and management of the Plan (collectively, “Data Recipients”). The countries to which your Personal Data may be transferred may have data protection standards that are different than those in your home
country and that offer a level of data protection that is less than that in your home country. 
 In accepting the award of the Option, you
hereby expressly acknowledge that you understand that from time to time the Company and its Affiliates may transfer your Personal Data to Data Recipients for the Purposes. You further acknowledge that you

  
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understand that the countries to which your Personal Data may be transferred may have data protection standards that are different than those in your home country and that offer a level of data
protection that is less than that in your home country. 
 Further, in accepting the award of the Option, you hereby expressly affirm that
you do not object, and you hereby expressly consent, to the transfer of your Personal Data by the Company and its Affiliates to Data Recipients for the Purposes from time to time. 

14. FORFEITURE AND RECOUPMENT OF PROCEEDS. The provisions of this Section 14 are intended to protect the Company’s goodwill, which you
acknowledge and agree is a unique and valuable asset of the Company. 
 14.1. Forfeiture Due to Engagement in Prohibited Activities.
Notwithstanding any other provision of these Terms and Conditions or the Agreement, if you engage in any of the behavior(s) prohibited in Section 15.1 at any time after the Grant Date, or any of Section 15.2, Section 15.3 or
Section 15.4 during the applicable time-period(s) specified in those Sections, then, to the extent determined by the Committee in its sole discretion, all or a portion of your rights under the Option, still outstanding at that time, shall
immediately terminate and become null and void. 
 14.2 Forfeiture and Recoupment of Proceeds Due to Section 954 of the Dodd-Frank
Wall Street Reform and Consumer Protection Act. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, and you
are then a current or former executive officer of the Company you shall forfeit and must repay to the Company any compensation awarded under this Agreement to the extent specified in any of the Company’s compensation recoupment policies
established or amended (now or in the future) in compliance with the rules and standards of the Securities and Exchange Commission Committee under or in connection with Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection
Act. 
  

	15.	PROHIBITED ACTIVITIES. 

 15.1 Prohibited Disclosure of Confidential Information.
You agree that, in the discretion of the Committee, the Option may be forfeited in whole or in part if you make any unauthorized disclosure of any Confidential Information of the Company or any of its Affiliates, or make any use of such Confidential
Information, except in the carrying out of your responsibilities for the Company or any of its Affiliates, and such unauthorized disclosure or use of Confidential Information is materially and demonstrably injurious to the Company or any of its
Affiliates. 
 For purposes of these Terms and Conditions, “Confidential Information” means and includes the Company’s
or any of its Affiliate’s confidential and/or proprietary information and/or trade secrets that have been developed or used and/or will be developed and that cannot be obtained readily by third parties from outside sources. Confidential
Information includes, by way of example and without limitation, the following: information and strategies discussed in Plan Meetings, human resources 

  
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information such as salary and budget information, performance ratings and headcount numbers, information about underperforming districts or contracts, and cost structures as well as, information
regarding customers, employees, vendors, contractors, and the industry not generally known to the public; strategies, methods, books, records, and documents; technical information concerning products, equipment, services, and processes; procurement
plans and procedures, and pricing techniques; the names of and other information concerning customers, investors, and business affiliates (such as contact name, service provided, pricing for that customer, amount of services used, credit and
financial data, and/or other information relating to the Company’s or any of its Affiliate’s relationship with that customer); pricing strategies and price curves; plans and strategies for divestitures, mergers, expansion or acquisitions;
budgets; customer lists; research and development projects and results; financial and sales data; evaluations, opinions, and interpretations of information and data; marketing and merchandising techniques; service strategies, prospective
customers’ names and marks; grids and maps; electronic databases; models; specifications; computer programs; internal business records; contracts benefiting or obligating the Company or any of its Affiliates; bids or proposals submitted to any
third party; technologies and methods; training methods and training processes; organizational structure; salaries of personnel; payment amounts or rates paid to Employees or other service providers; and other such confidential or proprietary
information. 
 15.2 Prohibition Against Solicitation of Customers. Ancillary to the grant of the Option, to protect the
Company’s goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be
forfeited in whole or in part if within eighteen (18) months following the date you incur a Termination of Employment for any reason, you call on, service, solicit, or accept competing business from customers of the Company or any of its
Affiliates with whom you, within the previous eighteen (18) months, (i) had or made contact, or (ii) had access to information and files regarding, and such action is materially and demonstrably injurious to the Company or any of its
Affiliates. 
 15.3 Prohibition Against Solicitation of Employees. Ancillary to the grant of the Option, to protect the Company’s
goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be forfeited in
whole or in part if within twenty-four (24) months following the date you incur a Termination of Employment you: 
 (i) either directly
or indirectly, call on, solicit, or induce any other employee or officer of the Company or any of its Affiliates to terminate his or her employment with the Company or any of its Affiliates, or 

(ii) assist any other person or entity in such a solicitation. 

  
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 15.4 Other Prohibited Activities. Ancillary to the grant of the Option, to protect the
Company’s goodwill, and in consideration for the grant of the Option and any transfer of Common Stock pursuant to any exercise of the Option by you, by accepting the Option you agree that, in the discretion of the Committee, the Option may be
forfeited in whole or in part if during your affiliation with the Company you engage in fraud, embezzlement or other felony that is detrimental to the Company or any of its Affiliates. 

15.5 Determinations. All determinations under this Section 15, including whether you have engaged in any of the activities described in
any of Sections 15.1, 15.2, 15.3 or 15.4 shall be made by the Committee in its sole discretion. 
 16. ACKNOWLEDGMENTS AND AGREEMENTS BY YOU. In
accepting the award of the Option you acknowledge and agree as follows: 
 (i) you have helped to develop the Company’s goodwill,
including the relationships the Company has developed with its customers and employees and their identities, and are capable of diverting that goodwill; 

(ii) the consideration for the non-solicitation and confidentiality agreements contained in Sections 15.1 through 15.3, the grant of the Option
and the transfer of shares of Common Stock pursuant to the Option, are reasonably related to the Company’s interest in protecting its goodwill; 

(iii) you have no right to be granted the Option but rather, the grant of the Option is in the sole discretion of the Committee; 

(iv) the Confidential Information constitutes a valuable, special, and unique asset used by the Company and its divisions in their business to
obtain a competitive advantage over their competitors who do not have access to such Confidential Information; 
 (v) protection of the
Confidential Information against unauthorized disclosure and use is of critical importance to the Company and its divisions in maintaining their competitive position; 

(vi) the restrictions of Section 15.2 are limited by geography to the specific places, addresses, or locations where a customer is present
and available for soliciting or servicing; and 
 (vii) you shall bear sole responsibility for the amount of any taxes paid by you with
respect to your exercise of the Option, notwithstanding any subsequent recoupment under Section 14.2 of the proceeds of such Option exercise by the Company. 

17. OTHER AGREEMENTS. Nothing in these Terms and Conditions is intended to reduce the Company’s protections or your obligations under (1) any
other agreement between you and the Company or any of its Affiliates, (2) the common law, or (3) any applicable state or federal statute. 

  
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 18. GOVERNING LAW AND VENUE. The Plan, these Terms and Conditions and the award of the stock option set
forth in the Agreement shall be governed by the laws of the State of Texas, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of the Plan, these Terms and Conditions and the award of
the Option to the substantive law of another jurisdiction. In accepting the award of the Option you are deemed to agree to submit to the exclusive jurisdiction and venue of the federal or state courts of Harris County, Houston, Texas, to resolve any
and all issues that may arise out of or relate to the Plan, these Terms and Conditions and the award of the Option. 
 19. SEVERABILITY AND BLUE
PENCILING. If any single Section or clause of these Terms and Conditions should be found unenforceable, it shall be severed and the remaining Sections and clauses of these Terms and Conditions shall be enforced in accordance with the intent of
these Terms and Conditions. If any particular provision of these Terms and Conditions shall be adjudicated to be invalid or unenforceable, the Company and you specifically authorize the court making such determination to edit the invalid or
unenforceable provision to allow these Terms and Conditions, and the provisions thereof, to be valid and enforceable to the fullest extent allowed by law or public policy. 

20. MISCELLANEOUS. The Agreement is awarded pursuant to and is subject to all of the provisions of the Plan, including amendments to the Plan, if any.
In the event of a conflict between these Terms and Conditions and the Plan provisions, the Plan provisions will control. The terms “you” and “your” refer to the Participant named in the
Agreement. Capitalized terms that are not defined herein shall have the meanings ascribed to such terms in the Plan or the Agreement. 

  
 7LC STRATEGIC REALTY, LLC 

SECURITIES PURCHASE AGREEMENT

THIS SECURITIES
PURCHASE AGREEMENT (this “Agreement”) is entered into on July 24, 2015, by and between LC Strategic Realty,
LLC, a New York limited liability company (the “Company”), Capstone Financial Group, Inc., a Nevada corporation
(“Capstone”), Christopher Naugle and Lorissa Naugle, who hereby agree as follows:

1.                 
PURCHASE AND SALE OF STOCK.

1.1             
Sale and Issuance of Membership Interest Units. Subject
to the terms and conditions of this Agreement, Capstone shall purchase from the Company at the Closing, and the Company shall sell
and issue to Capstone at the Closing, membership interests of the Company representing a 20% equity ownership interest in the Company,
for a purchase price of $138,750 cash.  The membership interests issued to Capstone pursuant to this Agreement shall be referred
to in this Agreement as the “Membership Interest Units.”

1.2             
Mechanics.

(a)               
Closing. Subject to the terms and conditions of this Agreement, the initial purchase
and sale of the Membership Interest Units shall take place remotely via the exchange of documents and signatures immediately after
the execution and delivery of this Agreement (the “Closing”), whereby the Company shall sell and issue to Capstone,
and Capstone shall purchase from the Company, the Membership Interest Units. In addition, at the Closing, the parties shall enter
into the mutually agreed upon Members Agreement and the two mutually agreed upon Non-Competition Agreements (together with this
Agreement, the “Transaction Agreements”).

(b)               
At the Closing, the Company shall issue to Capstone a certificate representing the Membership
Interest Units that Capstone is purchasing, against payment of the purchase price therefor by check, wire transfer, or any combination
thereof, or such other form of payment as shall be mutually agreed upon by Capstone and the Company.

(c)               
All references herein to “Membership Interest Units” shall be deemed to be references
to such Membership Interest Units as constituted on the date of this Agreement, and in the event of any split, reverse split or
recapitalization the indicated number of Membership Interest Units shall automatically be deemed adjusted prospectively to reflect
such event.

2.                 
REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

The Company hereby
represents and warrants to Capstone that (except for any matters expressly set forth on a Disclosure Schedule previously delivered
by the Company to Capstone and countersigned by Capstone, if any such Disclosure Schedule has been so delivered and countersigned)
the following representations are true and correct:

2.1             
Organization; Good Standing, Qualification. The Company
is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of New York,
has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business as now
conducted and as presently proposed to be conducted, to execute and deliver this Agreement, to issue and sell the Membership Interest
Units, and to carry out the provisions of this Agreement. The Company is duly qualified and is authorized to transact business
and is in good standing

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as a foreign limited liability company
in each jurisdiction in which the failure to so qualify would have a material adverse effect on the Company or its business.

2.2             
Authorization. All limited liability company action
on the part of the Company, its managers, officers, directors and members necessary for the authorization, execution and delivery
of this Agreement, the performance of all obligations of the Company hereunder and the authorization, issuance, sale and delivery
of the Membership Interest Units being sold hereunder, has been taken. This Agreement and the other Transaction Agreements to which
the Company is a party constitute valid and legally binding obligations of the Company, enforceable in accordance with their respective
terms except (a) as limited by applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other
laws of general application affecting enforcement of creditors’ rights generally, and (b) as limited by laws relating
to the availability of specific performance, injunctive relief, or other equitable remedies.

2.3             
Valid Issuance of Membership Interest Units. The
Membership Interest Units that are being issued to or purchased by Capstone hereunder, when issued, sold, and delivered in accordance
with the terms of this Agreement for the consideration expressed herein, will be duly and validly issued, fully paid, and nonassessable.
Assuming the accuracy of the representations of Capstone in Section 3 of this Agreement, the Membership Interest Units will
be issued in compliance with all applicable federal and state securities laws. Capstone will not, by virtue of owning such Membership
Interest Units, be subject to any mandatory capital calls or be subject to any potential liability beyond the possible loss of
its Membership Interest Units investment.

2.4             
Capitalization. 

(a)               
 Immediately before the Closing, Christopher Naugle and/or Lorissa Naugle own all of the issued
and outstanding membership interests of the Company. All of the outstanding membership interests have been duly authorized,
are fully paid and nonassessable and were issued in compliance with all applicable federal and state securities laws.

(b)               
The Company has not reserved any membership interests for issuance to managers, members,
officers, directors, employees and consultants of the Company pursuant to any stock option, profits interests or other equity incentive
plan. There are no outstanding options, warrants, rights (including conversion or preemptive rights and rights of first offer or
first refusal or similar rights) or agreements, orally or in writing, to purchase or acquire from the Company any membership interests,
or any securities convertible into or exchangeable for membership interests, or any other equity-linked rights or securities.

(c)               
The Company has no obligation (contingent or otherwise) to purchase or redeem any of its equity
interests.

2.5             
Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or investigation pending or
to the Company’s knowledge, currently threatened in writing against the Company or any officer or director of the Company.
Neither the Company nor any of its managers, members, officers or directors is a party or
is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality
(in the case of managers, members, officers or directors, such as would affect the Company). There is no action, suit, proceeding
or investigation by the Company pending or which the Company intends to initiate.

2.6             
Compliance with Other Instruments. The Company is
not in violation or default (a) of any provisions of its articles of organization or operating agreement, (b) of any instrument,
judgment, order,

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writ or decree, (c) under any note,
indenture or mortgage, (d) under any lease, agreement, contract or purchase order to which it is a party or by which it is bound,
or (e) to its knowledge, of any provision of federal or state statute, rule or regulation applicable to the Company, the violation
of which would have a material adverse effect on the Company. The execution, delivery and performance of the Transaction Agreements
and the consummation of the transactions contemplated by the Transaction Agreements will not result in any such violation or be
in conflict with or constitute, with or without the passage of time and giving of notice, either (i) a default under any such provision,
instrument, judgment, order, writ, decree, contract or agreement; or (ii) an event which results in the creation of any lien, charge
or encumbrance upon any assets of the Company or the suspension, revocation, forfeiture, or nonrenewal of any material permit or
license applicable to the Company.

2.7             
Financial Statements. 

(a)               
The Company has delivered to Capstone its audited financial statements as of and for the fiscal
year ended December 31, 2014, and its unaudited financial statements (including balance sheet, income statement and statement
of cash flows) as of and for the period ended May 31, 2015 (collectively, the “Financial Statements”). The Financial
Statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) applied on
a consistent basis throughout the periods indicated , except that the unaudited Financial Statements may not contain all footnotes
required by GAAP and are subject to customary and non-material year-end adjustments. The Financial Statements fairly present in
all material respects the financial condition and operating results of the Company as of the dates, and for the periods, indicated
therein, subject in the case of the unaudited Financial Statements to normal year-end audit adjustments. Except as set forth in
the Financial Statements, the Company has no material liabilities or obligations, contingent or otherwise, other than (i) liabilities
incurred in the ordinary course of business after May 31, 2015; (ii) obligations under contracts and commitments incurred
in the ordinary course of business; and (iii) liabilities and obligations of a type or nature not required under GAAP to be reflected
in the Financial Statements, which, in all such cases, individually and in the aggregate would not have a material adverse effect
on the Company. The Company maintains and will continue to maintain a standard system of accounting established and administered
in accordance with GAAP. 

2.8             
Agreements; Actions. 

(a)               
Except for the Transaction Agreements, there are no agreements, understandings, instruments,
contracts or proposed transactions to which the Company is a party or by which it is bound that involve (i) fixed or (if reasonably
likely to be realized for an amount above such threshold) contingent obligations of, or payments to, the Company in excess of $50,000;
(ii) the license of any patent, copyright, trademark, trade secret or other proprietary right to or from the Company; (iii) the
grant of rights to license, market, or sell its products or services to any other individual, corporation, partnership, trust,
limited liability company, association or other entity (“Person”) that limit the Company’s exclusive right
to license, market, or sell its products or services, or (iv) indemnification by the Company with respect to infringements of proprietary
rights.

(b)               
No Company manager, employee or consultant is subject to any agreement (with a Person who
previously employed or engaged him or her) which to any extent restricts him or her from competing, from engaging in any business,
or from soliciting personnel. 

(c)               
The Company is not a guarantor or indemnitor of any indebtedness of any other Person.

2.9             
Intellectual Property. All Company employees and consultants have entered into customary nondisclosure/ nonuse/ proprietary-information-protection/
intellectual-property-

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assignment agreements with the Company,
and all such agreements remain in full force and effect. To the Company’s knowledge, no product or service marketed or sold
(or proposed to be marketed or sold) by the Company violates or will violate any license or infringes or will infringe any intellectual
property rights of any other party. Other than with respect to commercially available software products under standard end-user
object code license agreements, there are no outstanding options, licenses, agreements, claims, encumbrances or shared ownership
interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses
or agreements of any kind with respect to the patents, trademarks, service marks, trade names, copyrights, trade secrets, licenses,
information, proprietary rights and processes of any other Person. The Company has not received any communications alleging that
the Company has violated, or by conducting its business, would violate any of the patents, trademarks, service marks, tradenames,
copyrights, trade secrets or other proprietary rights or processes of any other Person. The Company has obtained and possesses
valid licenses to use all of the software programs present on the computers and other software-enabled electronic devices that
it owns or leases or that it has otherwise provided to its personnel for their use in connection with the Company’s business.
To the Company’s knowledge, it will not be necessary to use any inventions or works of authorship of any of its managers,
employees or consultants (or Persons it currently intends to hire) made before their employment or engagement by the Company.
Each manager, employee and consultant has assigned to the Company all intellectual property rights he or she owns that are related
to the Company’s business as now conducted and as presently proposed to be conducted. “Company Intellectual Property”
shall mean all patents, patent applications, trademarks, trademark applications, service marks, service mark applications, tradenames,
copyrights, trade secrets, domain names, mask works, information and proprietary rights and processes, similar or other intellectual
property rights, subject matter of any of the foregoing, tangible embodiments of any of the foregoing, licenses in, to and under
any of the foregoing, and any and all such cases as are necessary to the Company in the conduct of the Company’s business
as now conducted and as presently proposed to be conducted.

2.10         
Disclosure. No representation or statement made by
or on behalf of the Company to Capstone contains or contained any untrue statement of a material fact or, to the Company’s
best knowledge, omits to state a material fact necessary in order to make such representation or statement not misleading in light
of the circumstances under which they were made.

3.                 
REPRESENTATIONS AND WARRANTIES OF CAPSTONE.

Capstone hereby
represents and warrants to the Company that:

3.1             
Organization; Good Standing. Capstone is a corporation
duly organized, validly existing, and in good standing under the laws of the State of Nevada, has all requisite corporate power
and authority to own and operate its properties and assets and to carry on its business as now conducted and as presently proposed
to be conducted, to execute and deliver this Agreement, to purchase the Membership Interest Units, and to carry out the provisions
of this Agreement. 

3.2             
Authorization. All and any corporate action on the
part of Capstone, its officers, directors and stockholders necessary for the authorization, execution and delivery of this Agreement,
the performance of all obligations of the Company hereunder and the purchase of the Membership Interest Units being sold hereunder,
has been taken. This Agreement and the other Transaction Agreements constitute valid and legally binding obligations of Capstone,
enforceable in accordance with their respective terms except (a) as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance and other laws of general application affecting enforcement of creditors’ rights generally,
and (b) as limited by laws relating to the availability of specific performance, injunctive relief, or other equitable

    -4-

    

    

remedies.

3.3             
Purchase Entirely for Own Account. This Agreement
is made with Capstone in reliance upon Capstone’s representation to the Company, which by its execution of this Agreement
it hereby confirms, that the Membership Interest Units to be issued to or purchased by Capstone will be acquired for investment
for its own account, not as a nominee or agent, and not with a view to the resale or distribution of any part thereof, and that
it has no present intention of selling, granting any participation in, or otherwise distributing the same. 

3.4             
Reliance Upon Capstone’s Representations. Capstone
understands that the Membership Interest Units are not registered under the Securities Act of 1933, as amended (the “Securities
Act”) on the ground that the sale provided for in this Agreement and the issuance of securities hereunder is exempt from
registration under the Securities Act pursuant to an exemption from the registration provisions thereof, and that the Company’s
reliance on such exemption is predicated on the bona fide nature of the investment intent and the accuracy of the representations
of Capstone set forth herein. 

3.5             
Accredited Investor. Capstone further represents
to the Company that it is an “accredited investor” as defined in Rule 501(a) promulgated under the Securities
Act.

3.6             
Restricted Securities. Capstone understands that
the Membership Interest Units may not be sold, transferred, or otherwise disposed of without registration under the Securities
Act or an exemption therefrom, and that in the absence of an effective registration statement covering the Membership Interest
Units or an available exemption from registration under the Securities Act, the Membership Interest Units must be held indefinitely.
In particular, Capstone is aware that the Membership Interest Units may not be sold pursuant to Rule 144 promulgated under
the Securities Act unless all of the conditions of that Rule are met. Among the conditions for use of Rule 144 may be the
availability of current information to the public about the Company. Such information is not now available and the Company has
no present plans to make such information available.

3.7             
Legends. Capstone understands that, to the extent
applicable, each certificate or other document evidencing any of the Membership Interest Units shall be endorsed with the legends
substantially in the form set forth below: 

(a)               
The following legend under the Securities Act:

“THE MEMBERSHIP INTEREST UNITS
REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD, TRANSFERRED, ASSIGNED,
PLEDGED, OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER SUCH ACT, OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL OR
OTHER EVIDENCE, SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT REQUIRED.”

(b)               
Any legend imposed or required by the Company’s operating agreement or applicable state
securities laws or by any agreement entered into in connection with this Agreement. 

4.                 
MISCELLANEOUS.

4.1             
Entire Agreement. This Agreement (together with the
other Transaction Agreements) constitutes the entire agreement among the parties with respect to the subject matter hereof and
thereof and

    -5-

    

    

supersedes all prior and contemporaneous
agreements and undertakings, both written and oral, between the parties, with respect to the subject matter hereof; provided, that
any prior confidentiality agreement is not superseded and shall remain in full force and effect.

4.2             
Survival of Warranties. The warranties and representations
of the Company and Capstone contained in or made pursuant to this Agreement shall survive the execution and delivery of this Agreement
and the Closing. 

4.3             
Successors and Assigns; Transfers. Except as otherwise
provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors
and assigns of the parties (including permitted transferees of any Membership Interest Units sold hereunder). Nothing in this Agreement,
express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns
any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.

4.4             
Governing Law. This Agreement shall be governed by
and construed under the laws of the State of New York as applied to agreements among New York residents entered into and to be
performed entirely within New York. The parties hereto agree to submit to the exclusive jurisdiction of and venue in the federal
and state courts seated in Erie County, New York with respect to the interpretation of this Agreement or for the purposes of any
action arising out of or relating to this Agreement.

4.5             
Counterparts. This Agreement may be executed in counterparts,
each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Such counterparts
may also be delivered by email.

4.6             
Titles and Subtitles. The titles and subtitles used
in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

4.7             
Notices. Unless otherwise provided, all notices and
other communications required or permitted under this Agreement shall be in writing and shall be mailed by United States first-class
mail, postage prepaid, sent by email or delivered personally by hand or by a nationally recognized courier addressed to the party
to be notified at the address or email address indicated for such person on the Company’s records, or at such other address
or email address as such party may designate with 10 days’ advance written notice to the other parties hereto pursuant to
this Section 4.7. All such notices and other written communications shall be effective on the date of mailing or delivery.

4.8             
Amendments and Waivers. No amendment or modification
hereto or waiver of any of the terms or provisions hereof shall be valid unless set forth in a writing that is executed by each
of the parties hereto. No such waiver of any term, provision or condition of this Agreement, in any one or more instances, shall
be deemed to be or construed as a further waiver of any such term, provision or condition or as a waiver of any other term, provision
or condition of this Agreement. 

4.9             
Facilitation. Each party hereto agrees to execute
and perform such other documents (including without limitation an appropriate amendment of the Company’s operating agreement)
and acts as are reasonably required in order to facilitate, effectuate and evidence the terms of this Agreement and the intent
thereof, and to cooperate in good faith in order to effectuate the provisions and intent of this Agreement.

4.10         
Severability. If one or more provisions of this Agreement
are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of the
Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance

    -6-

    

    

with its terms.

5.                 
AFFILIATED ENTITIES. Christopher Naugle and Lorissa Naugle agree that they shall cause any other entities or proprietorships
through which the Company and/or either of them directly or indirectly carry on any business with
a primary focus on (a) real estate, (b) media/entertainment/show business, or (c) endorsements/advertisements/personal appearances/use
of likeness/monetization of celebrity (other than LC Strategic Holdings, LLC) to issue to Capstone, for no additional consideration,
a number of its equity interests sufficient to give Capstone a 20% equity interest therein (Provided, that without Capstone’s
express prior written consent Capstone shall not be given any equity interest which results in it having unlimited liability, e.g.,
a general partnership interest, or being subject to mandatory capital calls). It is understood that this Section 5 shall not apply
to Syndicated Properties, LLC so long as its business is limited to a property at 37 Bridgman Street, Buffalo, New York and shall
not apply to Syndicated Holdings, LLC so long as its business is limited to the Fillmore Creek Townhouses project in Ellicottville,
New York and/or a property at 22 Somerton Avenue, Kenmore, New York.

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

 

	COMPANY:	 	 	LC STRATEGIC REALTY, LLC
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By: 	/s/
    Lorissa Naugle
	 	 	 	 	Name: Lorissa Naugle
	 	 	 	 	Title: Chief Executive Officer
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	CAPSTONE:	 	 	CAPSTONE FINANCIAL GROUP, INC.
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	By:	/s/
    Darin     Pastor
	 	 	 	 	Name: Darin Pastor
	 	 	 	 	Title: Chief Executive Officer
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	/s/
    Christopher Naugle
	 	 	 	 	CHRISTOPHER
    NAUGLE
	 	 	 	 	 	 
	 	 	 	 	 	 
	 	 	 	 	/s/
    Lorissa Naugle
	 	 	 	 	LORISSA NAUGLE

 

 

 

    -7-

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