Monaker Group, Inc. 8-K

Exhibit 10.1

DEBT CONVERSION AND VOTING AGREEMENT

This Debt Conversion and Voting Agreement (this “ Agreement ”) dated August 24, 2017, is by and between, Monaker Group, Inc., a Nevada corporation (“ Monaker ”) and Mark A. Wilton, an individual (“ Wilton ”), each a “ Party ” and collectively the “ Parties. ”

W I T N E S S E T H :

WHEREAS , Monaker has previously issued various promissory notes to Wilton, which as of the date of this Agreement have an aggregate principal balance of $1,409,326 (the “ Amount Owed ”) and are due and payable on December 17, 2017 (the “ Notes ”);

WHEREAS , the Notes accrue interest at the rate of 6% per annum and the total monthly interest due to Wilton currently totals $15,000 per month;

WHEREAS , the Notes allow Wilton the right to convert the amount due under such Notes into common stock, $0.00001 par value per share of Monaker (“ Common Stock ”), at a fixed rate of $5.00 per share and allow Monaker to force the conversion of the Notes into Common Stock at a conversion price equal to 80% of the 5 day trailing average closing price of the Common Stock;

WHEREAS , Monaker desires to convert the $1,409,326 balance of the Notes into an aggregate of 704,663 shares of Common Stock (the “ Conversion Shares ”) in consideration for the cancellation and forgiveness of the Amount Owed under the Notes, including all accrued interest thereon (the “ Amount Converted ”) and the termination of the Notes, and to pay Wilton the Monthly Payments (as defined below) provided that Wilton agrees to the terms and conditions of this Agreement, including the Voting Rights set forth below;

WHEREAS , Wilton agrees to convert the Amount Converted into the Conversion Shares and the requirement for Monaker to pay the Monthly Payments and to terminate the Notes, pursuant to the terms of this Agreement (the “ Conversion ”) and to also provide the Voting Rights set forth below; and

WHEREAS , the Parties desire to set forth in writing herein the terms and conditions of their agreement and understanding concerning Conversion, requirement to pay the Monthly Payments and the Voting Rights set forth below.

NOW, THEREFORE , in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, the receipt and sufficiency of which is hereby acknowledged by the Parties, the Parties hereto agree as follows:

1.       

Conversion and Forgiveness of Amount Converted and Notes .

(a)       

In consideration and in full satisfaction of the forgiveness of the entire Amount Converted and cancellation, termination and forgiveness of all of the Promissory Notes evidencing amounts owed by Monaker to Wilton, Monaker agrees to (i) issue Wilton the Conversion Shares; and (ii) pay Wilton $45,000 in cash, payable at the rate of $15,000 per month, on September 15, 2017, October 15, 2017 and November 15, 2017 (the “ Monthly Payments ”).

(b)       

Wilton is the sole owner of the Amount Converted and Notes and has good and marketable title to the Amount Converted and Notes, free and clear of any liens, claims, charges, options, rights of tenants or other encumbrances. Wilton has sole managerial and dispositive authority with respect to the Amount Converted.  

2.       

Voting Rights.

In partial consideration for the Conversion, Wilton agrees to the following:

(a)       

Wilton shall not, except with the written approval of Monaker, directly or indirectly, sell, transfer, pledge, assign, gift-over, hedge or otherwise dispose of, or enter into any contract, option, derivative arrangement or other arrangement (including any profit-sharing arrangement) or understanding with respect to, or create any lien on, the sale, transfer, gift-over, hedge pledge, assignment or other disposition (including any options or warrants to purchase shares) of, (i) the Conversion Shares, (ii) any other shares of Common Stock of Monaker which Wilton holds as of the date of this Agreement and (iii) any other voting shares of Monaker which Wilton should obtain rights to or ownership of after the date of this Agreement and prior to the Voting Rights Termination Date (as defined below)(collectively (i) through (iii), the “ Wilton Shares ”), to any person (any such action, a “ Transfer ”).

(b)       

Wilton shall not, except as contemplated by the terms of this Agreement (i) enter into any voting arrangement, whether by proxy, voting agreement, voting trust, power-of-attorney or other authorization or consent or otherwise, with respect to the Wilton Shares or (ii) take any other action that would in any way restrict, limit, contravene or interfere with the performance of his obligations hereunder or the transactions contemplated hereby or make any representation or warranty of Wilton herein untrue or incorrect in any material respect.

(c)       

Any action taken in violation of the Section 2 (a) or Section 2 (b) shall be null and void ab initio. If any involuntary Transfer of any of the Wilton Shares shall occur (including, but not limited to, a sale by Wilton’s trustee in any bankruptcy, or a sale to a purchaser at any creditor’s or court sale), the transferee (which term, as used herein, shall include any and all transferees and subsequent transferees of the initial transferee) shall take and hold Wilton Shares subject to all of the restrictions, liabilities and rights under this Agreement and the Voting Rights, which shall continue in full force and effect until the Voting Rights Termination Date (as defined below).

(d)       

At any meeting (annual, special or otherwise) of the shareholders of Monaker or in connection with any shareholder consent or approval of the shareholders of Monaker, including, in each case above, but not limited to in connection with the approval of authority for the Board of Directors of Monaker to approve a reverse stock split, the appointment of all Board of Directors recommended nominees as members of the Board of Directors, the approval of an equity stock plan, the approval of the executive compensation of Monaker and the frequency of the vote on such executive compensation, as well as the ratification of Monaker’s auditors, and any other or alternative proposals recommended or requested by the Board of Directors of Monaker (collectively, the “ Actions ”), or at any adjournment thereof or in any other circumstances upon which a vote, consent or other approval (including by written consent) with respect to such matters is sought, Wilton shall or shall cause the holder of record of the Wilton Shares on any applicable record date to, (i) appear at each such meeting or otherwise cause all of the Wilton Shares entitled to vote to be counted as present thereat for purposes of calculating a quorum and (ii) vote (or cause to be voted), in person or by proxy (at the option of Monaker), or shall consent, execute a consent or cause to be executed a consent in respect of, the Wilton Shares (A) in favor of the Actions and (B) against (x) any action or agreement which could reasonably be expected to impede, interfere with, prevent, delay or adversely affect the Actions, and (y) any action, proposal, transaction or agreement that could reasonably be expected to result in a breach of any covenant, representation or warranty or any other obligation or agreement of Wilton under this Agreement.

(e)       

Wilton covenants and agrees that, beginning on the date of this Agreement and ending on the Voting Rights Termination Date, Wilton shall not and shall cause any affiliates or representative not to directly or indirectly take any action which could reasonably be expected to impede, interfere with, prevent, delay or adversely affect the Actions. 

(f)       

Wilton agrees to permit Monaker to publish and disclose in Monaker’s information or proxy statement and related filings under the securities laws Wilton’s identity and ownership of the Wilton Shares and the nature of his commitments, arrangements and understandings under this Agreement and any other information required by applicable law.

(g)       

Wilton hereby irrevocably grants to, and appoints, William Kerby and any other individual who shall hereafter be designated by Monaker, Wilton’s proxy and attorney-in-fact (with full power of substitution), for and in the name, place and stead of Wilton, to vote the Wilton Shares, or grant a consent or approval in respect of such Wilton Shares, at any meeting of shareholders of Monaker or at any adjournment thereof or in any other circumstances upon which their vote, consent or other approval is sought, in favor of the Actions.

(h)       

Wilton represents that any proxies heretofore given in respect of the Wilton Shares are not irrevocable, and that any such proxies are hereby revoked.

(i)       

Wilton hereby affirms that the irrevocable proxy set forth in this Section 2 is given in connection with Monaker’s execution of this Agreement, and that such irrevocable proxy is given to secure the performance of the duties of Wilton under this Agreement. Wilton hereby further affirms that the irrevocable proxy is coupled with an interest and may under no circumstances be revoked, subject to Section 2(j) herein. Wilton hereby ratifies and confirms all that such irrevocable proxy may lawfully do or cause to be done by virtue hereof. Such irrevocable proxy is executed and intended to be irrevocable in accordance with applicable law. Such irrevocable proxy shall be valid until the Voting Rights Termination Date.

(j)       

The rights and obligations of this Section 2 (the “ Voting Rights ”) shall remain in effect until the earlier of August 22, 2020 and the date that Monaker provides Wilton written notice of its consent to termination of such Voting Rights. 

[Remainder of page left blank.]

3.       

Release.

(a)       

In consideration for the Parties agreeing to enter into and to be bound by the terms and conditions of this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the Parties, (i) Monaker; and (ii) Wilton (each of (a)(i) and (a)(ii) for this purposes of this Section 3(a) , a “ Releasing Party ” and collectively the “ Releasing Parties ”), on behalf of each of such Releasing Party’s and their affiliates, officers, directors, employees, investors, shareholders, administrators, predecessor and successor corporations, attorneys, affiliates, agents, and assigns, hereby release, acquit and forever discharge each other, and their current, past and future affiliates, agents, directors, officers, investors, servants, representatives, successors, shareholders, employees, administrators, predecessor and successor corporations, attorneys, and assigns (each as applicable, the “ Released Parties ”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, claims and demands, whether asserted or unasserted, whether known or unknown, suspected or unsuspected, which they ever had or now have, upon or by reason of any manner, cause, causes or thing whatsoever, arising from the beginning of time to the date of this Agreement, in law or equity and all rights, obligations, claims, demands, whether in contract, tort, or state and/or federal law (each a “ Claim ”) arising from or relating to, or associated with the Notes and Amount Owed, and any other Claims whatsoever that any Releasing Party has against any other Releasing Party as of the date of this Agreement, except for the obligations set forth herein (the “ Release ”).

(b)       

The Releasing Parties acknowledge that there is a risk that, after execution of this Agreement, they may discover, incur or suffer claims that were unknown or unanticipated at the time of this Agreement, including, but not limited to, unknown or unanticipated claims that arise from, are based upon, or are related to, any facts underlying the releases set forth above in Section 3(a) (collectively the “ Released Claims ”), which had they been known or more fully understood, may have affected the Releasing Parties’ decisions to execute the Agreement as it currently is written. Each Releasing Party knowingly and expressly assumes the risk of these unknown and unanticipated claims and agrees that this Agreement and the general releases set forth within it apply to all such unknown, unanticipated or potential claims. Furthermore, it is the intention of the Releasing Parties, by entering into this Agreement, to settle and release fully, finally and forever all Released Claims and any and all claims that now exist, or may have at any time existed or shall come to exist in connection with the Released Claims. In furtherance of the Releasing Parties’ intention, the releases given within this Agreement shall be and remain in effect as full and complete releases and discharges of the Released Claims and of any related matters notwithstanding the discovery by any Releasing Party of the existence of any additional or different claims or the facts relative to any such claims. In furtherance of the Release, each Releasing Party waives any right such may have under any statutes and regulations, which state, in substance:

‘‘ A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him may have materially affected his settlement with the debtor .’’

(c)       

The Releasing Parties are not aware of any claims not being released herein against them.

(d)       

The Releasing Parties agree that they will forever refrain and forbear from commencing, instituting or prosecuting any lawsuit, action or other proceeding, in law, equity or otherwise, against the Released Parties, in any way arising out of or relating to the Released Claims. The Releasing Parties each acknowledge and agree that monetary damages alone are inadequate to compensate the other Party (or their assigns) for injury caused or threatened by a breach of this “ Covenant Not to Sue ” and that preliminary and permanent injunctive relief restraining and prohibiting the prosecution of any action or proceeding brought or instituted in violation of this Covenant Not to Sue is a necessary and appropriate remedy in the event of such a breach. Nothing contained in this Section, however, shall be interpreted or construed to prohibit or in any way to limit the right of a non-breaching Released Party or of any of its assigns to obtain, in addition to injunctive relief, an award of monetary damages against any person or entity breaching this Covenant Not to Sue and Agreement.

(e)       

Notwithstanding the foregoing, any action or proceeding brought for breach of or to interpret or enforce the terms of this Agreement is excepted from each of the Covenants Not to Sue set forth above.

(f)       

The Releasing Parties understand, acknowledge and agree that the releases set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, claim, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such releases. Similarly, the Releasing Parties agree that no fact, event, circumstance, evidence or transaction which could now be asserted or which may hereafter be discovered relating to the subject matter discussed above, shall affect in any manner the final, absolute and unconditional nature of the release set forth above.

(g)       

The Parties hereto represent that each has not assigned, in whole or in part, any claim, demand and/or causes of action against any other Party, or their Affiliates, agents, officers, directors, servants, representatives, successors, employees, attorneys, or assigns to any person or entity prior to such Party’s execution of this Agreement.

4.       

Effective Date . The “ Effective Date ” of this Agreement and the Conversion shall be 8:00 a.m. Eastern Standard Time on August 22, 2017.

5.       

Full Satisfaction . Wilton agrees that he is accepting the Conversion Shares and Monthly Payments in full satisfaction of (i) the Amount Converted, and (ii) all obligations of Monaker under the Notes, all of which are being converted into the Conversion Shares and that as such Wilton will no longer have any rights of repayment against the Company as to the Amount Converted or under the Notes, which are being converted into Conversion Shares and the Monthly Payments pursuant to this Agreement.

6.       

Mutual Representations, Covenants and Warranties .

(a)       

The Parties have all requisite power and authority, corporate or otherwise, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. The Parties have duly and validly executed and delivered this Agreement and will, on or prior to the consummation of the transactions contemplated herein, execute, such other documents as may be required hereunder and, assuming the due authorization, execution and delivery of this Agreement by the Parties hereto and thereto, this Agreement constitutes, the legal, valid and binding obligation of the Parties enforceable against each Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles.

(b)       

The execution and delivery by the Parties of this Agreement and the consummation of the transactions contemplated hereby and thereby do not and shall not, by the lapse of time, the giving of notice or otherwise: (a) constitute a violation of any law; or (b) constitute a breach or violation of any provision contained in the document(s) regarding organization and/or management of the Parties, if applicable; or (c) constitute a breach of any provision contained in, or a default under, any governmental approval, any writ, injunction, order, judgment or decree of any governmental authority or any contract to which either the Company or Wilton is a party or by which either the Company or Wilton is bound or affected.

(c)       

Wilton hereby covenants that he will, whenever and as reasonably requested by the Company and at Wilton’s sole cost and expense, do, execute, acknowledge and deliver any and all such other and further acts, deeds, assignments, transfers, conveyances, confirmations, powers of attorney and any instruments of further assurance, approvals and consents as the Company may reasonably require in order to complete, insure and perfect the transactions contemplated herein, including, but not limited to the issuance of the Conversion Shares.

(d)       

Any individual executing this Agreement on behalf of a Party has authority to act on behalf of such Party and has been duly and properly authorized to sign this Agreement on behalf of such Party.

7.       

Wilton Representations and Warranties.

(a)       

Wilton is or will be acquiring the Conversion Shares, for his own account, for investment purposes only and not with a view to, or for sale in connection with, a distribution, as that term is used in Section 2(11) of the Securities Act of 1933, as amended (the “ Securities Act ”), in a manner which would require registration under the Securities Act or any state securities laws. Wilton can bear the economic risk of investment in the Conversion Shares, has knowledge and experience in financial business matters, is capable of bearing and managing the risk of investment in the Conversion Shares and is an “ accredited investor ” as defined in Regulation D under the Securities Act. Wilton recognizes that the Conversion Shares have not been registered under the Securities Act, nor under the securities laws of any state and, therefore, cannot be resold unless the resale of the Conversion Shares is registered under the Securities Act or unless an exemption from registration is available. Wilton has carefully considered and has, to the extent he believes such discussion necessary, discussed with his professional, legal, tax and financial advisors, the suitability of an investment in the Conversion Shares for his particular tax and financial situation and his respective advisers, if such advisors were deemed necessary, have determined that the Conversion Shares are a suitable investment for him. Wilton has not been offered the Conversion Shares by any form of general solicitation or advertising, including, but not limited to, advertisements, articles, notices or other communications published in any newspaper, magazine, or other similar media or television or radio broadcast or any seminar or meeting where, to Wilton’s knowledge, those individuals that have attended have been invited by any such or similar means of general solicitation or advertising. Wilton has had an opportunity to ask questions of and receive satisfactory answers from Monaker, or persons acting on behalf of Monaker, concerning the terms and conditions of the Conversion Shares and Monaker, and all such questions have been answered to the full satisfaction of Wilton. Neither Monaker, nor any other party, has supplied Wilton any information regarding the Conversion Shares or an investment in the Conversion Shares other than as contained in this Agreement, and Wilton is relying on his own investigation and evaluation of the Company and the Conversion Shares and not on any other information.

(b)       

Wilton understands and agrees that a legend has been or will be placed on any certificate(s) or other document(s) evidencing the Conversion Shares in substantially the following form:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED OR ANY STATE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED UNLESS (I) THEY SHALL HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED AND ANY APPLICABLE STATE SECURITIES ACT, OR (II) THE CORPORATION SHALL HAVE BEEN FURNISHED WITH AN OPINION OF COUNSEL, SATISFACTORY TO COUNSEL FOR THE CORPORATION, THAT REGISTRATION IS NOT REQUIRED UNDER ANY SUCH ACTS.  

8.       

Miscellaneous .

(a)       

Assignment . All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns. No rights hereunder may be assigned by Wilton without the prior written approval of Monaker.

(b)       

Remedies . The Parties agree that the covenants and obligations contained in this Agreement relate to special, unique, and extraordinary matters and that a violation of any of the terms of this Agreement would cause irreparable injury in an amount which would be impossible to estimate or determine and for which any remedy at law would be inadequate. Therefore, the Parties agree that if either Party fails or refuses to fulfill any of its obligations under this Agreement or to make any payment or deliver any instrument required under this Agreement, then the other Party shall have the remedy of specific performance, and this remedy shall be cumulative and nonexclusive and shall be in addition to any other rights and remedies otherwise available under any other contract or at law or in equity and to which that Party might be entitled.

(c)       

No Presumption from Drafting . This Agreement has been negotiated at arm’s-length between persons knowledgeable in the matters set forth within this Agreement. Accordingly, given that all Parties have had the opportunity to draft, review, and/or edit the language of this Agreement, no presumption for or against any Party arising out of drafting all or any part of this Agreement will be applied in any action relating to, connected with, or involving this Agreement. In particular, any rule of law, legal decisions, or common law principles of similar effect that would require interpretation of any ambiguities in this Agreement against the Party that has drafted it, is of no application and is expressly waived by all Parties. The provisions of this Agreement shall be interpreted in a reasonable manner to affect the intentions of the Parties.

(d)       

Governing Law and Jurisdiction . This Agreement shall be governed by, enforced, and construed under and in accordance with the laws of the United States of America and, with respect to the matters of state law, with the laws of the State of Florida without giving effect to principles of conflicts of law under Florida law. Each of the Parties: (a) irrevocably agrees that venue for any claim or dispute under this Agreement is proper in Broward County, Florida, irrevocably agrees that all claims and disputes may be heard and determined in Broward County, Florida, courts; and (b) irrevocably waives, to the fullest extent permitted by applicable law, any objection it may now or subsequently have to the laying of venue in any proceeding brought in a Broward County, Florida, court.

(e)       

Entire Agreement, Amendments and Waivers . This Agreement constitutes the entire agreement of the Parties regarding the subject matter of the Agreement and expressly supersedes all prior and contemporaneous understandings and commitments, whether written or oral, with respect to the subject matter hereof. No variations, modifications, changes or extensions of this Agreement or any other terms hereof shall be binding upon any Party hereto unless set forth in a document duly executed by such Party or an authorized agent of such Party.

(f)       

Headings; Gender . The paragraph headings contained in this Agreement are for convenience only, and shall in no manner be construed as part of this Agreement. All references in this Agreement as to gender shall be interpreted in the applicable gender of the Parties.

(g)       

Severability . Should any clause, sentence, paragraph, subsection, Section or Article of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the Parties agree that the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom by the Parties, and the remainder will have the same force and effectiveness as if such stricken part or parts had never been included herein. 

(h)       

Arm’s Length Negotiations . Each Party herein expressly represents and warrants to all other Parties hereto that (a) before executing this Agreement, said Party has fully informed itself of the terms, contents, conditions and effects of this Agreement; (b) said Party has relied solely and completely upon its own judgment in executing this Agreement; (c) said Party has had the opportunity to seek and has obtained the advice of its own legal, tax and business advisors before executing this Agreement; (d) said Party has acted voluntarily and of its own free will in executing this Agreement; and (e) this Agreement is the result of arm’s length negotiations conducted by and among the Parties and their respective counsel.

(i)       

Construction . When used in this Agreement, unless a contrary intention appears: (i) a term has the meaning assigned to it; (ii) “ or ” is not exclusive; (iii) “ including ” means including without limitation; (iv) words in the singular include the plural and words in the plural include the singular, and words importing the masculine gender include the feminine and neuter genders; (v) any agreement, instrument or statute defined or referred to herein or in any instrument or certificate delivered in connection herewith means such agreement, instrument or statute as from time to time amended, modified or supplemented and includes (in the case of agreements or instruments) references to all attachments thereto and instruments incorporated therein; (vi) the words “ hereof ”, “ herein ” and “ hereunder ” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision hereof; (vii) references contained herein to Article, Section, Schedule and Exhibit, as applicable, are references to Articles, Sections, Schedules and Exhibits in this Agreement unless otherwise specified; (viii) references to “ writing “ include printing, typing, lithography and other means of reproducing words in a visible form, including, but not limited to email; (ix) references to “ dollars ”, “ Dollars ” or “ $ ” in this Agreement shall mean United States dollars; (x) reference to a particular statute, regulation or Law means such statute, regulation or Law as amended or otherwise modified from time to time; (xi) any definition of or reference to any agreement, instrument or other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set forth herein); (xii) unless otherwise stated in this Agreement, in the computation of a period of time from a specified date to a later specified date, the word “ from ” means “ from and including ” and the words “ to ” and “ until ” each mean “ to but excluding ”; (xiii) references to “ days ” shall mean calendar days; and (xiv) the Exhibits attached hereto are incorporated herein by reference and made a part hereof with the same force and effect as if herein restated in full and all references herein to “ Agreement ” or similar terms shall mean this Agreement including all Exhibits hereto.

(j)       

Counterparts, Effect of Facsimile, Emailed and Photocopied Signatures . This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail (any such delivery, an “ Electronic Delivery ”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. At the request of any Party, each other Party shall re execute the original form of this Agreement and deliver such form to all other Parties. No Party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such Party forever waives any such defense, except to the extent such defense relates to lack of authenticity.    

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first written above.

(“ Monaker ”)

Monaker Group, Inc.

(“ Wilton ”)

Monaker Group, Inc. 8-K

Exhibit 10.3 

SECURED CONVERTIBLE PROMISSORY NOTE

FOR VALUE RECEIVED, the undersigned, BETTWORK INDUSTRIES, INC., a Nevada Corporation, having an address at Geneva 1207, Switzerland (“ Borrower ”), promises to pay to the order of MONAKER GROUP, INC. , a Nevada corporation, with an office at 2690 Weston Road, Suite 200, Weston, Florida 33331, and its assigns (“Holder”), the principal sum of TWO million NINE HUNDRED Thousand ($2,900,000.00) Dollars (the “ Principal Amount ”), together with interest on the unpaid Principal Amount thereof computed from the date of the executed PURCHASE AGREEMENT by and between Borrower and Holder, dated on or around the date hereof (the “ Sale Date ” and the “Agreement”), at the rates provided herein until August___, 2020 or such earlier date on which the Principal Amount becomes due and payable as provided herein (as applicable, the “ Maturity Date ”); provided, however, that from and after: (i) the Maturity Date, whether upon stated maturity, acceleration or otherwise, or (ii) the date on which the interest rate hereunder is increased to the Default Rate (as hereinafter defined) as provided herein, such additional interest shall be computed at the Default Rate.

As used herein, the term “ Default Rate ” shall mean a rate of interest of twelve percent (12.0%) per annum, but in no event shall the Default Rate be in excess of the Maximum Rate (as hereinafter defined).

If any payment of interest is not paid within five (5) days from the due date for such payment, a late charge equal to the lesser of ten percent (10%) of such overdue payment or the maximum amount permitted by applicable law shall automatically become due to the holder of this Secured Convertible Promissory Note (the “ Note ”), subject, however, to the limitation that late charges may be assessed only once on each overdue payment. Said late charges do not constitute interest and shall constitute compensation to the holder of this Note for collection and co-lender administration costs incurred hereunder. In addition, if any payment of principal or interest is not paid when due, the holder of this Note shall have the right, upon notice to Borrower, to increase the rate of interest per annum on all amounts outstanding to the Default Rate and, upon said notice, such rate increase shall be effective retroactively as of the date from which the interest component of such overdue payment began to accrue and shall remain in force and effect for so long as such default shall continue. This paragraph shall not be construed as an agreement or privilege to extend the due date of any payment, nor as a waiver of any other right or remedy accruing to the holder of this Note by reason of any default.

Borrower will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, rights and franchises and comply with all laws applicable to Borrower, except where the failure to comply could not reasonably be expected to have a material adverse effect on Borrower.

2.0 Principal and Interest . Principal and interest hereunder shall be payable as follows:

(a)

beginning on the Sale Date, interest on the Principal Amount outstanding hereof shall accrue at the rate of Six (6.0%) percent per annum, for the period beginning on and including the Sale Date to the last day of the month in which the Sale Date occurs (“ Short Interest ”), and shall accrue and be payable within five (5) days of the end of such month in which such Short Interest accrued.

(b)

Interest only at the rate per annum equal to the greater of (i) Six (6%) percent and (ii) the Prime Rate (as defined below) as adjusted from time to time, plus Three and Three Quarters Percent (3 3/4%) on the Principal Amount outstanding hereof shall accrue from ______ through ______ and be paid monthly, in arrears, in an amount, as determined by Holder, equal to one-twelfth (1/12th) of the annual interest payments for such period commencing ________ and continuing on the first day of each month thereafter through and including ________.

(c)

All principal, interest and other sums due hereunder shall be due and payable in full on the Maturity Date.

As used herein, the term “Prime Rate” shall mean the rate of interest published in The Wall Street Journal from time to time as the “Prime Rate.” If more than one “Prime Rate” is published in The Wall Street Journal for a day, the average of such “Prime Rates” shall be used, and such average shall be rounded up to the nearest one-eighth of one percent (0.125%). If The Wall Street Journal ceases to publish the “Prime Rate,” the Holder shall select an equivalent publication that publishes such “Prime Rate,” and if such “Prime Rates” are no longer generally published or are limited, regulated or administered by a governmental or quasigovernmental body, then Holder shall select a comparable interest rate index. If interest on this Note is calculated at the Prime Rate as provided herein, then the interest rate will change on September 1, 2017 and on the first day of each month thereafter following any change in the Prime Rate.

3.0 Calculation of Interest Payments . Each payment hereunder shall be credited first to Holder’s collection expenses, next to late charges, next to unpaid interest, and the balance, if any, to the reduction of the Principal Amount. The interest on this Note shall be calculated on the basis of a 30-day month and a 360-day year.

4.0 Prepayment of Note . This Note may be prepaid in whole or in part at any time, without penalty or premium, provided that Borrower provides the Holder at least fifteen (15) days prior written notice of its intention to repay such Note, during which fifteen (15) day period the Conversion Right (as defined below) shall apply.

5.0 Convertibility of Note . Holder will have the right to convert this Note into common stock of the Borrower at any time during the term of the Note (the “Conversion Right”). The Holder will be limited to converting shares of the Note to common stock of the Borrower prior to the Note being paid in full, such that Monaker’s beneficial ownership (as defined in the Securities Exchange Act of 1934, as amended) of common stock in Borrower will not exceed 4.99% of Borrower’s issued and outstanding shares of common stock. By written notice to the Borrower, the Holder may waive the provisions of this Section regarding the 4.99% limitation, but any such waiver will not be effective until the 61st day after delivery of such notice. If Holder elects to convert all or any portion of the Note during the term of the Note, the conversion price will be $1.00 per share (the “Conversion Price”, as adjusted for recapitalizations, stock splits, combinations and dividends) unless, prior to the Note being paid in full, Borrower completes a capital raise or acquisition and issues common stock or common stock equivalents (including, but not limited to convertible securities) with a price per share (as determined in the reasonable discretion of the Holder) less than the Conversion Price then in effect (a “Transaction”), then the Conversion Price will be adjusted to match such lower pricing structure associated with the Transaction (provided such repricing shall continue to apply to subsequent Transactions which occur prior to the Note being paid in full as well).

6.0 Borrower’s Waiver of certain rights . Borrower and each surety, endorser and guarantor hereof hereby waive all demands for payment, presentations for payment, notices of intention to accelerate maturity, notices of acceleration of maturity, demand for payment, protest, notice of protest and notice of dishonor, to the extent permitted by law. Borrower further waives trial by jury. No extension of time for payment of this Note or any installment hereof, no alteration, amendment or waiver of any provision of this Note and no release or substitution of any collateral securing Borrower’s obligations hereunder shall release, modify, amend, waive, extend, change, discharge, terminate or affect the liability of Borrower under this Note.

Any forbearance by Holder in exercising any right or remedy hereunder or under any other agreement or instrument in connection with the Loan or otherwise afforded by applicable law, shall not be a waiver or preclude the exercise of any right or remedy by Holder. The acceptance by Holder of payment of any sum payable hereunder after the due date of such payment shall not be a waiver of the right of the Holder to require prompt payment when due of all other sums payable hereunder or to declare a default for failure to make prompt payment.

If this Note is placed in the hands of an attorney for collection, Borrower shall pay all costs incurred and reasonable attorneys’ fees for legal services in the collection effort, whether or not a suit is brought.

At the election of the Holder, all payments due hereunder may be accelerated, and this Note shall become immediately due and payable without notice or demand, upon the occurrence of any of the following events (each an “ Event of Default ”): (1) Borrower fails to pay on or before the date due, any amount of principal and/or interest payable hereunder; (2) Borrower fails to perform or observe any other term or provision of this Note with respect to payment; provided , however , that Borrower shall be provided with a ten (10) calendar day period to cure same; (3) Borrower fails to perform or observe any other term or provision of this Note; provided , however , that Borrower shall be provided with written notice from Holder of any non-monetary default under this Note and a thirty (30) calendar day period to cure same; (4) there exists a default under the Agreement (as hereinafter defined), or a default under or misrepresentation contained in any other agreement, document or certificate of Borrower, which default is not cured within any grace period expressly provided therefor in such document; (5) Borrower shall: (i) become insolvent or take any action which constitutes its admission of inability to pay its debts as they mature; (ii) make an assignment for the benefit of creditors, file a petition in bankruptcy, petition or apply to any tribunal for the appointment of a custodian, receiver or a trustee for it or a substantial portion of its assets; (iii) commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation or statute of any jurisdiction, whether now or hereafter in effect; (iv) have filed against it any such petition or application in which an order for relief is entered or which remains undismissed for a period of thirty (30) days or more; (v) indicate its consent to, approval of or acquiescence in any such petition, application, proceeding or order for relief or the appointment of a custodian, receiver or trustee for it or a substantial portion of its assets; or (vi) suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of ninety (90) days or more; (6) Borrower shall dissolve or wind up; or (7) Borrower shall take any action authorizing, or in furtherance of, any of the foregoing. In addition to the rights and remedies provided herein, Holder may exercise any other right or remedy in any other document, instrument or agreement evidencing, securing or otherwise relating to the indebtedness evidenced hereby in accordance with the terms thereof, or under applicable law, all of which rights and remedies shall be cumulative.

7.0 Transferability of the Note . This Note may be transferred or assigned by the Holder without the consent of the Borrower. If this Note is transferred in any manner by the Holder, the rights, options and other provisions herein shall apply with equal effect in favor of any subsequent holder hereof.

Notwithstanding anything to the contrary contained herein, under no circumstances shall the aggregate amount of interest paid or agreed to be paid hereunder exceed the highest lawful rate permitted under applicable usury law (the “ Maximum Rate ”) and the payment obligations of Borrower under this Note are hereby limited accordingly. If under any circumstances, whether by reason of advancement or acceleration of the maturity of the unpaid principal balance hereof or otherwise, the aggregate amounts paid on this Note shall include amounts which by law are deemed interest and which would exceed the Maximum Rate, Borrower stipulates that payment and collection of such excess amounts shall have been and will be deemed to have been the result of a mistake on the part of both Borrower and the holder of this Note, and the party receiving such excess payments shall promptly credit such excess (to the extent only of such payments in excess of the Maximum Rate) against the unpaid principal balance hereof and any portion of such excess payments not capable of being so credited shall be refunded to Borrower.

8.0 Note Holder’s Security of Assets . The (a) full and punctual payment (in lawful money of the United States and in immediately available funds), as and when due, of all principal, interest, attorneys’ fees, costs, expenses and other amounts which are or may become payable by Borrower under this Note; and (b) the full and punctual performance of all other obligations of Borrower under this Note (collectively the “ Obligations ”) shall be secured by a security interest in, a continuing first lien upon, an unqualified right to possession and disposition of and a right of set-off against, in each case to the fullest extent permitted by law, all of the Borrower’s right, title and interest in, to the Assets (as defined in the Agreement), including all proceeds therefrom (the “ Collateral ” and the “ Security Interest ”).

(a)

Prior to the payment and performance in full of all of the Obligations, the Borrower shall not sell, pledge or otherwise transfer (whether voluntarily, involuntarily, by operation of law, or by gift or for consideration) any of the Collateral or any of its interest therein. Any such sale, pledge or other transfer shall be null and void and shall confer no rights on the purported transferee. The Borrower shall at all times maintain good and marketable title to the Collateral free and clear of all liens, encumbrances and other security interests. Company and where applicable, the Borrower, shall pay in full any tax that is imposed on any of the Collateral prior to its delinquency and, within ten days after any other lien or encumbrance is imposed on any of the Collateral, the Borrower shall pay and discharge such lien or other encumbrance in full.

(b)

The Borrower shall preserve and protect the Holder’s first-priority security interest in the Collateral and shall cause the Security Interest to be perfected and to continue to be perfected until the Obligations are paid and performed in full. The Borrower shall execute and deliver to the Holder (within ten days after receipt of the Holder’s written request) such other security agreements, endorsements, pledges, assignments and other documents (including, without limitation, financing statements and continuation statements and amendments thereto) as the Holder may request from time to time to effectuate the grant to the Holder of the Security Interest and the perfection of the Security Interest, and the Holder is authorized to file and/or record any such documents (whether or not executed by Borrower) with appropriate regulatory authorities. The Borrower shall promptly notify the Holder in sufficient detail upon becoming aware of any attachment, garnishment, execution or other legal process levied against any Collateral and of any other information received by the Borrower that may materially affect the value of the Collateral, the Security Interest or the rights and remedies of the Holder hereunder.

(c)

Upon occurrence of any Event of Default and at any time thereafter, the Holder (for the purposes of this Section, the “ Secured Party ”) shall have the right to exercise all of the remedies conferred hereunder, and the Secured Party shall have all the rights and remedies of a secured party under the Uniform Commercial Code, as currently in effect in the state of Florida (the “ UCC ”) and/or any other applicable law (including the Uniform Commercial Code of any jurisdiction in which any Collateral is then located). Without limitation, the Secured Party shall have the following rights and powers:

i. 

The Secured Party shall have the right to take possession of the Collateral;

ii. 

The Secured Party shall have the right to assign, sell, lease or otherwise dispose of and deliver all or any part of the Collateral, at public or private sale or otherwise, either with or without special conditions or stipulations, for cash or on credit or for future delivery, in such parcel or parcels and at such time or times and at such place or places, and upon such terms and conditions as the Secured Party may deem commercially reasonable, all without (except as shall be required by applicable statute and cannot be waived) advertisement or demand upon or notice to the Borrower or right of redemption of the Borrower, which are hereby expressly waived. Upon each such sale, lease, assignment or other transfer of Collateral, the Secured Party may, unless prohibited by applicable law which cannot be waived, purchase all or any part of the Collateral being sold, free from and discharged of all trusts, claims, right of redemption and equities of the Borrower, which are hereby waived and released; and/or

iii.

The Secured Party shall have the right to take any and all actions provided for under applicable law.

(d)

The proceeds of any such sale, lease or other disposition of the Collateral hereunder shall be applied first, to the expenses of retaking, holding, storing, processing and preparing for sale, selling, and the like (including, without limitation, any taxes, fees and other costs incurred in connection therewith) of the Collateral, to the reasonable attorneys’ fees and expenses incurred by the Secured Party in enforcing its rights hereunder and in connection with collecting, storing and disposing of the Collateral, and then to the satisfaction of the Obligations, and to the payment of any other amounts required by applicable law, after which the Secured Party shall pay to the Borrower any surplus proceeds. If, upon the sale, license or other disposition of the Collateral, the proceeds thereof are insufficient to pay all amounts to which the Secured Party is legally entitled, the Borrower will be liable for the deficiency, together with interest thereon, at the Default Rate, and the reasonable fees of any attorneys employed by the Secured Party to collect such deficiency. To the extent permitted by applicable law, the Borrower waives all claims, damages and demands against the Secured Party arising out of the repossession, removal, retention or sale of the Collateral, unless due to the gross negligence or willful misconduct of the Secured Party.

(e)

The Borrower agrees to pay all out-of-pocket fees, costs and expenses incurred in connection with any filing which may be required hereunder, including without limitation, any financing statements, continuation statements, partial releases and/or termination statements related thereto or any expenses of any searches reasonably required by the Secured Party. The Borrower shall also pay all other claims and charges which in the reasonable opinion of the Secured Party might prejudice, imperil or otherwise affect the Collateral or the Security Interest therein. The Borrower will also, upon demand, pay to the Secured Party the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and of any experts and agents, which the Secured Party may incur in connection with (i) the enforcement of this Note, (ii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, or (iii) the exercise or enforcement of any of the rights of the Secured Party under this Note. Until so paid, any fees payable hereunder shall be added to the principal amount of the Note and shall bear interest at the Default Rate.

(f)

Borrower hereby appoints Holder as its attorney-in-fact (with full power of substitution) to execute, deliver and file, effective upon the occurrence of an Event of Default on Borrower’s behalf and at Borrower’s expense, (1) any financing statements, continuation statements or other documents required to perfect or continue the Security Interest and (2) any other documents and instruments that Holder determines are necessary or appropriate in order to enable it to exercise its rights and remedies that are provided hereunder and by applicable law upon the occurrence of an Event of Default. This power, being coupled with an interest, shall be irrevocable until the Obligations are paid and performed in full.

(g)

The Security Interest shall terminate only if and when the Obligations have been paid and performed in full.

(h)

All rights of the Holder and all Obligations of the Borrower hereunder, shall be absolute and unconditional, irrespective of: (a) any lack of validity or enforceability of this Note, or any agreement entered into in connection with the foregoing, or any portion hereof or thereof; (b) any change in the time, manner or place of payment or performance of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from the Notes, or any other agreement entered into in connection with the foregoing; (c) any exchange, release or nonperfection of any of the Collateral, or any release or amendment or waiver of or consent to departure from any other collateral for, or any guaranty, or any other security, for all or any of the Obligations; (d) any action by the Holder or a Collateral Agent on behalf of the Holder to obtain, adjust, settle and cancel in its sole discretion any insurance claims or matters made or arising in connection with the Collateral; or (e) any other circumstance which might otherwise constitute any legal or equitable defense available to the Borrower, or a discharge of all or any part of the Security Interest granted hereby. Until the Obligations shall have been paid and performed in full, the rights of the Holder shall continue even if the Obligations are barred for any reason, including, without limitation, the running of the statute of limitations or bankruptcy.

(i)

The Borrower expressly waives presentment, protest, notice of protest, demand, notice of nonpayment and demand for performance. In the event that at any time any transfer of any Collateral or any payment received by the Holder hereunder shall be deemed by final order of a court of competent jurisdiction to have been a voidable preference or fraudulent conveyance under the bankruptcy or insolvency laws of the United States, or shall be deemed to be otherwise due to any party other than the Holder, then, in any such event, the Borrower’s Obligations hereunder shall survive cancellation of this Note, and shall not be discharged or satisfied by any prior payment thereof and/or cancellation of this Agreement, but shall remain a valid and binding obligation enforceable in accordance with the terms and provisions hereof. The Borrower waives all right to require the Holder or a Collateral Agent on behalf of the Holder to proceed against any other person or to apply any Collateral which the Holder or Collateral Agent on behalf of the Holder may hold at any time, or to pursue any other remedy. The Borrower waives any defense arising by reason of the application of the statute of limitations to any obligation secured hereby.

By acceptance of Holder’s Assets described in the Agreement, pursuant to the Agreement and execution of this Note, Borrower acknowledges, agrees and confirms that it has no defense, offset or counterclaim for any occurrence in relation to this Agreement and Borrower acknowledges that Holder has complied with all of its obligations under the Agreement as of the date hereof.

9.0 Payments of principal and interest . All payments of principal and interest hereunder are payable in lawful money of the United States of America and shall be made by wire transfer to the account of Holder, as instructed, at Bank of America, pursuant to wiring instructions to be provided to Borrower or to such other accounts as may be instructed by Holder.

10.0 Right of setoff or any defense . Borrower is hereby prohibited from exercising against Holder, any right or remedy which it might otherwise be entitled to exercise against Holder, including, without limitation, any right of setoff or any defense. Any other claim that Borrower may have, arising from or related to the transaction evidenced by this Note and the Agreement shall be asserted only against the Holder.

11.0 Binding Effect; Construction . This Note shall be binding on the parties hereto and their respective heirs, legal representatives, executors, successors and permitted assigns. This Note shall be construed without any regard to any presumption or rule requiring construction against the party causing such instrument or any portion thereof to be drafted.

12.0 Governing Law. This Note shall be governed by the laws of the State of Florida without regard to choice of law consideration. Borrower hereby irrevocably consents to the jurisdiction of the courts of the State of Florida and of any federal court located in such State in connection with any action or proceeding arising out of or relating to this Note or the Agreement.

13. Notification and Rights to Modify or change note . This Note may not be changed or terminated orally. Any changes or modifications must be acknowledged and accepted by both parties in writing.

14. General. A determination that any portion of this Note is unenforceable or invalid shall not affect the enforceability or validity of any other provision, and any determination that the application of any provision of this Note to any person or circumstance is illegal or unenforceable shall not affect the enforceability or validity of such provision to the extent legally permissible and otherwise as it may apply to other persons or circumstances.

JURY TRIAL WAIVER. BORROWER AGREES THAT ANY SUIT, ACTION OR PROCEEDING, WHETHER CLAIM OR COUNTERCLAIM, BROUGHT BY BORROWER OR THE HOLDER OF THIS NOTE ON OR WITH RESPECT TO THIS NOTE OR ANY OTHER DOCUMENT OR THE DEALINGS OF THE PARTIES WITH RESPECT HERETO OR THERETO, SHALL BE TRIED ONLY BY A COURT AND NOT BY A JURY. BORROWER AND HOLDER EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDING. BORROWER ACKNOWLEDGES AND AGREES THAT AS OF THE DATE HEREOF THERE ARE NO DEFENSES OR OFFSETS TO ANY AMOUNTS DUE IN CONNECTION WITH THE LOAN. FURTHER, BORROWER WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER, IN ANY SUCH SUIT, ACTION OR PROCEEDING, ANY SPECIAL, EXEMPLARY, PUNITIVE, CONSEQUENTIAL OR OTHER DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. BORROWER ACKNOWLEDGES AND AGREES THAT THIS PARAGRAPH IS A SPECIFIC AND MATERIAL ASPECT OF THIS NOTE AND THAT HOLDER WOULD NOT EXTEND CREDIT TO BORROWER IF THE WAIVERS SET FORTH IN THIS PARAGRAPH WERE NOT A PART OF THIS NOTE.

15. Signatures. This Note and any signed agreement or instrument entered into in connection with this Note, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail (email) or downloaded from a website or data room shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.

[Remainder of this page intentionally left blank.]

IN WITNESS WHEREOF, the undersigned has executed this Note on the date set forth above.

I certify that on August ___, 2017, ______________ came before me in person and stated to my satisfaction that he/she:

(a)

signed the attached $1.9 million Secured Convertible Promissory Note by Bettwork Industries Inc. in favor of Monaker Group, Inc.; and

(b)

was authorized to and did execute said instrument on behalf of and as ______________ of Bettwork Industries Inc., a Nevada corporation (the “Company”), the entity named in this instrument, as the free act and deed of the Company, by virtue of the authority granted by the Company’s organizational documents.

Monaker Group, Inc. 8-K

Exhibit 10.4 

ASSIGNMENT AND NOVATION AGREEMENT

This Assignment and Novation Agreement (this “ Agreement ”) dated and effective August [ ], 2017 (the “ Effective Date ”) is by and between Monaker Group, Inc. , a Nevada corporation (“ Monaker ”), Crystal Falls Investments, LLC , a Florida limited liability company (“ Crystal Falls ”), and Bettwork Industries Inc. , a Nevada corporation (“ Bettworks ”) . All contracting entities are each referred to as a “ Party ” and collectively as the “ Parties ” to the Agreement as such terms are used herein.

W I T N E S S E T H :  

WHEREAS , on May 16, 2016, in connection with the sale by Monaker to Crystal Falls, of Monaker’s 51% membership interest in Name Your Fee, LLC (“ Name Your Fee ”), Crystal Falls entered into a $750,000 Promissory Note in favor of Monaker (the “ Note ”, a copy of which is attached hereto as Exhibit A ;

WHEREAS , as of the date of this Agreement the Note has a principal balance of $750,000 and no accrued interest; and

WHEREAS , Crystal Falls desires to sell its interest in Name Your Fee to Bettworks and as part of that sale, Bettworks desires to assume all of Crystal Falls’ obligations under the Note and Monaker desires to consent to such assignment on the terms and on the conditions set forth herein.

NOW, THEREFORE , in consideration of the premises and the mutual covenants, agreements, and considerations herein contained, which the Parties acknowledge the receipt and sufficiency of, the Parties hereto agree as follows:

1.       

Assignment .

1.1.       

Effective as of the Effective Date, Crystal Falls assigns all of its obligations and liabilities under the Note to Bettworks and Bettworks accepts such assignment (the “ Assignment ”).

1.2.       

Effective upon the Parties’ entry into this Agreement, the Note and all of the obligations thereunder shall be deemed to have been assigned from Crystal Falls to Bettworks and all obligations and requirements under the Note shall be owed only by Bettworks to Monaker and Crystal Falls shall have no further liability thereunder.

1.3.       

Effective as of the Effective Date, Monaker releases and discharges Crystal Falls from all obligations, liabilities, claims and demands howsoever arising under or in relation to the Note and accepts the obligations and liabilities of Bettworks under the Note in place of the liabilities and obligations of Crystal Falls.

1.4.       

Effective as of the Effective Date, Bettworks agrees to observe, perform, discharge and be bound by the terms and conditions and covenants of the Note in every way as if Bettworks were, and had originally been, a party to the Note in place of Crystal Falls. Without limiting the forgoing, Bettworks agrees and acknowledges the Profit Participation obligation as set forth in the Note, which obligation Bettworks confirms, acknowledges and agrees to abide by and comply with as if Bettworks was an original party to the Note. Bettworks also confirms and acknowledges that the ownership interest in Name Your Fee serves as security for the repayment of the Note and Bettworks authorizes Monaker to file financing statements and other security instruments in such jurisdictions as it may deem necessary or warranted to reflect the collateral on such membership interests of Name Your Fee, as owned by Bettworks.

1.5.       

Monaker covenants not to bring any suit, action or proceeding or make any demand or claim of any type against Crystal Falls relating to or in connection with the Note or the relationship created thereby. Such release and discharge in being without prejudice to the liabilities and obligation of Bettworks to Monaker under the Note as novated by this Agreement.

1.6.       

In consideration for the Assignment and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and effective on the Effective Date, Crystal Falls hereby releases, acquits and forever discharges Monaker, its current, past and future affiliates, agents, directors, officers, servants, representatives, successors, shareholders, employees, attorneys, and assigns (collectively, the “ Release Parties ”) from all actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, covenants, controversies, agreements, promises, variances, trespasses, damages, judgments, claims and demands, whether asserted or unasserted, whether known or unknown, suspected or unsuspected, which it ever had or now has, upon or by reason of any manner, cause, causes or thing whatsoever, in law or equity and all rights, obligations, claims, demands, whether in contract, tort, or state and/or federal law arising from or relating to or associated with the Note, or in connection with any other matter whatsoever (the “ Release ”). Crystal Falls further represents that it has not assigned, in whole or in part, any claim, demand and/or causes of action against any Released Party prior to its entry into this Agreement.

1.7.       

Bettworks will do or cause to be done all things reasonably necessary to preserve and keep in full force and effect its corporate existence, rights and franchises and comply with all laws applicable to Bettworks, except where the failure to comply could not reasonably be expected to have a material adverse effect on Bettworks until the payment in full or conversion in full (as provided below) of the Note.

2.       

Consent to Assignment . Pursuant to the foregoing terms and conditions Monaker hereby approves the Assignment and the terms and conditions of this Agreement and represents and warrants that it shall not raise any claims against Crystal Falls in connection with the breach, default or non-performance of the Note by Bettworks after the Effective Date, which obligations shall be owed solely by Bettworks to Monaker.

3.       

Compliance with Terms of Note . Bettworks agrees and covenants to comply with all of the terms and conditions of the Note, as modified hereby, and to be bound by all of such terms as if it were an original party thereto.

4.       

Continued Effectiveness . Except as otherwise provided or modified herein, all terms and conditions of the Note shall remain effective with respect to Monaker and Bettworks.

5.       

Note Conversion Option Right .

5.1.       

As additional consideration for Monaker agreeing to the Assignment, Monaker shall have the option, exercisable at any time after the date of this Agreement, from time to time, to convert any or all of the outstanding principal and interest due under the Note into fully-paid non-assessable shares of common stock of Bettworks (the “ Shares ” and a “ Conversion ”). The number of Shares due to Monaker in connection with any Conversion shall equal the total principal and interest amount of the Note which is converted by Monaker into Shares, divided by $1.00 (as adjusted for any stock splits, subdivisions, combinations, recapitalizations, stock dividends or similar events effecting Bettworks’ common stock)(the “ Conversion Price ”), rounded up to the nearest whole share of common stock.

5.2.       

In order to exercise the conversion option set forth in this Section 5 (the “ Conversion Option ”), Monaker shall provide Bettworks a written notice of its intention to exercise the Conversion Option, which shall be in the form of Exhibit A , attached hereto (“ Notice of Conversion ”). Within three (3) business days of Bettworks’ receipt of the Notice of Conversion, Bettworks shall issue the Shares in the name of Monaker. Monaker and Bettworks shall maintain records showing the actual principal and interest due on the Note, provided that absent manifest error, Monaker’s records shall control. It shall not be necessary for Monaker to deliver a copy of the Note upon any Conversion thereof and instead the parties shall update their records to reflect for any such conversion(s).

5.3.       

Bettworks shall at all times reserve and keep available such number of its duly authorized but unissued shares of common stock as is necessary to comply with the terms of this Agreement and the Note and for the issuance of the Shares which could be issued in connection with the Conversion Option. If at any time the number of shares of authorized but unissued common stock are not sufficient to comply with the terms of this Agreement, the Note, and provide for full conversion of the Note, Bettworks will promptly take such corporate action as may be necessary to increase its authorized but unissued shares of common stock to such number of shares of common stock as are sufficient for such purpose. Bettworks will obtain any authorization, consent, approval or other action by or make any filing with any court or administrative body that may be required under applicable securities laws in connection with the issuance of any shares issued by it in order to comply with the terms of this Agreement, the Note, and to allow for the issuance of the Shares.

6.       

Amendment to the Note . Effective upon the execution of this Agreement by all of the Parties hereto, (a) Section (d) of the Note shall be deemed removed and deleted from the Note; and (b) any breach by Bettworks of any term, condition or obligation set forth in this Agreement shall be deemed an Event of Default under the Note.

7.       

Representations, Covenants and Warranties . Each of the Parties, for themselves and for the benefit of each of the other Parties hereto, represents, covenants and warranties that:

(a)       

Such Party has all requisite power and authority, corporate or otherwise, to execute and deliver this Agreement and to consummate the transactions contemplated hereby and thereby. This Agreement constitutes the legal, valid and binding obligation of such Party enforceable against such Party in accordance with its terms, except as such enforcement may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and general equitable principles;

(b)       

The execution and delivery by such Party and the consummation of the transactions contemplated hereby and thereby do not and shall not, by the lapse of time, the giving of notice or otherwise: (i) constitute a violation of any law; or (ii) constitute a breach of any provision contained in, or a default under, any governmental approval, any writ, injunction, order, judgment or decree of any governmental authority, any of the governing documents of such Party, or any contract to which such Party is bound or affected; and

(c)       

any individual executing this Agreement on behalf of a Party has authority to act on behalf of such Party and has been duly and properly authorized to sign this Agreement on behalf of such Party.

8.       

Further Assurances . The Parties agree that, from time to time, each of them will take such other action and to execute, acknowledge and deliver such contracts, deeds, or other documents as may be reasonably requested and necessary or appropriate to carry out the purposes and intent of this Agreement and the transactions contemplated herein.

9.       

Effect of Agreement . Upon the effectiveness of this Agreement, each reference in the Note to “ Agreement, ” “ hereunder, ” “ hereof, ” “ herein ” or words of like import shall mean and be a reference to such Note as modified hereby to affect the Assignment and the terms hereof, provided that it shall not be necessary for Bettworks to deliver a replacement Note to Monaker and instead the Note, together with this Agreement, shall evidence and document Bettworks’ obligation to pay Monaker pursuant to the Note.

10.       

Note to Continue in Full Force and Effect . Except as specifically modified or amended herein, the Note and the terms and conditions thereof shall remain in full force and effect.

11.       

Consideration . All of the Parties agree and confirm by signing below that they have received valid consideration in connection with this Agreement and the transactions contemplated herein.

12.       

Miscellaneous .

(a)       

Assignment . All of the terms, provisions and conditions of this Agreement shall be binding upon and shall inure to the benefit of and be enforceable by the Parties hereto and their respective successors and permitted assigns.

(b)       

Applicable Law . This Agreement shall be construed in accordance with and governed by the laws of the State of Florida, excluding any provision of this Agreement which would require the use of the laws of any other jurisdiction. In the event that the Parties are unable to resolve such dispute to the initial legal action, the Parties submit to the jurisdiction and venue in the State or Federal courts of Florida.

(c)       

Entire Agreement, Amendments and Waivers . This Agreement constitutes the entire agreement of the Parties hereto and expressly supersedes all prior and contemporaneous understandings and commitments, whether written or oral, with respect to the subject matter hereof, except for the Note as amended hereby. No variations, modifications, changes or extensions of this Agreement or any other terms hereof shall be binding upon any Party hereto unless set forth in a document duly executed by such Party or an authorized agent of such Party.

(d)       

Waiver. No failure on the part of any Party to enforce any provisions of this Agreement will act as a waiver of the right to enforce that provision.

(e)       

Section Headings. Section headings are for convenience only and shall not define or limit the provisions of this Agreement.

(f)       

Severability . Should any clause, sentence, paragraph, subsection, Section or Article of this Agreement be judicially declared to be invalid, unenforceable or void, such decision will not have the effect of invalidating or voiding the remainder of this Agreement, and the Parties agree that the part or parts of this Agreement so held to be invalid, unenforceable or void will be deemed to have been stricken herefrom by the Parties, and the remainder will have the same force and effectiveness as if such stricken part or parts had never been included herein.

(g)       

Counterparts and Signatures . This Agreement and any signed agreement or instrument entered into in connection with this Agreement, and any amendments hereto or thereto, may be executed in one or more counterparts, all of which shall constitute one and the same instrument. Any such counterpart, to the extent delivered by means of a facsimile machine or by .pdf, .tif, .gif, .peg or similar attachment to electronic mail (any such delivery, an “ Electronic Delivery ”) shall be treated in all manner and respects as an original executed counterpart and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person. No Party shall raise the use of Electronic Delivery to deliver a signature or the fact that any signature or agreement or instrument was transmitted or communicated through the use of Electronic Delivery as a defense to the formation of a contract, and each such Party forever waives any such defense, except to the extent such defense relates to lack of authenticity.

[Remainder of page left intentionally blank. Signature page follows.]

IN WITNESS WHEREOF , the Parties hereto have executed this Agreement as of the date first written above to be effective as of the Effective Date written above.

(“ Bettworks ”)

Bettwork Industries Inc.

(“ Monaker ”)

Monaker Group, Inc.

(“ Crystal Falls ”)

Crystal Falls Investments, LLC

EXHIBIT A

Conversion Election Form

____________, 20__

Re:

Conversion of Promissory Note

Ladies and Gentlemen:

You are hereby notified that, pursuant to, and upon the terms and conditions of that certain Promissory Note of Bettwork Industries Inc. (the “ Company ”) dated May 16, 2016 (the “ Note ”) and that certain Assignment and Novation Agreement dated on or around August [ ], 2017, between Monaker Group, Inc., Crystal Falls Investments, LLC and Bettwork Industries Inc. (the “ Agreement ”), we hereby elect to exercise our Conversion Option (as such term in defined in the Agreement), in connection with $__________ of the amount currently owed under the Note (including $___________ of principal and $________ of accrued interest), effective as of the date of this writing, which amount will convert into ________________ shares of the common stock of the Company (the “ Conversion ”), based on the Conversion Price (as defined in the Note). Please issue certificate(s) for the applicable securities issuable upon the Conversion, in the name of the person provided below.

Please issue certificate(s) for common stock as follows:

Monaker Group, Inc. 8-K

Exhibit 10.5

MONAKER GROUP, INC.

2017 EQUITY INCENTIVE PLAN

TABLE OF CONTENTS

MONAKER GROUP, INC.

2017 EQUITY INCENTIVE PLAN

ARTICLE I.
PREAMBLE

1.1.       

This 2017 Equity Incentive Plan of Monaker Group, Inc. (the “ Company ”) is intended to secure for the Company and its Affiliates the benefits arising from ownership of the Company’s Common Stock by the Employees, Officers, Directors and Consultants of the Company and its Affiliates, all of whom are and will be responsible for the Company’s future growth. The Plan is designed to help attract and retain for the Company and its Affiliates personnel of superior ability for positions of exceptional responsibility, to reward Employees, Officers, Directors and Consultants for their services and to motivate such individuals through added incentives to further contribute to the success of the Company and its Affiliates. With respect to persons subject to Section 16 of the Act, transactions under this Plan are intended to satisfy the requirements of Rule 16b-3 of the Act.

1.2.       

Awards under the Plan may be made to an Eligible Person in the form of (i) Incentive Stock Options (to Eligible Employees only); (ii) Nonqualified Stock Options; (iii) Restricted Stock; (iv) Stock Awards; (v) Performance Shares; or (vi) any combination of the foregoing.

1.3.       

The Company’s board of directors adopted the Plan on August 25, 2017 (the “ Effective Date ”). The grant of Incentive Stock Options is subject to approval by the Company’s shareholders within twelve (12) months of the Effective Date. Shareholder approval is to be obtained in accordance with the Company’s Certificate of Formation and Bylaws, each as amended, and applicable laws. The Board may grant Incentive Stock Options prior to shareholder approval, but until the Company obtains this approval, a grantee shall not exercise them. If the Company does not timely obtain shareholder approval (or a grantee desires to exercise such Incentive Stock Options prior to shareholder approval), a grantee may exercise previously granted Incentive Stock Options as Nonqualified Stock Options. Unless sooner terminated as provided elsewhere in this Plan, this Plan shall terminate upon the close of business on the day next preceding the tenth (10th) anniversary of the Effective Date. Award Agreements outstanding on such date shall continue to have force and effect in accordance with the provisions thereof.

1.4.       

The Plan shall be governed by, and construed in accordance with, the laws of the State of Nevada (except its choice-of-law provisions).

1.5.       

Capitalized terms shall have the meaning provided in ARTICLE II unless otherwise provided in this Plan or any related Award Agreement.

ARTICLE II.
DEFINITIONS

DEFINITIONS . Except where the context otherwise indicates, the following definitions apply:

2.1.       

“ Act ” means the Securities Exchange Act of 1934, as now in effect or as hereafter amended.

2.2.       

“ Affiliate ” means any parent corporation or subsidiary corporation of the Company, whether now or hereinafter existing, as those terms are defined in Sections 424(e) and (f), respectively, of the Code.

2.3.       

“ Award ” means an award granted to a Participant in accordance with the provisions of the Plan, including, but not limited to, Stock Options, Restricted Stock, Stock Awards, Performance Shares, or any combination of the foregoing.

2.4.       

“ Award Agreement ” means the separate written agreement evidencing each Award granted to a Participant under the Plan.

2.5.       

“ Board of Directors ” or “ Board ” means the Board of Directors of the Company, as constituted from time to time.

2.6.       

“ Bylaws ” means the Company’s Bylaws as amended and restated from time to time.

2.7.       

“ Change of Control ” means (i) the adoption of a plan of merger or consolidation of the Company with any other corporation or association as a result of which the holders of the voting capital stock of the Company as a group would receive less than 50% of the voting capital stock of the surviving or resulting corporation; (ii) the approval by the Board of Directors of an agreement providing for the sale or transfer (other than as security for obligations of the Company) of substantially all the assets of the Company; or (iii) in the absence of a prior expression of approval by the Board of Directors, the acquisition of more than 20% of the Company’s voting capital stock by any person within the meaning of Rule 13d-3 under the Act (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company).

2.8.       

“ Code ” means the Internal Revenue Code of 1986, as amended, and the regulations and interpretations promulgated thereunder.

2.9.       

“ Committee ” means a committee of two or more members of the Board appointed by the Board in accordance with Section 3.2 of the Plan. In the event the Company has not designated a Committee pursuant to Section 3.2 of the Plan, “ Committee ” shall refer to the Compensation Committee of the Company (in the event the Compensation Committee has authority to administer the Plan), if any, or the Board of Directors of the Company.

2.10.       

“ Common Stock ” means the Company’s common stock.

2.11.       

“ Company ” means Monaker Group, Inc., a Nevada corporation.

2.12.       

“ Consultant ” means any person, including an advisor engaged by the Company or an Affiliate to render bona fide consulting or advisory services to the Company or an Affiliate, other than as an Employee, Director or Non-Employee Director.

2.13.       

“ Director ” means a member of the Board of Directors of the Company.

2.14.       

“ Disability ” means the permanent and total disability of a person within the meaning of Section 22(e)(3) of the Code.

2.15.       

“ Effective Date ” shall be the date set forth in Section 1.3 of the Plan.

2.16.       

“ Eligible Employee ” means an Eligible Person who is an Employee of the Company or any Affiliate.

2.17.       

“ Eligible Person ” means any Employee, Officer, Director, Non-Employee Director or Consultant of the Company or any Affiliate, except for instances where services are in connection with the offer or sale of securities in a capital-raising transaction, or they directly or indirectly promote or maintain a market for the Company’s securities, subject to any other limitations as may be provided by the Code, the Act, or the Board. In making such determinations, the Board may take into account the nature of the services rendered by such person, his or her present and potential contribution to the Company’s success, and such other factors as the Board in its discretion shall deem relevant.

2.18.       

“ Employee ” means an individual who is a common-law employee of the Company or an Affiliate including employment as an Officer. Mere service as a Director or payment of a director’s fee by the Company or an Affiliate shall not be sufficient to constitute “ employment ” by the Company or an Affiliate.

2.19.       

“ ERISA ” means the Employee Retirement Income Security Act of 1974, as now in effect or as hereafter amended.

2.20.       

“ Fair Market Value ” means, as of any date and unless the Committee determines otherwise, the value of Common Stock determined as follows:

2.20.1       

If the Common Stock is listed on any established stock exchange or a national market system, including without limitation the NYSE MKT, Nasdaq National Market or The Nasdaq SmallCap Market of The Nasdaq Stock Market, its Fair Market Value will be the closing sales price for such stock (or the closing bid, if no sales were reported) as quoted on such exchange or system for the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable;

2.20.2       

If the Common Stock is regularly quoted by a recognized securities dealer but selling prices are not reported for the date in question, or the Common Stock is quoted on an over-the-counter market, the Fair Market Value will be the mean between the high bid and low asked prices for the Common Stock for the day of determination, as reported in The Wall Street Journal or such other source as the Committee deems reliable; or

2.20.3       

In the absence of an established market for the Common Stock, the Fair Market Value will be determined in good faith by the Committee.

2.20.4       

The Committee also may adopt a different methodology for determining Fair Market Value with respect to one or more Awards if a different methodology is necessary or advisable to secure any intended favorable tax, legal or other treatment for the particular Award(s) (for example, and without limitation, the Committee may provide that Fair Market Value for purposes of one or more Awards will be based on an average of closing prices (or the average of high and low daily trading prices) for a specified period preceding the relevant date).

2.21.       

“ Grant Date ” means, as to any Award, the latest of:

2.21.1       

the date on which the Board authorizes the grant of the Award; or

2.21.2       

the date the Participant receiving the Award becomes an Employee or a Director of the Company or its Affiliate, to the extent employment status is a condition of the grant or a requirement of the Code or the Act; or

2.21.3       

such other date (later than the dates described in 2.21.1 and 2.21.2 above) as the Board may designate and as set forth in the Participant’s Award Agreement.

2.22.       

“ Immediate Family ” means any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law and shall include adoptive relationships.

2.23.       

“ Incentive Stock Option ” means a Stock Option intended to qualify as an incentive stock option within the meaning of Section 422 of the Code and is granted under ARTICLE IV of the Plan and designated as an Incentive Stock Option in a Participant’s Award Agreement.

2.24.       

“ Non-Employee Director ” shall have the meaning set forth in Rule 16b-3 under the Act.

2.25.       

“ Nonqualified Stock Option ” means a Stock Option not intended to qualify as an Incentive Stock Option and is not so designated in the Participant’s Award Agreement.

2.26.       

“ Officer ” means a person who is an officer of the Company within the meaning of Section 16 of the Act.

2.27.       

“ Option Period ” means the period during which a Stock Option may be exercised from time to time, as established by the Board and set forth in the Award Agreement for each Participant who is granted a Stock Option.

2.28.       

“ Option Price ” means the purchase price for a share of Common Stock subject to purchase pursuant to a Stock Option, as established by the Board and set forth in the Award Agreement for each Participant who is granted a Stock Option.

2.29.       

“ Outside Director ” means a Director who either (i) is not a current employee of the Company or an “ affiliated corporation ” (within the meaning of Treasury Regulations promulgated under Section 162(m) of the Code), is not a former employee of the Company or an “ affiliated corporation ” receiving compensation for prior services (other than benefits under a tax qualified pension plan), was not an officer of the Company or an “ affiliated corporation ” at any time and is not currently receiving direct or indirect remuneration from the Company or an “ affiliated corporation ” for services in any capacity other than as a Director or (ii) is otherwise considered an “ outside director ” for purposes of Section 162(m) of the Code.

2.30.       

“ Participant ” means an Eligible Person to whom an Award has been granted and who has entered into an Award Agreement evidencing the Award or, if applicable, such other person who holds an outstanding Award.

2.31.       

“ Performance Objectives ” shall have the meaning set forth in ARTICLE IX of the Plan.

2.32.       

“ Performance Period ” shall have the meaning set forth in ARTICLE IX of the Plan.

2.33.       

“ Performance Share ” means an Award under ARTICLE IX of the Plan of a unit valued by reference to the Common Stock, the payout of which is subject to achievement of such Performance Objectives, measured during one or more Performance Periods, as the Board, in its sole discretion, shall establish at the time of such Award and set forth in a Participant’s Award Agreement.

2.34.       

“ Plan ” means this Monaker Group, Inc. 2017 Equity Incentive Plan, as it may be amended from time to time.

2.35.       

“ Reporting Person ” means a person required to file reports under Section 16(a) of the Act.

2.36.       

“ Restricted Stock ” means an Award under ARTICLE VII of the Plan of shares of Common Stock that are at the time of the Award subject to restrictions or limitations as to the Participant’s ability to sell, transfer, pledge or assign such shares, which restrictions or limitations may lapse separately or in combination at such time or times, in installments or otherwise, as the Board, in its sole discretion, shall determine at the time of such Award and set forth in a Participant’s Award Agreement.

2.37.       

“ Restriction Period ” means the period commencing on the Grant Date with respect to such shares of Restricted Stock and ending on such date as the Board, in its sole discretion, shall establish and set forth in a Participant’s Award Agreement.

2.38.       

“ Retirement ” means retirement as determined under procedures established by the Board or in any Award, as set forth in a Participant’s Award Agreement.

2.39.       

“ Rule 16b-3 ” means Rule 16b-3 promulgated under the Act or any successor to Rule 16b-3, as in effect from time to time. Those provisions of the Plan which make express reference to Rule 16b-3, or which are required in order for certain option transactions to qualify for exemption under Rule 16b-3, shall apply only to a Reporting Person.

2.40.       

“ Stock Award ” means an Award of shares of Common Stock under ARTICLE VIII of the Plan.

2.41.       

“ Stock Option ” means an Award under ARTICLE IV or ARTICLE V of the Plan of an option to purchase Common Stock. A Stock Option may be either an Incentive Stock Option or a Nonqualified Stock Option.

2.42.       

“ Ten Percent Stockholder ” means an individual who owns (or is deemed to own pursuant to Section 424(d) of the Code), at the time of grant, stock possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Company or any of its Affiliates.

2.43.       

“ Termination of Service ” means (i) in the case of an Eligible Employee, the discontinuance of employment of such Participant with the Company or its Subsidiaries for any reason other than a transfer to another member of the group consisting of the Company and its Affiliates and (ii) in the case of a Director who is not an Employee of the Company or any Affiliate, the date such Participant ceases to serve as a Director. The determination of whether a Participant has discontinued service shall be made by the Board in its sole discretion. In determining whether a Termination of Service has occurred, the Board may provide that service as a Consultant or service with a business enterprise in which the Company has a significant ownership interest shall be treated as employment with the Company.

ARTICLE III.
ADMINISTRATION

3.1.       

The Plan shall be administered by the Board of Directors of the Company. The Board shall have the exclusive right to interpret and construe the Plan, to select the Eligible Persons who shall receive an Award, and to act in all matters pertaining to the grant of an Award and the determination and interpretation of the provisions of the related Award Agreement, including, without limitation, the determination of the number of shares subject to Stock Options and the Option Period(s) and Option Price(s) thereof, the number of shares of Restricted Stock or shares subject to Stock Awards or Performance Shares subject to an Award, the vesting periods (if any) and the form, terms, conditions and duration of each Award, and any amendment thereof consistent with the provisions of the Plan. The Board may adopt, establish, amend and rescind such rules, regulations and procedures as it may deem appropriate for the proper administration of the Plan, make all other determinations which are, in the Board’s judgment, necessary or desirable for the proper administration of the Plan, amend the Plan or a Stock Award as provided in ARTICLE XI , and terminate or suspend the Plan as provided in ARTICLE XI . All acts, determinations and decisions of the Board made or taken pursuant to the Plan or with respect to any questions arising in connection with the administration and interpretation of the Plan or any Award Agreement, including the severability of any and all of the provisions thereof, shall be conclusive, final and binding upon all persons. On or after the date of grant of an Award under the Plan, the Board may (i) accelerate the date on which any such Award becomes vested, exercisable or transferable, as the case may be, (ii) extend the term of any such Award, including, without limitation, extending the period following a termination of a Participant’s employment during which any such Award may remain outstanding, or (iii) waive any conditions to the vesting, exercisability or transferability, as the case may be, of any such Award; provided, that the Board shall not have any such authority to the extent that the grant of such authority would cause any tax to become due under Section 409A of the Code.

3.2.       

The Board may, to the full extent permitted by and consistent with applicable law and the Company’s Bylaws, and subject to Subparagraph 3.2.1 herein below, delegate any or all of its powers with respect to the administration of the Plan to the Company’s Compensation Committee or another Committee of the Company consisting of not fewer than two members of the Board each of whom shall qualify (at the time of appointment to the Committee and during all periods of service on the Committee) in all respects as a Non-Employee Director and as an Outside Director.

3.2.1       

If administration is delegated to a Committee, the Committee shall have, in connection with the administration of the Plan, the powers theretofore possessed by the Board, including the power to delegate to a subcommittee any of the administrative powers the Committee is authorized to exercise (and references in the Plan to the Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions, not consistent with the provisions of the Plan, as may be adopted from time to time by the Board.

3.2.2       

The Board may abolish the Committee at any time and reassume all powers and authority previously delegated to the Committee.

3.2.3       

For purposes of clarifying the preceding paragraph, shares of Common Stock covered by Awards shall only be counted as used to the extent they are actually issued and delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. If an Award is settled for cash or if shares of Common Stock are withheld to pay the exercise price of a Stock Option or to satisfy any tax withholding requirement in connection with an Award, only the shares issued (if any), net of the shares withheld, will be deemed delivered for purposes of determining the number of shares of Common Stock that are available for delivery under the Plan. In addition, shares of Common Stock related to Awards that expire, are forfeited or cancelled or terminate for any reason without the issuance of shares shall not be treated as issued pursuant to the Plan. In addition, if shares of Common Stock owned by a Participant (or such Participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the Company in payment of any obligation in connection with an Award, the number of shares tendered shall be added to the number of shares of Common Stock that are available for delivery under the Plan.

3.2.4       

In addition to, and not in limitation of, the right of any Committee so designated by the Board to administer this Plan to grant Awards to Eligible Persons under this Plan, the full Board of Directors and/or the Company’s Compensation Committee may from time to time grant Awards to Eligible Persons pursuant to the terms and conditions of this Plan, subject to the requirements of the Code, Rule 16b-3 under the Act or any other applicable law, rule or regulation. In connection with any such grants, the Board of Directors and/or the Company’s Compensation Committee shall have all of the power and authority of the Committee to determine the Eligible Persons to whom such Awards shall be granted and the other terms and conditions of such Awards.

3.3.       

Without limiting the provisions of this ARTICLE III , and subject to the provisions of ARTICLE X , the Board is authorized to take such action as it determines to be necessary or advisable, and fair and equitable to Participants and to the Company, with respect to an outstanding Award in the event of a Change of Control as described in ARTICLE X or other similar event. Such action may include, but shall not be limited to, establishing, amending or waiving the form, terms, conditions and duration of an Award and the related Award Agreement, so as to provide for earlier, later, extended or additional times for exercise or payments, differing methods for calculating payments, alternate forms and amounts of payment, an accelerated release of restrictions or other modifications. The Board may take such actions pursuant to this Section 3.3 by adopting rules and regulations of general applicability to all Participants or to certain categories of Participants, by including, amending or waiving terms and conditions in an Award and the related Award Agreement, or by taking action with respect to individual Participants from time to time. In the event any Award is not evidenced by a written Award Agreement, such Award shall be governed by the terms of this Plan and the terms and conditions of the grant of the Award as evidenced by the minutes of the Board (or any authorized Committee thereof). For the sake of clarity, the failure of the Company to document an Award by way of a written Award Agreement shall not affect the validity of such Award.

3.4.       

Subject to the provisions of Section 3.9 and this Section 3.4 , the maximum aggregate number of shares of Common Stock which may be issued pursuant to Awards under the Plan shall be 1,250,000 shares. Such shares of Common Stock shall be made available from authorized and unissued shares of the Company.

3.4.1       

For all purposes under the Plan, each Performance Share awarded shall be counted as one share of Common Stock subject to an Award.

3.4.2       

If, for any reason, any shares of Common Stock (including shares of Common Stock subject to Performance Shares) that have been awarded or are subject to issuance or purchase pursuant to Awards outstanding under the Plan are not delivered or purchased, or are reacquired by the Company, for any reason, including but not limited to a forfeiture of Restricted Stock or failure to earn Performance Shares or the termination, expiration or cancellation of a Stock Option, or any other termination of an Award without payment being made in the form of shares of Common Stock (whether or not Restricted Stock), such shares of Common Stock shall not be charged against the aggregate number of shares of Common Stock available for Award under the Plan and shall again be available for Awards under the Plan. In no event, however, may Common Stock that is surrendered or withheld to pay the exercise price of a Stock Option or to satisfy tax withholding requirements be available for future grants under the Plan.

3.4.3       

For purposes of clarifying the preceding paragraph, shares of Common Stock covered by Awards shall only be counted as used to the extent they are actually issued and delivered to a Participant (or such Participant’s permitted transferees as described in the Plan) pursuant to the Plan. If an Award is settled for cash or if shares of Common Stock are withheld to pay the exercise price of a Stock Option or to satisfy any tax withholding requirement in connection with an Award, only the shares issued (if any), net of the shares withheld, will be deemed delivered for purposes of determining the number of shares of Common Stock that are available for delivery under the Plan. In addition, shares of Common Stock related to Awards that expire, are forfeited or cancelled or terminate for any reason without the issuance of shares shall not be treated as issued pursuant to the Plan. In addition, if shares of Common Stock owned by a Participant (or such Participant’s permitted transferees as described in the Plan) are tendered (either actually or through attestation) to the Company in payment of any obligation in connection with an Award, the number of shares tendered shall be added to the number of shares of Common Stock that are available for delivery under the Plan.

3.4.4       

The foregoing subsections 3.4.1 and 3.4.2 of this Section 3.4 shall be subject to any limitations provided by the Code or by Rule 16b-3 under the Act or by any other applicable law, rule or regulation.

3.5.       

Each Award granted under the Plan shall be evidenced by a written Award Agreement, which shall be subject to and shall incorporate (by reference or otherwise) the applicable terms and conditions of the Plan and shall include any other terms and conditions (not inconsistent with the Plan) required by the Board. In the event any Award is not evidenced by a written Award Agreement, such Award shall be governed by the terms of this Plan and the terms and conditions of the grant of the Award as evidenced by the minutes of the Board (or any authorized Committee thereof). For the sake of clarity, the failure of the Company to document an Award by way of a written Award Agreement shall not affect the validity of such Award.

3.6.       

Securities Matters .

3.6.1       

The Company shall be under no obligation to affect the registration pursuant to the Act of any shares of Common Stock to be issued hereunder or to effect similar compliance under any state or local laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued any shares of Common Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Board may require, as a condition to the issuance of shares of Common Stock pursuant to the terms hereof, that the recipient of such shares make such covenants, agreements and representations, and that any certificates representing such shares bear such legends, as the Board deems necessary or desirable.

3.6.2       

The exercise of any Stock Option granted hereunder shall only be effective at such time as counsel to the Company shall have determined that the issuance of shares of Common Stock pursuant to such exercise is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Common Stock are traded. The Company may, in its sole discretion, defer the effectiveness of an exercise of a Stock Option hereunder or the issuance of shares of Common Stock pursuant to any Award pending or to ensure compliance under federal, state or local securities laws. The Company shall inform the Participant in writing of its decision to defer the effectiveness of the exercise of a Stock Option or the issuance of shares of Common Stock pursuant to any Award. During the period that the effectiveness of the exercise of a Stock Option has been deferred, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

3.6.3       

In the event the Plan and/or the Common Stock issuable in connection with Awards hereunder are registered with the Securities Exchange Commission (the “ SEC ”) under the Act, no free-trading shares of Common Stock shall be issuable by the Company under the Plan and pursuant to such registration statement, (a) except to natural person (as such term is interpreted by the SEC); (b) in connection with services associated with the offer or sale of securities in a capital-raising transaction; or (c) where the services directly or indirectly promote or maintain a market for the Company’s securities.

3.7.       

The Board may require any Participant acquiring shares of Common Stock pursuant to any Award under the Plan to represent to and agree with the Company in writing that such person is acquiring the shares of Common Stock for investment purposes and without a view to resale or distribution thereof. Shares of Common Stock issued and delivered under the Plan shall also be subject to such stop-transfer orders and other restrictions as the Board may deem advisable under the rules, regulations and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed and any applicable federal or state laws, and the Board may cause a legend or legends to be placed on the certificate or certificates representing any such shares to make appropriate reference to any such restrictions. In making such determination, the Board may rely upon an opinion of counsel for the Company.

3.8.       

Except as otherwise expressly provided in the Plan or in an Award Agreement with respect to an Award, no Participant shall have any right as a shareholder of the Company with respect to any shares of Common Stock subject to such Participant’s Award except to the extent that, and until, one or more certificates representing such shares of Common Stock shall have been delivered to the Participant. No shares shall be required to be issued, and no certificates shall be required to be delivered, under the Plan unless and until all of the terms and conditions applicable to such Award shall have, in the sole discretion of the Board, been satisfied in full and any restrictions shall have lapsed in full, and unless and until all of the requirements of law and of all regulatory bodies having jurisdiction over the offer and sale, or issuance and delivery, of the shares shall have been fully complied with.

3.9.       

The total amount of shares with respect to which Awards may be granted under the Plan and rights of outstanding Awards (both as to the number of shares subject to the outstanding Awards and the Option Price(s) or other purchase price(s) of such shares, as applicable) shall be appropriately adjusted for any increase or decrease in the number of outstanding shares of Common Stock of the Company resulting from payment of a stock dividend on the Common Stock, a stock split or subdivision or combination of shares of the Common Stock, or a reorganization or reclassification of the Common Stock, or any other change in the structure of shares of the Common Stock. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined by the Board in its sole discretion. Any such adjustment may provide for the elimination of any fractional shares which might otherwise become subject to an Award. All adjustments made as a result of the foregoing in respect of each Incentive Stock Option shall be made so that such Incentive Stock Option shall continue to be an Incentive Stock Option, as defined in Section 422 of the Code.

3.10.       

No director or person acting pursuant to authority delegated by the Board shall be liable for any action or determination under the Plan made in good faith. The members of the Board shall be entitled to indemnification by the Company in the manner and to the extent set forth in the Company’s Articles of Incorporation, as amended, Bylaws or as otherwise provided from time to time regarding indemnification of Directors.

3.11.       

The Board shall be authorized to make adjustments in any performance based criteria or in the other terms and conditions of outstanding Awards in recognition of unusual or nonrecurring events affecting the Company (or any Affiliate, if applicable) or its financial statements or changes in applicable laws, regulations or accounting principles. The Board may correct any defect, supply any omission or reconcile any inconsistency in the Plan or any Award Agreement in the manner and to the extent it shall deem necessary or desirable to reflect any such adjustment. In the event the Company (or any Affiliate, if applicable) shall assume outstanding employee benefit awards or the right or obligation to make future such awards in connection with the acquisition of another corporation or business entity, the Board may, in its sole discretion, make such adjustments in the terms of outstanding Awards under the Plan as it shall deem appropriate.

3.12.       

Subject to the express provisions of the Plan, the Board shall have full power and authority to determine whether, to what extent and under what circumstances any outstanding Award shall be terminated, canceled, forfeited or suspended. Notwithstanding the foregoing or any other provision of the Plan or an Award Agreement, all Awards to any Participant that are subject to any restriction or have not been earned or exercised in full by the Participant shall be terminated and canceled if the Participant is terminated for cause, as determined by the Board in its sole discretion.

ARTICLE IV.
INCENTIVE STOCK OPTIONS

4.1.       

The Board, in its sole discretion, may from time to time on or after the Effective Date grant Incentive Stock Options to Eligible Employees, subject to the provisions of this ARTICLE IV and ARTICLE III and ARTICLE VI and subject to the following conditions:

4.1.1       

Incentive Stock Options shall be granted only to Eligible Employees, each of whom may be granted one or more of such Incentive Stock Options at such time or times determined by the Board.

4.1.2       

The Option Price per share of Common Stock for an Incentive Stock Option shall be set in the Award Agreement, but shall not be less than (i) one hundred percent (100%) of the Fair Market Value of the Common Stock at the Grant Date, or (ii) in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, one hundred ten percent (110%) of the Fair Market Value of the Common Stock at the Grant Date.

4.1.3       

An Incentive Stock Option may be exercised in full or in part from time to time within ten (10) years from the Grant Date, or such shorter period as may be specified by the Board as the Option Period and set forth in the Award Agreement; provided, however, that, in the case of an Incentive Stock Option granted to a Ten Percent Stockholder, such period shall not exceed five (5) years from the Grant Date; and further, provided that, in any event, the Incentive Stock Option shall lapse and cease to be exercisable upon a Termination of Service or within such period following a Termination of Service as shall have been determined by the Board and set forth in the related Award Agreement; and provided, further, that such period shall not exceed the period of time ending on the date three (3) months following a Termination of Service (except as otherwise provided in any employment agreement approved by the Board), unless employment shall have terminated:

(i)       

as a result of Disability, in which event such period shall not exceed the period of time ending on the date twelve (12) months following a Termination of Service; or

(ii)       

as a result of death, or if death shall have occurred following a Termination of Service (other than as a result of Disability) and during the period that the Incentive Stock Option was still exercisable, in which event such period may not exceed the period of time ending on the earlier of the date twelve (12) months after the date of death;

(iii)       

and provided, further, that such period following a Termination of Service or death shall in no event extend beyond the original Option Period of the Incentive Stock Option.

4.1.4       

The aggregate Fair Market Value of the shares of Common Stock with respect to which any Incentive Stock Options (whether under this Plan or any other plan established by the Company) are first exercisable during any calendar year by any Eligible Employee shall not exceed one hundred thousand dollars ($100,000), determined based on the Fair Market Value(s) of such shares as of their respective Grant Dates; provided, however, that to the extent permitted under Section 422 of the Code, if the aggregate Fair Market Values of the shares of Common Stock with respect to which Stock Options intended to be Incentive Stock Options are first exercisable by any Eligible Employee during any calendar year (whether such Stock Options are granted under this Plan or any other plan established by the Company) exceed one hundred thousand dollars ($100,000), the Stock Options or portions thereof which exceed such limit (according to the order in which they were granted) shall be treated as Nonqualified Stock Options.

4.1.5       

No Incentive Stock Options may be granted more than ten (10) years from the Effective Date.

4.1.6       

The Award Agreement for each Incentive Stock Option shall provide that the Participant shall notify the Company if such Participant sells or otherwise transfers any shares of Common Stock acquired upon exercise of the Incentive Stock Option within two (2) years of the Grant Date of such Incentive Stock Option or within one (1) year of the date such shares were acquired upon the exercise of such Incentive Stock Option.

4.2.       

Subject to the limitations of Section 3.4 , the maximum aggregate number of shares of Common Stock subject to Incentive Stock Option Awards shall be the maximum aggregate number of shares available for Awards under the Plan.

4.3.       

The Board may provide for any other terms and conditions which it determines should be imposed for an Incentive Stock Option to qualify under Section 422 of the Code, as well as any other terms and conditions not inconsistent with this ARTICLE IV or ARTICLE III or ARTICLE VI , as determined in its sole discretion and set forth in the Award Agreement for such Incentive Stock Option.

4.4.       

Each provision of this ARTICLE IV and of each Incentive Stock Option granted hereunder shall be construed in accordance with the provisions of Section 422 of the Code, and any provision hereof that cannot be so construed shall be disregarded.

ARTICLE V.
NONQUALIFIED STOCK OPTIONS

5.1.       

The Board, in its sole discretion, may from time to time on or after the Effective Date grant Nonqualified Stock Options to Eligible Persons, subject to the provisions of this ARTICLE V and ARTICLE III or ARTICLE VI and subject to the following conditions:

5.1.1       

Nonqualified Stock Options may be granted to any Eligible Person, each of whom may be granted one or more of such Nonqualified Stock Options, at such time or times determined by the Board.

5.1.2       

The Option Price per share of Common Stock for a Nonqualified Stock Option shall be set in the Award Agreement and may be less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the Grant Date; provided, however, that the exercise price of each Nonqualified Stock Option granted under the Plan shall in no event be less than the par value per share of the Company’s Common Stock.

5.1.3       

A Nonqualified Stock Option may be exercised in full or in part from time to time within the Option Period specified by the Board and set forth in the Award Agreement; provided, however, that, in any event, the Nonqualified Stock Option shall lapse and cease to be exercisable upon a Termination of Service or within such period following a Termination of Service as shall have been determined by the Board and set forth in the related Award Agreement.

5.2.       

The Board may provide for any other terms and conditions for a Nonqualified Stock Option not inconsistent with this ARTICLE V or ARTICLE III or ARTICLE VI , as determined in its sole discretion and set forth in the Award Agreement for such Nonqualified Stock Option.

ARTICLE VI.
INCIDENTS OF STOCK OPTIONS

6.1.       

Each Stock Option shall be granted subject to such terms and conditions, if any, not inconsistent with this Plan, as shall be determined by the Board and set forth in the related Award Agreement, including any provisions as to continued employment as consideration for the grant or exercise of such Stock Option and any provisions which may be advisable to comply with applicable laws, regulations or rulings of any governmental authority.

6.2.       

Except as hereinafter described, a Stock Option shall not be transferable by the Participant other than by will or by the laws of descent and distribution, and shall be exercisable during the lifetime of the Participant only by the Participant or the Participant’s guardian or legal representative. In the event of the death of a Participant, any unexercised Stock Options may be exercised to the extent otherwise provided herein or in such Participant’s Award Agreement by the executor or personal representative of such Participant’s estate or by any person who acquired the right to exercise such Stock Options by bequest under the Participant’s will or by inheritance. The Board, in its sole discretion, may at any time permit a Participant to transfer a Nonqualified Stock Option for no consideration to or for the benefit of one or more members of the Participant’s Immediate Family (including, without limitation, to a trust for the benefit of the Participant and/or one or more members of such Participant’s Immediate Family or a corporation, partnership or limited liability company established and controlled by the Participant and/or one or more members of such Participant’s Immediate Family), subject to such limits as the Board may establish. The transferee of such Nonqualified Stock Option shall remain subject to all terms and conditions applicable to such Nonqualified Stock Option prior to such transfer. The foregoing right to transfer the Nonqualified Stock Option, if granted by the Board shall apply to the right to consent to amendments to the Award Agreement.

6.3.       

Shares of Common Stock purchased upon exercise of a Stock Option shall be paid for in such amounts, at such times and upon such terms as shall be determined by the Board, subject to limitations set forth in the Stock Option Award Agreement. The Board may, in its sole discretion, permit the exercise of a Stock Option by payment in cash or by tendering shares of Common Stock (either by actual delivery of such shares or by attestation), or any combination thereof, as determined by the Board. In the sole discretion of the Board, payment in shares of Common Stock also may be made with shares received upon the exercise or partial exercise of the Stock Option, whether or not involving a series of exercises or partial exercises and whether or not share certificates for such shares surrendered have been delivered to the Participant. The Board also may, in its sole discretion, permit the payment of the exercise price of a Stock Option by the voluntary surrender of all or a portion of the Stock Option. Shares of Common Stock previously held by the Participant and surrendered in payment of the Option Price of a Stock Option shall be valued for such purpose at the Fair Market Value thereof on the date the Stock Option is exercised.

6.4.       

The holder of a Stock Option shall have no rights as a shareholder with respect to any shares covered by the Stock Option (including, without limitation, any voting rights, the right to inspect or receive the Company’s balance sheets or financial statements or any rights to receive dividends or non-cash distributions with respect to such shares) until such time as the holder has exercised the Stock Option and then only with respect to the number of shares which are the subject of the exercise. No adjustment shall be made for dividends or other rights for which the record date is prior to the date such stock certificate is issued.

6.5.       

The Board may permit the voluntary surrender of all or a portion of any Stock Option granted under the Plan to be conditioned upon the granting to the Participant of a new Stock Option for the same or a different number of shares of Common Stock as the Stock Option surrendered, or may require such voluntary surrender as a condition precedent to a grant of a new Stock Option to such Participant. Subject to the provisions of the Plan, such new Stock Option shall be exercisable at such Option Price, during such Option Period and on such other terms and conditions as are specified by the Board at the time the new Stock Option is granted. Upon surrender, the Stock Options surrendered shall be canceled and the shares of Common Stock previously subject to them shall be available for the grant of other Stock Options.

6.6.       

The Board may at any time offer to purchase a Participant’s outstanding Stock Option for a payment equal to the value of such Stock Option payable in cash, shares of Common Stock or Restricted Stock or other property upon surrender of the Participant’s Stock Option, based on such terms and conditions as the Board shall establish and communicate to the Participant at the time that such offer is made.

6.7.       

The Board shall have the discretion, exercisable either at the time the Award is granted or at the time the Participant discontinues employment, to establish as a provision applicable to the exercise of one or more Stock Options that, during a limited period of exercisability following a Termination of Service, the Stock Option may be exercised not only with respect to the number of shares of Common Stock for which it is exercisable at the time of the Termination of Service but also with respect to one or more subsequent installments for which the Stock Option would have become exercisable had the Termination of Service not occurred.

6.8.       

Notwithstanding anything to the contrary herein, the Company may reprice any Stock Option without the approval of the stockholders of the Company. For this purpose, “ reprice ” means (i) any of the following or any other action that has the same effect: (A) lowering the exercise price of a Stock Option after it is granted, (B) any other action that is treated as a repricing under U.S. generally accepted accounting principles (“ GAAP ”), or (C) cancelling a Stock Option at a time when its exercise price exceeds the Fair Market Value of the underlying Common Stock, in exchange for another Stock Option, restricted stock or other equity, unless the cancellation and exchange occurs in connection with a merger, acquisition, spin-off or other similar corporate transaction; and (ii) any other action that is considered to be a repricing under formal or informal guidance issued by exchange or market on which the Company’s Common Stock then trades or is quoted.

6.9.       

In addition to, and without limiting the above Section 6.8 , the Board may permit the voluntary surrender of all or a portion of any Stock Option granted under the Plan to be conditioned upon the granting to the Participant of a new Stock Option for the same or a different number of shares of Common Stock as the Stock Option surrendered, or may require such voluntary surrender as a condition precedent to a grant of a new Stock Option to such Participant. Subject to the provisions of the Plan, such new Stock Option shall be exercisable at such Option Price, during such Option Period and on such other terms and conditions as are specified by the Board at the time the new Stock Option is granted. Upon surrender, the Stock Options surrendered shall be canceled and the shares of Common Stock previously subject to them shall be available for the grant of other Stock Options.

ARTICLE VII.
RESTRICTED STOCK

7.1.       

The Board, in its sole discretion, may from time to time on or after the Effective Date award shares of Restricted Stock to Eligible Persons as a reward for past service and an incentive for the performance of future services that will contribute materially to the successful operation of the Company and its Affiliates, subject to the terms and conditions set forth in this ARTICLE VII .

7.2.       

The Board shall determine the terms and conditions of any Award of Restricted Stock, which shall be set forth in the related Award Agreement, including without limitation:

7.2.1       

the purchase price, if any, to be paid for such Restricted Stock, which may be zero, subject to such minimum consideration as may be required by applicable law;

7.2.2       

the duration of the Restriction Period or Restriction Periods with respect to such Restricted Stock and whether any events may accelerate or delay the end of such Restriction Period(s);

7.2.3       

the circumstances upon which the restrictions or limitations shall lapse, and whether such restrictions or limitations shall lapse as to all shares of Restricted Stock at the end of the Restriction Period or as to a portion of the shares of Restricted Stock in installments during the Restriction Period by means of one or more vesting schedules;

7.2.4       

whether such Restricted Stock is subject to repurchase by the Company or to a right of first refusal at a predetermined price or if the Restricted Stock may be forfeited entirely under certain conditions;

7.2.5       

whether any performance goals may apply to a Restriction Period to shorten or lengthen such period; and

7.2.6       

whether dividends and other distributions with respect to such Restricted Stock are to be paid currently to the Participant or withheld by the Company for the account of the Participant.

7.3.       

Awards of Restricted Stock must be accepted within a period of thirty (30) days after the Grant Date (or such shorter or longer period as the Board may specify at such time) by executing an Award Agreement with respect to such Restricted Stock and tendering the purchase price, if any. A prospective recipient of an Award of Restricted Stock shall not have any rights with respect to such Award, unless such recipient has executed an Award Agreement with respect to such Restricted Stock, has delivered a fully executed copy thereof to the Board and has otherwise complied with the applicable terms and conditions of such Award.

7.4.       

In the sole discretion of the Board and as set forth in the Award Agreement for an Award of Restricted Stock, all shares of Restricted Stock held by a Participant and still subject to restrictions shall be forfeited by the Participant upon the Participant’s Termination of Service and shall be reacquired, canceled and retired by the Company. Notwithstanding the foregoing, unless otherwise provided in an Award Agreement with respect to an Award of Restricted Stock, in the event of the death, Disability or Retirement of a Participant during the Restriction Period, or in other cases of special circumstances (including hardship or other special circumstances of a Participant whose employment is involuntarily terminated), the Board may elect to waive in whole or in part any remaining restrictions with respect to all or any part of such Participant’s Restricted Stock, if it finds that a waiver would be appropriate.

7.5.       

Except as otherwise provided in this ARTICLE VII , no shares of Restricted Stock received by a Participant shall be sold, exchanged, transferred, pledged, hypothecated or otherwise disposed of during the Restriction Period.

7.6.       

Upon an Award of Restricted Stock to a Participant, a certificate or certificates representing the shares of such Restricted Stock will be issued to and registered in the name of the Participant. Unless otherwise determined by the Board, such certificate or certificates will be held in custody by the Company until (i) the Restriction Period expires and the restrictions or limitations lapse, in which case one or more certificates representing such shares of Restricted Stock that do not bear a restrictive legend (other than any legend as required under applicable federal or state securities laws) shall be delivered to the Participant, or (ii) a prior forfeiture by the Participant of the shares of Restricted Stock subject to such Restriction Period, in which case the Company shall cause such certificate or certificates to be canceled and the shares represented thereby to be retired, all as set forth in the Participant’s Award Agreement. It shall be a condition of an Award of Restricted Stock that the Participant deliver to the Company a stock power endorsed in blank relating to the shares of Restricted Stock to be held in custody by the Company.

7.7.       

Except as provided in this ARTICLE VII or in the related Award Agreement, a Participant receiving an Award of shares of Restricted Stock Award shall have, with respect to such shares, all rights of a shareholder of the Company, including the right to vote the shares and the right to receive any distributions, unless and until such shares are otherwise forfeited by such Participant; provided, however, the Board may require that any cash dividends with respect to such shares of Restricted Stock be automatically reinvested in additional shares of Restricted Stock subject to the same restrictions as the underlying Award, or may require that cash dividends and other distributions on Restricted Stock be withheld by the Company or its Affiliates for the account of the Participant. The Board shall determine whether interest shall be paid on amounts withheld, the rate of any such interest, and the other terms applicable to such withheld amounts.

ARTICLE VIII.
STOCK AWARDS

8.1.       

The Board, in its sole discretion, may from time to time on or after the Effective Date grant Stock Awards to Eligible Persons in payment of compensation that has been earned or as compensation to be earned, including without limitation compensation awarded or earned concurrently with or prior to the grant of the Stock Award, subject to the terms and conditions set forth in this ARTICLE VIII .

8.2.       

For the purposes of this Plan, in determining the value of a Stock Award, all shares of Common Stock subject to such Stock Award shall be set in the Award Agreement and may be less than one hundred percent (100%) of the Fair Market Value of the Common Stock at the Grant Date.

8.3.       

Unless otherwise determined by the Board and set forth in the related Award Agreement, shares of Common Stock subject to a Stock Award will be issued, and one or more certificates representing such shares will be delivered, to the Participant as soon as practicable following the Grant Date of such Stock Award. Upon the issuance of such shares and the delivery of one or more certificates representing such shares to the Participant, such Participant shall be and become a shareholder of the Company fully entitled to receive dividends, to vote and to exercise all other rights of a shareholder of the Company. Notwithstanding any other provision of this Plan, unless the Board expressly provides otherwise with respect to a Stock Award, as set forth in the related Award Agreement, no Stock Award shall be deemed to be an outstanding Award for purposes of the Plan.

ARTICLE IX.
PERFORMANCE SHARES

9.1.       

The Board, in its sole discretion, may from time to time on or after the Effective Date award Performance Shares to Eligible Persons as an incentive for the performance of future services that will contribute materially to the successful operation of the Company and its Affiliates, subject to the terms and conditions set forth in this ARTICLE IX .

9.2.       

The Board shall determine the terms and conditions of any Award of Performance Shares, which shall be set forth in the related Award Agreement, including without limitation:

9.2.1       

the purchase price, if any, to be paid for such Performance Shares, which may be zero, subject to such minimum consideration as may be required by applicable law;

9.2.2       

the performance period (the “ Performance Period ”) and/or performance objectives (the “ Performance Objectives ”) applicable to such Awards;

9.2.3       

the number of Performance Shares that shall be paid to the Participant if the applicable Performance Objectives are exceeded or met in whole or in part; and

9.2.4       

the form of settlement of a Performance Share.

9.3.       

At any date, each Performance Share shall have a value equal to the Fair Market Value of a share of Common Stock.

9.4.       

Performance Periods may overlap, and Participants may participate simultaneously with respect to Performance Shares for which different Performance Periods are prescribed.

9.5.       

Performance Objectives may vary from Participant to Participant and between Awards and shall be based upon such performance criteria or combination of factors as the Board may deem appropriate, including, but not limited to, minimum earnings per share or return on equity. If during the course of a Performance Period there shall occur significant events which the Board expects to have a substantial effect on the applicable Performance Objectives during such period, the Board may revise such Performance Objectives.

9.6.       

In the sole discretion of the Board and as set forth in the Award Agreement for an Award of Performance Shares, all Performance Shares held by a Participant and not earned shall be forfeited by the Participant upon the Participant’s Termination of Service. Notwithstanding the foregoing, unless otherwise provided in an Award Agreement with respect to an Award of Performance Shares, in the event of the death, Disability or Retirement of a Participant during the applicable Performance Period, or in other cases of special circumstances (including hardship or other special circumstances of a Participant whose employment is involuntarily terminated), the Board may determine to make a payment in settlement of such Performance Shares at the end of the Performance Period, based upon the extent to which the Performance Objectives were satisfied at the end of such period and pro-rated for the portion of the Performance Period during which the Participant was employed by the Company or an Affiliate; provided, however, that the Board may provide for an earlier payment in settlement of such Performance Shares in such amount and under such terms and conditions as the Board deems appropriate or desirable.

9.7.       

The settlement of a Performance Share shall be made in cash, whole shares of Common Stock or a combination thereof and shall be made as soon as practicable after the end of the applicable Performance Period. Notwithstanding the foregoing, the Board in its sole discretion may allow a Participant to defer payment in settlement of Performance Shares on terms and conditions approved by the Board and set forth in the related Award Agreement entered into in advance of the time of receipt or constructive receipt of payment by the Participant.

9.8.       

Performance Shares shall not be transferable by the Participant. The Board shall have the authority to place additional restrictions on the Performance Shares including, but not limited to, restrictions on transfer of any shares of Common Stock that are delivered to a Participant in settlement of any Performance Shares.

ARTICLE X.
CHANGES OF CONTROL OR OTHER FUNDAMENTAL CHANGES

10.1.       

Upon the occurrence of a Change of Control and unless otherwise provided in the Award Agreement with respect to a particular Award:

10.1.1       

all outstanding Stock Options shall become immediately exercisable in full, subject to any appropriate adjustments in the number of shares subject to the Stock Option and the Option Price, and shall remain exercisable for the remaining Option Period, regardless of any provision in the related Award Agreement limiting the exercisability of such Stock Option or any portion thereof for any length of time;

10.1.2       

all outstanding Performance Shares with respect to which the applicable Performance Period has not been completed shall be paid out as soon as practicable as follows:

(i)       

all Performance Objectives applicable to the Award of Performance Shares shall be deemed to have been satisfied to the extent necessary to earn one hundred percent (100%) of the Performance Shares covered by the Award;

(ii)       

the applicable Performance Period shall be deemed to have been completed upon occurrence of the Change of Control;

(iii)       

the payment to the Participant in settlement of the Performance Shares shall be the amount determined by the Board, in its sole discretion, or in the manner stated in the Award Agreement, as multiplied by a fraction, the numerator of which is the number of full calendar months of the applicable Performance Period that have elapsed prior to occurrence of the Change of Control, and the denominator of which is the total number of months in the original Performance Period; and

(iv)       

upon the making of any such payment, the Award Agreement as to which it relates shall be deemed terminated and of no further force and effect; and

10.1.3       

all outstanding shares of Restricted Stock with respect to which the restrictions have not lapsed shall be deemed vested, and all such restrictions shall be deemed lapsed and the Restriction Period ended.

10.2.       

Anything contained herein to the contrary notwithstanding, upon the dissolution or liquidation of the Company, each Award granted under the Plan and then outstanding shall terminate; provided, however, that following the adoption of a plan of dissolution or liquidation, and in any event prior to the effective date of such dissolution or liquidation, each such outstanding Award granted hereunder shall be exercisable in full and all restrictions shall lapse, to the extent set forth in Section 10.1.1 , 10.1.2 and 10.1.3 above.

10.3.       

After the merger of one or more corporations into the Company or any Affiliate, any merger of the Company into another corporation, any consolidation of the Company or any Affiliate of the Company and one or more corporations, or any other corporate reorganization of any form involving the Company as a party thereto and involving any exchange, conversion, adjustment or other modification of the outstanding shares of the Common Stock, each Participant shall, at no additional cost, be entitled, upon any exercise of such Participant’s Stock Option, to receive, in lieu of the number of shares as to which such Stock Option shall then be so exercised, the number and class of shares of stock or other securities or such other property to which such Participant would have been entitled to pursuant to the terms of the agreement of merger or consolidation or reorganization, if at the time of such merger or consolidation or reorganization, such Participant had been a holder of record of a number of shares of Common Stock equal to the number of shares as to which such Stock Option shall then be so exercised. Comparable rights shall accrue to each Participant in the event of successive mergers, consolidations or reorganizations of the character described above. The Board may, in its sole discretion, provide for similar adjustments upon the occurrence of such events with regard to other outstanding Awards under this Plan. The foregoing adjustments and the manner of application of the foregoing provisions shall be determined by the Board in its sole discretion. Any such adjustment may provide for the elimination of any fractional shares which might otherwise become subject to an Award. All adjustments made as the result of the foregoing in respect of each Incentive Stock Option shall be made so that such Incentive Stock Option shall continue to be an Incentive Stock Option, as defined in Section 422 of the Code.

ARTICLE XI.
AMENDMENT AND TERMINATION

11.1.       

Subject to the provisions of Section 11.2 , the Board of Directors at any time and from time to time may amend or terminate the Plan as may be necessary or desirable to implement or discontinue the Plan or any provision hereof. To the extent required by the Act or the Code, however, no amendment, without approval by the Company’s shareholders, shall:

11.1.1       

materially alter the group of persons eligible to participate in the Plan;

11.1.2       

except as provided in Section 3.4 , change the maximum aggregate number of shares of Common Stock that are available for Awards under the Plan; or

11.1.3       

alter the class of individuals eligible to receive an Incentive Stock Option or increase the limit on Incentive Stock Options set forth in Section 4.1.4 or the value of shares of Common Stock for which an Eligible Employee may be granted an Incentive Stock Option.

11.2.       

No amendment to or discontinuance of the Plan or any provision hereof by the Board of Directors or the shareholders of the Company shall, without the written consent of the Participant, adversely affect (in the sole discretion of the Board) any Award theretofore granted to such Participant under this Plan; provided, however, that the Board retains the right and power to:

11.2.1       

annul any Award if the Participant is terminated for cause as determined by the Board; and

11.2.2       

convert any outstanding Incentive Stock Option to a Nonqualified Stock Option.

11.3.       

If a Change of Control has occurred, no amendment or termination shall impair the rights of any person with respect to an outstanding Award as provided in ARTICLE X .

ARTICLE XII.
MISCELLANEOUS PROVISIONS

12.1.       

Nothing in the Plan or any Award granted hereunder shall confer upon any Participant any right to continue in the employ of the Company or its Affiliates or to serve as a Director or shall interfere in any way with the right of the Company or its Affiliates or the shareholders of the Company, as applicable, to terminate the employment of a Participant or to release or remove a Director at any time. Unless specifically provided otherwise, no Award granted under the Plan shall be deemed salary or compensation for the purpose of computing benefits under any employee benefit plan or other arrangement of the Company or its Affiliates for the benefit of their respective employees unless the Company shall determine otherwise. No Participant shall have any claim to an Award until it is actually granted under the Plan and an Award Agreement has been executed and delivered to the Company. To the extent that any person acquires a right to receive payments from the Company under the Plan, such right shall, except as otherwise provided by the Board, be no greater than the right of an unsecured general creditor of the Company. All payments to be made hereunder shall be paid from the general funds of the Company, and no special or separate fund shall be established and no segregation of assets shall be made to assure payment of such amounts, except as provided in ARTICLE VII with respect to Restricted Stock and except as otherwise provided by the Board.

12.2.       

The Plan and the grant of Awards shall be subject to all applicable federal and state laws, rules, and regulations and to such approvals by any government or regulatory agency as may be required. Any provision herein relating to compliance with Rule 16b-3 under the Act shall not be applicable with respect to participation in the Plan by Participants who are not subject to Section 16 of the Act.

12.3.       

The terms of the Plan shall be binding upon the Company, its successors and assigns.

12.4.       

Neither a Stock Option nor any other type of equity-based compensation provided for hereunder shall be transferable except as provided for in Section 6.2 . In addition to the transfer restrictions otherwise contained herein, additional transfer restrictions shall apply to the extent required by federal or state securities laws. If any Participant makes such a transfer in violation hereof, any obligation hereunder of the Company to such Participant shall terminate immediately.

12.5.       

This Plan and all actions taken hereunder shall be governed by the laws of the State of Nevada.

12.6.       

Each Participant exercising an Award hereunder agrees to give the Board prompt written notice of any election made by such Participant under Section 83(b) of the Code, or any similar provision thereof.

12.7.       

If any provision of this Plan or an Award Agreement is or becomes or is deemed invalid, illegal or unenforceable in any jurisdiction, or would disqualify the Plan or any Award Agreement under any law deemed applicable by the Board, such provision shall be construed or deemed amended to conform to applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Board, materially altering the intent of the Plan or the Award Agreement, it shall be stricken, and the remainder of the Plan or the Award Agreement shall remain in full force and effect.

12.8.       

The grant of an Award pursuant to this Plan shall not affect in any way the right or power of the Company or any of its Affiliates to make adjustments, reclassification, reorganizations, or changes of its capital or business structure, or to merge or consolidate, or to dissolve, liquidate or sell, or to transfer all or part of its business or assets.

12.9.       

The Plan is not subject to the provisions of ERISA or qualified under Section 401(a) of the Code.

12.10.       

If a Participant is required to pay to the Company an amount with respect to income and employment tax withholding obligations in connection with (i) the exercise of a Nonqualified Stock Option, (ii) certain dispositions of Common Stock acquired upon the exercise of an Incentive Stock Option, or (iii) the receipt of Common Stock pursuant to any other Award, then the issuance of Common Stock to such Participant shall not be made (or the transfer of shares by such Participant shall not be required to be effected, as applicable) unless such withholding tax or other withholding liabilities shall have been satisfied in a manner acceptable to the Company. To the extent provided by the terms of an Award Agreement, the Participant may satisfy any federal, state or local tax withholding obligation relating to the exercise or acquisition of Common Stock under an Award by any of the following means (in addition to the Company’s right to withhold from any compensation paid to the Participant by the Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to the Participant as a result of the exercise or acquisition of Common Stock under the Award, provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum amount of tax required to be withheld by law; or (iii) delivering to the Company owned and unencumbered shares of Common Stock.

12.11.       

Compliance with other laws .

12.11.1       For Reporting Persons:

(i)       

the Plan is intended to satisfy the provisions of Rule 16b-3;

(ii)       

all transactions involving Participants who are subject to Section 16(b) of the Exchange Act of 1934, as amended, are subject to the provisions of Rule 16b-3 regardless of whether they are set forth in the Plan; and

(iii)       

any provision of the Plan that conflicts with Rule 16b-3 does not apply to the extent of the conflict.

12.11.2       

If any provision of the Plan, any Award, or Award Agreement conflicts with the requirements of Code Section 162(m) or 422 for Awards subject to these requirements, then that provision does not apply to the extent of the conflict.

12.11.3       

Notwithstanding any other provision of the Plan, the Board and each applicable Committee shall administer the Plan and exercise all authority and discretion under the Plan to satisfy the requirements of Code Section 409A or any exemption thereto.

12.11.4       

Notwithstanding any other provision of the Plan, if, for an Employee of a parent company, the conversion of an Incentive Stock Option to a Nonqualified Stock Option or the treatment of an Incentive Stock Option as a Nonqualified Stock Option would not satisfy the requirements of Code Section 409A or an exemption thereto, as determined by the Board in its exclusive discretion, then the Incentive Stock Option shall terminate on the date that it would no longer qualify as an Incentive Stock Option as determined by the Board in its exclusive discretion.

12.12.       

Any reference in the Plan to a written document includes any document delivered electronically or posted on the Company’s intranet.

12.13.       

The headings and captions in the Plan are inserted as a matter of convenience for organizational purposes, and do not construe, define, extend, interpret, or limit any provision of the Plan.

12.14.       

Whenever the context may require, any pronoun includes the corresponding masculine, feminine, or neuter form, and the singular includes the plural and vice versa.

12.15.       

Any reference in the Plan to a statutory or regulatory provision includes corresponding successor provisions.

12.16.       

The proceeds from the sale of shares pursuant to Awards granted under the Plan shall constitute general funds of the Company.

12.17.       

Nothing contained in the Plan or in any Award agreement executed pursuant hereto shall be deemed to confer upon any individual or entity to whom an Award is or may be granted hereunder any right to remain in the employ or service of the Company or a parent or subsidiary of the Company or any entitlement to any remuneration or other benefit pursuant to any consulting or advisory arrangement.