EFTA00591165.pdf

PWRW&G Comments 8/4/2014 CONFIDENTIAL TERM SHEET July-28August 4, 2014 The following summarizes the terms and conditions of the proposed transaction between Ph -Press LiffkiteiEIARSPALC ("Buyer") and Artspace Marketplace, Inc., a Delaware corporation ("Seller"). The execution of a definitive merger agreement relating to the proposed transaction (the "Agreement) and the consummation of the proposed transaction shall be subject to the conditions set forth herein. Except for the sections of this term sheet entitled "Governing Law," "Expenses and Fees", "Deposit" and "Confidentiality; Public Disclosure," the provisions set forth in this term sheet ("Term Sheet") are not legally binding and are subject to the negotiation and execution of definitive agreements and documents and receipt of appropriate board and stockholder approvals by Seller. I Transaction: Purchase Price: Deposit: Definitive Agreement: The transaction will be structured as a reverse subsidiary merger of a newly- formed wholly-owned subsidiary of Buyer with and into Seller, or in such other structure (such as a sale of assets) as the parties may agree (the "Transaction"). The consideration payable by Buyer pursuant to the Transaction will be US$[4.25] million of cash. The Company's outstanding bridge loans will be repaid in full from the proceeds of the Transaction, and the balance will be paid to the holders of the Series B preferred shares. A ilea-refundeble—cash deposit of $0.5 million will be made-{e Selleiplaced in escrow by Buyer concurrently with the execution hereof, which will be applied-temaintained until completionofAhe Transaction. The deposit will be offset against the Purchase Price,--The-deposit-is and will be refundable to Buyer_solely if (i) Seller terminates negotiatesnegotiations_prior to August 15, 2014 in order—te—purfate—en—alternative—trawntetien—at—a—higher—perehase pneeor otherwise refuses to complete the Transaction on the terms contemplated in this Term Sheet, (ii) due diligence reveals, prior to closing of the Transaction, that any of Seller's database, balance sheet liabilities, or technology platform materially differs from what has been represented to Buyer in writing prior to the date of this Term Sheet, or (iii) all shareholder and board approvals of Seller necessary to complete the Transaction are not obtained by August 2014. Upon receipt of the deposit into escrow, the Company shall immediately cease any existing solicitations, discussions or negotiations with any person that has made or indicated an intention to acquire the Company. The Agreement will provide that the consummation of the Transaction is on an "as is, where is" basis. The parties intend to complete the due diligence and the negotiations with respect to the Agreement, in order to be able to have a signing and closing of all transactions contemplated hereunder, by no later than August 4_, 2014 and shall make all reasonable efforts to meet this time table. Buyer acknowledges that any required transition and implementation process (including with the assistance of Seller's tech personnel) will EFTA00591165 Expenses and Fees: Confidentiality; Public Disclosure: Governing Law: be made post-closing and after full payment of the purchase price. Buyer and Seller shall each bear its own fees and expenses incurred in connection with this term aheetTerm Sheet, the Transaction and related transactions (including financial advisory fees, investment banking fees, legal fees, accounting fees and other fees, costs and expenses). Ex-eePt—as—ether-wise—FequiFed—b.Hawc neitheENeither_Buyer nor Seller (nor any of their respective affiliates, officers, directors, employees, equityholders, agents or representatives), shall, without the prior written consent of the other party, (i) make any public announcement of the signing of this terra-sheetTerm Sheet_or the transactions contemplated hereby or of the pendency of discussions between the parties or (ii) disclose to any third party the terms of this term—sheetTerm Sheet, the substance of its discussions and negotiations with the other party or the fact that the parties are in discussions, in each case except for such disclosures as are necessary to comply with applicable laws, rules and regulations. In addition, subject to the foregoing exception, neither party shall disclose the contents or the existence of this tenn-sheetTerm Sheet or the pendency of discussions between the parties to any person other than employees and representatives who have a need to know such information in connection with the performance of their duties to either of the parties. This term cheetTerm Sheet, the Agreement and the other agreements contemplated hereby shall be governed by the internal laws of the State of New York, without regard to any conflicts of laws principles, that would indicate the applicability of any other jurisdiction. This term sheet shall become null and void if not executed by Seller and returned to, and countersigned by, Buyer by 5:00 p.m. (EDT) on July--30August 2014. Accepted as of the date first set forth above: Fhaiden-Fress-Lifake4ARSPALC Artspace Marketplace, Inc. By: By: Name:Keith Fox Name: Catherine Levene Title: CEOManager Title: CEO 2 Normal.dotm EFTA00591166 3 Nomial.doim EFTA00591167 Summary Report: Litera® Change-Pro 7.0.0.360 Document Comparison done on 8/4/2014 4:31:43 PM Style Name: PW Basic Original DMS:iw://EUROPE/Europe1/2003024/1 Modified DMS: iw://EUROPE/Europe1/2003024/2 Changes: Add 26 Delete 19 Move-Rem 0 Move To 0 Table Insert 0 Table Delete 0 Embedded Graphics (Visio, ChemDraw, Images etc.) 0 Embedded Excel 0 Format Changes 0 Total Changes: 45 EFTA00591168