Exhibit 2.1
MEMBERSHIP INTEREST PURCHASE AGREEMENT
MEMBERSHIP INTEREST PURCHASE AGREEMENT, dated this 4th day of June, 2014
(this "Agreement"), by and among the members of TelBill, LLC (the "Company"),
(the "Seller"); and DataJack, Inc., a Nevada corporation ("Purchaser"); and the
Company.
W I T N E S S E T H
WHEREAS, the Seller is the owner of One Hundred Percent (100%) of the
outstanding membership interests of the Company, TelBill Holdings, LLC (100%),
▇▇▇▇▇ ▇. ▇▇▇▇ the "Membership Interests"), and
WHEREAS, Seller desires to sell to Purchaser the Membership Interests
representing One Hundred Percent (100%) of the issued and outstanding Membership
Interests of the Company, on the terms and conditions set forth in this
Agreement whereby the Company will become a wholly owned subsidiary of the
Purchaser, and
WHEREAS, Purchaser desires to buy the Membership Interests on the terms and
conditions set forth herein,
NOW THEREFORE, in consideration of the promises and respective mutual
agreements herein contained, it is agreed by and between the parties hereto as
follows.
ARTICLE 1
SALE AND PURCHASE OF THE INTERESTS
1.1 Sale of the Membership Interests. Subject to the terms and conditions
herein set forth, on the basis of the representations, warranties and agreements
herein contained, Sellers hereby sell, assign, transfer and deliver the
Membership Interests to Purchaser, and Purchaser purchases the Membership
Interests from the Sellers (the "Transaction").
1.2 The Closing. The purchase of the Membership Interests (the "Closing")
shall take place at the office of the Purchaser in Dallas, Texas or such other
place as Purchaser and Sellers may mutually agree contemporaneously with the
execution hereof. Such date is herein referred to as the "Closing Date".
1.3 Instruments of Conveyance and Transfer. On the Closing Date, Sellers
shall deliver evidence of Sellers' ownership in the Membership Interests
representing the Membership Interests to be sold to Purchaser and the parties to
this Agreement will execute an instrument acceptable to all parties as shall be
effective to vest in Purchaser all right, title and interest in and to all of
the Membership Interests.
1.4 Consideration and Payment for the Membership Interests. In
consideration for the Membership Interests, Purchaser shall pay to the Sellers
the following items of securities and future compensation (the "Purchase Price",
with the shares of Purchaser common stock issued pursuant to this Section 1.4
referred to as the "Purchase Price Shares").
(a) 30,600,000 shares equal to fifty one percent (51%) of DataJack, Inc's
then outstanding number of shares of common stock ("Common Stock")
(the "Purchase Price"). In addition 9% (nine percent) or 5,400,000
shares will be issued as options or warrants of which will be granted
to employees and or channel partners at Seller's discretion subject to
the applicable law of the Securities Act of 1933, as amend (the
"Securities Act").
(b) True-Up Tranche. Additionally, subsequent to the Closing Date and for
a period of eighteen months following the Closing Date, Buyer will
attempt to raise working capital from various "accredited" investors.
Seller shall be entitled to a one-time "true-up" grant of additional
shares of Common Stock or options immediately following the
completion, if any, of such capital raise such that Seller shall
continue to own no less than fifty-one (51%) of the then outstanding
number of shares of Common Stock, including any warrants or other
contingent rights to purchase shares of Common Stock issued as part of
the financing, immediately after the Closing of such financing. All
such shares of Common Stock granted pursuant to this Section 2.1(ii)
shall be deemed to be part of the "Purchase Price". All shares of
Common Stock issued as part of the Purchase Price shall be
"restricted" securities as such term is defined by the Securities
1.5 Within five (5) business days after the Closing Date, ▇▇▇▇▇ ▇. ▇▇▇▇,
will be elected by the Purchaser as a Board Member of the Purchaser's Board of
Directors and will appoint three additional board members pursuant to written
consent, resolution, or other appropriate written corporate action or Board of
Director's meeting in accordance with Purchaser's bylaws and the Nevada Revised
Statutes.
1.6 ▇▇. ▇▇▇▇▇ ▇. ▇▇▇▇ will serve as the CEO of the Company.
1.7 On the Closing Date.
1.8 Excluded Assets and Liabilities from Sale. All assets and liabilities
listed in Schedule A are excluded from purchase.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF THE SELLERS
Each of the Sellers severally (and not jointly or joint and severally)
represents, warrants and undertakes to the Purchaser that, except as set forth
in the Disclosure Schedule:
2.1 Transfer of Title. Such Seller shall transfer all right, title and
interest in and to its respective Membership Interests to the Purchaser free and
clear of all liens, security interests, pledges, encumbrances, charges,
restrictions, demands and claims, of any kind or nature whatsoever, whether
direct or indirect or contingent.
(a) Due Execution. This Agreement has been duly executed and delivered by
such Seller.
(b) Valid Agreement. This Agreement constitutes, and upon execution and
delivery thereof by such Seller, will constitute, a valid and binding
agreement of such Seller enforceable against such Seller in accordance
with its terms.
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(c) Authorization. Such Seller has full power and authority to execute
this Agreement and to consummate the transactions set forth herein.
The execution and delivery by such Seller of this Agreement has have
been duly and validly authorized by all necessary corporate action..
(d) Sellers's Title to Membership Interests; No Liens or Preemptive
Rights; Valid Issuance. Such Seller has good and valid title and
control of its respective Membership Interests; there are no existing
impediment or encumbrance to the sale and transfer of such Membership
Interests to the Purchaser. Assuming Purchaser has the requisite power
and authority to be the lawful owner of such Membership Interests,
upon delivery to the Purchaser at the Closing of such Membership
Interests, duly endorsed by such Seller for transfer to Purchaser, and
upon such Seller's receipt of its respective Purchase Price Shares,
good and valid title to such Membership Interests will pass to
Purchaser, and all of the Membership Interests will be free and clear
of all taxes, liens, security interests, pledges, rights of first
refusal or other preference rights, encumbrances, charges,
restrictions, demands, claims or assessments of any kind or any nature
whatsoever whether direct, indirect or contingent, other than those
arising from acts of Purchaser or its affiliates.
2.2 No Governmental Action Required. The execution and delivery by such
Seller of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official,
other than those that may be required solely by reason of Purchaser's (as
opposed to any other third party's) participation in the transactions
contemplated by this Agreement.
2.3 Compliance with Applicable Law and Corporate Documents. The execution
and delivery by such Seller of this Agreement does not and will not, and the
sale by such Seller of its respective Membership Interests and the consummation
of the other transactions contemplated by this Agreement does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, (ii) the certificate of formation or limited
liability company agreement of the Company or (iii) any agreement, judgment,
injunction, order, decree or other instrument binding upon such Seller or the
Company's assets, or result in the creation or imposition of any lien on any
asset of any Seller.
2.4 Not a Voting Trust: No Proxies. Such Seller's respective Membership
Interests are not subject to any voting trust or agreement. No person holds or
has the right to receive any proxy or similar instrument with respect to such
Seller's Membership Interests. Except as provided in this Agreement, such Seller
is not a party to any agreement which offers or grants to any person the right
to purchase or acquire any of its respective Membership Interests.
2.5 Adoption of Company's Representations. To the best of such Seller's
actual knowledge, the representations made by the Company in Article 3 are
accurate in all material respects.
2.6 Brokers. To the best of such Seller's knowledge, no registered
representative of a securities broker-dealer, broker or securities
broker-dealer, whether or not the foregoing are properly registered with FINRA
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or the Securities and Exchange Commission ("SEC"), finder or investment banker
is entitled to any brokerage, finder's or other fee or commission payable by the
Purchaser or the Company, directly or indirectly, in connection with the
transactions contemplated by this Agreement.
2.7 Investment Intent. Such Seller represents that it is acquiring the
Purchase Price Shares issuable to it pursuant hereto solely for its own account
for investment purposes only and not with a view toward resale or distribution
thereof, other than pursuant to an effective registration statement or
applicable exemption from the registration requirements of the Securities Act of
1933, as amended (the "Securities Act"). Such Seller understands that such
Purchase Price Shares will be issued in reliance upon an exemption from the
registration requirements of the Securities Act and that subsequent sale or
transfer of such securities is prohibited absent registration or exemption from
the provisions of the Securities Act. Such Seller further acknowledges that
under SEC Rule 144, the Purchase Price Shares may be sold pursuant to all of the
provisions of such Rule after a required holding period. Such Seller understands
that it and its control persons may be deemed to be "Affiliates" of Purchaser
pursuant to this Agreement, and that additional restrictions upon transfer will
occur as a result thereof. Such Seller hereby agrees that it will not sell,
assign, transfer, pledge or otherwise convey any of the Purchase Price Shares
issuable pursuant hereto, except in compliance with the provisions of the
Securities Act and in accordance with any transfer restrictions or similar terms
set forth on the certificates representing such securities or otherwise set
forth herein. Such Seller acknowledges receiving copies of Purchaser's most
recent SEC Reports (as defined in Section 4.11 hereof).
ARTICLE 3
REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COMPANY
The Company represents, warrants and undertakes to the Purchaser that,
except as set forth on the Disclosure Schedule:
3.1 Due Organization. The Company is a limited liability company duly
organized, validly existing and in good standing under the laws of the State of
Missouri with full corporate power and authority to own, lease, use, and operate
its properties and to carry on its business as and where now owned, leased,
used, operated and conducted.
3.2 (a) Company Authority. The Company has all requisite corporate power
and authority to enter into and perform this Agreement and to consummate the
transactions contemplated herein.
(b) Due Authorization. The execution, delivery and performance by the
Company of this Agreement has been duly and validly authorized and no
further consent or authorization of the Company, its members or
managers is required.
(c) Valid Execution. This Agreement has been duly executed and delivered
by the Company.
(d) Binding Agreement. This Agreement constitutes, and upon execution and
delivery thereof by the Company, will constitute, a valid and binding
agreement of the Company, enforceable against the Company in
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accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditor's rights
generally or the availability of equitable remedies.
(e) No Violation of Corporate Documents or Agreements. The execution and
delivery of this Agreement by the Company and the performance by the
Company of its obligations hereunder will not cause, constitute, or
conflict with or result in (i) any breach or violation, or give rise
to a right of termination, cancellation or acceleration of any
obligation or to loss of a material benefit under, or to increased,
additional, accelerated or guaranteed rights or entitlements of any
person under any of the provisions of, or constitute a default under,
any license, indenture, mortgage, charter, instrument, articles of
incorporation, bylaw, judgment, order, decision, writ, injunction, or
decree or other agreement or instrument or proceeding to which the
Company is a party, or by which it may be bound, nor will any consents
or authorizations of any party other than by those hereto required,
(ii) an event that would cause the Company to be liable to any party,
or (iii) an event that would result in the creation or imposition or
any lien, charge or encumbrance on any asset of the Company or on the
securities of the Company to be acquired by the Purchaser.
3.3 Outstanding Membership Interests, No Preemptive Rights, No Liens;
Anti-Dilution. As of the date hereof, the total outstanding Membership Interests
of Sellers are as set forth on the Signature Page. The Membership Interests are
duly authorized, validly issued, fully paid and non-assessable. No Membership
Interests are subject to preemptive rights or similar rights of the members of
the Company or any liens or encumbrances imposed through the actions or failure
to act of the Company, or otherwise. As of the date hereof (i) there are no
outstanding options, warrants, convertible securities, scrip, rights to
subscribe for, puts, calls, rights of first refusal, tag-along agreements, nor
any other agreements, understandings, claims or other commitments or rights of
any character whatsoever to which the Company is a party or otherwise bound
relating to, or securities or rights convertible into or exchangeable for any
Membership Interests of the Company, or arrangements by which the Company is or
may become bound to issue additional Membership Interests of the Company, and
(ii) there are no agreements or arrangements under which the Company is
obligated to register the sale of any of its securities under the Securities Act
of 1933, and (iii) there are no anti-dilution or price adjustment provisions
contained in any security issued by the Company (or in the Company's formation
documents or in any agreement providing rights to security holders) that will be
triggered by the transactions contemplated by this Agreement. The Company has
furnished to Purchaser true and accurate copies of the Company's formation and
governing documents.
3.4 No Governmental Action Required. The execution and delivery by the
Company of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official,
other than those that may be required solely by reason of Purchaser's (as
opposed to any other third party's) participation in the transactions
contemplated by this Agreement.
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3.5 Compliance with Applicable Law and Corporate Documents. The execution
and delivery by the Company of this Agreement and the performance by the Company
of the transactions contemplated hereby does not and will not contravene or
constitute a default under or violation of (i) any provision of applicable law
or regulation, including any environmental law, (ii) the Company's formation
documents, or (iii) any agreement, judgment, injunction, order, decree or other
instrument binding upon the Company or any its assets, or result in the creation
or imposition of any lien on any asset of the Company. To the best of its
knowledge, the Company is in compliance with and conforms to all statutes, laws,
ordinances, rules, regulations, orders, restrictions and all other legal
requirements of any domestic or foreign government or any instrumentality
thereof having jurisdiction over the conduct of its businesses or the ownership
of its properties.
3.6 No Litigation. The Company is not a party to any other suit, action,
arbitration, or legal, administrative, or other proceeding, or pending or
threatened governmental investigation. The Company is not subject to or in
default with respect to any order, writ, injunction, or decree of any federal,
state, local, or foreign court, department, agency, or instrumentality.
3.7 No Taxes. To the Company's knowledge and belief, the Company is not,
and will not become with respect to any periods ending on or prior to the
Closing Date, liable for any income, sales, withholding, franchise, excise,
license, real or personal property taxes (a "Tax") to any foreign, United States
federal, state or local governmental agencies whatsoever. All United States
federal, state, county, municipality local or foreign income Tax returns and all
other material Tax returns (including information returns) that are required, or
have been required, to be filed by or on behalf of the Company have been or will
be filed as of the Closing Date and all Taxes due pursuant to such returns or
pursuant to any assessment received by the Company have been or will be paid as
of the Closing Date. The charges, accruals and reserves on the books of the
Company in respect of taxes or other governmental charges have been established
in accordance with the tax method of accounting. All returns that have been
filed relating to Tax are true and accurate in all material respects. No audit,
action, suit, proceeding or other examination regarding taxes for which the
Company may have any liability is currently pending against or with respect to
the Company and neither Sellers nor the Company have received any notice
(formally or informally) of any audit, suit, proceeding or other examination. No
material adjustment relating to any Tax returns, no closing or similar agreement
have been entered into or issued or have been proposed (formally or informally)
by any tax authority (insofar as such action relate to activities or income of
or could result in liability of the Company for any Tax) and no basis exists for
any such actions. The Company has not changed any election, adopted or changed
any accounting method or period, filed any amended return for any Tax, settled
any claim or assessment of any Tax, or surrendered any right to claim any refund
of any Tax, or consented to any extension or waiver of the statute of
limitations for any Tax. The Company has not had an "ownership change" as that
term is defined in Section 382 of the Internal Revenue Code of 1986, as amended
and in effect.
3.8 Assets. The Company's material assets are listed in the Disclosure
Schedule. All such assets are in good working order and are owned by the Company
free and clear of any liens, claims or encumbrances.
3.9 Licenses, Permits, Etc. The Company possesses adequate licenses,
clearances, ratings, permits and franchises, and all rights with respect
thereto, to conduct its business substantially as now and heretofore conducted,
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and without any conflict with the rights of others in any such license,
clearance, rating, permit or franchise. Except for instances previously
remedied, the Company does not have knowledge of, nor has it received notice of,
any termination, revocation or limitation of, or of the pendency or threatened
commencement of any proceeding to terminate, revoke or limit any such licenses,
clearances, ratings, permits or other approvals by the governmental body issuing
same. To the knowledge of the Company, no such right will be terminated as a
result of the sale of the Membership Interests hereby. A list of all such
permits and licenses is set forth in the Disclosure Schedule.
3.10 Liabilities. The Company has no liabilities or obligations, other than
(A) liabilities and obligations which are stated or provided for in the
Disclosure Schedule and which continue to exist, and (B) liabilities and
obligations incurred by the Company in the ordinary course of business
consistent with past practices subsequent to the date of the Disclosure Schedule
which do not and will not have a material adverse effect (none of which results
from, arises out of, relates to, is in the nature of, or was caused by any
breach of contract, breach of warranty, tort, infringement, or violation of
law).
3.11 ERISA Compliance.
(a) The Disclosure Schedule contains a list of each pension, profit
sharing, thrift or other retirement plan, employee stock ownership
plan, deferred compensation, stock option, stock purchase, performance
share, bonus or other incentive plan, severance plan, health, group
insurance or other welfare plan, or other similar plan, agreement,
policy or understanding, including without limitation, any "employee
benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), under which the
Company or any ERISA Affiliate has any current or future obligation or
liability or under which any employee of the Company or any ERISA
Affiliate has any current or future right to benefits (each such plan,
agreement, policy or understanding being hereinafter referred to
individually as a "Plan"). ---- The Company has delivered to Purchaser
true and complete copies of (A) each Plan, (B) the summary plan
description, if any, for each Plan, (C) the most recent Internal
Revenue Service determination letter with respect to each Plan, if
applicable, (D) the latest annual report (Form 5500 or 5500-C) for the
past three (3) years, if any, which has been filed with the Internal
Revenue Service for each Plan, and (E) copies of any related materials
that have been furnished to participants or beneficiaries of each Plan
or to any Governmental Body.
(b) Each Plan is in compliance in all material respects with the
provisions of ERISA, the Code and all other applicable federal and
state laws and the rules and regulations promulgated thereunder
interpreting or applying these laws and each Plan (and related trust
or funding vehicle, if any) has at all times been administered and
maintained in accordance with its terms and applicable Laws,
including, without limitation, the filing of all applicable reports.
(c) Each Plan shall be terminated at or prior to the Closing.
3.12 Insurance. The Disclosure Schedule includes a true and correct list of
all policies or binders of insurance of the Company in force, specifying the
insurer, policy number (or covering note number with respect to binders) and
amount thereof and describing each pending claim thereunder. Such policies are
in full force and effect. To the knowledge of the Company, the activities and
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operations of the Company have been conducted in a manner so as to conform in
all material respects to all applicable provisions of such insurance policies.
There are no outstanding unpaid claims under any such policy or binder, or
claims for worker's compensation. The Company has not received notice of
cancellation or non-renewal of any such policy or binder which has not been
replaced on substantially similar terms prior to the date of such cancellation.
Such insurance will lapse on the Closing Date.
3.13 Compliance with Law. To the best of its knowledge, the Company has
complied with, and is not in violation of any provision of any applicable
statute, rule, regulation, order, or restriction of any domestic or foreign
government or any instrumentality or agency thereof in respect of the conduct of
its respective business or the ownership of its respective properties, which
violation would have a material adverse effect on the Company. There are no
pending or threatened proceedings against the Company by any federal, state or
local government, or any department, board, agency or other body thereof.
3.14 Consents. The Disclosure Schedule lists all consents ("Consents") of
third parties required to be obtained as a result of the change of control of
the Company hereby.
3.15 Agreements. Except as set forth in the Disclosure Schedule, the
Company is not a party to any material agreement, loan, credit, lease, sublease,
franchise, license, contract, commitment or instrument or subject to any
corporate restriction. The Disclosure Schedule identifies every loan or credit
agreement, and every fully or partially executory agreement or purchase order
pursuant to which the Company is obligated to deliver goods or perform services,
pay for goods, services or other property, or repay any loan, including, without
limitation, any agreement with present or former officers, directors,
consultants, agents, brokers, vendors, customers and/or dealers of any nature.
True, correct and complete copies of all such agreements have been delivered to
Purchaser. The Company is not in default under any such agreement, loan, credit,
lease, sublease, franchise, license, contract, commitment, instrument or
restriction. No such instrument requires the consent of any other party thereto
in order to consummate the sales of the Membership Interests hereby.
3.16 Intellectual Property. The Disclosure Schedule sets forth a true,
correct and complete list and description of all registered patents, trademarks
and copyrights and applications therefore owned by the Company (the
"Intellectual Property"). To the best of the Company's knowledge, the Company is
the sole owner of, and has the exclusive right to use, free and clear of any
payment, restriction or encumbrance, the Intellectual Property. The Company has
not received any written or oral communication from any person or entity
asserting any ownership interest in any Company Intellectual Property. To the
best of the Company's knowledge, the Intellectual Property does not infringe on,
misappropriate, or otherwise violate a valid and enforceable intellectual
property right of any other person or entity.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants that the following are true and correct
as of the date hereof and will be true and correct through the Closing Date as
if made on that date:
4.1 Agreement's Validity. This Agreement has been duly executed and
delivered by Purchaser and constitutes a legal, valid and binding obligation of
Purchaser, enforceable against Purchaser in accordance with its terms, except as
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may be limited by applicable bankruptcy, insolvency or similar laws affecting
creditors' rights generally or the availability of equitable remedies.
4.2 Investment Intent. Purchaser is acquiring the Membership Interests for
its own account for investment and not with a view to, or for sale or other
disposition in connection with, any distribution of all or any part thereof.
4.3 Restricted Securities. Purchaser understands that the Membership
Interests have not been registered pursuant to the Securities Act of 1933, as
amended (the "Securities Act") or any applicable state securities laws, that the
Membership Interests will be characterized as "restricted securities" under
federal securities laws, and that under such laws and applicable regulations the
Membership Interests cannot be sold or otherwise disposed of without
registration under the Securities Act or an exemption therefrom.
4.4 Expenses. Purchaser will pay any and all expenses pertaining to an
audit and other financial preparation of the financial statements of the Company
in conformity with GAAP and the federal securities laws.
4.5 Form 8-K. Purchaser will file a Form 8-K under Item 9.01 (Financial
Statements and Exhibits) within 71 calendar days after the date that the initial
report on Form 8-K must be filed reporting the Purchase, which will include the
audited financial statements of the Company in conformity with Item 9.01 of Form
8-K.
4.6 Compliance with Law. To the knowledge of the Purchaser, the Purchaser
has complied with, and is not in violation of, any applicable statute, rule,
regulation, order, or restriction of any domestic or foreign government or any
instrumentality or agency thereof in respect of the conduct of its respective
business or the ownership of its respective properties, which violation would
have a material adverse effect on the Purchaser. There are no pending or
threatened proceedings against the Purchaser by any federal, state or local
government, or any department, board, agency or other body thereof.
4.7 Licenses, Permits. Etc. The Purchaser possesses adequate licenses,
clearances, ratings, permits and franchises, and all rights with respect
thereto, to conduct its business substantially as now and heretofore conducted,
and without any conflict with the rights of others in any such license,
clearance, rating, permit or franchise. Except for instances previously
remedied, the Purchaser does not have knowledge of, nor has it received notice
of, any termination, revocation or limitation of, or of the pendency or
threatened commencement of any proceeding to terminate, revoke or limit any such
licenses, clearances, ratings, permits or other approvals by the governmental
body issuing same.
4.8 Compliance with Applicable Law and Corporate Documents. The execution
and delivery by the Purchaser of this Agreement and the performance by the
Purchaser of the transactions contemplated hereby does not and will not
contravene or constitute a default under or violation of (i) any provision of
applicable law or regulation, including any environmental law, (ii) the
Purchaser's formation documents, or (iii) any agreement, judgment, injunction,
order, decree or other instrument binding upon the Purchaser or any its assets,
or result in the creation or imposition of any lien on any asset of the
Purchaser. To the best of its knowledge, the Purchaser is in compliance with and
conforms to all statutes, laws, ordinances, rules, regulations, orders,
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restrictions and all other legal requirements of any domestic or foreign
government or any instrumentality thereof having jurisdiction over the conduct
of its businesses or the ownership of its properties.
4.9 Power and Authority. The Purchaser has the corporate power and
authority to execute and deliver this Agreement and related agreements, to
perform its obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The Purchaser has taken all
necessary corporate action to authorize the execution, delivery and performance
of this Agreement and the related agreements.
4.10 No Violation. The execution and delivery by the Purchaser of this
Agreement and the related agreements, the consummation of the transactions
contemplated hereby and thereby, and the compliance by the Purchaser with the
terms and provisions hereof and thereof, will not (a) result in a violation or
breach of, or constitute, with the giving of notice or lapse of time, or both, a
material default (or give rise to any right of termination, cancellation or
acceleration) under, any of the terms, conditions or provisions of the
Purchaser's charter or bylaws or any contract to which the Purchaser is a party
or by which the Purchaser is bound, (b) violate any federal or state laws
applicable to the Purchaser, or (c) result in the imposition of any lien upon
any of the properties or assets of the Purchaser or the suspension, revocation,
impairment, forfeiture or nonrenewal of any material permit, license,
authorization or approval applicable to the Purchaser or its businesses,
operations or properties.
4.11 Validity. Each share of the Purchaser's common stock that is issued
and outstanding is validly issued, fully paid and non-assessable with no
personal liability attaching to the ownership thereof. The designations, powers,
preferences, rights, qualifications, limitations and restrictions in respect of
each class or series of authorized capital stock of the Purchaser are as set
forth in the Company's articles of incorporation, and all such designations,
powers, preferences, rights, qualifications, limitations and restrictions are
valid, binding and enforceable and in accordance with all applicable laws. All
of the outstanding shares of common stock have been issued in compliance with
the Securities Act and all applicable state securities laws. Upon issuance of
the Purchase Price Shares to each Seller, the Purchase Price Shares will be
validly issued, fully paid and non-assessable shares of the Company's common
stock.
4.12 SEC Reports. The Purchaser has made all periodic reports required by
Sections 13 and 15(d) (the "SEC Reports") of the Securities and Exchange Act of
1934, as amended (the "Exchange Act"). The SEC Reports, when filed, complied in
all material respects with applicable requirements of the Exchange Act, the
Securities Act and the securities laws, rules and regulations of any state. The
SEC Reports, when filed or as amended in corrective disclosures, did not contain
an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not misleading.
4.13 Financial Statements. Each of the balance sheets included in the SEC
Reports (including any related notes and schedules) fairly presents in all
material respects the financial position of the Purchaser as of its date, and
each of the other financial statements included in the SEC Reports (including
any related notes and schedules) fairly presents in all material respects the
results of operations and cash flows of the Purchaser for the periods or as of
the dates therein set forth in accordance with GAAP consistently applied during
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the periods involved (except that the interim reports are subject to normal
recording adjustments which might be required as a result of year-end audit and
except as otherwise stated therein). Except as disclosed in the Financial
Statements, the Purchaser is not a guarantor or indemnitor of any indebtedness
of any other Person. The Purchaser maintains and will continue to maintain a
standard system of accounting established and administered in accordance with
GAAP.
4.14 Undisclosed Liabilities. Except for liabilities and losses incurred in
the ordinary course of business or as otherwise disclosed in the SEC Reports,
the Purchaser does not have any material direct or indirect indebtedness,
liability, loss, damage, deficiency, or obligation, fixed or unfixed, ▇▇▇▇▇▇ or
inchoate, liquidated or unliquidated, secured or unsecured, subordinated or
unsubordinated, matured or unmatured, accrued, absolute, contingent, regulatory
or administrative charges or lawsuits brought, whether or not of a kind required
by GAAP to be set forth on a financial statement, that were not adequately
reflected or reserved for in the financial statements contained in the
Purchaser's last annual report on Form 10-K.
4.15 Investment Company. The Purchaser is not and after giving effect to
the sale of the Membership Interests in the Transaction will not be an
"Investment Company" or an entity "controlled" by an "Investment Company" as
such terms are defined in the Investment Company Act of 1940, as amended.
4.16 Due Organization. The Purchaser is a for profit corporation duly
organized, validly existing and in good standing under the laws of the State of
Nevada (a) with full power and authority to own, lease, use, and operate its
properties and to carry on its business as and where now owned, leased, used,
operated and conducted, and (b) all actions taken by the current directors and
stockholders of the Purchaser have been valid and in accordance with the laws of
the State of Nevada and all actions taken by the Purchaser have been duly
authorized by the current directors and stockholders of the Purchaser as
appropriate.
4.17 Outstanding Shares, No Preemptive Rights, No Liens; Anti-Dilution. As
of the date hereof, the total outstanding shares of common stock of the
Purchaser are 24,260,405, All of the shares are duly authorized, validly issued,
fully paid and non-assessable. No shares are subject to preemptive rights or
similar rights of the stockholders of the Purchaser or any liens or encumbrances
imposed through the actions or failure to act of the Purchaser, or otherwise. As
of the Closing Date, there are no unexercised options or agreements that would
require Purchaser to issue any additional shares.
4.18 No Governmental Action Required. The execution and delivery by the
Purchaser of this Agreement does not and will not, and the consummation of the
transactions contemplated hereby will not, require any action by or in respect
of, or filing with, any governmental body, agency or governmental official.
4.19 No Litigation. The Purchaser is not a party to any suit, action,
arbitration, or legal, administrative, or other proceeding, or pending or
threatened governmental investigation other that what is disclosed within the
recent annual K report. The Purchaser is not subject to or in default with
respect to any order, writ, injunction, or decree of any federal, state, local,
or foreign court, department, agency, or instrumentality.
4.20 No Taxes. The Purchaser is not, and will not become with respect to
any periods ending on or prior to the Closing Date, liable for any income,
sales, withholding, franchise, excise, license, real or personal property taxes
11
(a "Tax") to any foreign, United States federal, state or local governmental
agencies whatsoever. All United States federal, state, county, municipality
local or foreign income Tax returns and all other material Tax returns
(including information returns) that are required, or have been required, to be
filed by or on behalf of the Purchaser have been or will be filed as of the
Closing Date and all Taxes due pursuant to such returns or pursuant to any
assessment received by the Purchaser have been or will be paid as of the Closing
Date. The charges, accruals and reserves on the books of the Purchaser in
respect of taxes or other governmental charges have been established in
accordance with the tax method of accounting. All returns that have been filed
relating to Tax are true and accurate in all material respects. No audit,
action, suit, proceeding or other examination regarding taxes for which the
Purchaser may have any liability is currently pending against or with respect to
the Purchaser and neither Sellers nor the Purchaser has received any notice
(formally or informally) of any audit, suit, proceeding or other examination. No
material adjustment relating to any Tax returns, no closing or similar agreement
have been entered into or issued or have been proposed (formally or informally)
by any tax authority (insofar as such action relate to activities or income of
or could result in liability of the Purchaser for any Tax) and no basis exists
for any such actions. The Purchaser has not changed any election, adopted or
changed any accounting method or period, filed any amended return for any Tax,
settled any claim or assessment of any Tax, or surrendered any right to claim
any refund of any Tax, or consented to any extension or waiver of the statute of
limitations for any Tax. The Purchaser has not had an "ownership change" as that
term is defined in Section 382 of the Internal Revenue Code of 1986, as amended
and in effect.
4.21 Assets. The Purchaser's material assets are listed in the Purchaser's
SEC Reports. All such assets are in good working order and are owned by the
Purchaser free and clear of any liens, claims or encumbrances.
4.22 ERISA Compliance.
(a) The Disclosure Schedule contains a list of each pension, profit
sharing, thrift or other retirement plan, employee stock ownership
plan, deferred compensation, stock option, stock purchase, performance
share, bonus or other incentive plan, severance plan, health, group
insurance or other welfare plan, or other similar plan, agreement,
policy or understanding, including without limitation, any "employee
benefit plan" within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974 ("ERISA"), under which the
Purchaser or any ERISA Affiliate has any current or future obligation
or liability or under which any employee of the Purchaser or any ERISA
Affiliate has any current or future right to benefits (each such plan,
agreement, policy or understanding being hereinafter referred to
individually as a "Plan"). The Purchaser has delivered to Purchaser
true and complete copies of (A) each Plan, (B) the summary plan
description, if any, for each Plan, (C) the most recent Internal
Revenue Service determination letter with respect to each Plan, if
applicable, (D) the latest annual report (Form 5500 or 5500-C) for the
past three (3) years, if any, which has been filed with the Internal
Revenue Service for each Plan, and (E) copies of any related materials
that have been furnished to participants or beneficiaries of each Plan
or to any Governmental Body.
(b) Each Plan is in compliance in all material respects with the
provisions of ERISA, the Code and all other applicable federal and
state laws and the rules and regulations promulgated thereunder
interpreting or applying these laws and each Plan (and related trust
12
or funding vehicle, if any) has at all times been administered and
maintained in accordance with its terms and applicable Laws,
including, without limitation, the filing of all applicable reports.
4.23 Insurance. The Disclosure Schedule includes a true and correct list of
all policies or binders of insurance of the Purchaser in force, specifying the
insurer, policy number (or covering note number with respect to binders) and
amount thereof and describing each pending claim thereunder. Such policies are
in full force and effect. The Purchaser is not in default with respect to any
provisions contained in any such policy or binder, nor has it failed to give any
notice or present any claim under any such policy or binder in due and timely
fashion. There are no outstanding unpaid claims under any such policy or binder,
or claims for worker's compensation. The Purchaser has not received notice of
cancellation or non-renewal of any such policy or binder. The Purchaser has
never been, and is not now, the subject of any claim relating to damage or
injury in excess of the Purchaser's then-current product liability policy limits
or which has been disclaimed by the Purchaser's insurer.
4.24 Consents. The Disclosure Schedule lists all consents ("Consents") of
third parties required to be obtained as a result of the change of control of
the Purchaser hereby.
4.25 Agreements. All of the Purchaser's material agreements have been filed
as exhibits to the Purchaser's Form 10-Q, 10-K, 8-K or other reports that it has
filed with the Securities and Exchange Commission.
ARTICLE 5
COVENANTS OF THE PARTIES
5.1 General. In case at any time after the Closing Date any further action
is necessary or desirable to carry out the purposes of this Agreement, each of
the parties will take such further action (including the execution and delivery
of such further instruments and documents) as any other party may request, all
at the sole cost and expense of the requesting party (unless the requesting
party is entitled to indemnification therefor under Article 6 below).
5.2 Notices. Each Seller will, and will cause the Company to, give any
notices to third parties, and each Seller will use its best efforts, and will
cause the Company to use its best efforts, to obtain any third-party Consents
that the Purchaser may reasonably request. Each of the Company and Purchaser
will (and the Sellers will cause the Company to) give any notices to, make any
filings with, and use its best efforts to obtain any required authorizations and
approvals of governmental bodies.
5.3 Transition. Sellers will not take any action that is designed or
intended to have the effect of discouraging any lessor, licensor, customer,
supplier, or other business associate of the Company from maintaining the same
business relationships with the Company after the Closing as it maintained with
the Company prior to the Closing. The Sellers will refer all customer inquiries
relating to the business of the Company to the Purchaser from and after the
Closing.
5.4 Financial Commitment. Purchaser commits that it will make available to
the Company working capital of at least One Million Two Hundred Fifty Thousand
Dollars ($1,250,000.00 USD) to complete the Company's product development.
13
Purchaser further commits to contribute such additional working capital as is
commercially necessary to maintain the Company's business operations.
5.5 Brokers. Each of Purchaser and each Seller represent, as to itself and
its affiliates, that no registered representative of a securities broker-dealer,
broker or securities broker-dealer, whether or not the foregoing are properly
registered with FINRA or the Securities and Exchange Commission, finder or
investment banker or other firm or person is or will be entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement.
5.5. "Piggyback" Registration Rights. The Purchaser will use its best
efforts to include all Purchase Price Shares in any underwritten public offering
of the Common Stock (the "Public Offering"), in accordance with the Securities
Act on a "piggyback" registration basis. The Sellers shall sell in the Public
Offering all Purchase Price Shares which the Purchaser is able to register in
the Public Offering, unless the underwriters in the Public Offering advise the
Purchaser that bona fide marketing factors require a limitation of the number of
securities to be underwritten, in which case, the Purchaser shall so advise all
Sellers of Purchase Price Shares which would otherwise be underwritten pursuant
hereto, and the number of shares that may be included in the underwriting shall
be allocated to the Sellers of such Purchase Price Shares on a PRO RATA basis.
If requested by the managing or lead managing underwriter in the Public
Offering, the Sellers shall execute and deliver such customary documentation as
is utilized by such underwriter for selling stockholders in underwritten public
offerings including, without limitation, an underwriting agreement and a
"lock-up" agreement with the managing or lead managing underwriter in such forms
as are customarily used by such underwriter with any modifications as the
parties thereto shall agree. In connection with any such registration, the
Sellers shall supply to the Purchaser such information as may be reasonably
requested by the Purchaser in connection with the preparation and filing of a
registration statement with the SEC. The Sellers shall not supply any
information to the Purchaser for inclusion in such registration statement that
will, taken as a whole, at the time the registration statement becomes effective
under the Securities Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The covenants and agreements made in this
Section 5.5 shall survive the closing of the transactions contemplated hereby.
5.6. Rule 144. Purchaser agrees, for its part, to make available to the
Sellers the benefits of certain rules and regulations of the SEC which may
permit the sale of the Purchase Price Shares to the public without registration.
Without limiting the generality of the foregoing, the Purchaser agrees that, at
all times when the Purchaser is subject to the reporting requirements of the
Securities Act and of the Exchange Act, it shall use its best efforts to: (a)
make and keep public information available, as those terms are understood and
defined in SEC Rule 144 or any similar or analogous rule promulgated under the
Securities Act, at all times after the effective date of the first registration
filed by the Purchaser for an offering of its securities to the general public;
(b) file with the SEC, in a timely manner, all reports and other documents
required of the Purchaser under the Exchange Act; and (c) so long as a Seller
owns any Purchase Price Shares, furnish to such Seller forthwith upon request: a
written statement by the Purchaser as to its compliance with the reporting
requirements of said Rule 144 of the Securities Act, and of the Exchange Act, a
copy of the most recent annual or quarterly report of the Purchaser filed with
the SEC; and such other reports and documents as a Seller may reasonably request
14
in connection with availing itself of any SEC rule or regulation allowing it to
sell any such securities without registration. The covenants and agreements made
in this Section 5.6 shall survive the closing of the transactions contemplated
hereby.
ARTICLE 6
INDEMNIFICATION
6.1 Purchaser Claims. (a) Subject to the limitations set forth in Sections
6.1(e) and 6.5 below, each Seller shall indemnify and hold harmless Purchaser
(on a pro-rata basis among the Sellers in proportion to the Purchase Price
received by each Seller)
(i) Any and all damages, losses, liabilities, costs, and expenses incurred
or suffered by Purchaser that result from, relate to, or arise out of:
(A) Any failure by such Seller to carry out any covenant or agreement
contained in this Agreement;
(B) Any material misrepresentation or breach of warranty by such
Seller contained in this Agreement, the Disclosure Schedule, or
any certificate, furnished to Purchaser by Sellers pursuant
hereto; or
(C) Any claim by any Person for any brokerage or finder's fee or
commission in respect of the transactions contemplated hereby as
a result of such Seller's dealings, agreement, or arrangement
with such Person.
(ii) Any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs, and other
expenses (including, without limitation, reasonable legal fees and
expenses) incident to any of the foregoing including all such expenses
reasonably incurred in mitigating any damages resulting to Purchaser
from any matter set forth in subsection (i) above.
(b) The amount of any liability of such Seller under this Section 6.1
shall be computed net of any tax benefit to Purchaser from the
matter giving rise to the claim for indemnification hereunder and
net of any insurance proceeds received by Purchaser with respect
to the matter out of which such liability arose.
(c) The representations and warranties of each Seller contained in
this Agreement, the Disclosure Schedule, or any certificate
delivered by or on behalf of Sellers pursuant to this Agreement
or in connection with the transactions contemplated herein shall
survive the consummation of the transactions contemplated herein
and shall continue in full force and effect for the periods
specified below ("Survival Period"):
(i) The representations and warranties contained in Sections 3.7
and 3.10 shall survive until the expiration of any
applicable statutes of limitation provided by law; and
(ii) All other representations and warranties of Sellers shall be
of no further force and effect after eighteen (18) months
from the Closing Date.
15
Anything to the contrary notwithstanding, the Survival period shall be
extended automatically to include any time period necessary to resolve
a written claim for indemnification which was made in reasonable
detail before expiration of the Survival Period but not resolved prior
to its expiration, and any such extension shall apply only as to the
claims so asserted and not so resolved within the Survival Period.
Liability for any such item shall continue until such claim shall have
been finally settled, decided, or adjudicated.
(d) Purchaser shall provide written notice to Sellers of any claim
for indemnification under this Article as soon as practicable;
provided, however, that failure to provide such notice on a
timely basis shall not bar Purchaser's ability to assert any such
claim except to the extent that Sellers is actually prejudiced
thereby, provided that such notice is received by Sellers during
the applicable Survival Period. Purchaser shall make commercially
reasonable efforts to mitigate any damages, expenses, etc.
resulting from any matter giving rise to liability of Sellers
under this Article.
(e) Notwithstanding anything to the contrary in this Agreement, (i)
each Seller is responsible only for the representations and
warranties of such Seller, (ii) no Seller shall have any
liability arising out of a breach or inaccuracy of the
representations or warranties of another Seller, and (iii) the
total, maximum liability of each Seller arising out of breach or
inaccuracy of representations or warranties shall not exceed the
amount paid to such Seller pursuant to Section 1.4(b) hereof.
6.2 Sellers Claims. (a) Purchaser shall indemnify and hold harmless
Sellers, and their successors and assigns, against, and in respect of:
(i) Any and all damages, losses, liabilities, costs, and expenses
incurred or suffered by Sellers that result from, relate to, or
arise out of:
(A) Any failure by Purchaser to carry out any covenant or
agreement contained in this Agreement;
(B) Any material misrepresentation or breach of warranty by
Purchaser contained in this Agreement, the Disclosure
Schedule, or any certificate, furnished to Purchaser by
Sellers pursuant hereto; or
(C) Any claim by any Person for any brokerage or finder's fee or
commission in respect of the transactions contemplated
hereby as a result of Purchaser's dealings, agreement, or
arrangement with such Person.
(ii) Any and all actions, suits, claims, proceedings, investigations,
demands, assessments, audits, fines, judgments, costs, and other
expenses (including, without limitation, reasonable legal fees
and expenses) incident to any of the foregoing including all such
expenses reasonably incurred in mitigating any damages resulting
to Sellers from any matter set forth in subsection (i) above.
(b) The amount of any liability of Purchaser under this Section 6.2 shall
be computed net of any tax benefit to Purchaser from the matter giving
rise to the claim for indemnification hereunder and net of any
16
insurance proceeds received by Purchaser with respect to the matter
out of which such liability arose.
(c) The representations and warranties of Purchaser contained in this
Agreement, the Disclosure Schedule, or any certificate delivered by or
on behalf of Sellers pursuant to this Agreement or in connection with
the transactions contemplated herein shall survive the consummation of
the transactions contemplated herein and shall continue in full force
and effect for the periods specified below ("Survival Period"):
(i) The representations and warranties contained in Section 4.20
shall survive until the expiration of any applicable statutes of
limitation provided by law; and
(ii) All other representations and warranties of Sellers shall be of
no further force and effect after eighteen (18) months from the
Closing Date.
Anything to the contrary notwithstanding, the Survival period shall be
extended automatically to include any time period necessary to resolve a
written claim for indemnification which was made in reasonable detail
before expiration of the Survival Period but not resolved prior to its
expiration, and any such extension shall apply only as to the claims so
asserted and not so resolved within the Survival Period. Liability for any
such item shall continue until such claim shall have been finally settled,
decided, or adjudicated.
(d) Sellers shall provide written notice to Purchaser of any claim for
indemnification under this Article as soon as practicable; provided,
however, that failure to provide such notice on a timely basis shall
not bar Sellers's ability to assert any such claim except to the
extent that Purchaser is actually prejudiced thereby, provided that
such notice is received by Purchaser during the applicable Survival
Period. Sellers shall make commercially reasonable efforts to mitigate
any damages, expenses, etc. resulting from any matter giving rise to
liability of Sellers under this Article.
6.3 Defense of Third-Party Claims. With respect to any claim by Purchaser
under Section 6.1, relating to a third party claim or demand, Purchaser shall
provide Sellers with prompt written notice thereof and Sellers may defend, in
good faith and at their expense, by legal counsel chosen by them and reasonably
acceptable to Purchaser any such claim or demand, and Purchaser, at its expense,
shall have the right to participate in the defense of any such third party
claim. So long as Sellers is defending in good faith any such third party claim,
Purchaser shall not settle or compromise such third party claim. In any event
Purchaser shall cooperate in the settlement or compromise of, or defense
against, any such asserted claim.
With respect to any claim by Sellers under Section 6.2 relating to a third
party claim or demand, Sellers shall provide Purchaser with prompt written
notice thereof and Sellers may defend, in good faith and at their expense, by
legal counsel chosen by them and reasonably acceptable to Sellers any such claim
or demand, and Sellers, at its expense, shall have the right to participate in
the defense of any such third party claim. So long as Purchaser is defending in
good faith any such third party claim, Sellers shall not settle or compromise
such third party claim. In any event Sellers shall cooperate in the settlement
or compromise of, or defense against, any such asserted claim.
17
6.4 Settlement of Disputes.
(a) Arbitration. All disputes with respect to any claim for
indemnification under this Article VI and all other disputes and
controversies of every kind and nature between the parties hereto
arising out of or in connection with this Agreement shall be submitted
to arbitration pursuant to the following procedures:
(i) After a dispute or controversy arises, either party may, in a
written notice delivered to the other party, demand such
arbitration. Such notice shall include a statement of the matter
in controversy;
(ii) Within 30 days after receipt of such demand, an arbitrator shall
be chosen by the American Arbitration Association ("AAA");
(iii)The arbitration hearing shall be held within 30 days of the
appointment of the arbitrator in Dallas, Texas, at a location
designated by the arbitrator. The Commercial Arbitration Rules of
the AAA shall be used and the substantive laws of the State of
Texas (excluding conflict of laws provisions) shall apply;
(iv) An award rendered by the arbitrator appointed pursuant to this
Agreement shall be final and binding on all parties to the
proceeding, shall deal with the question of costs of the
arbitration and all related matters, shall not award punitive
damages, and judgment on such award may be entered by either
party in a court of competent jurisdiction; and
(v) Except as set forth in subsection (b) below, the parties
stipulate that the provisions of this Section 6.4 shall be a
complete defense to any suit, action or proceeding instituted in
any federal, state, or local court or before any administrative
tribunal with respect to any controversy or dispute arising out
of this Agreement. The arbitration provisions hereof shall, with
respect to such controversy or dispute, survive the termination
or expiration of this Agreement.
(b) Emergency Relief. Notwithstanding anything in this Section 6.4 to the
contrary, either party may seek from a court any provisional remedy
that may be necessary to protect any rights or property of such party
pending the establishment of the arbitral tribunal or its
determination of the merits of the controversy.
6.5 Limitations. No party may make a claim for indemnity under this
Agreement unless the amount of the indemnifiable damages incurred with respect
to such claim exceeds Five Thousand Dollars ($5,000). In addition, no party may
make a claim for indemnity under this Agreement unless the aggregate amount of
all such claims for indemnifiable Damages exceeds Twenty Thousand Dollars
($20,000) (the "Threshold Amount") at which point such indemnity claim shall
include the full amount of indemnifiable Damages including the Threshold Amount.
6.6 Exclusive Remedy. Except in the case of fraud, the provisions of this
Article 6 are intended to be the exclusive monetary remedy between the parties
following the Closing for the matters covered by this Agreement (including any
18
liabilities arising prior to the Closing), and no party shall seek recovery from
the other party with respect to such matters under theories of strict liability,
negligence or other theory of recovery, whether under contract or tort or at law
or in equity.
ARTICLE 7
CLOSING, DELIVERY OF DOCUMENTS AND POST CLOSING COVENANTS
7.1 Closing. The Closing referred to in Section 1.2 hereof shall occur as a
single integrated transaction, as follows.
(a) Delivery by Sellers. Each Seller shall deliver to Purchaser
(i) An assignment of such Seller's Membership Interest, which
assignment shall be in the form set forth in Exhibit B attached
hereto; and
(ii) resignations as managers and officers of the Company.
(b) Delivery by the Company. The Company shall deliver to Purchaser:
(i) copies of resolutions by the members of the Company approving the
terms of this Agreement and the execution of the Agreement by the
Company;
(ii) copies of all books, records and documents relating to the
Company, including the corporate records and stock records of the
Company;
(iii)any other such instruments, documents and certificates as are
required to be delivered by Sellers or its representatives
pursuant to the provisions of this Agreement; and
(iv) the Consents.
(c) Delivery by Purchaser. Purchaser shall deliver to each Seller:
(i) the certificate evidencing the Purchase Price Shares to be issued
to such Seller, duly issued as of the Closing Date;
(ii) copies of resolutions of the Board of Directors of Purchaser
approving the terms of the Agreement and the execution of this
Agreement by the Purchaser.
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ARTICLE 8
MISCELLANEOUS
8.1 Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the transactions
contemplated hereby, and supersedes all prior agreements, arrangements and
understanding related to the subject matter hereof. No understanding, promise,
inducement, statement of intention, representation, warranty, covenant or
condition, written or oral, express or implied, whether by statute or otherwise,
has been made by any party hereto which is not embodied in this Agreement or the
written statement, certificates, or other documents delivered pursuant hereto or
in connection with the transactions contemplated hereby, and no party hereto
shall be bound by or liable for any alleged understanding, promise, inducement,
statement, representation, warranty, covenant or condition not set forth.
8.2 Notices. Any notice or communications hereunder must be in writing and
given by depositing same in the United States mail addressed to the party to be
notified, postage prepaid and registered or certified mail with return receipt
requested or by delivering same in person. Such notices shall be deemed to have
been received on the date on which it is hand delivered or on the third business
day following the date on which it is to be mailed. For purpose of giving
notice, the addresses of the parties shall be:
If to Purchaser, to:
DataJack, Inc.
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
If to Sellers:
▇▇▇▇▇ ▇. ▇▇▇▇
5400 Carillon Point
Building ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
8.3 Governing Law. This Agreement shall be governed in all respects,
including validity, construction, interpretation and effect, by the laws of the
State of Florida (without regard to principles of conflicts of law).
8.4 Counterparts. This Agreement may be executed by the parties hereto in
separate counterparts each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
8.5 Waivers and Amendments; Non-Contractual Remedies; Preservation of
Remedies. This Agreement may be amended, superseded, canceled, renewed, or
extended, and the terms hereof may be waived, only by a written instrument
signed by authorized representatives of the parties or, in the case of a waiver,
by an authorized representative of the party waiving compliance. No such written
20
instrument shall be effective unless it expressly recites that it is intended to
amend, supersede, cancel, renew or extend this Agreement or to waive compliance
with one or more of the terms hereof, as the case may be. No delay on the part
of any party in exercising any right, power or privilege hereunder shall operate
as a waiver thereof, nor shall any waiver on the part of any party of any such
right, power or privilege, or any single or partial exercise of any such right,
power of privilege, preclude any further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided are
cumulative and are not exclusive of any rights or remedies that any party may
otherwise have at law or in equity. The rights and remedies of any party based
upon, arising out of or otherwise in respect of any inaccuracy in or breach of
any representation, warranty, covenant or agreement contained in this Agreement
shall in no way be limited by the fact that the act, omission, occurrence or
other state of facts upon which any claim of any such inaccuracy or breach is
based may also be the subject of any other representation, warranty, covenant or
agreement contained in this Agreement (or in any other agreement between the
parties) as to which there is no inaccuracy or breach.
8.6 Binding Effect; No Assignment, No Third-Party Rights. This Agreement
shall be binding upon and inure to the benefit of the parties and their
respective successors and permitted assigns. This Agreement is not assignable
without the prior written consent of each of the parties hereto or by operation
of law. This Agreement is for the sole benefit of the parties hereto and their
permitted assigns, and nothing herein, expressed or implied, shall give or be
construed to give to any person, including any union or any employee or former
employee of Sellers, any legal or equitable rights, benefits or remedies of any
nature whatsoever, including any rights of employment for any specified period,
under or by reason of this Agreement.
8.7 Further Assurances. Each party shall, at the request of the other
party, at any time and from time to time following the Closing Date promptly
execute and deliver, or cause to be executed and delivered, to such requesting
party all such further instruments and take all such further action as may be
reasonably necessary or appropriate to carry out the provisions and intents of
this Agreement and of the instruments delivered pursuant to this Agreement.
8.8 Severability of Provisions. If any provision or any portion of any
provision of this Agreement or the application of any such provision or any
portion thereof to any person or circumstance, shall be held invalid or
unenforceable, the remaining portion of such provision and the remaining
provisions of the Agreement, or the application of such provision or portion of
such provision is held invalid or unenforceable to person or circumstances other
than those as to which it is held invalid or unenforceable, shall not be
affected thereby and such provision or portion of any provision as shall have
been held invalid or unenforceable shall be deemed limited or modified to the
extent necessary to make it valid and enforceable, in no event shall this
Agreement be rendered void or unenforceable.
8.9 Exhibits and Schedules. All exhibits annexed hereto, and all schedules
referred to herein, are hereby incorporated in and made a part of this Agreement
as if set forth herein.
8.10 Captions. All section titles or captions contained in this Agreement
or in any schedule or exhibit annexed hereto or referred to herein, and the
table of contents to this Agreement, are for convenience only, shall not be
deemed a part of this Agreement and shall not affect the meaning or
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interpretation of this Agreement. All references herein to sections shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.
8.11 Expenses. Except as otherwise expressly provided in this Agreement,
whether or not the Closing occurs, each party hereto shall pay its own expenses
incidental to the preparation of this Agreement, the carrying out of the
provisions hereof and the consummation of the transactions contemplated.
8.12 Public Announcements. The parties agree to consult with each other
before issuing any press release or making any public statement or completing
any public filing with respect to this Agreement or the transactions
contemplated hereby and, except as may be required by applicable law or any
listing agreement with any national securities exchange or quotation system,
will not issue any such press release or make any such public statement prior to
consultation.
8.13 Disclosure Schedule. Sellers and the Company shall deliver the
Disclosure Schedule upon execution of this Agreement, and shall amend it as
necessary to keep current the information therein. The Disclosure Schedule shall
make reference to any applicable Section of this Agreement and contain all
information necessary to make such disclosure accurate and not misleading.
8.14 Electronic Signatures. Any form of electronic signature, such as
facsimile or email scan, shall be deemed to be an original signature.
[Signature Page Follows]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the date first written herein above.
DATAJACK, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
---------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, CEO/President
TelBill Holdings, LLC
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇
----------------------------
▇▇▇▇▇ ▇. ▇▇▇▇
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EXHIBIT B
FORM OF ASSIGNMENT
ASSIGNMENT OF MEMBERSHIP INTEREST
FOR VALUE RECEIVED, the undersigned, TelBill Holdings, L.L.C., a Washington
Limited Liability Company ("Assignor"), hereby assigns and transfers unto
DataJack, Inc., a Nevada corporation ("Assignee"), all of Assignor's right,
title and interest in and to, and as a member of, TelBill Holdings, LLC, a
Washington limited liability company (the "Assigned Interest"), and Assignee
hereby accepts such assignment.
This Assignment is made pursuant to a certain Membership Interest Purchase
Agreement among Assignor, Assignee and others dated June 4, 2014, and is subject
to the terms of such Agreement.
Dated: June 4th, 2014.
ASSIGNOR: ASSIGNEE:
TelBill Holdings, L.L.C. DataJack, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------- ---------------------------------
Its: Manager/ ▇▇▇▇▇ ▇. ▇▇▇▇ Its: CEO/President ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
DataJack, Inc.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
---------------------------------
Its: Board Member ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
SCHEDULE A
The following assets and liabilities are not considered part of the purchase.
1. ALL HSBC bank accounts with any and all balances other than any and all
mobile wallet balances.
2. The TelBill logo and brand
3. The TelBill website and related sales & marketing materials
4. Contract with telSPACE for the license to use the telSPACE billing system
5. Contract with mCASH for the license to use the mCASH mobile commerce
software
6. Contract with Rackspace for hosting services
7. Liability: ▇▇▇ ▇▇▇▇▇▇ note for $50,000