Common use of Convertible Preferred Stock Clause in Contracts

Convertible Preferred Stock. (c) Subject to and upon the terms and conditions hereof, (i) the Prencen Entities waive any default that may exist due to the failure of the Company to maintain the Required Reserve Amount as required by Section 4(m) of the Securities Purchase Agreement and Section 11 of the Note, and (ii) the Lender (and its successors and assigns) agrees not to convert any portion of its Note to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely for the purpose of effecting the conversion of (A) all of the shares of Preferred Stock then outstanding and (B) the conversion of the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action on the part of any Person) upon the filing of the Charter Amendment (as defined below). Notwithstanding anything to the contrary provided herein, the waivers set forth in Section 2(a), Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Preferred Stock under the Preferred Stock SPA, the Company does not receive the consents of the holders of a majority of the outstanding voting securities of the Company in the form attached hereto as Exhibit B (the “Transaction Stockholder Consent”) authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock of the Company from 1,000,000,000 shares of Common Stock to 3,000,000,000 shares of Common Stock, (2) the Company fails to prepare and file with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after such closing, an information statement (the “Information Statement”), at the expense of the Company, informing the stockholders of the Company’s receipt of the Transaction Stockholder Consent, (3) in the event that the SEC elects to review the Information Statement, the Company does not use its reasonable best efforts to cause the Information Statement to become effective as soon as possible, (4) in the event that the SEC does not elect to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPA, or (5) the Company fails to file an amendment to its Certificate of Incorporation (the “Charter Amendment”) increasing the number of authorized shares from 1,000,000,000 to 3,000,000,000 within five (5) Business Days following the effective date of the Information Statement.

Convertible Preferred Stock. (c) Subject to and upon Upon surrender of a Receipt 11 16 or Receipts at the terms and conditions hereof, (i) the Prencen Entities waive any default that Depositary's Office or at such other offices as it may exist due to the failure of the Company to maintain the Required Reserve Amount as required by Section 4(m) of the Securities Purchase Agreement and Section 11 of the Note, and (ii) the Lender (and its successors and assigns) agrees not to convert any portion of its Note to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely designate for the purpose of effecting a split-up or combination of such Receipt or Receipts, and subject to the conversion terms and conditions of (A) all this Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts in the authorized denomination or denominations requested, evidencing the aggregate number of Depositary Shares evidenced by the Receipt or Receipts surrendered. Any holder of a Receipt or Receipts representing any number of whole shares of Convertible Preferred Stock then outstanding and may (Bunless the related Depositary Shares have previously been converted or called for redemption) withdraw the conversion of the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action Convertible Preferred Stock on the part basis of any Person) upon the filing one share of the Charter Amendment (as defined below). Notwithstanding anything to the contrary provided herein, the waivers set forth in Section 2(a), Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Convertible Preferred Stock under the Preferred Stock SPAfor every ten Depositary Shares surrendered and all money and other property, the Company does not receive the consents of the holders of a majority of the outstanding voting securities of the Company in the form attached hereto as Exhibit B (the “Transaction Stockholder Consent”) authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock of the Company from 1,000,000,000 shares of Common Stock to 3,000,000,000 shares of Common Stockif any, (2) the Company fails to prepare and file with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after represented thereby by surrendering such closing, an information statement (the “Information Statement”)Receipt or Receipts, at the expense of Depositary's office or at such other offices as the CompanyDepositary may designate for such withdrawals. Thereafter, informing the stockholders of the Company’s receipt of the Transaction Stockholder Consent, (3) in the event that the SEC elects to review the Information Statementwithout unreasonable delay, the Company does not use its reasonable best efforts Depositary shall deliver to cause the Information Statement to become effective as soon as possible, (4) in the event that the SEC does not elect to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPAsuch holder, or (5) to the Company fails to file an amendment to its Certificate of Incorporation (the “Charter Amendment”) increasing person or persons designated by such holder as hereinafter provided, the number of authorized whole shares from 1,000,000,000 of Convertible Preferred Stock and all money and other property, if any, represented by the Receipt or Receipts so surrendered for withdrawal, but holders of such whole shares of Convertible Preferred Stock will not thereafter be entitled to 3,000,000,000 within five (5) Business Days following deposit such Convertible Preferred Stock hereunder or to receive Depositary Shares therefor. However, if a Receipt delivered by the effective date holder to the Depositary in connection with such withdrawal shall evidence a number of Depositary Shares that is not divisible by 10, without remainder, any fractional share of Convertible Preferred Stock otherwise issuable upon conversion will be rounded down. Delivery of the Information Statement.Convertible Preferred Stock and money and other property being withdrawn may be made by the delivery of such certificates, documents of title, which, if required by law, shall be properly endorsed or accompanied by proper instruments of transfer, and other instruments as the Depositary may deem appropriate. If the Convertible Preferred Stock and the money and other property being withdrawn are to be delivered to a person or persons other than the record holder of the Receipt or Receipts being surrendered for withdrawal of Convertible Preferred Stock, such holder shall execute and deliver to the Depositary a written order so directing the Depositary and the Depositary may require

Convertible Preferred Stock. The debt arose out of a Master Credit Agreement entered into by Puget on August 9, 2013 with Shield Investments Inc., a corporation of currently unknown corporate domicile (c“Shield”), such agreement having been assigned by Shield to Rock Bay LLC (also a business entity whose corporate domicile is currently unknown; “Rock Bay”) Subject pursuant to a Debt Purchase and upon Assignment Agreement dated October 31, 2014, and, Rock Bay having been acquired by Alpere on August 18, 2015 with the terms Master Credit Agreement transferred by Rock Bay, LLC to Alpere, on that same date, which Master Credit Agreement was supplemented by a Securities Exchange and conditions hereofSettlement Agreement dated as of February 2, (i) 2015 between Alpere and Puget, a copy of which was filed by the Prencen Entities waive any default that may exist due to parties thereto with the failure United States Securities and Exchange Commission. All of the Company foregoing are being merged into the conditional debt conversion agreement to maintain which this letter relates. I hereby certify under penalty of perjury that upon receipt of the Required Reserve Amount Class B Convertible Preferred Stock, Alpere will be acquiring it for its own account for investment purposes without any intention of selling or distributing all or any part thereof. I represent and warrant that Alpere qualifies as required an accredited investor (as that term is defined in Rule 501(a) of Regulation D promulgated under authority of the Securities Act of 1933, as amended [the “Securities Act”]) and that I, on Alpere’s behalf, am sophisticated in financial affairs, or have relied on the advice of someone sophisticated in financial affairs, and that Alpere is able to bear the economic risks of this investment and I do not have any reason to anticipate any change in Alpere’s circumstances, financial or otherwise, nor any other particular occasion or event which should cause Alpere to sell or distribute, or necessitate or require its sale or distribution of the Class B Convertible Preferred Stock. No one other than Alpere and its stockholders has any beneficial interest in the Class B Convertible Preferred Stock. I further certify that I have consulted with Alpere’s legal counsel who, after having been apprized by me of all the material facts surrounding this transaction, opined to Alpere, for the benefit of Puget, that this transaction was being effected in full compliance with the applicable securities laws of the Conditionally Converting Creditor’s state of domicile, based on the exemption provided by Rule 3E-500.005 promulgated under authority of Section 4(m517.061(11) of the Securities Purchase Agreement and Section 11 Act of Florida. I agree that Alpere will in no event sell or distribute any of the NoteClass B Convertible Preferred Stock unless in the opinion of Puget’s counsel (based on an opinion of the Conditionally Converting Creditor’s legal counsel) the Class B Convertible Preferred Stock may be legally sold without registration under the Securities Act, and/or registration and/or other qualification under then-applicable State and/or Federal statutes, or the Class B Convertible Preferred Stock shall have been so registered and/or qualified and an appropriate prospectus, shall then be in effect. I am fully aware that the Class B Convertible Preferred Stock is being offered and issued by Puget to Alpere in reliance on the exemption provided by Section 3(a)(9) or the Securities Act which exempts the sale of securities by an issuer solely in exchange for other outstanding securities of the issuer and without payment of any related commissions or consideration, based on my certifications and warranties on behalf of Alpere. In connection with the foregoing, Alpere consents to Puget legending the Conditionally Converting Creditor’s certificates representing the Class B Convertible Preferred Stock to indicate its investment intent and the restriction on transfer contemplated hereby and to Puget’s placing a "stop transfer" order against the Class B Convertible Preferred Stock in Puget’ securities transfer books until the conditions set forth herein shall have been met. I acknowledge by my execution hereof that Alpere has had access to Puget’s Exchange Act Reports, books, records and properties, and (ii) have inspected the Lender (same to my full and its successors and assigns) agrees not to convert any portion of its Note complete satisfaction prior to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely for the purpose of effecting the conversion of (A) all Conditionally Converting Creditor’s acquisition of the shares Class B Convertible Preferred Stock. I represent and warrant that because of Preferred Stock then outstanding my experience in business and (B) investments, I am competent to make an informed investment decision with respect thereto on the conversion basis of my inspection of Puget’s records and my questioning of Puget’s officers. I further certify that Alpere’s domicile is located at the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement address set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action on the part of any Person) upon the filing of the Charter Amendment (as defined below)Agreement. Notwithstanding anything to the contrary provided hereinVery truly yours, the waivers set forth in Section 2(a)Alpere, Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Preferred Stock under the Preferred Stock SPA, the Company does not receive the consents of the holders of a majority of the outstanding voting securities of the Company in the form attached hereto as Exhibit B (the “Transaction Stockholder Consent”) authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock of the Company from 1,000,000,000 shares of Common Stock to 3,000,000,000 shares of Common Stock, (2) the Company fails to prepare and file with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after such closing, an information statement (the “Information Statement”), at the expense of the Company, informing the stockholders of the Company’s receipt of the Transaction Stockholder Consent, (3) in the event that the SEC elects to review the Information Statement, the Company does not use its reasonable best efforts to cause the Information Statement to become effective as soon as possible, (4) in the event that the SEC does not elect to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPA, or (5) the Company fails to file an amendment to its Certificate of Incorporation (the “Charter Amendment”) increasing the number of authorized shares from 1,000,000,000 to 3,000,000,000 within five (5) Business Days following the effective date of the Information Statement.Inc.

Convertible Preferred Stock. (c) Subject to and upon the terms and conditions hereof, (i) the Prencen Entities waive any default that may exist due to the failure of the Company to maintain the Required Reserve Amount as required by Section 4(m) of the Securities Purchase Agreement and Section 11 of the Note, and (ii) the Lender (and its successors and assigns) agrees not to convert any portion of its Note to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely for the purpose of effecting the conversion of (A) all of the shares of Preferred Stock then outstanding and (B) the conversion of the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action on the part of any Person) upon the filing of the Charter Amendment (as defined below). Notwithstanding anything to the contrary provided herein, the waivers set forth in Section 2(a), Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Preferred Stock under the Preferred Stock SPA, the Company does not receive the consents of the holders of a majority of the outstanding voting securities of the Company in the form attached hereto as Exhibit B (the “"Transaction Stockholder Consent”") authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock of the Company from 1,000,000,000 shares of Common Stock to 3,000,000,000 shares of Common Stock, (2) the Company fails to prepare and file with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after such closing, an information statement (the “"Information Statement”"), at the expense of the Company, informing the stockholders of the Company’s 's receipt of the Transaction Stockholder Consent, (3) in the event that the SEC elects to review the Information Statement, the Company does not use its reasonable best efforts to cause the Information Statement to become effective as soon as possible, (4) in the event that the SEC does not elect to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPA, or (5) the Company fails to file an amendment to its Certificate of Incorporation (the “"Charter Amendment”") increasing the number of authorized shares from 1,000,000,000 to 3,000,000,000 within five (5) Business Days following the effective date of the Information Statement.

Convertible Preferred Stock. The inability of the Corporation (cor its successor) Subject to make a purchase payment for any reason shall not relieve the Corporation (or its successor) from its obligation to effect any required purchase when, as and upon if permitted by applicable law. If the terms and conditions hereof, (i) Corporation fails to pay the Prencen Entities waive any default that may exist Fundamental Change Repurchase Price in full when due in accordance with this Section 9 in respect of some or all of the shares or Convertible Preferred Stock to be repurchased pursuant to the failure Fundamental Change Repurchase Right, the Corporation will pay Dividends on such shares not repurchased at the Regular Dividend Rate until such shares are repurchased, payable quarterly in arrears, out of funds legally available, on each Dividend Payment Date, for the period from and including the first Dividend Payment Date (or the Initial Issue Date, as applicable) upon which the Corporation fails to pay the Fundamental Change Repurchase Price in full when due in accordance with this Section 9 through but not including the latest of the Company to maintain day upon which the Required Reserve Amount as Corporation pays the Fundamental Change Repurchase Price in full in accordance with this Section 9. For the avoidance of doubt, the Fundamental Change Repurchase Price shall not be required by Section 4(m) of the Securities Purchase Agreement and Section 11 of the Note, and (ii) the Lender (and its successors and assigns) agrees not to convert any portion of its Note to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely for the purpose of effecting the conversion of paid unless either (x) (A) all outstanding indebtedness and other obligations of the Corporation and its Subsidiaries under or relating to the Credit Agreement (as amended, restated or otherwise modified) have been paid and satisfied in full or (B) all commitments under the Credit Agreement (as amended, restated or otherwise modified) have been terminated, (y) the Credit Agreement (as amended, restated, supplemented or otherwise modified from time to time) would not prohibit the payment of such Fundamental Change Repurchase Price or (z) the terms of any other applicable agreement evidencing indebtedness incurred for the purposes of refinancing or replacement of the Credit Agreement would not prohibit the payment of such Fundamental Change Repurchase Price; provided, that if the proceeds of any transaction or series of related transactions constituting the Fundamental Change would be sufficient to both (x) repay all outstanding indebtedness and other obligations of the Corporation and its Subsidiaries under or relating to the Credit Agreement (as amended, restated or otherwise modified) (or any other indebtedness in effect at such time which prohibits the payment of the Fundamental Change Repurchase Price without the prior repayment in full of such indebtedness (a “Prohibitive Debt Facility”)) and (y) pay all or any portion of the Fundamental Change Repurchase Price, the Company shall be obligated to repay and satisfy all outstanding indebtedness and other obligations of the Corporation and its Subsidiaries under or relating to the Credit Agreement (as amended, restated or otherwise modified) (or any Prohibitive Debt Facility) and terminate all commitments under the Credit Agreement (as amended, restated or otherwise modified) (or any Prohibitive Debt Facility) such that the Corporation shall not be restricted from repaying the Fundamental Change Repurchase Price in whole or in part on the Fundamental Change Repurchase Date. Notwithstanding the foregoing, in the event a Holder exercises a Fundamental Change Repurchase Right pursuant to this Section 9 at a time when the Corporation is restricted or prohibited (contractually or otherwise, including under the Credit Agreement) from repurchasing some or all of the Convertible Preferred Stock subject to the Fundamental Change Repurchase Right, the Corporation will use its commercially reasonable efforts to obtain the requisite consents to remove or obtain an exception or waiver to such restrictions or prohibition. Nothing herein shall limit a Holder’s right to pursue any other remedies available to such Holder under this Certificate of Designation, at law or in equity, including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Corporation’s failure to comply with its obligations under this Section 9. The Corporation will not voluntarily take any action, or voluntarily engage in any transaction, that would result in a Fundamental Change unless the Corporation in good faith believes that it will have sufficient funds legally available to fully pay the maximum aggregate Fundamental Change Repurchase Price that would be payable in respect of such Fundamental Change on all shares of Convertible Preferred Stock then outstanding and (B) the conversion of the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action on the part of any Person) upon the filing of the Charter Amendment (as defined below). Notwithstanding anything to the contrary provided herein, the waivers set forth in Section 2(a), Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Preferred Stock under the Preferred Stock SPA, the Company does not receive the consents of the holders of a majority of the outstanding voting securities of the Company in the form attached hereto as Exhibit B (the “Transaction Stockholder Consent”) authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized number of shares of Common Stock of the Company from 1,000,000,000 shares of Common Stock to 3,000,000,000 shares of Common Stock, (2) the Company fails to prepare and file with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after such closing, an information statement (the “Information Statement”), at the expense of the Company, informing the stockholders of the Company’s receipt of the Transaction Stockholder Consent, (3) in the event that the SEC elects to review the Information Statement, the Company does not use its reasonable best efforts to cause the Information Statement to become effective as soon as possible, (4) in the event that the SEC does not elect to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPA, or (5) the Company fails to file an amendment to its Certificate of Incorporation (the “Charter Amendment”) increasing the number of authorized shares from 1,000,000,000 to 3,000,000,000 within five (5) Business Days following the effective date of the Information Statement.

Convertible Preferred Stock. (c) Subject The Share Cap shall be subject to and upon the terms and conditions hereof, (i) the Prencen Entities waive any default that may exist due equitable adjustment in a manner not adverse to the failure of the Company to maintain the Required Reserve Amount as required by Section 4(m) of the Securities Purchase Agreement and Section 11 of the Note, and (ii) the Lender (and its successors and assigns) agrees not to convert any portion of its Note to the extent necessary to ensure that at all times the Company has available a sufficient number of authorized shares of Common Stock under its Certificate of Incorporation to be reserved solely for the purpose of effecting the conversion of (A) all of the shares of Preferred Stock then outstanding and (B) the conversion of the full principal amount of the Notes issued pursuant to the Watershed Securities Purchase Agreement (as defined in the Securities Purchase Agreement) then outstanding; provided that the waiver and agreement set forth in the foregoing clauses (i) and (ii) shall terminate (with no further action on the part of any Person) upon the filing of the Charter Amendment (as defined below). Notwithstanding anything to the contrary provided herein, the waivers set forth in Section 2(a), Section 2(b) and clause (i) of this Section 2(c) shall immediately terminate (with no further action on the part of any Person) if (1) within five Business Days following the closing date of the issuance of the Preferred Stock under the Preferred Stock SPA, the Company does not receive the consents of the holders of Convertible Preferred Stock if and whenever there shall occur a majority of stock split, combination, reclassification or other similar event involving the outstanding voting securities of Common Stock. From and after the Company in time at which the form attached hereto as Exhibit B (the “Transaction Stockholder Consent”) authorizing the amendment of the Certificate of Incorporation of the Company to increase the authorized aggregate number of shares of Common Stock issued upon conversion of the Company Convertible Preferred Stock equals the Share Cap, each holder electing to convert or subject to Mandatory Conversion of Convertible Preferred Stock shall be entitled to receive from 1,000,000,000 the Corporation a cash payment (a “Make-Whole Payment”) equal to the product of (x) the Current Market Price of the Common Stock on the applicable Conversion Date times (y) the number of shares of Common Stock that such holder would have been entitled to 3,000,000,000 shares receive had such Convertible Preferred Stock been converted. To the extent that multiple holders of Convertible Preferred Stock elect or are subject to conversion on the same Conversion Date in respect of which a Make-Whole Payment may be required hereunder, any allocation between Make-Whole Payments and Common Stock, Stock issuable upon conversion shall be made ratably among such holders. The Corporation shall (2A) pay any Make-Whole Payment owing to a holder of Convertible Preferred Stock on the Company fails same day it delivers or would otherwise be required to prepare and file deliver Common Stock to such holder in connection with the SEC, as promptly as practicable after the closing of the issuance of the Preferred Stock under the Preferred Stock SPA, but in no event later than the date 20 calendar days after such closing, an information statement related conversion and (the “Information Statement”), at the expense of the Company, informing the stockholders of the Company’s receipt of the Transaction Stockholder Consent, (3B) in the event that the SEC elects Corporation has issued a number of shares of Common Stock upon conversion of the Convertible Preferred Stock equal to review the Information StatementShare Cap (the date such Share Cap is reached, the Company does not use its reasonable best efforts to cause “Share Cap Date”), promptly thereafter give all holders of Convertible Preferred Stock of record as of the Information Statement to become effective as soon as possible, (4) in the event Share Cap Date written notice that the SEC does not elect Corporation has issued, upon conversion of Convertible Preferred Stock, an amount of Common Stock that is equal to review the Information Statement, the Information Statement is not effective within two months following the date of the closing for the issuance of the Preferred Stock under the Preferred Stock SPA, or (5) the Company fails to file an amendment to its Certificate of Incorporation (the “Charter Amendment”) increasing the number of authorized shares from 1,000,000,000 to 3,000,000,000 within five (5) Business Days following the effective date of the Information StatementShare Cap.