EXHIBIT 10.1

 

AGREEMENT AND PLAN OF MERGER

 

This Agreement and Plan of Merger (the  "Agreement") is made and  entered into
 as  of June 26, 2015 by Indaba Group, LLC, a Colorado limited liability
company, which has a mailing address at 2854 Larimer Street, Denver, CO 80205
("Indaba" or "Seller"), Ryan Shields ("Shields"), Blake Gindi ("Gindi"), and
Jack Gindi ("Jack Gindi") (collectively, the "Indaba Members"), and Warp 9,
Inc., a Nevada corporation ("Buyer" or "Company"), and Warp 9, Inc., a Delaware
corporation ("Merger Sub"), with respect to the following facts.  Each of
Indaba, Seller, Shields, Gindi, Jack Gindi, the Indaba Members, Buyer, Company
and Merger Sub are sometimes referred to herein individually as a "Party" and
collectively as the "Parties."

 

R E C I T A LS

 

A.        The Indaba Members own 100% of the membership interests of Indaba.

B.         Indaba is engaged in the business of providing digital commerce
services the "Business").

 

 C.         The Board of Managers of Indaba and the board of directors of each
of the Merger Sub and the Company have determined that an acquisition of Indaba
by the Buyer is advisable, fair to and in the best interests of their respective
companies, members and stockholders and, accordingly, have each approved the
merger of Indaba with and into Merger Sub (the "Merger"), with the Merger Sub
surviving such Merger as the Surviving Corporation, upon the terms and subject
to the conditions set forth in this Agreement; and

D.        Neither the Buyer nor the Surviving Corporation shall make, for U.S.
federal income tax purposes, an election pursuant to Section 338 of the Code (or
any corresponding provision of state Law) in connection with the transactions
contemplated by this Agreement. 

 

E.         The Parties hereto intend that the reorganization contemplated by
this Merger Agreement shall constitute a tax-free reorganization pursuant to
Section 368(a)(1) of the Internal Revenue Code;

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged by the Parties to this Agreement, and in light
of the above recitals to this Agreement, the Parties to this Agreement hereby
agree as follows:

1.  The Merger. 

Upon Closing as described in Section 4 below, and subject to the terms and
conditions of this Agreement, Indaba shall merge with Merger Sub, and a
Certificate of Merger, in the form attached as Exhibit A, shall be filed with
the Delaware Secretary of State (the time of such filing is referred to
hereafter as the

1

--------------------------------------------------------------------------------

"Effective Time").  From and after the Effective Time, the separate existence of
Indaba shall cease and Merger Sub shall continue as the Surviving Corporation. 
The Merger shall have the effects set forth in Section 259 of the Delaware
General Corporation Law.

1.1              The Closing.  The Closing shall take place in accordance with
Section 4 below.

1.2           Merger Consideration.  The aggregate consideration to be paid by
the Buyer to the Indaba Members in exchange for and in cancellation of their
interests in Indaba as a result of the Merger (the "Merger Consideration") shall
be two million dollars ($2,000,000.00) paid in the form of ten thousand (10,000)
shares of the Company's Series A Convertible Preferred Stock (the "Series A
Preferred Stock"), at two hundred dollars ($200.00) per share, which shall have
the rights, preferences and privileges as set forth in a Certificate of
Designation, in the form attached hereto as Exhibit B, to be filed with the
Nevada Secretary of State prior to the Effective Time. Each one (1) share of
Series A Preferred Stock is convertible into ten thousand (10,000) shares of
Common Stock of the Buyer.  With respect to the public resale of the Common
Stock, each Indaba Member shall at all times be subject to the restrictions,
conditions and requirements applicable to an affiliate of the Buyer, as
described in Rule 144 of the Securities Act of 1933, as amended, even if the
Indaba Members or its assignees and successors are no longer affiliates of the
Buyer.

 

1.3              Certificate of Incorporation and By-laws; Officers and
Directors. 

(a)                At the Effective Time, by virtue of the Merger and without
any action on the part of any Party, the Certificate of Incorporation of the
Surviving Corporation shall be the Certificate of Incorporation of the Merger
Sub immediately prior to the Effective Time, except that the name of the
Surviving Corporation set forth therein shall be changed to Indaba Group, Inc.

(b)               At the Effective Time, by virtue of the Merger and without any
action on the part of any Party, the By-laws of the Surviving Corporation shall
be the By-laws of the Merger Sub immediately prior to the Effective Time, except
that the name of the Surviving Corporation set forth therein shall be changed to
Indaba Group, Inc.

2.    Covenant to Remain Employees of the Surviving Corporation.

 

As an inducement to Buyer to enter into and to perform its obligations under
this Agreement, the Indaba Members covenant to enter into employment agreements
with Buyer in substantially the form attached here as Exhibit C (each an
"Employment Agreement").  In the event that Shields or Gindi (a "Terminating
Seller") (i) voluntarily resigns as an employee of the Surviving Corporation
without Good Reason, as defined in his Employment Agreement; (ii) terminates his
employment with the Surviving Corporation due to death, disability rendering the
Terminating Seller unable to work, or (iii) is involuntarily terminated as an
employee of the Surviving Corporation for cause, as defined in Section 3 below,
in each case prior to the two (2) year anniversary of the Closing, then Buyer
will have the sole right, exercisable at any time within one (1) year after such
termination, to either (i) cause an immediate conversion of all or any portion
of the Terminating Seller's Series A Preferred Stock into shares of Buyer's
Common Stock, or (ii) redeem such shares of Series A Preferred Stock in cash at
a price equal to the liquidation preference then in effect for such shares;
provided, that in the event of any such conversion of the Series A Preferred
Stock, all Common

2

--------------------------------------------------------------------------------

Stock issued pursuant to such a conversion will be subject to a two (2) year
lock-up whereby Seller will not be able to transfer, hypothecate, assign or sell
any of those shares for two (2) years after receipt of them.  In any event,
Seller will, with respect to the resale by any of them of any of the shares of
Buyer's common stock issued to them at any time pursuant to any conversion of
any portion of their Series A Preferred Stock, be subject to the restrictions,
conditions and requirements applicable to an affiliate of Buyer under Rule 144
of the Securities Act of 1933, as amended, even if Seller or the Indaba Members
are no longer affiliates of Buyer.

 

3.    Other Covenants.

 

3.1      Covenant Not to Compete. As a material inducement for Buyer to enter
into this Agreement, the Indaba Members agree that for a period of two years
following the Closing  (the "Non-Competition Period"), they covenant and agree
that each of them shall not, directly or indirectly own, manage, operate,
participate in, produce, represent, distribute and/or otherwise act on behalf of
any person, firm, corporation, partnership or other entity which involves
digital commerce services (the "Competitive Business") anywhere within  the
 United  States,  its  possessions  and  territories,  Canada  or  Mexico
(collectively, the "Territory"); or hire any employee or former employee of
Buyer, the Surviving Corporation or Indaba to perform services in or involving
the Competitive Business, unless the individual hired shall have departed
Buyer's, the Surviving Corporation's or Indaba's employment at least twelve (12)
months prior to the hiring.   The Indaba Members further covenant and agree that
during the Non-Competition Period, they will not directly or indirectly solicit
or agree to service for their benefit or the benefit of any third-party, any of
Buyer's or the Surviving Corporation's customers. Notwithstanding the foregoing,
nothing in this Section 3.1 shall prohibit them from owning, managing,
operating, participating in the operation of, or advising, consulting or being
employed by any entity that is not involved in the Competitive Business. The
Indaba Members acknowledge and agree that Buyer will expend substantial time,
talent, effort and money in marketing, promoting, managing, selling and
otherwise exploiting the businesses Buyer and the Surviving Corporation operate,
in part by virtue of Buyer's acquisition of the Assets pursuant to this
Agreement, that Indaba Members are all of the members of Indaba, that they are
receiving a substantial benefit from the transactions contemplated hereunder and
that the benefit received by Buyer and the Indaba Members in agreeing to be
bound by this Section 3.1 are a material part of the consideration for the
transactions  contemplated by  this  Agreement.    The  Parties  recognize that
 this  Section  3.1 contains  conditions,  covenants,  and  time  limitations
 that  are  reasonably  required  for  the protection of the business of the
Surviving Corporation and Buyer.  If any limitation, covenant or condition shall
be deemed to be unreasonable and unenforceable by a court or arbitrator of
competent jurisdiction, then this Section 3.1 shall thereupon be deemed to be
amended to provide for modification  of  such  limitation,  covenant  and/or
 condition  to  such  extent  as  the  court  or arbitrator shall find to be
reasonable and such modification shall not affect the remainder of this
Agreement.   The Indaba Members acknowledge that, in the event an Indaba Member
breaches this Agreement, money

3

--------------------------------------------------------------------------------

damages will not be adequate to compensate Buyer for the loss occasioned by such
breach. The Indaba Members therefore consent, in the event of such a breach, to
the granting of injunctive or other equitable relief against the Indaba Members
by any court of competent jurisdiction.         

 

3.2     Indaba and Buyer Boards of Directors.  At or prior to the Closing, to be
effective on the Closing, the Parties will execute all documents, resolutions,
resignations, appointments and acceptances in order to cause the Surviving
Corporation Board of Directors to consist of the following five members at the
Closing: Shields, Gindi, Andrew Van Noy, Zachary Bartlett and Gregory Boden. 
Shields and Gindi will also be appointed to the Buyer's Board of Directors.

 

3.3     Cooperation on Tax Matters.  The Parties acknowledge and agree that they
intend for the transactions set forth in this Agreement to be treated as a
tax-free reorganization under IRC § 368(a)(1)(A).  From and after the date of
this Agreement, each party shall cooperate fully, as and to the extent
reasonably requested by any other party, in connection with the preparation of
tax returns, forms and/or documents necessary to ensure that the transactions
set forth in this Agreement are treated as a tax-free reorganization under IRC §
368(a)(1)(A). 

 

4.    Closing and Further Acts.

 

4.1       Time and Place of Closing.   Upon satisfaction or waiver of the
conditions set forth in this Agreement, the closing of the Transaction (the
"Closing") will take place in Santa Barbara, California at 11:00 a.m. (local
time) on the date that the Parties may mutually agree in writing, but in no
event later than September 30, 2015 (the "Closing Date"), unless extended by
mutual written agreement of the Parties.

 

4.2       Actions at Closing. At the Closing, the following actions will take
place:

(a)       Buyer will deliver to each of the Indaba Members a certificate
representing their respective shares of Buyer's Series A Preferred Stock.

 

            (b)      The Parties shall execute and deliver for filing the
Certificate of Merger upon the Closing.

 

            (c)       Indaba will deliver to Buyer copies of necessary
resolutions of the Board of Managers of Indaba authorizing the execution,
delivery, and performance of this Agreement and the other agreements
contemplated by this Agreement, which resolutions have been certified by an
officer of Indaba as being valid and in full force and effect.

 

            (d)      Buyer will deliver to Indaba copies of corporate
resolutions of the Board of Directors of Buyer authorizing the execution,
delivery  and  performance  of  this Agreement and the other agreements
contemplated by this Agreement, which resolutions have been certified by an
officer of Buyer as being valid and in full force and effect.

4

--------------------------------------------------------------------------------

 

(e)       Indaba  will  deliver  to  the  Buyer  true  and  complete  copies  of
 Indaba's Articles of Organization and a Certificate of Good Standing from the
Secretary of State of its state of domicile, which articles and certificate of
good standing are dated not more than thirty (30) days prior to the Closing
Date.

 

 (f)      Delivery of any additional documents or instruments as a party may
reasonably request or as may be necessary to evidence and effect the Merger.

 

4.3       Actions Pre-Closing.  Seller and the Indaba Members will at all times
prior to and after the Closing cooperate fully with Buyer and Buyer's officers,
directors, representatives, accountants and lawyers to enable Buyer to conduct
thorough due diligence of Indaba and to enable Indaba to prepare and have
audited all financial statements deemed necessary by Buyer to comply with all of
its reporting obligations with the Securities and Exchange Commission, including
without limitation the preparation and filing of its Reports on Form 8-K within
four (4) business days after the Closing, without audited financial statements,
and with audited financial statements within seventy-one (71) days after the
Closing, subject to the provisions of Section 4.5 of this Agreement.

 

4.4       Actions Post Closing.  The Indaba Members will at all times after the
Closing cooperate fully with Buyer and Buyer's officers, directors,
representatives, accountants and lawyers to complete the preparation and audit
of all financial statements of Buyer and Indaba deemed necessary or appropriate
by Buyer, and to enable Buyer to comply with all of its reporting obligations
with the Securities and Exchange Commission.

 

4.5       Costs of Financial Audit of Indaba.  Buyer will bear the costs of the
2014 audit of Indaba financial statements, except that Indaba will reimburse
Buyer for the total cost of the audit (not to exceed $25,000), as invoiced by
the auditor, if any of the following events occur: (i) the audit cannot be
completed due to the lack of reasonable cooperation from Seller, the Indaba
Members or Indaba's personnel, or (ii) the audited financials and records of
Indaba are, in the opinion of the certified auditors, materially and adversely
different than those presented to the Buyer prior to the date of this Agreement,
or (iii) Seller or the Indaba Members refuse to proceed with the Closing and
Buyer is ready, willing and able to proceed with the Closing, or Seller or the
Indaba Members otherwise materially breach this Agreement. With the exception of
possible audit fee reimbursement, under no circumstances will either Buyer or
Seller or the Indaba Members be due any termination expenses in connection with
this Agreement. 

 

5.    Representations and Warranties of the Indaba Members and Seller.

 

Except as set forth on the Disclosure Schedules, attached hereto as Exhibit D,
the Indaba Members and Seller represent and warrant, jointly and severally, as
of the date hereof, to Buyer as follows:

 

5.1     Power and Authority; Binding Nature of Agreement.  The Indaba Members
and Seller have full power and authority to enter into this Agreement and to
perform their obligations hereunder. The execution, delivery, and performance of
this Agreement by Indaba have been duly authorized by all necessary action on
its part.   Assuming that this Agreement is a valid and binding obligation of
each of the other Parties hereto, this Agreement is a valid and

5

--------------------------------------------------------------------------------

binding obligation of the Indaba Members and Seller, except as may be limited by
bankruptcy, moratorium, insolvency or other similar laws generally affecting the
enforcement of creditors' rights, and the effect or availability of rules of law
governing specific performance, injunctive relief or other equitable remedies
(regardless of whether any such remedy is considered in a proceeding at law or
in equity).

 

5.2    Subsidiaries.   There is no corporation, general partnership limited
partnership, joint venture, association, trust or other entity or organization
that Indaba directly or indirectly controls or in which Indaba directly or
indirectly owns any equity or other interest.

 

5.3     Good Standing.  Indaba (i) is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized, (ii)
has all necessary power and authority to own its assets and to conduct its
business as it is currently being conducted, and (iii) is duly qualified or
licensed to do business and is in good standing in every jurisdiction (both
domestic and foreign) where such qualification or licensing is required.

 

5.4     Financial Statements.   Indaba has delivered to Buyer the following
unaudited financial statements prior to the Closing (the "Indaba Financial
Statements"):  (i) the unaudited statement of operations and balance sheet of
Indaba for the calendar year ended December 31, 2013, (ii) the unaudited
statement of operations and balance sheet of Indaba for the calendar year ended
December 31, 2014, and (iii) the unaudited statement of operations and balance
sheet of Indaba for the three (3) months ended March 31, 2015. Except as stated
therein or in the notes thereto, the Indaba Financial Statements: (a) present
fairly the financial position of Indaba as of the respective dates thereof and
the results of operations and changes in financial position of Indaba for the
respective periods covered thereby; and (b) have been prepared in accordance
with Indaba's normal business practices applied on a consistent basis throughout
the periods covered. Indaba will cooperate with Buyer to prepare the following
audited financial statements prior to the Closing (the "Indaba Audited Financial
Statements"):  (i) the audited statement of operations, statement of cash flows
and balance sheet of Indaba for the calendar year ended December 31, 2014, and
the (ii) audited statement of operations, statement of cash flows and balance
sheet for the calendar year ended December 31, 2013

 

5.5     Capitalization.  The Indaba Members own 100% of Indaba's membership
interests, and there are no options, warrants or other rights to acquire any
ownership interest in Indaba, except as set forth in this Agreement.  The
existing membership interests were issued to the Indaba Members in full
compliance with all applicable federal, state and local securities laws and
other laws.

 

5.6     Absence of Changes.  Except as otherwise set forth on Schedule 5.6
hereto or otherwise disclosed to and acknowledged by Buyer in writing prior to
the Closing, since August 31, 2014:

 

(a)       There has not been any material adverse change in the business,
condition, assets,  operations  or  prospects  of  Indaba  and  no  event  has

6

--------------------------------------------------------------------------------

 occurred  that is reasonably likely to have a material adverse effect on the
business, condition, assets, operations or prospects of Indaba.

 

(b)       Indaba has not repurchased, redeemed or otherwise reacquired any of
its membership interests or other securities.

 

(c)       Indaba has not sold or otherwise issued any of its membership
interests.

 

(d)       Indaba has not amended its articles of organization, operating
agreement or other charter or organizational documents, nor has it effected or
been a party to any merger, recapitalization, reorganization or similar
transaction.

 

(e)       Indaba has not formed any subsidiary or contributed any funds or other
assets to any subsidiary.

 

(f)        Indaba has not purchased or otherwise acquired any material assets,
nor has it leased any assets from any other person, except in the ordinary
course of business consistent with past practice.

 

(g)       Indaba has not made any capital expenditure outside the ordinary
course of business or inconsistent with past practice.

 

(h)       Indaba has not sold or otherwise transferred any material assets to
any other person, except in the ordinary course of business consistent with past
practice and at a price equal to the fair market value of the assets
transferred.

 

(i)        There has not been any material loss, damage or destruction to any of
the material properties or Assets of Indaba (whether or not covered by
insurance).

 

(j)       Indaba has not written off as uncollectible any indebtedness or
accounts receivable, except for write offs that were made in the ordinary course
of business consistent with past practice.

 

(k)       Indaba has not leased any assets to any other person except in the
ordinary course of business consistent with past practice and at a rental rate
equal to the fair rental value of the leased assets.

 

(l)        Indaba has not mortgaged, pledged, hypothecated or otherwise
encumbered any assets, except in the ordinary course of business consistent with
past practice.

 

(m)      Indaba has not entered into any contract, or incurred any debt,
liability or other obligation (whether absolute, accrued, contingent or
otherwise), except for (i) contracts that were entered into in the ordinary
course of business consistent with past practice and that have terms of less
than six (6)

7

--------------------------------------------------------------------------------

months and do not contemplate payments by or  to  Indaba  which  will  exceed,
 over  the  term  of  the  contract,  ten  thousand  dollars ($10,000) in the
aggregate, and (ii) current liabilities incurred in the ordinary course of
business consistent with the past practice.

 

(n)       Indaba has not made any loan or advance to any other person, except
for advances that have been made to customers in the ordinary course of business
consistent with past practice and that have been properly reflected as "accounts
receivables."

 

(o)       Other than annual raises or bonuses paid or provided consistent with
past business practices, Indaba has not paid any bonus to, or increased the
amount of the salary, fringe benefits or other compensation or remuneration
payable to, any of the managers, officers or employees of Indaba.

 

(p)       No contract or other instrument to which Indaba is or was a party or
by which Indaba or any of its assets are or were bound has been amended or
terminated, except in the ordinary course of business consistent with past
practice.

 

(q)       Indaba has not discharged any lien or discharged or paid any
indebtedness, liability or other obligation, except for current liabilities that
(i) are reflected in the Indaba Financial Statements as of March 31, 2015 or
have been incurred since March 31, 2015 in the ordinary course of business
consistent with past practice, and (ii) have been discharged or paid in the
ordinary course of business consistent with past practice.

 

(r)        Indaba has not forgiven any debt or otherwise released or waived any
right or claim, except in the ordinary course of business consistent with past
practice.

 

(s)       Indaba has not changed its methods of accounting or its accounting
practices in any respect.

 

(t)        Indaba has not entered into any transaction outside the ordinary
course of business or inconsistent with past practice.

 

(u)       Indaba has not agreed or committed (orally or in writing) to do any of
the things described in clauses (b) through (t) of this Section 5.6.

 

5.7     Absence  of  Undisclosed  Liabilities.  Indaba  has  no  debt,
 liability  or  other obligation  of  any  nature  (whether  due  or  to
 become  due  and  whether  absolute,  accrued, contingent or otherwise) that is
not reflected or reserved against in the Indaba Financial Statements as of March
31, 2015, except for obligations incurred since March 31, 2015 in the ordinary
and usual course of business consistent with past practice.

 

5.8     Indaba Assets.

 

(a)       The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby will not result in a breach of the terms
and conditions of, or result in a loss of rights under, or result in the
creation of any lien, charge or encumbrance upon, any of its assets (the
"Assets").

8

--------------------------------------------------------------------------------

 

(b)       Indaba has good and marketable title to the Assets, free and clear of
all mortgages, liens, leases, pledges, charges, encumbrances, equities or
claims, except as expressly disclosed in writing by Indaba to Buyer prior to the
Closing Date.

 

(c)       Except as reflected in the Indaba Financial Statements, the Assets
 are  not  subject  to  any  material  liability,  absolute  or contingent,
which has not been disclosed by Indaba to and acknowledged by Buyer in writing
 prior  to  the  Closing  Date.

 

(d)       Indaba has provided to Buyer in writing an accurate description of all
of the assets of Indaba or used in the business of Indaba.

 

(e)       Indaba has provided to Buyer in writing a list of all contracts,
agreements, licenses, leases, arrangements, commitments and other undertakings
to which Indaba is a party or by which it or its property is bound.   Except as
specified by Indaba to and acknowledged by Buyer in writing prior to the Closing
Date, all of such contracts, agreements, leases, licenses and commitments are
valid, binding and in full force and effect.  As soon as practicable after the
execution of this Agreement by all Parties, Indaba will provide Buyer with
copies of all such documents for Buyer's review.

 

5.9     Compliance with Laws; Licenses and Permits.  Indaba is not in violation
of, nor has it failed to conduct its business in material compliance with, any
applicable federal, state, local or foreign laws, regulations, rules, treaties,
rulings, orders, directives or decrees.  Indaba has delivered to Buyer a
complete and accurate list and provided Buyer with the right to inspect true and
complete copies of all of the licenses, permits, authorizations and franchises
to which Indaba is subject and all said licenses, permits, authorizations and
franchises are valid and in full force and effect.   Said licenses, permits,
authorizations and franchises constitute all of the licenses, permits,
authorizations  and  franchises  reasonably  necessary  to  permit  Indaba  to
 conduct  its business in the manner in which it is now being conducted, and
Indaba is not in violation or breach of any of the terms, requirements or
conditions of any of said licenses, permits, authorizations or franchises.

 

5.10     Taxes.  Except as disclosed herein, Indaba has accurately and
completely filed with the appropriate United States state, local and foreign
governmental agencies all tax returns and reports required to be filed (subject
to permitted extensions applicable to such filings), and has paid or accrued in
full all taxes, duties, charges, withholding obligations and other governmental
liabilities as well as any interest, penalties, assessments or deficiencies, if
any, due to, or claimed to be due by, any governmental authority (including
taxes on properties, income, franchises, licenses, sales and payroll).  (All
such items are collectively referred to herein as "Taxes").  The Indaba
Financial Statements fully accrue or reserve all current and deferred taxes.
 Indaba is not a party to any pending action or proceeding, nor is any such
action or proceeding threatened by any governmental authority for the assessment
or collection of Taxes.  No liability for taxes has been incurred other than in
the ordinary course of business.  There are no liens for Taxes except for liens
for property taxes not yet delinquent.  Indaba is not a

9

--------------------------------------------------------------------------------

party to any Tax sharing, Tax allocation, Tax indemnity or statute of
limitations extension or waiver agreement and in the past year has not been
included on any consolidated combined or unitary return with any entity other
than Indaba.  Indaba has duly withheld from each payment made to each person
from whom such withholding is required by law the amount of all Taxes or other
sums (including but not limited to United States federal income taxes, any
applicable state or municipal income tax, disability tax, unemployment insurance
contribution and Federal Insurance Contribution Act taxes) required to be
withheld therefore and has paid the same to the proper tax authorities prior to
the due date thereof. To the extent any Taxes withheld by Indaba have not been
paid as of the Closing Date because such Taxes were not yet due, such Taxes will
be paid to the proper tax authorities in a timely manner.  All Tax returns filed
by Indaba are accurate and comply with and were prepared in accordance with
applicable statutes and regulations.  The Indaba Members and Seller will cause
Indaba to prepare and file all Tax returns and pay all Taxes required prior to
the Closing.  Such Tax returns will be subject to review and approval by Buyer,
which approval will not be unreasonably withheld.

 

5.11     Environmental Compliance Matters.   Indaba has at all relevant times
with respect to the Business or otherwise been in material compliance with all
environmental laws, and has received no potentially responsible party notices or
similar notices from any governmental agencies or private parties concerning
releases or threatened releases of any "hazardous substance" as that term is
defined under 42 U.S.C. 960(1) (14).

 

5.12     Compensation. Indaba has provided Buyer with a full and complete list
of all officers, directors, employees and consultants of Indaba as of the date
hereof, specifying their names and job designations, their respective current
wages, salaries or other forms of direct compensation, and the basis of such
compensation, whether fixed or commission or a combination thereof.

 

5.13     No Default.

 

(a)       Each of the contracts, agreements or other instruments of Indaba and
each of the  standard  Customer  Agreements  or  contracts  of  Indaba  is  a
 legal,  binding  and enforceable obligation by or against Indaba, subject to
the effect of applicable bankruptcy, insolvency, reorganization, moratorium or
other similar federal or state laws affecting the rights of creditors and the
effect or availability of rules of law governing specific performance,
injunctive relief or other equitable remedies (regardless of whether any such
remedy is considered in a proceeding at law or in equity).  To the knowledge of
Seller, no party with whom Indaba has an agreement or contract is in default
there under or has breached any terms or provisions thereof which is material to
the conduct of Indaba's business.

 

(b)       Indaba has performed or is now performing the obligations of, and
Indaba is not in material default (or would by the elapse of time and/or the
giving of notice be in material default) in respect of, any contract, agreement
or commitment binding upon it or its assets or properties and material to the
conduct of its business.   No third party has raised any claim, dispute or
controversy with respect to any of the executed contracts of Indaba, nor has

10

--------------------------------------------------------------------------------

Indaba received notice of warning of alleged nonperformance, delay in delivery
or other noncompliance by Indaba with respect to its obligations under any of
those contracts, nor are there any facts which exist indicating that any of
those contracts may be totally or partially terminated or suspended by the other
Parties thereto.

 

5.14     Product Warranties.   Except as otherwise disclosed to and acknowledged
by Buyer in the form of a written disclosure schedule prior to the Closing and
for warranties under applicable law, (a) there are no warranties, express or
implied, written or oral, with respect to the products or projects of  Indaba,
(b)  there are no  pending or  threatened claims with respect to  any such
warranty and (c) Indaba has no, and after the Closing Date, will have no,
liability with respect to any such warranty, whether known or unknown, absolute,
accrued, contingent, or otherwise and whether due or to become due, other than
customary returns in the ordinary course of business that are fully reserved
against in the Indaba Financial Statements.   In the event that warranty claims
arise after the Closing, the Indaba Members shall have the right to settle those
claims through Indaba, subject only to a cost of labor and materials charge
without any mark up.

5.15    Proprietary Rights.

 

(a)       Indaba has provided Buyer in writing a complete and accurate list and
provided Buyer with the right to inspect true and complete copies of all
software, patents and applications for patents, trademarks, trade names, service
marks, and copyrights, and applications therefore, owned or used by Indaba or in
which it has any rights or licenses, except for software used by Indaba and
generally available on the commercial market. Indaba has provided Buyer with a
complete and accurate description of all agreements or provided Buyer with the
right to inspect true and complete copies of all agreements of Indaba with each
officer, employee or consultant of Indaba providing Indaba with title and
ownership to patents, patent applications, trade secrets and inventions
developed or used by Indaba in its business. All of such agreements are valid,
enforceable and legally binding, subject to the effect or availability of rules
of law governing specific performance, injunctive relief or other equitable
remedies (regardless of whether any such remedy is considered in a proceeding at
law or in equity).

 

(b)       Indaba  owns  or  possesses  licenses  or  other  rights  to  use  all
 computer software, software programs, patents, patent applications, trademarks,
trademark applications, trade secrets, service marks, trade names, copyrights,
inventions, drawings, designs, customer lists, propriety know-how or
information, or other rights with respect thereto (collectively referred to as
"Proprietary Rights"), used in the business of Indaba, and the same are
sufficient to conduct Indaba's business as it has been and is now being
conducted.

 

(c)       The operations of Indaba do not conflict with or infringe, and no one
has asserted to Indaba that such operations conflict with or infringe on any
Proprietary Rights owned, possessed or used by any third party.  There are no
claims, disputes, actions, proceedings, suits or appeal pending against Indaba
with respect to any Proprietary Rights, and none has been threatened against
Indaba.  There are no facts or alleged fact which would reasonably

11

--------------------------------------------------------------------------------

serve as a basis for any claim that Indaba does not have the right to use, free
of any rights or claims of others, all Proprietary Rights in the development,
manufacture, use, sale or other disposition of any or all products or services
presently being used, furnished or sold in the conduct of the business of Indaba
as it has been and is now being conducted.

 

(d)      To the knowledge of Seller, no current employee of Indaba is in
violation of any term of any employment contract, proprietary information and
inventions agreement, non-competition agreement, or any other contract or
agreement relating to the relationship of any such employee with Indaba or any
previous employer.

 

5.16     Insurance.  Indaba has provided Buyer with complete and accurate copies
of all policies of insurance and provided Buyer with the right to inspect true
and complete copies of all policies of insurance to which Indaba is a party or
is a beneficiary or named insured as of the Closing Date.  Indaba has in full
force and effect, with all premiums due thereon paid the policies of insurance
set forth therein.  There were no claims in excess of $10,000 asserted or
currently outstanding under any of the insurance policies of Indaba in respect
of all motor vehicle, general liability, errors and omissions, workers
compensation, and medical claims during the calendar year ending on December 31,
2013 or December 31, 2014.

 

5.17     Labor Relations.  None of the employees of Indaba are represented by
any union or are parties to any collective bargaining arrangement, and, to the
knowledge of Seller, no attempts are being made to organize or unionize any of
Indaba's employees.  Except as disclosed in writing to Buyer prior to the
Closing, to the knowledge of Seller, there is not presently pending or existing,
and there is not presently threatened, any material (a) strike, slowdown,
picketing, work stoppage or employee grievance process, or (b) action,
arbitration, audit, hearing, investigation, litigation, or suit (whether civil,
criminal, administrative, investigative, or informal) against or affecting
Indaba relating to the alleged violation of any legal requirement pertaining to
labor relations or employment matters.  Indaba is in compliance with all
applicable laws respecting employment and employment practices, terms and
conditions of employment, wages and hours, occupational safety and health and is
not engaged in any unfair labor practices.  Indaba is in compliance with the
Immigration Reform and Control Act of 1986.  Except as disclosed in Schedule
5.17, Indaba has no employment agreements.

 

              5.18    Condition of Premises.  All real property leased by Indaba
is in good condition and repair, ordinary wear and tear excepted.

 

5.19   No Distributor Agreements.  Except as disclosed to and acknowledged by
Buyer in writing prior to the Closing, Indaba is not a party to, nor is the
property of Indaba bound by, any distributors' or manufacturer's representative
or agency agreement.

 

5.20   Conflict of Interest Transactions.   No past or present shareholder,
director, officer or employee of Indaba or any of their affiliates (i) is
indebted to, or has any financial, business or contractual relationship or
arrangement with Indaba, or (ii) has any direct or indirect interest in any
property, asset or

12

--------------------------------------------------------------------------------

right which is owned or used by Indaba or pertains to the business of Indaba
with the exception of outstanding shareholder loans which will be satisfied and
discharged in full prior to the Closing Date.

 

5.21   Litigation.       There is no action, suit, proceeding, dispute,
litigation, claim, complaint or, to the knowledge of Seller, investigation by or
before any court, tribunal, governmental body, governmental agency or arbitrator
pending or threatened against or with respect to Indaba which (i) if adversely
determined would have a material adverse effect on the business, condition,
assets, operations or prospects of Indaba, or (ii) challenges or would challenge
any of the actions required to be taken by Indaba under this Agreement. There
exists no basis for any such action, suit, proceeding, dispute, litigation,
claim, complaint or investigation.

 

5.22   Non-Contravention.  Neither (a) the execution and delivery of this
Agreement, nor (b) the performance of this Agreement will: (i) contravene or
result in a violation of any of the provisions of the organizational documents
of Indaba; (ii) contravene or result in a violation of any resolution adopted by
the members or directors of Indaba; (iii) result in a violation or breach of, or
give any person the right to declare (whether with or without notice or lapse of
time) a default under or to terminate, any material agreement or other
instrument to which  Indaba is a party or by which Indaba or any of its assets
are bound; (iv) give any person the right to accelerate the maturity of any
indebtedness or other obligation of Indaba; (v) result in the loss of any
license or other contractual right of Indaba; (vi) result in the loss of, or in
a violation of any of the terms, provisions or conditions of, any governmental
license, permit, authorization or franchise of Indaba; (vii) result in the
creation or imposition of any lien, charge, encumbrance or restriction on any of
the assets of Indaba; (viii) result in the reassessment or revaluation of any
property of Indaba by any taxing authority or other governmental authority; (ix)
result in the imposition of, or subject Indaba to any liability for, any
conveyance or transfer tax or any similar tax; or (x) result in a violation of
any law, rule, regulation, treaty, ruling, directive, order, arbitration award,
judgment or decree to which Indaba or any of its assets or any limited liability
interests are subject.

 

5.23     Approvals.   Indaba has provided Buyer with a complete and accurate
list of all jurisdictions in which Indaba is authorized to do business along
with the documentation evidencing such authorization.  No authorization, consent
or approval of, or registration or filing with, any governmental authority is
required to be obtained or made by Indaba in connection with the execution,
delivery or performance of this Agreement, including the conveyance to Buyer of
the Business.

 

5.24     Brokers.  Indaba has not agreed to pay any brokerage fees, finder's
fees or other fees or commissions with respect to the Transaction, and no person
is entitled, or intends to claim that it is entitled, to receive any such fees
or commissions in connection with such transaction.

 

5.25    Special Government Liabilities.  Indaba has no existing or pending
liabilities, obligations or deferred payments due to any federal, state or local
government agency or entity in connection with its business or with any program
sponsored or funded in whole or in part by any federal, state or local
government

13

--------------------------------------------------------------------------------

agency or entity, nor are the Indaba Members or Seller aware of any threatened
action or claim or any condition that could support an action or claim against
Indaba or the Business for any of said liabilities, obligations or deferred
payments.

 

5.26     Sales and EBITDA.  Indaba's total sales for the year ended December 31,
2014 were in excess of $1,688,000.00 and EBITDA (defined below) was
approximately $-60,576.26.  The Indaba Members and the Seller have estimated in
good faith that Indaba's total sales for the six (6) months ending June 30, 2015
will be approximately $1,300,000 and EBITDA will be approximately $100,000.  The
foregoing estimates shall in no event be construed as a guaranty or warranty of
future performance.  For purposes of this Agreement, "EBITDA" means, for the
relevant time period, earnings before interest, taxes, depreciation and
amortization, determined in accordance with generally accepted accounting
principles, as consistently applied by Indaba, plus (i) all out of pocket costs
and expenses incurred by Indaba in connection with the Transaction, (ii) all
cash and non-cash compensation expenses and distributions to any of the Indaba
Members, (iii) any extraordinary, unusual or non-recurring or non-cash amounts
paid or payable for capital expenditures, and (iv) any extraordinary, unusual or
non-recurring employee bonuses or similar compensation relating to the
Transaction.

 

            5.27     Net Working Capital.  Immediately prior to the Closing,
Indaba's Working Capital, as hereinafter defined, shall be not less than one
hundred fifty thousand dollars ($150,000).  For purposes of this Section 5.27:

                                                i.            "Current Assets"
means the current assets of Seller as determined in accordance with U.S.
generally accepted accounting principles.

                                               ii.            "Current
Liabilities" means the current Liabilities of Seller as determined in accordance
with U.S. generally accepted accounting principles.

                                             iii.            "Working Capital"
means an amount equal to (a) the amount of the Current Assets, minus (b) the
amount of the Current Liabilities. 

5.28     Full Disclosure.  Neither this Agreement (including the exhibits
hereto) nor any statement, certificate or other document delivered to Buyer by
or on behalf of Indaba contains any untrue statement of a material fact or omits
to state a material fact necessary to make the representations and other
statements contained herein and therein not misleading.

5.29          Tax Advice. The Indaba Members and Seller hereby represent and
warrant that they have sought their own independent tax advice regarding the
Transaction and neither the Indaba Members nor Seller have relied on any
representation or statement made by Buyer, Merger Sub, or their representatives
regarding the tax implications of such transactions.

 

5.30     Acknowledgement of Risks.  The Indaba Members hereby represent and
warrant that they have conducted a thorough review of Buyer's public reports and
financial statements filed by it with the Securities and Exchange Commission,
and have had an opportunity to ask questions of and to receive additional
information from representatives of Buyer.   The Indaba Members acknowledge that
there are substantial risks associated with owning the Series A Preferred

14

--------------------------------------------------------------------------------

Stock and Buyer's common stock into which it is convertible, including but not
limited to (i) those risk factors specifically disclosed to the Indaba Members
in writing by Buyer, a copy of which has been delivered to the Indaba Members,
(ii) Buyer may default on the Series A Preferred Stock and the price of its
common stock may decline, (iii) the transferability of Buyer's common stock is
restricted  by  applicable  federal  and  state  securities  laws  as  well  as
 by  the  terms  of  this Agreement and the Series A Preferred Stock, and may be
impaired by a lack of trading volume, and (iv) those additional risks described
in public reports filed by Buyer with the Securities and Exchange Commission. 
The Indaba Members are acquiring the Series A Preferred Stock for investment for
their own respective accounts only and not with a view to, or for resale in
connection with, any distribution thereof.  The Indaba Members represent and
warrant that they are sophisticated, knowledgeable and experienced in making
investments of this kind and are capable of evaluating the risks and merits of
acquiring the Series A Preferred Stock.

 

6.    Representations and Warranties of Buyer.

Buyer represents and warrants to the Indaba Members and Seller as follows:

 

6.1       Power and Authority; Binding Nature of Agreement.  Buyer has full
power and authority to enter into this Agreement and to perform its obligations
hereunder.   The execution, delivery and performance of this Agreement by Buyer
have been duly authorized by all necessary action on its part.  Assuming that
this Agreement is a valid and binding obligation of the other party hereto, this
Agreement is a valid and binding obligation of Buyer.

 

6.2       Approvals. No authorization, consent or approval of, or registration
or filing with, any governmental authority or any other person is required to be
obtained or made by Buyer in connection with the execution, delivery or
performance of this Agreement.

 

6.3     Good Standing.  Buyer (i) is duly organized, validly existing and in
good standing under the laws of the jurisdiction in which it is organized, (ii)
has all necessary power and authority to own its assets and to conduct its
business as it is currently being conducted, (iii) is duly qualified or licensed
to do business and is in good standing in every jurisdiction (both domestic and
foreign) where such qualification or licensing is required, (iv) has the full
right, corporate power and authority to enter into this Agreement and to perform
its obligations hereunder; (v)

 

6.4     Authority.  The execution of this Agreement by the individual whose
signature is set forth at the end of this Agreement, and the delivery of this
Agreement by Buyer, have been duly authorized by all necessary corporate action
on the part of Buyer;

 

6.5     Representations True on Closing Date. The representations and warranties
of Buyer set forth in this Agreement are true and correct on the date hereof,
and will be true and correct on the Closing Date as though such representations
and warranties were made as of the Closing Date.

15

--------------------------------------------------------------------------------

 

6.6  Non-Contravention.  The execution, delivery and performance of this
Agreement by Buyer will not violate, conflict with, require consent under or
result in any breach or default under (i) any of Buyer's organizational
documents (including its Certificate of Incorporation and By-laws), (ii) any
applicable Law or (iii) with or without notice or lapse of time or both, the
provisions of any material contract or agreement to which Buyer is a party or to
which any of its material assets are bound (the "Buyer Contracts").

 

6.7     Material Compliance.            Buyer is in material compliance with all
applicable Laws and Buyer Contracts relating to this Agreement, and the
operation of its business.

 

6.8     Capital Structure. 

 

(a) Capital Stock.  The authorized capital stock of the Company consists of: (i)
Four Hundred Ninety Five Million (495,000,000) Shares and (ii) Five Million
(5,000,000) shares of preferred stock, par value $0.001per share, of the Company
(the "Company Preferred Stock"). As of the date of this Agreement,
(105,790,195)  Shares were issued and outstanding, (0) ZERO Shares were issued
and held by the Company in its treasury and (0) ZERO shares of Company Preferred
Stock were issued and outstanding or held by the Company in its treasury. All of
the outstanding shares of capital stock of the Company are, and all shares of
capital stock of the Company which may be issued as contemplated or permitted by
this Agreement will be, when issued, duly authorized and validly issued, fully
paid and non-assessable and not subject to any pre-emptive rights. No Subsidiary
of the Company owns any Shares. Prior to the Closing, Buyer will deliver to each
Seller a schedule describing all stock options (the "Stock Options") and
convertible notes of the Company (the "Convertible Notes"), along with the
aggregate number of shares that could be issued if all Stock Options were issued
and all Convertible Notes were converted into Shares.

 

6.9            Governmental Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with, or notice to (any
of the foregoing being a "Consent"), any supranational, national, state,
municipal, local or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other governmental authority, or any
quasi-governmental or private body exercising any regulatory or other
governmental or quasi-governmental authority (a "Governmental Entity") is
required to be obtained or made by the Buyer in connection with the execution,
delivery and performance by the Company of this Agreement or the consummation by
the Buyer of the Merger and other transactions contemplated hereby, except for:
(i) the filing of the Certificate of Merger with the Secretary of State of the
State of Delaware; (ii) if required by Nevada law, the filing of the Buyer Proxy
Statement with the Securities and Exchange Commission ("SEC") in accordance with
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and such
reports under the Exchange Act as may be required in connection with this
Agreement, the Merger and the other transactions contemplated by this Agreement;
(iii) such Consents as may be required under (A) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") or (B) any other Laws that
are designed or intended to prohibit, restrict or regulate actions having the
purpose or effect of monopolization or restraint of trade or significant
impediments or lessening of competition or creation or

16

--------------------------------------------------------------------------------

strengthening of a dominant position through merger or acquisition ("Foreign
Antitrust Laws" and, together with the HSR Act, the "Antitrust Laws"), in any
case that are applicable to the transactions contemplated by this Agreement;
(iv) such Consents as may be required under applicable state securities or "blue
sky" Laws and the securities Laws of any foreign country; (v) the other Consents
of Governmental Entities listed in Schedule 6.7(c); and (vi) such other Consents
which if not obtained or made would not reasonably be expected to have,
individually or in the aggregate, a material adverse effect.

 

6.10 SEC Filings; Financial Statements; Internal Controls; Sarbanes-Oxley Act
Compliance.

 

(a)        SEC Filings. Buyer has timely filed with or furnished to, as
applicable, the SEC all registration statements, prospectuses, reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated by reference) required to be filed or furnished
by it with the SEC since January 1, 1998 (the "Buyer SEC Documents"). Buyer has
made available to Seller all such Buyer SEC Documents that it has so filed or
furnished prior to the date hereof. To the knowledge of Buyer's management and
board of directors, as of their respective filing dates (or, if amended or
superseded by a subsequent filing, as of the date of the last such amendment or
superseding filing prior to the date hereof), each of the Buyer SEC Documents
complied as to form in all material respects with the applicable requirements of
the Securities Act of 1933, as amended (the "Securities Act"), and the Exchange
Act, and the rules and regulations of the SEC thereunder applicable to such
Buyer SEC Documents. To the knowledge of Buyer's management and board of
directors, none of the Buyer SEC Documents, including any financial statements,
schedules or exhibits included or incorporated by reference therein at the time
they were filed (or, if amended or superseded by a subsequent filing, as of the
date of the last such amendment or superseding filing prior to the date hereof),
contained any untrue statement of a material fact or omitted to state a 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. None of the Buyer 's Subsidiaries is required to file or furnish any
forms, reports or other documents with the SEC.

 

(b)        Undisclosed Liabilities. The audited balance sheet of Buyer dated as
of June 30, 2014 contained in the Buyer SEC Documents filed prior to the date
hereof is hereinafter referred to as the "Buyer Balance Sheet." Neither Buyer
nor any of its Subsidiaries has any Liabilities other than Liabilities that (i)
are reflected or recorded on the Buyer Balance Sheet (including in the notes
thereto), (ii) were incurred since the date of the Buyer Balance Sheet in the
ordinary course of business, (iii) are incurred in connection with the
transactions contemplated by this Agreement, or (iv) would not reasonably be
expected to have, individually or in the aggregate, a material adverse effect.

 

(c)        Off-balance Sheet Arrangements. Neither Buyer nor any of its
Subsidiaries is a party to, or has any commitment to become a party to, any
joint venture, off balance sheet partnership or any similar contract (including
any contract or arrangement relating to any transaction or relationship between
or among Buyer and any of its Subsidiaries, on the one hand, and any
unconsolidated affiliate, including any structured finance, special purpose or
limited purpose entity or person, on the other hand, or any "off balance sheet
arrangements" (as defined in Item 303(a) of Regulation S-K under the Exchange
Act)), where the result,

17

--------------------------------------------------------------------------------

purpose or intended effect of such contract is to avoid disclosure of any
material transaction involving, or material liabilities of, Buyer or any of its
Subsidiaries in Buyer's or such Subsidiary's published financial statements or
other Buyer SEC Documents.

 

6.11     Full Disclosure.  Neither this Agreement (including the exhibits
hereto) nor any statement, certificate or other document delivered to Seller by
or on behalf of Buyer contains any untrue statement of a material fact or omits
to state a material fact necessary to make the representations and other
statements contained herein and therein not misleading.

 

7.         Conditions to Closing.

 

7.1       Conditions Precedent to Buyer's Obligation to Close.   Buyer's
obligation to close the transaction as contemplated in this Agreement is
conditioned upon the occurrence or waiver by Buyer of the following:

 

(a)        The Indaba Members have delivered an updated list of assets and
liabilities that is accurate and complete as of not more than five (5) business
days prior to the Closing.

 

(b)      All representations and warranties of the Indaba Members and Seller
made in this Agreement or in any exhibit or schedule hereto delivered by the
Indaba Members and Seller shall be true and correct as of the Closing Date with
the same force and effect as if made on and as of that date.

 

(c)       The Indaba Members and Seller shall have performed and complied with
all agreements, covenants and conditions required by this Agreement to be
performed or complied with by them prior to or at the Closing Date.

 

(d)       Buyer must be satisfied in its sole and absolute discretion with its
due diligence of the Indaba Members and Seller.

 

(e)      Buyer shall have received a report from the Secretary of State for
Colorado showing the existence or absence of liens, financing statements and
other encumbrances recorded against any of the Assets, dated not more than five
(5) days prior to the Closing, and such report shall be satisfactory to Buyer in
its sole and absolute discretion.

 

7.2       Conditions Precedent to the Indaba Members' and Seller's Obligation to
Close.   The Indaba Members' and Sellers' obligation to close the transaction as
contemplated in this Agreement is conditioned upon the occurrence or waiver by
the Indaba Members of the following:

18

--------------------------------------------------------------------------------

 

(a)       All representations and warranties of Buyer made in this Agreement or
in any exhibit hereto delivered by Buyer shall be true and correct on and as of
the Closing Date with the same force and effect as if made on and as of that
date.

 

(b)       Buyer  shall  have  performed  and  complied  with  all  agreements 
and conditions required by this Agreement to be performed or complied with by
Buyer prior to or at the Closing Date.

 

(c)      Buyer shall have executed and delivered an Employment Agreement to
Shields and Gindi.

 

8.         Survival of Representations and Warranties.

 

All representations and warranties made by each of the Parties hereto will
survive the Closing for eighteen (18) months after the Closing Date, or longer
if expressly and specifically provided in the Agreement.  Indaba and the Indaba
Members will have joint and several liability under this Agreement, except for
the covenant not to compete in Section 3.1 of this Agreement or where otherwise
expressly and specifically provided in this Agreement.

 

9.         Indemnification.

 

9.1       Indemnification by the Indaba Members.  The Indaba Members agree
jointly and severally, to indemnify, defend and hold harmless Buyer and its
affiliates against any and all claims, demands, losses, costs, expenses,
obligations, liabilities and damages, including interest, penalties and
reasonable attorney's fees and costs ("Losses"), incurred by Buyer or any of its
affiliates arising, resulting from, or relating to any and all liabilities of
Indaba incurred prior to the Closing Date or relating to the Assets prior the
Closing Date, any misrepresentation of a material fact or omission to disclose a
material fact made by the Indaba Members or Seller in this Agreement, in any
exhibits to this Agreement or in any other document furnished or to be furnished
by Indaba or Sellers under this Agreement, or any breach of, or failure by the
Indaba Members or Seller to perform, any of their representations, warranties,
covenants or agreements in this Agreement or in any exhibit or other document
furnished or to be furnished by the Indaba Members or Seller under this
Agreement.

 

9.2       Indemnification by Buyer.    Buyer agrees to indemnify, defend and
hold harmless the Indaba Members and Seller arising, resulting from, or relating
to any misrepresentation of a material fact or omission to disclose a material
fact made by the Buyer in this Agreement, in any exhibits to this Agreement or
in any other document furnished or to be furnished by the Buyer under this
Agreement, or any breach of, or failure by Buyer to perform, any of its
representations, warranties, covenants or agreements in this Agreement or in any
exhibit or other document furnished or to be furnished by Buyer under this
Agreement.

 

9.3       Procedure for Indemnification Claims.

 

(a)       Whenever any parties become aware that a claim (an "Underlying Claim")
has arisen entitling them to seek indemnification under Section 9 of

19

--------------------------------------------------------------------------------

this Agreement,  such  parties  (the  "Indemnified  Parties")  shall  promptly
 send  a  notice  ("Notice") to the parties liable for such indemnification (the
"Indemnifying Parties") of the right to indemnification (the "Indemnity Claim");
provided, however, that the failure to so notify the Indemnifying Parties will
relieve the Indemnifying Parties from liability under this Agreement with
respect to such Indemnity Claim only if, and only to the extent that, such
failure to notify the Indemnifying Parties results in the forfeiture by the
Indemnifying Parties of rights and defenses otherwise available to the
Indemnifying Parties with respect to the Underlying Claim.  Any Notice pursuant
to this Section 9.3(a) shall set forth in reasonable detail, to the extent then
available, the basis for such Indemnity Claim and an estimate of the amount of
damages arising therefore.

 

(b)       If an Indemnity Claim does not result from or arise in connection with
any Underlying Claim or legal proceedings by a third party, the Indemnifying
Parties will have thirty (30) calendar days following receipt of the Notice to
issue a written response to the Indemnified Parties, indicating the Indemnifying
Parties' intention to either (i) contest the Indemnity Claim or (ii) accept the
Indemnity Claim as valid.   The Indemnifying Parties' failure to provide such a
written response within such thirty (30) day period shall be deemed to be an
acceptance of the Indemnity Claim as valid.  In the event that an Indemnity
Claim is accepted as valid, the Indemnifying Parties shall, within fifteen (15)
business days thereafter, pay Losses incurred by the Indemnified Parties in
respect of the Underlying Claim in cash by wire transfer of immediately
available funds to the account or accounts specified by the Indemnified Parties.
 To the extent appropriate, payments for indemnifiable Losses made pursuant to
this Agreement will be treated as adjustments to the Purchase Price.

 

(c)       In the event an Indemnity Claim results from or arises in connection
with any Underlying Claim or legal proceedings by a third party, the
Indemnifying Parties shall have fifteen (15) calendar days following receipt of
the Notice to send a Notice to the Indemnified Parties of their election to, at
their sole cost and expense, assume the defense of any such Underlying Claim or
legal proceeding; provided that such Notice of election shall contain a
confirmation by the Indemnifying Parties of their obligation to hold harmless
the Indemnified Parties with respect to Losses arising from such Underlying
Claim. The failure by the Indemnifying Parties to elect to assume the defense of
any such Underlying Claim within such fifteen (15) day period shall entitle the
Indemnified Parties to undertake control of the defense of the Underlying Claim
on behalf of and for the account and risk of the Indemnifying Parties in such
manner as the Indemnified Parties may deem appropriate, including, but not
limited to, settling the Underlying Claim. The parties controlling the defense
of the Underlying Claim shall not, however, settle or compromise such Underlying
Claim without the prior written consent of the other parties, which consent
shall not be unreasonably withheld or delayed.  The non-controlling parties
shall be entitled to participate in (but not control) the defense of any such
action, with their own counsel and at their own expense.

 

(d)      The Indemnifying Parties and the Indemnified Parties will cooperate
reasonably, fully and in good faith with each other, at the sole expense of

20

--------------------------------------------------------------------------------

the Indemnifying Parties subject to the last sentence of Section 9.3(c) of this
Agreement, in connection with the defense, compromise or settlement of any
Underlying Claim including, without limitation, by making available to the other
parties all pertinent information and witnesses within their reasonable control.

 

(e)       Basket; Limitations on Indemnification; Calculation of Losses.

           (i)   Basket.  A Buyer Indemnified Party shall not be entitled to
make a claim for indemnification for any Losses arising out of Section 9.1 until
the aggregate amount of all claims for Losses which arise out of Section 9.1
exceeds ten thousand dollars ($10,000) (the "Basket").  In the event the
aggregate amount of such Losses exceeds the Basket, then the Seller shall
indemnify such Buyer Indemnified Party with respect to the amount of all Losses
exceeding the amount of the Basket.

           (ii)  Seller's and Indaba Member Cap.  The maximum aggregate
liability of the Seller and Indaba Members, collectively, under Section 8.2(a)
for all Losses shall be an amount equal to the Purchase Price actually received
by such Seller or Indaba Member (the "Seller's Cap").

           (iii) Exclusions from the Basket and Seller's Cap.  Notwithstanding
the foregoing, the following Losses shall not be subject to the provisions of
the Basket and the Seller's Cap and a Buyer Indemnified Party shall be entitled
to indemnification with respect to such Losses in accordance with this Article 9
as though the Basket and the Seller's Cap were not a part of this Agreement:

(1)               Losses relating to, caused by or resulting from the breach of
any of the Seller's and/or Indaba Members representations and warranties as a
result of fraud or intentional misrepresentation; and

(2)               Losses relating to, caused by or resulting from the breach of
any ongoing covenant of the Seller or Indaba Member.

 

                      9.4       Recovery   Losses for which a Buyer Indemnified
Party may be entitled to recover pursuant to this Article 9 shall be offset by
the pro rata cancellation of Series A Preferred Shares held by the Indaba
Members at the rate of $200.00 per share, if any, against any Seller or Indaba
Member in accordance with this Article 9.  Except for specific performance and
injunctive relief, the indemnification obligations and procedures set forth in
this Article 9 shall be the sole and exclusive remedy for liabilities arising
out of this Agreement and the transactions contemplated hereby.

 

10.       Injunctive Relief.

 

10.1     Damages Inadequate.  Each party acknowledges that it would be
impossible to measure in money the damages to the other party if there is a
failure to comply with any covenants and provisions of this Agreement, and
agrees that in the event of any breach of any covenant or provision, the other
party to this Agreement will not have an adequate remedy at law.

21

--------------------------------------------------------------------------------

 

10.2     Injunctive Relief.  It is therefore agreed that the other party to this
Agreement who is entitled to the benefit of the covenants and provisions of this
Agreement which have been breached, in addition to any other rights or remedies
which they may have, will be entitled to immediate injunctive relief to enforce
such covenants and provisions, and that in the event that any such action or
proceeding is brought in equity to enforce them, the defaulting or breaching
party will not urge a defense that there is an adequate remedy at law.

 

11.       Further Assurances.

 

Following the Closing, the Indaba Members and Seller shall furnish to Buyer such
instruments and other documents as Buyer may reasonably request for the purpose
of carrying out or evidencing the transactions contemplated hereby.

 

12.       Fees and Expenses.

 

Each party hereto shall pay all fees, costs and expenses that it incurs in
connection with the negotiation and preparation of this Agreement and in
carrying out the transactions contemplated hereby (including, without
limitation, all fees and expenses of its counsel and accountant).

 

13.       Waivers.

 

If any party at any time waives any rights hereunder resulting from any breach
by the other party of any of the provisions of this Agreement, such waiver is
not to be construed as a continuing waiver of other breaches of the same or
other provisions of this Agreement. Resort to any remedies referred to herein
will not be construed as a waiver of any other rights and remedies to which such
party is entitled under this Agreement or otherwise.

 

14.       Successors and Assigns.

 

Each covenant and representation of this Agreement will inure to the benefit of
and be binding upon each of the Parties, their personal representatives, assigns
and other successors in interest.

 

15.       Entire and Sole Agreement.

 

           This Agreement constitutes the entire agreement between the Parties
and supersedes all other agreements, representations, warranties, statements,
promises and undertakings, whether oral or written, with respect to the subject
matter of this Agreement.  This Agreement may be modified or amended only by a
written agreement signed by all Parties to this Agreement.   The Parties
acknowledge that as of the date of the execution of this Agreement, any and all
other agreements, either written or verbal, regarding the substance of this
Agreement will be terminated and be of no further force or effect.

 

16.       Governing Law.

 

This Agreement will be governed by the laws of California without giving effect
to applicable conflict of law provisions.  With respect to any litigation

22

--------------------------------------------------------------------------------

arising out of or relating to this Agreement, each party agrees that it will be
filed in and heard by the state or federal courts with jurisdiction to hear such
suits located in Santa Barbara County, California.

 

17.       Counterparts.

 

This Agreement may be executed simultaneously in any number of counterparts,
each of which counterparts will be deemed to be an original, and such
counterparts will constitute but one and the same instrument.

 

18.       Assignment.

Except in the case of an affiliate of Buyer, this Agreement may not be
assignable by any party without prior written consent of the other Parties.

 

19.       Remedies.

 

Except as otherwise expressly provided herein, none of the remedies set forth in
this Agreement are intended to be exclusive, and each party will have all other
remedies now or hereafter existing at law, in equity, by statute or otherwise.
 The election of any one or more remedies will not constitute a waiver of the
right to pursue other available remedies.

 

20.       Section Headings.

 

The section headings in this Agreement are included for convenience only, are
not a part of this Agreement and will not be used in construing it.

 

21.       Severability.

 

In the event that any provision or any part of this Agreement is held to be
illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability will not affect the validity or enforceability of any other
provision or part of this Agreement.

 

22.       Notices.

Each notice or other communication hereunder must be in writing and will be
deemed to have been duly given on the earlier of (i) the date on which such
notice or other communication is actually received by the intended recipient
thereof, or (ii) the date five (5) days after the date such notice or other
communication is mailed by registered or certified mail (postage prepaid) to the
intended recipient at the following address (or at such other address as the
intended recipient will have specified in a written notice given to the other
Parties hereto):

23

--------------------------------------------------------------------------------

 

If to the Indaba Members and Seller:

Indaba Group, LLC

2854 Larimer Street

Denver, CO 80205

Attn: Ryan Shields, President

Telephone: 720-545-0120

 

Facsimile:  

 

If to Buyer:

Warp 9, Inc.

1933 Cliff Dr. Suite 11

Santa Barbara, CA 93109

Attention: Andrew Van Noy, CEO

Telephone: 805-964-3313

Facsimile: 805-964-6968

 

23.       Publicity.

 

Except as may be required in order for a party to comply with applicable laws,
rules, or regulations or to enable a party to comply with this Agreement, or
necessary for Buyer to prepare and disseminate any private or public placements
of its securities or to communicate with its stakeholders, no press release,
notice to any third party or other publicity concerning the Transaction will be
issued, given or otherwise disseminated without the prior approval of each of
the Parties hereto.

 

[Signatures on following page.]

24

--------------------------------------------------------------------------------

IN WITNESS WHEREOF, this Agreement has been entered into as of the date first
above written.

 

Indaba:                                               Indaba Group, LLC.

 

By:   /s/ Ryan Shields        

       Ryan Shields, President

 

Indaba Members:                                /s/ Ryan Shields               

Ryan Shields, Individually

 

/s/ Blake Gindi               

Blake Gindi, Individually

    

/s/ Jack Gindi               

Jack Gindi, Individually    

 

 

Company:                                     WARP 9, INC., a Nevada corporation

 

By:    /s/ Andrew Van Noy                              

      Andrew Van Noy, Chief Executive Officer

 

 

Merger Sub:                                 WARP 9, INC., a Delaware corporation

 

By:    /s/ Andrew Van Noy                                

      Andrew Van Noy, Chief Executive Officer

25

--------------------------------------------------------------------------------

EXHIBIT A

 

Certificate of Merger

 

 

--------------------------------------------------------------------------------

CERTIFICATE OF MERGER

OF

DOMESTIC CORPORATION AND FOREIGN LIMITED LIABILITY COMPANY

Pursuant to Title 8, Section 264(c) of the Delaware General Corporation Law, the
undersigned corporation executed the following Certificate of Merger:

FIRST: The name of the surviving corporation is Warp 9, Inc., a Delaware
Corporation, and the name of the limited liability company being merged into
this surviving corporation is Indaba Group, LLC, a Colorado limited liability
company.

SECOND: The Agreement of Merger has been approved, adopted, certified, executed
and acknowledged by the surviving corporation and the merging limited liability
company.

THIRD: The name of the surviving corporation is Indaba Group, Inc.

FOURTH: The merger is to become effective on _______________________________.

FIFTH: The Agreement of Merger is on file at ________________________________
_______________________________________________________________________, the
place of business of the surviving corporation.

SIXTH: A copy of the Agreement of Merger will be furnished by the corporation on
request, without cost, to any stockholder of any constituent corporation or
member of any constituent limited liability company.

SEVENTH: The certificate of incorporation of the surviving corporation shall be
amended and restated in its entirety as set forth on Exhibit A attached hereto,
and in accordance with Article I therein, the surviving corporation's name shall
be changed to "Indaba Group, Inc."

IN WITNESS WHEREOF, said Corporation has caused this certificate to be signed by
an authorized officer, the______________ day of ________________, A.D., 2015.

By:____________________________________

Name:____________________________________

Title:____________________________________

 

 

--------------------------------------------------------------------------------

 

EXHIBIT B

Certificate of Designation

 

--------------------------------------------------------------------------------

 

EXHIBIT C

Employment Agreement

 

--------------------------------------------------------------------------------

 

EXHIBIT D

Disclosure Schedules