Exhibit 10.1

 

Execution

 

 

  

STOCK PURCHASE AGREEMENT

 

BETWEEN

 

STAFFING 360 SOLUTIONS, INC.

(the “SELLER”)

 

AND

 

CYBER 360, INC., a Nevada Corporation

(“NV CYBER 360”)

 

AND

 

MARK P. AIELLO

(“AIELLO”)

 

AND

 

MICHAEL A. CONSOLAZIO and

HEATHER D. HAUGHEY

(the “PURCHASERS”)

 

Effective as of January 1, 2015

 

 

 

 

 

 

Execution

 

STOCK PURCHASE AGREEMENT

 

THIS STOCK PURCHASE AGREEMENT (the “Agreement”), dated as of February 27, 2015
(the “Closing Date”) and effective as of January 1, 2015 (the “Effective Date”),
is by and between Mark P. Aiello (“Aiello”), Michael A. Consolazio
(“Consolazio”), and Heather D. Haughey (“Haughey” and together with Consolazio,
the “Purchasers”), Staffing 360 Solutions, Inc., a Nevada corporation (the
“Seller”), and its wholly-owned subsidiary Cyber 360, Inc., a Nevada corporation
(“NV Cyber 360”). Aiello, the Purchasers, the Seller and NV Cyber 360 are
collectively referred to herein as the “Parties” and individually as a “Party.”

 

BACKGROUND

 

On April 26, 2013, the Seller purchased from Aiello, Consolazio and Haughey all
of the issued and outstanding shares of capital stock of The Revolution Group,
Ltd., a Massachusetts corporation (“TRG”) under a Stock Purchase Agreement dated
as of March 21, 2013 (the “Original Sale”). After the Original Sale, the Seller
changed TRG’s name to Cyber 360 Solutions, Inc. On or about December 8, 2014,
the Seller transferred all of the shares of capital stock of Cyber 360
Solutions, Inc. to the Seller’s wholly-owned subsidiary, NV Cyber 360 (then
known as Staffing 360 Group, Inc. d/b/a Cyber 360 Solutions), so that the
Massachusetts corporation, Cyber 360 Solutions, Inc., became a wholly-owned
subsidiary of NV Cyber 360 and an indirect wholly-owned subsidiary of the
Seller. On January 29, 2015 the name of the Massachusetts Cyber 360 Solutions,
Inc. was changed to Cyber 360, Inc. Therefore, as of the date of this Agreement,
NV Cyber 360, a Nevada corporation owns the Massachusetts corporation of the
same name. As used in this Agreement, Massachusetts Cyber 360, Inc. is referred
to as “MA Cyber 360” and, together with NV Cyber 360, as the “Companies” or
individually as a “Company.”

 

This Agreement reflects a transaction in which, as of the Effective Date, the
Purchasers will “repurchase” MA Cyber 360 (formerly TRG), by purchasing from the
Seller all of the issued and outstanding shares of capital stock in NV Cyber 360
so that, upon consummation of the transaction, the Purchasers will own directly
NV Cyber 360 and, indirectly, MA Cyber 360 (the “Acquisition”). Except to the
extent set forth in this Agreement, all agreements executed in connection with
the Original Sale and all other agreements between the Parties and the Seller
will terminate upon the consummation of the Acquisition.

 

Now, therefore, in consideration of the premises and the mutual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the Parties agree as follows:

 

 

 

 

ARTICLE I

 

Definitions

 

1.1 Definitions. In addition to the capitalized terms defined elsewhere in this
Agreement, including the recitals and background hereto, the following
capitalized terms, when used herein, shall have the following meanings:

 

“Acquisition” has the meaning set forth in the second paragraph under the
heading “Background” above.

 

“Affiliate” means, with respect to a specified Person, any other Person or
member of a group of Persons acting together that, directly or indirectly,
through one or more intermediaries, Controls, or is Controlled by or is under
common Control with, the specified Person.

 

“Agreement,” “this Agreement,” “hereto,” “hereof,” “hereunder,” “hereby,” and
similar expressions refer to this Stock Purchase Agreement, including all
exhibits attached hereto, and not any particular article, section, subsection or
other subdivision hereof or thereof.

 

“Aiello Employment Agreement” has the meaning set forth in Section 2.4(c)
hereof.

 

“Business Day” means any day that is not a Saturday, Sunday or any other day on
which banks are required or authorized by law to be closed in Boston,
Massachusetts or New York City, New York.

 

“Closing” means the consummation of the Acquisition.

 

“Closing Date” has the meaning set forth in the first paragraph of this
Agreement.

 

“Consents” has the meaning set forth in Section 3.12 hereof.

 

“Control” (including the terms “Controlling,” “Controlled By,” and “under Common
Control With”) means the possession, direct or indirect, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of voting securities, by contract, by position or
otherwise.

 

“Earn Out” has the meaning set forth in the Original SPA.

 

“Effective Date” has the meaning set forth in the first paragraph of this
Agreement.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended.

 

“Governmental Body” means any federal, state or local governmental body or
political subdivision thereof, and any agency or other entity exercising
executive, legislative, judicial, regulatory or administrative functions of
government, including, without limitation, all taxing authorities.

 

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“Indebtedness” has the meaning set forth in Section 3.9 hereof.

 

“Lien” means any interest, consensual or otherwise, in property securing a
monetary obligation owed to, or a claim by, a Person other than the owner of the
Property, whether such interest is based on the common law, statute or contract,
including without limitation, all liens, mortgages, security interests, pledges,
deeds of trust, statutory liens for unpaid rentals, options or other charges and
encumbrances.

 

“Material” or “Materially” (Capitalized) means (a) a contract with a value in
excess of Fifty Thousand Dollars ($50,000), or (b) an effect on the identified
company in excess of Fifty Thousand Dollars ($50,000).

 

“material” or “materially” (not capitalized) means (a) a contract with a value
in excess of Twenty-Five Thousand Dollars ($25,000), or (b) an effect on the
identified company in excess of Twenty-Five Thousand Dollars ($25,000).

 

“Material Adverse Change” or “Material Adverse Effect” means any change, effect,
event, occurrence or state of facts that is, or is reasonably likely to be,
Materially adverse to the business and/or financial condition, assets, results
of operations or prospects of the Seller, NV Cyber 360 or MA Cyber 360, other
than any change, effect, event, occurrence or state of facts relating to the
economy in general.

 

“Maximum Number of Securities” has the meaning set forth in Section 5.8(a)
hereof.

 

“Original Sale” has the meaning set forth in the paragraph entitled “Background”
on the first page of this Agreement.

 

“Original SPA” has the meaning set forth in Section 2.3 hereof.

 

“Permitted Lien” has the meaning set forth in Section 3.8 hereof

 

“Person” means any individual, corporation, partnership, limited liability
company or partnership, unincorporated association, trust, joint venture or
other organization or entity.

 

“Piggy-Back Registration” has the meaning set forth in Section 5.8(a) hereof.

 

“Prohibited Transfer” has the meaning set forth in Section 5.7 hereof.

 

“Purchase Price” has the meaning set forth in Section 2.2 hereof.

 

“Registration Damages” has the meaning set forth in Section 5.8(d)(i) hereof.

 

“S360 Shares” has the meaning set forth in Section 2.3 hereof.

 

“Shares” has the meaning set forth in Section 2.1 hereof.

 

“Representative” means, as to any Person, such Person’s Affiliates and its and
their respective managers, directors, officers, employees, agents and advisors
(including financial advisors, counsel and accountants).

 

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“SEC” means the Securities and Exchange Commission.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Selling Expenses” has the meaning set forth in Section 5.8(a) hereof.

 

“Sterling Bank Agreements” means the Money-Only Funding Agreements dated as of
January 14, 2013 and May 7, 2013, and the Cash Collateral Pledge Agreement dated
as of January 14, 2013, all by and between Sterling National Bank and NV Cyber
360, and all other documents and agreement executed in connection therewith.

 

“Subsidiary” means, as to any particular parent corporation, any corporation,
partnership, trust, joint venture, limited liability company, association, or
other business entity as to which more than fifty percent (50%) of the
outstanding stock or equity interests having ordinary voting rights or power at
the time is owned or Controlled by such parent corporation or by one or more
Subsidiaries of such parent corporation.

  

ARTICLE II

 

Purchase and Sale of Shares

 

2.1 Purchase of Shares. On the terms and subject to the conditions set forth in
this Agreement, including without limitation the payment of the Purchase Price,
receipt of which is hereby acknowledged, as of the Effective Date the Seller
hereby sells, assigns, transfers, conveys and delivers to the Purchasers, and
the Purchasers hereby purchase, acquire and take assignment and delivery of, One
Thousand (1,000) shares of capital stock of Cyber 360, Inc., a Nevada
corporation (“NV Cyber 360”), which constitute one hundred percent (100%) of the
issued and outstanding shares of capital stock of NV Cyber 360 (the “Shares”).
The Purchasers are purchasing such Shares in the proportions set forth on
Exhibit A attached hereto and made a part hereof.

 

2.2 Delivery of Purchase Price and Shares. The purchase price for the Shares in
the aggregate is one U.S. dollar ($1.00) (the “Purchase Price”). The Purchasers
have delivered and paid to the Seller the Purchase Price for the Shares, and the
Seller has delivered to the Purchasers the original stock certificate or
certificates for the Shares of NV Cyber 360 being transferred hereunder, duly
endorsed or accompanied by stock powers duly executed and otherwise in a form
acceptable for transfer to the Purchasers pro rata based on the percentages set
forth for each Purchaser on Exhibit A hereto.

 

2.3 Payment of Unpaid Portion of Earn Out. In connection with the Acquisition
and the termination of the stock purchase agreement, dated as of March 21, 2013
executed by the Seller, Aiello, and the Purchasers in connection with the
Original Sale (the “Original SPA”) pursuant to Section 2.4 hereof, the parties
to the Original SPA have agreed to a final settlement of any remaining
obligations with respect to the Earn Out from the Original Sale by having Seller
issue and deliver to the Purchasers One Million One Hundred Thirty-Four Thousand
Fifty (1,134,050) shares of common stock of the Seller (the “S360 Shares”), with
each S360 Share valued as agreed by the Parties at $1 per share. The S360 Shares
have been issued pro rata to each Purchaser in accordance with the amounts set
forth on Exhibit A hereto. The S360 Shares will be issued free and clear of all
Liens (subject to Section 5.7). The Purchasers will provide to the Seller any
information or documentation reasonably requested by the Seller in connection
with recording their ownership of the S360 Shares. Not later than thirty (30)
days after the Closing Date, the Seller shall deliver to the Purchasers either
(i) certificates representing the S360 Shares, or (ii) evidence reasonably
satisfactory to the Purchasers’ counsel that the S360 Shares have been duly
issued to each Purchaser and that each Purchaser is reflected as the owner
thereof on the books and records of the Seller.

 

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The S360 Shares are fully vested. The S360 Shares have been issued free and
clear of all Liens (subject to Section 5.7) and have all rights associated with
the Seller’s common stock issued to or held by the other shareholders of the
Seller. The S360 Shares will be entitled to the registration rights provided in
Section 5.8 hereof, but will be subject to the lock-up provided in Section 5.7
hereof.

 

2.4 Termination of Original Sale Agreements. Subject to the payment of the
Purchase Price and delivery and receipt of the S360 Shares, the Parties agree
that the following agreements and obligations executed and undertaken in
connection with the Original Sale are terminated as of the Effective Date and
are of no further force and effect, and no Party will have any further
obligations or liability to the other in connection with the Original Sale,
except as otherwise specifically provided in this Agreement. These include
without limitation:

 

(a) Original Stock Purchase Agreement. All obligations of the Parties under the
Original SPA that survived the closing of Original Sale (including without
limitation the representations and warranties and all indemnity obligations set
forth therein), are hereby terminated, void, and are of no further force and
effect.

 

(b) Indemnity Agreement. All obligations of the Parties under the Indemnity
Agreement dated as of April 26, 2013 are hereby terminated, void, and are of no
further force and effect.

 

(c) The Aiello Employment Agreement. Subject to the exceptions set forth in the
last sentence of this Section 2.4(c), all obligations of the Parties under the
Employment Agreement dated as of March 21, 2013 by and between the Seller and
Mark P. Aiello (the “Aiello Employment Agreement”), including without
limitation, Aiello’s covenant of non-competition and non-solicitation, are
hereby terminated, void, and are of no further force and effect. The Parties
specifically agree that the Seller’s obligation under Section 8 “Indemnification
and Insurance” of the Aiello Employment Agreement, remains in effect with
respect to events that occurred on or prior to the Effective Date of this
Agreement.

 

(d) Restrictive Covenants. The obligations of Haughey and Consolazio under their
respective Restrictive Covenants executed and delivered in connection with the
Original Sale (the “Restrictive Covenants”), including without limitation,
obligations of non-competition and non-solicitation, are hereby terminated,
void, and are of no further force and effect.

 

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Nothing is this Agreement is to be construed as affecting in any manner the
right of the Purchasers and Aiello to retain the Cash Portion of the Purchase
Price (as defined in the Original SPA) delivered at the closing of the Original
Sale, or the ownership by the Purchasers and Aiello of the Purchaser Shares (as
defined in the Original SPA) that were delivered as part of the purchase price
in connection with the closing of the Original Sale. The Parties hereby
acknowledge and agree that notwithstanding any events or circumstances that
occurred prior to the Closing, the Seller has not defaulted or breached any of
its obligations under the Original SPA or the Aiello Employment Agreement.

 

2.5 No Other Payments. The Parties acknowledge that, except as set forth in this
Agreement, no payments of any kind are owed by either Company to the Seller or
by the Seller to either Company.

 

ARTICLE III

 

Representations and Warranties of the Seller

 

The Seller hereby represents and warrants to the Purchasers that:

 

3.1 Organization and Good Standing. Each of the Seller and NV Cyber 360 has been
duly organized and is validly existing as a corporation in good standing under
the laws of the State of Nevada with full corporate power and authority to own
or lease its respective properties and to conduct its respective businesses as
currently conducted. MA Cyber 360 is validly existing as a corporation in good
standing under the laws of The Commonwealth of Massachusetts with full corporate
power and authority to own or lease its properties and to conduct its business
as currently conducted.

 

3.2 Authorization; Enforceability. Each of the Seller and NV Cyber 360 has all
requisite corporate power and authority to execute, deliver and perform fully
its obligations under this Agreement including without limitation to sell,
assign, transfer and deliver the Shares pursuant to this Agreement. All
corporate action required to be taken by the Board of Directors and shareholders
of the Seller and/or NV Cyber 360 in order to authorize the execution and
performance of this Agreement by such Party has been taken. This Agreement
constitutes the legal, valid and binding obligation of the Seller and NV Cyber
360, enforceable against each of them in accordance with its terms except as
such enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally, and by general
equitable principles.

 

3.3 Capitalization. The authorized, issued and outstanding capital stock of NV
Cyber 360 consists solely of those Shares shown on Exhibit A hereto. The Shares
constitute all of the issued and outstanding equity securities of NV Cyber 360.
The Shares have been duly authorized and validly issued and are outstanding,
fully paid and non-assessable. The authorized, issued and outstanding capital
stock of MA Cyber 360 consists solely of those shares shown on Exhibit A hereto.
The shares of MA Cyber 360 capital stock listed on Exhibit A constitute all of
the issued and outstanding equity securities of MA Cyber 360. There are no
outstanding options, warrants, rights (including conversion or preemptive rights
and rights of first refusal or similar rights) or agreements, orally or in
writing, to purchase or acquire from either Company any shares of any class of
capital stock, or any securities or other instruments convertible into or
exchangeable for shares of capital stock of such Company, and no commitments to
issue any such securities or instruments.

 

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3.4 Ownership of Shares. The Seller owns of record and beneficially all of the
Shares, and has good and valid title to the Shares free and clear of all liens,
trusts (constructive and other), adverse claims and other encumbrances. Upon
delivery of the Shares and payment of the Purchase Price pursuant to this
Agreement, the Purchasers will receive good and valid title to the Shares, free
and clear of all Liens (other than those imposed by applicable securities laws).
NV Cyber 360 owns of record and beneficially all of the issued and outstanding
shares of capital stock of MA Cyber 360, and has good and valid title to such
shares free and clear of all Liens (other than those imposed by applicable
securities laws).

 

3.5 S360 Shares. The S360 Shares have been duly authorized by all necessary
action, and are validly issued, fully paid and non-assessable and free and clear
of all Liens (other than those imposed by applicable securities laws and subject
to Section 5.7).

 

3.6 Subsidiaries. MA Cyber 360 is a wholly-owned subsidiary of NV Cyber 360, and
NV Cyber 360 has no Subsidiaries other than MA Cyber 360. MA Cyber 360 has no
Subsidiaries.

 

3.7 No Conflicts. The execution, delivery and performance of this Agreement by
the Seller and NV Cyber 360 and the consummation of the transactions
contemplated hereby will not (i) conflict with or result in a breach or
violation of any term or provision of, or constitute a default under, the
charter or bylaws of the Seller or either Company, or (ii) violate or conflict
with any law or order to which the Seller or either Company is subject.

 

3.8 Title to Property: Encumbrances. Each Company has good, clear and marketable
title to all real and personal property, free and clear of all Liens except
Permitted Liens. The term “Permitted Liens,” as used in this Agreement, shall
mean (i) statutory liens for taxes or assessments not at the time due, (ii)
liens in respect of pledges or deposits under workers’ compensation laws or
similar legislation, (iii) carriers’, warehousemen’s, mechanics’, laborers’ and
material men’s liens if the obligations secured by such liens are not then
delinquent, (iv) encumbrances in the nature of zoning restrictions, easements,
rights or restrictions of record on the use of real property if the same do not
detract from the value of the property encumbered thereby or impair the use of
such property in the business of the Companies, (v) liens by Sterling Bank under
the Sterling Bank Agreements, and (vi) security interests in favor of the
respective landlords of the Companies that may exist under the terms of real
property leases for office space of the Companies. The Parties will use their
best efforts in good faith to terminate the Sterling Bank Agreements within
fifteen (15) days after Closing Date, so that all Liens on the assets of the
Companies in favor of Sterling National Bank will terminate within sixty (60)
days after the Closing Date.

 

3.9 Indebtedness. Other than any Indebtedness incurred under the Sterling Bank
Agreements, neither Company has any liability or obligation for Indebtedness,
The term “Indebtedness”, as used in this Agreement, shall mean: (a) any
liability of a Company created or assumed by such Company: (i) for borrowed
money; (ii) evidenced by a bond, note, debenture or similar instrument
(including a purchase money obligation, deed of trust or mortgage) given in
connection with the acquisition of, or exchange for, any property or assets
(other than inventory or similar property acquired and consumed or to be
consumed in the ordinary course of such Company’s business), including
securities and debt instruments; (iii) in respect of letters of credit issued
for a Company’s account and “swaps” of interest and currency exchange rates (and
other interest and currency exchange rate hedging agreements) to which such
Company is a party; or (iv) for the payment of money as lessee under leases that
are consistent with the past practice of the Companies recorded as capital
leases for financial reporting purposes; and (b) any amendment, renewal,
extension, revision or refunding of any such liability or obligation; provided,
however, that Indebtedness shall not include any liability for: (1) compensation
of Company employees in the ordinary course of business; (2) interest that has
been accrued and is not yet due and payable; (3) inventory or similar property
acquired and consumed or to be consumed in the ordinary course of a Company’s
business; (4) services in the ordinary course of business; (5) rent or other
amounts payable under real or personal property leases that have been as
disclosed elsewhere herein, other than capital leases as described in subsection
(a)(iv) above; (6) amounts payable on credit cards to the extent used to acquire
inventory or similar property; and (7) utility bills, property taxes and other
accounts payable. The Parties will use their best efforts in good faith to
terminate the Sterling Bank Agreements within fifteen (15) days after Closing
Date.

 

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3.10 No Litigation. There is no claim, legal action, suit, arbitration, or
mediation proceeding or other legal, administrative or governmental
investigation, inquiry or proceeding pending or, to the actual knowledge of the
executive officers of the Seller threatened in writing, (i) against or affecting
the Companies or any of their respective properties, assets or business, or to
which any capital stock of the Companies is subject, or relating to or which
would prevent the transactions contemplated by this Agreement or the
consummation hereof, or (ii) against or affecting the Seller or any of its
properties, assets or business relating to, or which would negatively affect or
prevent the transactions contemplated by this Agreement or the consummation
hereof.

 

3.11 Income and Other Taxes. Except as described in Schedule 3.11 attached
hereto and made a part hereof, all federal, state and local tax returns required
to be filed with any governmental tax authority to date in connection with the
operations of NV Cyber 360 and MA Cyber 360 have been timely filed (after giving
effect to applicable extensions properly granted by law), and all taxes required
to be paid, and required to be deposited to date in connection with their
respective operations have been timely paid and deposited. All of the
information that the Companies use for their respective income tax returns for
the period of April 26, 2013 through the Effective Date is true and correct in
all material respects and reasonably will enable the Companies’ tax preparers to
prepare such returns consistently with the income tax returns of prior periods.
No audit, examination or similar proceeding is pending or, to the knowledge of
the Seller, threatened in regard to any taxes due from or with respect to either
Company or any tax return filed by or with respect to either Company.

 

3.12 Consents. No consents, authorizations, order or approvals of or
registration, qualification, designation, declaration or filing with any court,
Governmental Body or agency or instrumentality thereof or any arbitrator or any
other Person (“Consents”) is required for the execution and delivery of this
Agreement by the Seller or NV Cyber 360 and the consummation of the transactions
contemplated hereby.

 

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3.13 Books and Records. NV Cyber 360’s minute book and other books and records
are located at such Company’s principal offices, at 641 Lexington Avenue, Suite
1526, New York, New York 10022. MA Cyber 360’s minute book and other books and
records are located at 641 Lexington Avenue, Suite 1526, New York, New York
10022. The books of account and other financial and corporate records of each
Company are in all material respects complete and correct. The minute book of NV
Cyber 360 contains materially accurate records of all meetings and accurately
reflect all other corporate action of the stockholders and directors of such
Company through the date hereof. The minute book of MA Cyber 360 contains
materially accurate records of all meetings and accurately reflect all other
corporate action of the stockholders and directors of such Company from April
26, 2013 through the date hereof. The minute books and other records of both
Companies will be delivered to the Purchaser on or promptly after the Effective
Date.

 

3.14 Legal Compliance.

 

(a) Compliance with Laws. Neither the Seller nor NV Cyber 360 has received any
communication, written or otherwise, during the past three (3) years from a
governmental authority that alleges that the Seller or NV Cyber 360 is not in
compliance with any law applicable to the conduct of its business, the
noncompliance with which could reasonably be expected to have a Material Adverse
Effect on NV Cyber 360. MA Cyber 360 has not received any communication, written
or otherwise, at any time after April 26, 2013 from a governmental authority
that alleges that MA Cyber 360 is not in compliance with any law applicable to
the conduct of its business, the noncompliance with which could reasonably be
expected to have a Material Adverse Effect on NV Cyber 360. Each of the Seller,
NV Cyber 360 and MA Cyber 360 is in compliance, in all material respects, with
all laws applicable to the conduct of its business.

 

(b) Permits. Each of the Seller, NV Cyber 360 and MA Cyber 360 possesses all
material certificates, licenses, permits, authorizations and approvals made or
issued pursuant to or under, or required by, laws applicable to such Party to
own, lease and operate its assets and to conduct its respective business as
currently conducted.

 

3.15 Illegal Payments. Neither the Seller or the Companies nor, to the knowledge
of the Seller, any officer, director or employee of the Seller or the Companies
has: (a) used any funds of such Party for unlawful contributions, gifts,
entertainment or other unlawful expenses relating to political activity; (b)
made any payment in violation of applicable Law to any foreign or domestic
government official or employee or to any foreign or domestic political party or
campaign or violated any provision of the Foreign Corrupt Practices Act of 1977,
as amended; or (c) made any other payment in violation of applicable Law.

 

3.16 No Other Representations and Warranties. Except for the representations and
warranties contained in this Agreement, neither the Seller, nor the Companies,
nor any other Person on behalf of the Seller or the Companies makes or has made
any other representation or warranty, express or implied, at law or in equity,
in respect of Seller, the Companies or their respective Affiliates, their
respective businesses, the sale of the Shares or the issuance of the S360 Shares
or any of the other transactions contemplated by this Agreement, and the Seller
and NV Cyber 360 hereby expressly disclaim any other representations or
warranties, whether made by the Seller, the Companies or any of their respective
Representatives.

 

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ARTICLE IV

 

Representations and Warranties of the Purchasers and Aiello

 

Each of the Purchasers and Aiello hereby severally and not jointly, represent
and warrant to the Seller that:

 

4.1 Capacity; Enforceability. Such Party has the legal capacity, to execute,
deliver and perform fully his/her obligations under this Agreement. This
Agreement constitutes the legal, valid and binding obligation of such Party,
enforceable against such Party in accordance with its terms except as such
enforcement may be limited by bankruptcy, insolvency and other similar laws
affecting the enforcement of creditors’ rights generally, and by general
equitable principles.

 

4.2 No Conflicts. The execution, delivery and performance of this Agreement by
such Party and the consummation of the transactions contemplated hereby will not
violate or conflict with any law or order to which such Party is subject.

 

4.3 No Other Representations and Warranties. Except for the representations and
warranties contained in this Agreement, such Party does not make and has not
made (and no other Person on behalf of such Party makes or has made) any other
representation or warranty, express or implied, at law or in equity, in respect
of such Party or its Affiliates, their respective businesses, the purchase of
the Shares or any of the other transactions contemplated by this Agreement.

 

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ARTICLE V

 

Covenants

 

The Parties hereby covenant as follows:

 

5.1 Delivery of the S360 Shares. Within thirty (30) days after the Closing Date,
the Seller will execute and deliver to the Purchasers either (i) certificates
representing the S360 Shares or (ii) evidence reasonably satisfactory to the
Purchaser’s counsel that the S360 Shares have been duly issued to each Purchaser
and that each Purchaser is reflected as the owner thereof on the books and
records of the Seller, effective as of the Effective Date.

 

 

5.2 Taxes. The Seller will promptly file, in no event later than ninety (90)
days after the Closing Date, all necessary tax returns and will take all other
action necessary or required to bring the Companies current in any state or
municipality in which a Company has not timely filed its tax returns or paid its
taxes that are due, and the Seller shall pay to the proper tax authorities all
taxes that are due with respect to the Companies, and all fines or other
penalties that may have been or may be assessed by any tax authority with
respect to the Companies due to underpayment of taxes or failure to timely file
taxes. In addition, the Seller shall be responsible for, and shall reimburse the
Companies for, any other costs that may be incurred by the Companies in
connection with the failure to file tax returns or pay taxes due on or before
the Closing Date. The Seller will send copies of all such tax filings to NV
Cyber 360 as they are made.

 

5.3 Covenant Not to Use Name.

 

(a) The Seller hereby covenants that, after the Closing the Seller shall not use
the name “Cyber”, (or any confusingly similar variations thereof as a
trademark), service mark, trade name, corporate name, logo, slogan, website and
Internet domain name for purposes of conducting or transacting any business, for
a period of twenty-four (24) months.

 

(b) The Purchasers and NV Cyber 360 each hereby covenant that after the date
that is twelve (12) months after the Closing (the “Anniversary Date”) neither
the Purchasers nor any of the Companies shall use the number “360” as a
trademark, service mark, trade name, corporate name, logo, slogan, website and
Internet domain name for purposes of conducting or transacting any business. As
promptly as practicable after the Anniversary Date, the Purchasers and NV Cyber
360 will take all actions necessary to cause each of the Companies to change its
name to cease using the number “360”, including amending their respective
organizational documents.

 

5.4 Intellectual Property. The Seller acknowledges and agrees that from and
after the Effective Date, the Companies will own all assets, all work product,
names, logos, websites, and URLs necessary for the conduct of their business,
and from the Effective Date and through the Anniversary Date will have all
rights necessary to use the name “Cyber 360” and all intellectual property in
connection with the name “Cyber 360.”

 

5.5 Confidentiality. The Parties covenant that any confidential or proprietary
information (except information filed with the SEC or publicly available
information), respecting any individual Party, the business of any Party or its
Affiliates (hereinafter, “Confidential Information” and such Party or Affiliate
owning such Confidential Information, the “Disclosing Party”) will, except as
otherwise agreed in writing by the Disclosing Party, be kept in strict
confidence and not used or disclosed by any other Parties to this Agreement and
their respective Representatives; provided that (i) the Parties may disclose
Confidential Information of a Disclosing Party to their attorneys, accountants
and professional advisors, as may be necessary to enable such Persons to perform
their duties on behalf of such Party, in which instance such Persons and any
other Representatives of such Persons shall be advised of the confidential
nature of such Confidential Information and shall themselves be required by such
Party to keep such Confidential Information confidential, (ii) the Seller may
disclose such Confidential Information as it may be required to disclose by
applicable law (including any SEC position) or securities listing or trading
requirement and (iii) except as otherwise contemplated by clause (ii) above, in
the event that a Party or its Affiliates becomes legally compelled to disclose
any Confidential Information of a Disclosing Party, such Party or its Affiliate
may disclose such Confidential Information so long as (A) such Party has
provided the Disclosing Party written notice of such requirement reasonably in
advance of such disclose to the extent practicable so that the Disclosing Party
may seek a protective order or other remedy (or waive compliance with this
Section 5.5) and (B) in the event that such protective order or other remedy is
not obtained, or the Disclosing Party waives compliance with this Section 5.5,
such Party and its Affiliates furnish only that portion of such Confidential
Information which they are legally required to be provided as advised in writing
by outside counsel and exercise their commercially reasonable efforts to obtain
assurances that confidential treatment will be accorded such Confidential
Information.

 

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5.6 Publicity. Neither the Seller, on the one hand, or the Purchasers, Aiello or
NV Cyber 360, on the other hand, will (or permit their respective
Representatives to) disclose, make or issue, any statement or announcement
concerning the specific terms or conditions of this Agreement to any third
parties (other than its Representatives who need to know such information in
connection with carrying out or facilitating the transactions contemplated
hereby) without the prior written consent of the other set of Parties (such
consent not to be unreasonably withheld, delayed or conditioned), except (i) in
the case of the Seller, as may be required of the Seller or its Affiliates by
applicable law (including any SEC position) or securities listing or trading
requirement or (ii) in the case of any other Party, as required by applicable
law as advised in writing by outside counsel and after conferring with the
Seller concerning the timing and content of such required disclosure.

 

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5.7. Lock-Up. Each Purchaser hereby agrees not to, without the prior written
consent of the Seller, during the period commencing from the Closing and ending
on the earlier of (x) the one (1) year anniversary of the Closing and (y) the
consummation of a sale, liquidation, merger, share exchange or other similar
transaction following the Closing that results in all of the Seller’s
shareholders having the right to exchange their equity holdings in the Seller
for cash, securities or other property: (i) lend, offer, pledge, hypothecate,
encumber, donate, assign, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any S360 Shares; (ii) enter into any swap or other arrangement that
transfers to another, in whole or in part, any of the economic consequences of
ownership of any S360 Shares; or (iii) publicly disclose the intention to do any
of the foregoing; whether any such transaction described in clauses (i), (ii) or
(iii) above is to be settled by delivery of any S360 Shares or other securities,
in cash or otherwise (any of the foregoing described in clauses (i), (ii), or
(iii), a “Prohibited Transfer”). Each Purchaser further agrees to execute such
agreements as may be reasonably requested by the Seller, in form and substance
reasonably satisfactory to such Purchaser, that are consistent with the
foregoing or that are necessary to give further effect thereto. If any
Prohibited Transfer is made or attempted contrary to the provisions of this
Section 5.7, such purported Prohibited Transfer shall be null and void ab
initio, and the Seller shall refuse to recognize any such purported transferee
of such S360 Shares as one of its equity holders for any purpose. In order to
enforce this Section 5.7, the Seller may impose stop-transfer instructions with
respect to the S360 Shares until the end of the restriction period described in
the first sentence of this Section ‎5.7.

 

5.8. Piggy-Back Registration Rights.

 

(a) If the Seller proposes to file a registration statement under the Securities
Act with respect to an offering of Seller equity securities, or securities or
other obligations exercisable or exchangeable for, or convertible into, Seller
equity securities, by the Seller for its own account and/or for security holders
of the Seller for their account, other than a registration statement (i) filed
solely in connection with an offering of securities to directors, employees or
independent contractors of the Seller pursuant to any stock incentive or other
benefit plan, (ii) filed on Form S-4 or S-8 or any successor to such forms,
(iii) for an exchange offer or offering of securities solely to the Seller’s
existing security holders, (iv) for a dividend reinvestment plan, or (v) solely
in connection with a merger, share capital exchange, asset acquisition, share
purchase, reorganization, amalgamation, subsequent liquidation, or other similar
business transaction that results in all of the Seller’s shareholders, including
without limitation the Purchasers, having the right to exchange their common
stock for cash, securities or other property of a non-capital raising bona fide
business transaction, then the Seller shall (x) give written notice of such
proposed filing to each Purchaser as soon as practicable but in no event less
than ten (10) days before the anticipated filing date, which notice shall
describe the amount and type of securities to be included in such offering, the
intended method(s) of distribution, and the name of the proposed managing
underwriter or underwriters, if any, of the offering, and (y) offer to each
Purchaser in such notice the opportunity to register the sale of such number of
the S360 Shares as such Purchaser may request in writing within ten (10) days
following receipt by the Purchaser of such notice (a “Piggy-Back Registration”).
The Seller shall include in such registration statement such S360 Shares that
are requested by a Purchaser to be included therein within ten (10) days after
the receipt by the Purchaser of any such notice on the same terms and conditions
as any shares of Seller’s common stock that are included in such registration
statement by other shareholders of the Seller exercising piggy-back registration
rights in existence as of the date of this Agreement with respect to shares of
Seller’s common stock. If at any time after giving written notice of its
intention to register any securities and prior to the effective date of the
registration statement filed in connection with such registration, the Seller
shall determine for any reason not to register or to delay registration of such
securities, the Seller may, at its election, give written notice of such
determination to the Purchasers, and (x) in the case of a determination not to
register, shall be relieved of its obligation to register any S360 Shares of a
Purchaser in connection with such registration, and (y) in the case of a
determination to delay registering, shall be permitted to delay registering any
S360 Shares of a Purchaser for the same period as the delay in registering such
other securities. If the offering pursuant to a Piggy-Back Registration is to be
an underwritten offering, then each Purchaser must permit the sale or other
disposition of such Purchaser’s S360 Shares in accordance with the intended
method(s) of distribution thereof, and shall enter into an underwriting
agreement in customary form with the underwriter or underwriters selected for
such Piggy-Back Registration and each Purchaser shall be responsible for any
fees or commissions due to such underwriters in connection with the sale of such
Purchaser’s S360 Shares (“Selling Expenses”). If (x) the managing underwriter or
underwriters for a Piggy-Back Registration that is to be an underwritten
offering advises the Seller in writing that the dollar amount or number of
securities which the Seller, on behalf of itself and/or its security holders who
have a contractual right to register their shares, desires to sell exceeds the
maximum dollar amount or maximum number of securities that can be sold in such
offering without adversely affecting the proposed offering price, timing,
distribution method or probability of success of such offering or (y) the SEC
determines that the dollar amount or number of securities to be registered under
the registration statement exceeds the maximum dollar amount or number that may
be registered under such registration statement in accordance with applicable
law (including without limitation any SEC rules, regulations, policies or
positions) (such maximum dollar amount or maximum number of securities, as
applicable, in either of clauses (x) or (y) above, the “Maximum Number of
Securities”), then the Seller shall include in any such offering only the
Maximum Number of Securities allocated as follows: (A) first, the securities
that the Seller desires to sell; (B) then, the number of securities required to
be included in such offering, if any, by other security holders of the Seller
exercising any demand registration rights that such Persons have pursuant to
written contractual arrangements with the Seller; and (C) finally, the
securities of Persons exercising piggy-back registration rights pursuant to
written contractual arrangements with the Seller, including without limitation
the Purchasers pursuant to this Section 5.8, pro-rata among all such security
holders exercising piggy-back registration rights. A Purchaser may elect to
withdraw such Purchaser’s request for inclusion of such Purchaser’s S360 Shares
in any Piggy-Back Registration by giving written notice to the Seller of such
request to withdraw prior to the effectiveness of the registration statement.
The Seller, whether based on its own determination or as the result of a
withdrawal by Persons making a demand pursuant to written contractual
obligations, may withdraw a registration statement at any time prior to the
effectiveness of the registration statement. All expenses other than Selling
Expenses incurred in connection with registrations, filings or qualifications in
any registration under this Section ‎5.8, including without limitation all
registration, filing, and qualification fees, printers’ and accounting fees and
fees and disbursements of counsel for the Seller shall be borne and paid by the
Seller.

 

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(b) The right of a Purchaser to request inclusion of any of such Purchaser’s
S360 Shares in any registration pursuant this Section 5.8 shall terminate with
respect to such S360 Shares upon the earliest to occur of: (i) such time as when
such S360 Shares can be sold under Rule 144 promulgated under the Securities Act
or another similar exemption under the Securities Act; and (ii) after such time
as such S360 Shares have been registered under an effective registration
statement. Further, the Seller has the right to exclude any S360 Shares of a
Purchaser from any registration statement in the event the Seller is
contractually obligated to exclude such securities. In the event that the
registration statement covers securities being sold by the Seller on its own
behalf, the Seller or the underwriter shall have a right to require a Purchaser
to agree to a lock-up period of up to six (6) months from the date of
effectiveness of the registration statement as a condition to registering such
Purchaser’s S360 Shares.

 

(c) In connection with any registration statement for which a Purchaser has
elected to exercise its Piggy-Back Registration rights pursuant to this Section
‎5.8, such Purchaser agrees to (i) cooperate with the Seller in connection with
the preparation of such registration statement as it pertains to such Purchaser
or such Purchaser’s S360 Shares, (ii) respond within three (3) Business Days to
any written request by the Seller to provide or verify information regarding
such Purchaser or such Purchaser’s S360 Shares being registered on behalf of
such Purchaser (including without limitation the proposed manner of sale) that
may be required to be included in such registration statement and related
prospectus pursuant to the rules and regulations of the SEC, and (iii) provide
in a timely manner information regarding the proposed distribution by such
Purchaser of the S360 Shares for which such Purchaser has exercised his or her
Piggy-Back Registration rights and such other information as may be requested by
the Seller from time to time in connection with the preparation of and for
inclusion in such registration statement and related prospectus.

 

(d) So long as at the time of the filing of such registration statement the
Purchaser is not an executive officer or director of the Seller, if any S360
Shares of such Purchaser are included a registration statement:

 

(i) To the extent permitted by applicable Law, the Seller will indemnify and
hold harmless such Purchaser from and against any and all loss, damage, claim or
liability (joint or several) to which such Purchaser may become subject under
the Securities Act, the Exchange Act, or other federal or state securities law,
insofar as such loss, damage, claim or liability (or any action in respect
thereof) arises out of or is based upon: (A) any untrue statement or alleged
untrue statement of a material fact contained in such registration statement;
(B) any omission or alleged omission to state in such registration statement a
material fact required to be stated therein, or necessary to make the statements
therein not misleading; or (C) any violation by the Seller (or any of its
Representatives) of the Securities Act, the Exchange Act, any state securities
law (collectively, “Registration Damages”); and the Seller will pay to such
Purchaser any legal or other expenses reasonably incurred by such Purchaser in
connection with investigating or defending any claim or proceeding from which
Registration Damages may result, as such expenses are incurred; provided,
however, that the foregoing indemnity shall not apply to the extent that any
such Registration Damages arise out of, result from or are based upon
information provided in writing by such Purchaser expressly for use in such
registration statement or actions or omissions made by the Seller or its
Representatives in reliance upon and in conformity with information furnished in
writing by or on behalf of such Purchaser expressly for use in connection with
such registration statement; provided, further, that the Seller shall not be
responsible to indemnify for any amounts paid in settlement of any claim or
proceeding if such settlement is effected without the consent of the Seller,
which consent shall not be unreasonably withheld, delayed or conditioned.

 

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(ii) To the extent permitted by applicable law, such Purchaser will indemnify
and hold harmless the Seller, its Representatives (including without limitation
any underwriter under the Securities Act), any other security holder of the
Seller selling securities in such registration statement and any controlling
person (as defined in the Securities Act) of any such Persons from and against
any and all Registration Damages, in each case only to the extent that such
Registration Damages arise out of, result from or are based upon information
provided in writing by such Purchaser expressly for use in such registration
statement or actions or omissions made by the Seller or its Representatives in
reliance upon and in conformity with information furnished in writing by or on
behalf of such Purchaser expressly for use in connection with such registration
statement; and such Purchaser will pay to the Seller and each other
aforementioned indemnified Person any legal or other expenses reasonably
incurred thereby in connection with investigating or defending any claim or
proceeding from which Registration Damages may result, as such expenses are
incurred; provided, that, except in the case of fraud or willful misconduct by
such Purchaser, such Purchaser shall not be responsible to indemnify for any
amounts paid in settlement of any claim or proceeding if such settlement is
effected without the consent of such Purchaser, which consent shall not be
unreasonably withheld, delayed or conditioned.

 

(iii) The indemnification procedures set forth in Section ‎7.3 shall apply to
any indemnification claim under this Section ‎5.8 (with any reference in Section
‎7.3 referring to any provision of ‎ARTICLE VII referring to this Section 5.8
instead).

 

5.9 Termination of Sterling Bank Agreements. The Seller will use its best
efforts to terminate the Sterling Bank Agreements within fifteen (15) days after
Closing Date, so that all Liens on the assets of the Companies in favor of
Sterling National Bank will terminate within sixty (60) days after the Closing
Date. The Buyer agrees to refrain from conducting any draws relating to the
Sterling Bank Agreements in excess of an aggregate of Fifty-thousand dollars
($50,000) after the Closing, and will comply with and timely remit all monies
received in relation to the Sterling Bank Agreements to Sterling National Bank
until Liens on the assets of the Companies in favor of Sterling National Bank
are terminated.

 

ARTICLE VI

 

Actions Taken and Documents Delivered

 

The Parties hereby acknowledge the following actions and delivery of the
following documents:

 

6.1 Purchase Price. The Purchasers have delivered the Purchase Price to the
Seller.

 

6.2 Delivery of Shares of NV Cyber 360. The Seller has delivered to the
Purchasers the original stock certificate or certificates for the Shares being
transferred hereunder, duly endorsed or accompanied by stock powers duly
executed and otherwise in a form acceptable for transfer to the Purchasers as
set forth on Exhibit A, in a form reasonably satisfactory to the Purchasers’
counsel.

 

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6.3 Resignations. The Purchasers have received the written resignation of each
current member of the board of directors and each officer of NV Cyber 360 and MA
Cyber 360, other than Mark P. Aiello.

 

6.4 Consents. The Seller has delivered all of the Consents required in
connection with the consummation of the transactions contemplated by this
Agreement.

 

ARTICLE VII

 

Indemnification

 

7.1 Survival of Representations and Warranties.

 

All representations and warranties contained in this Agreement shall survive the
Closing and shall terminate eighteen (18) months from the Closing Date (the
“Expiration Date”) and thereafter shall be of no force or effect, except for any
claim with respect to which notice has been given to the party to be charged
prior to such expiration date; provided, however, that any representations and
warranties that are proven to have been fraudulently made shall not expire on
the Expiration Date; provided further that representations of Section 3.11
(Income and Other Taxes) shall expire upon the termination of any applicable
statutes of limitations and the representations contained in Sections 3.1
through and including 3.6 shall continue indefinitely.

 

7.2 Indemnification.

 

(a) Subject to the terms of this Agreement the Seller agrees to indemnify,
defend, save and hold harmless, the Purchasers, Aiello, and the Companies, and
their respective officers, directors and employees, (collectively, the
“Purchaser Indemnified Parties”) from and against any loss, cost, expense,
liability, claim or legal damages (including, without limitation, reasonable
fees and disbursements of counsel) (collectively, “Damages”) arising out of or
resulting from: (i) any inaccuracy in or breach of any representation and
warranty of the Seller; or (ii) any failure of the Seller to perform or observe
fully any non-waived covenant, agreement or provision to be performed or
observed by it pursuant to this Agreement.

 

(b) Subject to the terms of this Agreement, each of the Purchasers, Aiello, and
the Companies severally and not jointly, agree to indemnify, defend, save and
hold harmless, the Seller, and its officers, directors and employees
(collectively, the “Seller Indemnified Parties”) from and against any Damages
arising out of or resulting from: (i) any inaccuracy in or breach of any
representation and warranty of a Purchaser or Aiello; or (ii) any failure of a
Purchaser, Aiello, or a Company to perform or observe fully any non-waived
covenant, agreement or provision to be performed or observed by it pursuant to
this Agreement.

 

(c) Notwithstanding anything to the contrary contained herein, after the
Closing, except for (i) claims based in whole or in part upon fraud, willful
misconduct or intentional misrepresentation or (ii) any equitable remedies,
including the right to an injunction or specific performance, to which the
Purchasers may be entitled: (A) the maximum liability of the Seller under this
Agreement with respect is limited to a maximum of Five Hundred Thousand Dollars
($500,000); and (B) this ‎Article VII shall constitute the sole and exclusive
remedy for each Party against any other Party with respect to any and all
breaches or alleged breaches of any covenant, representation or warranty made by
such party in this Agreement.

 

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7.3 Indemnification Procedures. After receipt by a Party entitled to
indemnification (an “Indemnified Party”) of notice of the commencement of any
action or other claim by a third party that may give rise to a claim of
indemnity hereunder (a “third party claim”), the Indemnified Party will, in a
timely manner, notify the Indemnifying Party of the third party claim, but the
failure to notify Indemnifying Party shall not relieve the Indemnifying Party of
its obligation to indemnify under this Agreement unless the lack of timeliness
materially prejudices the Indemnifying Party’s ability to defend against such
third party claim. After receipt of such notice the Indemnifying Party shall, in
a timely manner, undertake the defense or settlement of such third party claim
with counsel reasonably satisfactory to the Indemnified Party (who shall not,
except with the consent of the Indemnified Party, be counsel to the Indemnifying
Party). Neither the Indemnifying Party nor the Indemnified Party shall settle
any third-party claim without the consent of the other, which shall not be
unreasonably withheld, delayed or conditioned.

 

ARTICLE VIII

 

Releases

 

8.1 Release by the Seller. Effective as of the Closing, the Seller, on behalf of
itself and its Subsidiaries, Affiliates and its and their respective officers,
directors, employees, shareholders, successors and assigns (collectively, the
“Seller Releasors”), for good and valuable consideration, the adequacy and
receipt whereof are hereby acknowledged, does hereby, irrevocably and
unconditionally, release, remise, acquit and forever discharge Aiello, the
Purchasers and the Companies and their respective Subsidiaries (collectively,
the “Purchaser Releasees”) of and from any and all claims, charges, complaints,
demands, debts, actions, causes of action, damages and liabilities, if any, both
in law and equity, in tort or in contract, of any jurisdiction, foreign or
domestic, known or unknown, which such Seller Releasor now has, or has ever had
against the Purchaser Releasees, arising from or in connection with the Original
Sale or otherwise arising on or prior to the Closing; except in each case for
the rights of the Seller Releasors under this Agreement, including without
limitation those matters covered by the indemnities set forth in Article VII
hereof, all of which are specifically excluded from this Release. The terms of
this Release are contractual and not a mere recital. The Seller Releasors
acknowledge that they understand the contents of this Release and the effect
thereof, that they have had the advice of legal counsel in connection herewith,
that they have not been induced by any representations not contained in this
Agreement to enter into this Release, and that this Release will remain in
effect notwithstanding the discovery or existence of any additional fact or any
facts different from those which the Seller Releasers now know or believe to be
true.

 

8.2 Release by the Purchasers, Aiello and the Companies. Effective as of the
Closing, each of the Purchasers, Aiello and the Companies, on behalf of
themselves and their respective Subsidiaries and their respective officers,
directors, employees, shareholders, successors and assigns (collectively, the
“Purchaser Releasors”), for good and valuable consideration, the adequacy and
receipt whereof are hereby acknowledged, does hereby, irrevocably and
unconditionally, release, remise, acquit and forever discharge the Seller and
its Subsidiaries (collectively, the “Seller Releasees”) of and from any and all
claims, charges, complaints, demands, debts, actions, causes of action, damages
and liabilities, if any, both in law and equity, in tort or in contract, of any
jurisdiction, foreign or domestic, known or unknown, which such Purchaser
Releasor now has, or has ever had against the Seller Releasees, arising from or
in connection with the Original Sale or otherwise arising on or prior to the
Closing; except in each case for (i) Seller’s obligation under Section 8
“Indemnification and Insurance” of the Aiello Employment Agreement and (ii) the
rights of the Purchaser Releasors under this Agreement, including without
limitation those matters covered by the indemnities set forth in Article VII
hereof, all of which are specifically excluded from this Release. The terms of
this Release are contractual and not a mere recital. The Purchaser Releasors
acknowledge that they understand the contents of this release and the effect
thereof, that they have had the advice of legal counsel in connection herewith,
that they have not been induced by any representations not contained in this
Agreement to enter into this Release, and that this Release will remain in
effect notwithstanding the discovery or existence of any additional fact or any
facts different from those which the Purchaser Releasors now know or believe to
be true.

 

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ARTICLE IX

 

General Provisions

 

9.1 Complete Agreement and other Matters. This Agreement (a) constitutes the
entire agreement and supersedes all other prior and contemporaneous promises,
covenants, understandings, representations, warranties, agreements and
undertakings, both written and oral, between the Parties hereto with respect to
the subject matter hereof; (b) is not intended to confer upon any person or
entity any rights or remedies hereunder or with respect to the subject matter
hereof except an specifically provided in this Agreement; (c) shall not be
assigned by operation of law or otherwise; (d) shall be governed by, and
construed in accordance with, the internal laws (and not the law of conflicts)
of The Commonwealth of Massachusetts; (e) may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all such
counterparts together shall constitute a single agreement; (f) may be executed
by facsimile signature, provided that the original thereof is provided to the
other Parties promptly after the Closing; and (g) shall be construed without
regard to headings or captions, or gender, or whether a reference is to the
singular or plural. The Parties agree that service of process by registered or
certified mail, return receipt requested, at his, her or its address specified
in or pursuant to Section 9.5 is reasonably calculated to give actual notice.

 

9.2 Expenses. All costs and expenses incurred in connection with this Agreement
and the transactions contemplated hereby shall be paid by the Party or Parties
incurring the same, it being expressly understood by the Parties hereto that the
Seller, and not the Companies, shall be liable for the costs and expenses of the
Seller, the Companies and their counsel and accountants in connection with this
Agreement and the transactions contemplated hereby.

 

9.3 Amendment. This Agreement may be amended at any time only by a written
instrument executed by each Party hereto.

 

9.4 Further Action. Subject to the terms and conditions provided in this
Agreement, each of the Parties hereto agrees to use all reasonable efforts to
take, or cause to be taken, all action, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective the transactions contemplated by this Agreement.
If at any time after the Closing any further action is necessary to carry out
the purposes of this Agreement, the Parties shall take, or cause to be taken,
all such necessary action.

 

9.5 Notices. All notices, requests, demands, claims, and other communications
hereunder will be in writing. Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given: (i) upon receipt if
delivered personally; (ii) one (1) Business Day following the date sent when
sent by reputable national overnight courier (such as FedEx) and (iii) three (3)
Business Days following the date mailed when mailed by registered or certified
mail, return receipt requested and postage prepaid, at the following addresses:

 

(a) As to the Seller: Staffing 360 Solutions, Inc.     641 Lexington Avenue    
Suite 1526     New York, NY  10022     Attention: Matthew Briand           With
a copy to: Ellenoff Grossman & Schole LLP     1345 Avenue of the Americas, 11th
Floor     New York, NY 10105     Attention:   Barry Grossman, Esq.         (b)
As to the Purchasers and/or Aiello:               To Consolazio: Michael A.
Consolazio     63 Bridge Street     Salem, NH 03079           To Haughey:
Heather D. Haughey     35 Lancashire Drive     Mansfield, MA 02048           To
Aiello:  Mark P. Aiello     805 Summer Street     Manchester, Massachusetts
01944                   In each case with a copy to: Lauren A. Puglia, Esq.    
Sassoon & Cymrot, LLP     84 State Street, Suite 84     Boston, MA 02109

 

or to such other address, or to such other authorized recipient of any notice
hereunder, as any Party shall in writing deliver to all other Parties in
accordance with this Section 9.5.

 

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9.6 Survival. The provisions of this Agreement shall survive the consummation of
the Acquisition contemplated under this Agreement, subject to Section 7.1.

 

9.7 Representation of the Companies. The Parties agree that, notwithstanding the
fact that Ellenoff Grossman & Schole LLP (“EGS”) may have jointly represented
the Seller and the Companies in connection with this Agreement, and has also
represented the Companies and/or their respective Affiliates in connection with
matters other than the transaction that is the subject of this Agreement prior
to Closing, EGS will be permitted in the future, after Closing, to represent the
Seller or its Affiliates in connection with matters in which such Persons are
adverse to the Companies or any of their Affiliates, including any disputes
arising out of, or related to, this Agreement. NV Cyber 360 and each of the
Purchasers and Aiello, who are represented by independent counsel in connection
with the transactions contemplated by this Agreement, hereby agree, in advance,
to waive (and to cause their Affiliates to waive) any actual or potential
conflict of interest that may hereafter arise in connection with EGS’s future
representation of the Seller or its Affiliates in which the interests of such
Person are adverse to the interests of either of the Companies, the Purchasers
or Aiello or any of their respective Affiliates, including any matters that
arise out of this Agreement or that are substantially related to this Agreement
or to any prior representation by EGS of the Companies or any of their
respective Affiliates. The Parties acknowledge and agree that, for the purposes
of the attorney-client privilege, the Seller, and not the Companies or their
respective directors, officers or employees, shall be deemed the clients of EGS
with respect to the negotiation, execution and performance of this Agreement.

 

[Signature page follows]

 

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IN WITNESS WHEREOF, each of the Parties hereto has executed this Stock Purchase
Agreement, or has caused this Agreement to be executed as an instrument under
seal on its behalf by a representative duly authorized, all as of the date first
above set forth.

 

  SELLER:         STAFFING 360 SOLUTIONS, INC.                     By: /s/
Brendan Flood                                                                 
Name: Brendan Flood     Title: Executive Chairman         NV CYBER 360:        
CYBER 360, INC., a Nevada corporation               By:    /s/ Mark P. Aiello  
  Name: Mark P. Aiello     Title: President               AIELLO:              
/s/ Mark P. Aiello   Mark P. Aiello               PURCHASERS:               /s/
Michael A. Consolazio   Michael A. Consolazio                     /s/ Heather D.
Haughey   Heather D. Haughey

 

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Exhibit A

 

Capitalization of NV CYBER 360 and MA Cyber 360;

 

 

NV Cyber 360 has 1,000,000 shares of NV Cyber 360 Common Stock, authorized. As
of the Effective Date, there are 1,000 shares of NV Cyber 360 Common Stock
outstanding, all of which are owned, beneficially and of record by the Seller.

 

MA Cyber 360 has 178,222 shares of Common Stock, no par value per share,
authorized, with 90,000 shares designated as Class A Voting Shares and 88,222
shares designated as Class B Non-Voting Shares. As of the Effective Date , there
are 90,000 Class A Voting Shares and 76,000 Class B Non-Voting Shares issued and
outstanding, all of which are owned, beneficially and of record by NV Cyber 360.

 

 

The Purchasers are purchasing all of the Shares of NV Cyber 360, and receiving
Shares of the Seller, as follows:

 

   Number of             Shares of   Percentage of   Number of  Purchaser  NV
Cyber 360   NV Cyber 360   S360 Shares                Michael A. Consolazio 
 480    48%   544,344  63 Bridge Street                Salem, NH 03079      
                          Heather D. Haughey   520    52%   589,706  35
Lancashire Drive                Mansfield, MA 02048               

 

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