Execution version

 

Intellectual Property Sale Deed

 

 

 

 

Gregory Winfield Hall as agent for National Australia Bank

Limited (as Mortgagee in Possession)

 

Barfresh Inc.

 

 

 

 

Gadens Lawyers
77 Castlereagh Street
Sydney NSW 2000

 

T+ 61 2 9931 4999

F+ 61 2 9931 4888

RefWXD33614099

 

 

 

 

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Contents         1. Definitions and interpretation 3     2. Sale and purchase 7
      3. Purchase Price 8       4. Completion 8       5. Post Completion 9      
6. Title, risk and liabilities 9       7. Limitation of liability 10       8.
Representations and warranties 14       9. Confidentiality and publicity 15    
  10. Termination 17       11. Tax 18       12. Interest 19       13. General
provisions 19       Schedule 1 – Intellectual Property 23       Schedule 2 –
Encumbrances 28       Signing page 29

 

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Intellectual Property Sale Deed

 

Dated 15 October 2013

 

Parties

 

1.Gregory Winfield Hall as agent for National Australia Bank Limited (as
Mortgagee in Possession) C/-PwC, 201 Sussex Street, Sydney, NSW, 2000 (Seller).

 

2.Barfresh Inc. of Suite 701, 90 Madison Street, Colorado,80206 USA (Buyer).

 

Background

 

A.National Australia Bank Limited ACN 004 044 937 (NAB) provided certain
facilities to Barfresh Food Group Pty Ltd. (“Bar Fresh Food Group”) an
Australian company.

 

B.Smoo Pty Limited ACN 113 127 030 (Smoo) provided a guarantee to NAB to secure
the obligations of Barfresh Food Group to NAB, which guarantee is supported by
the GSA.

 

C.Smoo is in default of its obligations under the guarantee and the GSA.

 

D.NAB has appointed Gregory Winfield Hall (Mr Hall) as agent to act on its
behalf in exercising its powers under the GSA, including the right to sell the
Intellectual Property.

 

E.Smoo has the legal title to the Intellectual Property.

 

F.The Seller has agreed to sell, and the Buyer has agreed to buy, the Seller’s
right, title and interest in the Intellectual Property on the terms and
conditions of this document.

 

Operative provisions

 

1. Definitions and interpretation       1.1 Definitions         In this
document, unless the context otherwise requires:         $means the lawful
currency of the Commonwealth of Australia.         ASX means ASX Limited.      
  ATO Public Ruling means any ruling authorised by the Commissioner of Taxation
for Australia and published by the Australian Taxation Office.         Bank
Security Interests mean the security interests listed in part 1 of schedule 2.  
      Business Day means a day that is not a Saturday, Sunday or public holiday
in Sydney.         Claim includes a claim, notice, demand, action, proceeding,
litigation, investigation or judgment, loss, cost or liability however arising
whether present or future.

 

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        Completion Date means the date on which Completion takes place.        
Completion means completion of the sale and purchase of the Intellectual
Property contemplated in this document.         Confidential Information means:
        (a) all information of or used by the Seller, relating to its
transactions, operations and affairs;         (b) all other information in
relation to the Intellectual Property treated by the Seller as confidential,
including this document;         (c) all notes, data, reports and other records
(whether or not in tangible form) based on, incorporating or derived from
information referred to in paragraph (a) or (b); and         (d) all copies
(whether or not in tangible form) of the information, notes, reports and records
referred to in paragraphs (a), (b) or (c),         that is not public knowledge
(otherwise than as a result of a breach of confidentiality).         Defaulting
Party has the meaning given in clause 4.4.

 

Due Diligence Material means all information and documents provided or made
available by or on behalf of the Seller or its representatives to the Buyer or
its representatives.

 

Encumbrance means any security interest, mortgage, lien, restriction against
transfer, pledge, claim, encumbrance and any third party interest.

 

End Date means the first to occur of:

 

  (a) the Completion Date; or         (b) the date this document is terminated
under clause 4.5 or clause 10.

 

Event of Default means the happening of any of the events listed in clause 10.1.

 

Excluded Intellectual Property means:

 

  (c) any assets of the Seller not included in the definition of Intellectual
Property;         (d) all assets which are the subject of a valid Claim of any
third party;         (e) any asset, the transfer, surrender, disposal or dealing
of or with which, or any part of or interest in which, would or might cause a
breach of a third party right or be otherwise contrary to any relevant law; and
        (f) Excluded Claims.

 

Excluded Claims mean all claims which the Seller and or NAB may have against
third parties.

 

Governmental Agency means the Crown, any government, any governmental ministry
or department, or any Crown, governmental, semi-governmental, statutory,
parliamentary, administrative, fiscal, public, municipal, local, judicial or
regulatory entity, agency, instrumentality, utility, authority, court,
commission, body or tribunal.

 

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GSA means the General Security Agreement between NAB and Smoo dated 14 August
2012, and registered as number 201208150032747 in the Personal Property
Securities Act 2009 Register.

 

GST means the same as in the GST Law, and any other goods and services tax or
any tax, levy, charge or impost which applies in a similar way.

 

GST Law has the same meaning as in the A New Tax System (Goods and Services Tax)
Act 1999 (Cth) and words defined in the GST Law (including ’supply’ and ‘taxable
supply’) have the same meaning in this document unless the context makes it
clear that a different meaning is intended.

 

Immediately Available Funds mean a bank cheque issued by an Australian
registered bank or an electronic funds transfer through the RTGS (real-time
gross settlement) payment system.

 

Insolvency Event means the happening of any of the following events:

 

  (a) an application is made to a court for an order or an order is made
appointing a liquidator, provisional liquidator in respect of the Buyer (or
proceedings are commenced or a resolution passed or proposed in a notice of
meeting for any of those things);         (b) proceedings are initiated with a
view to obtaining an order for the winding up or similar process of the Buyer,
or an order is made or any effective resolution is passed for the winding up of
the Buyer;         (c) except to reconstruct or amalgamate while solvent on
terms approved by the non-defaulting party, the Buyer enters into, or resolves
to enter into, a scheme of arrangement, deed of company arrangement or
composition with, or assignment for the benefit of, all or any class of its
creditors, or it proposes a reorganisation, moratorium or other administration
involving any class of its creditors;         (d) a controller is appointed to
or over or takes possession of all or a substantial part of the assets or
undertakings of the Buyer;         (e) the Buyer is or is deemed or presumed by
law or a court to be insolvent;         (f) the Buyer takes any step to obtain
protection or is granted protection from its creditors, under any applicable
legislation or an administrator is appointed to the Buyer; and         (g)
anything analogous or having a substantially similar effect to any of the events
specified above happens in respect of the Buyer under the law of any applicable
jurisdiction.

 

Intellectual Property means the right, title and interest, if any, of the Seller
to the Patents and Trade Marks, and any other rights that the Seller has, if
any, in other intellectual property rights, whether or not protected by statute
or common law in Australia or elsewhere in the world, including copyright,
designs, other subject matter of intellectual property rights and trading names
and domain names, but excluding moral rights of the Seller.

 

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Liability means all liability (whether actual, contingent or prospective), loss,
damages, costs and expenses of any description.

 

Mr Hall has the meaning given in paragraph D of the Background section above.

 

NAB has the meaning given in paragraph A of the Background section above.

 

Non-Defaulting Party has the meaning given in clause 4.4.

 

Patents includes the patents described in part 1 of schedule 1.

 

Penalty Amount means an amount equal to:

 

  (a) the Purchase Price under this document;         (b) less the ultimate
purchase price paid by a third party purchaser or purchasers (Third Party) of
the Intellectual Property;         (c) plus all the costs of the Seller that
relate to the sale of the Intellectual Property to the Third Party, including
receivership costs, marketing costs, costs of lawyers and costs of other
advisors; and         (d) plus interest on the amount referred to in paragraph
(a) calculated from 15 October 2013 to the date that the Third Party completes
on the acquisition of the Intellectual Property.

 

Permitted Disclosees has the meaning given in clause 9.1(b)(i).

 

Purchase Price means the amount specified at clause 3.1.

 

Smoo has the meaning given in paragraph B of the Background section above.

 

Specified Time means 12:00 pm on 15 October 2013.

 

Stakeholder means Gadens Lawyers Sydney Pty Limited of 77 Castlereagh Street,
Sydney, New South Wales.

 

Tax includes any tax, levy, impost, assessment, deduction, charge, rate, stamp
duty or compulsory loan or withholding levied, imposed, assessed or collected by
or under any legislation or Governmental Agency, including any income, company,
undistributed profits, payroll, sales, goods, services, value added, capital
gains, withholding, prescribed payments, land, rating, stamp, transaction,
social service and workers’ compensation tax, stamp duty, charge, contribution,
levy and obligation, together with any associated interest, penalty, fine,
charge and fee or other amount and Taxation has a corresponding meaning.

 

Trade Marks means the registered trademarks listed in part 2 of schedule 1.

 

1.2Interpretation

 

In this document unless the context otherwise requires:

 

  (a) clause and subclause headings are for reference purposes only;         (b)
the singular includes the plural and vice versa;         (c) words denoting any
gender include all genders;

 

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  (d) reference to a person includes any other entity recognised by law and vice
versa;         (e) where a word or phrase is defined its other grammatical forms
have a corresponding meaning;         (f) any reference to a party to this
document includes its successors and permitted assigns;         (g) any
reference to any document or agreement includes that document or agreement as
amended at any time;         (h) the use of the word includes or including is
not to be taken as limiting the meaning of the words preceding it;         (i)
the expression at any time includes reference to past, present and future time
and the performance of any action from time to time;         (j) an agreement,
representation or warranty on the part of two or more persons binds them jointly
and severally;         (k) an agreement, representation or warranty on the part
of two or more persons is for the benefit of them jointly and severally;        
(l) reference to an exhibit, annexure, attachment or schedule is a reference to
the corresponding exhibit, annexure, attachment or schedule in this document;  
      (m) reference to a provision described, prefaced or qualified by the name,
heading or caption of a clause, subclause, paragraph, schedule, item, annexure,
exhibit or attachment in this document means a cross reference to that clause,
subclause, paragraph, schedule, item, annexure, exhibit or attachment;        
(n) when a thing is required to be done or money required to be paid under this
document on a day which is not a Business Day, the thing must be done and the
money paid on the immediately preceding Business Day; and         (o) reference
to a statute includes all regulations and amendments to that statute and any
statute passed in substitution for that statute or incorporating any of its
provisions to the extent that they are incorporated.

 

1.3The rule about contra proferentem

 

This document is not to be interpreted against the interests of a party merely
because that party proposed this document or some provision in it or because
that party relies on a provision of this document to protect itself.

 

2.Sale and purchase

 

2.1Sale of Intellectual Property

 

The Seller agrees to sell to the Buyer, and the Buyer agrees to buy from the
Seller, the Seller’s right, title and interest in the Intellectual Property:

 

  (a) for the Purchase Price;         (b) with all rights attached or accrued by
or after the Specified Time; and         (c) with effect from Completion.

 

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3. Purchase Price       3.1 Amount         The Purchase Price for the
Intellectual Property is $710,000.       3.2 Payment of the Purchase Price      
  The Buyer has paid the Purchase Price on or around the Specified Time, and the
Seller acknowledges receipt of the Purchase Price.       3.3 Set off        
Subject to as provided in this document, all amounts payable by the Buyer under
this document must be paid by the Buyer without set off or deduction or
withholding by the Buyer and the Buyer waives all right of set off, deduction,
withholding, counter claim, retention, abatement or compensation.       4.
Completion       4.1 Time and place         Completion will take place at 2 pm
(or such other time as the parties may agree) on 15 October 2013 at the offices
of the Stakeholder at 77 Castlereagh Street, Sydney, or another place agreed by
the parties in writing.       4.2 Seller’s obligations         At Completion,
the Seller must deliver to the Buyer to the extent it has them in its
possession:

 

  (a) the certificates of registration for the Trade Marks; and         (b) the
certificates of registration for the Patents.

 

4.3 Simultaneous actions at Completion         In respect of Completion:

 

  (a) the obligations of the parties under this document are interdependent; and
        (b) all actions required to be performed will be taken to have occurred
simultaneously on the date of Completion.

 

4.4Notice to complete

 

If Completion does not occur in accordance with this clause 4 because of the
failure of any party (the Defaulting Party) to satisfy any of its obligations
under this clause 4 then:

 

(a)the Buyer (where the Defaulting Party is the Seller); or

 

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(b)the Seller (where the Defaulting Party is the Buyer),

 

(in either case the Non-Defaulting Party) may give the Defaulting Party a notice
requiring the Defaulting Party to satisfy those obligations within a period of
5 Business Days after the date of the notice and specifying that time is of the
essence in relation to that notice.

 

4.5Remedies for failure to comply with notice

 

If the Defaulting Party fails to comply with a notice given under clause 4.4,
the Non-Defaulting Party may, without limiting its other rights or remedies
available under this document or at law, but subject to clause 7:

 

(a)immediately terminate this document, in which case the Non-Defaulting Party
may seek damages for breach of this document; or

 

(b)seek specific performance of this document, in which case:

 

(i)if specific performance is obtained the Non-Defaulting Party may also seek
damages for breach of this document; and

 

(ii)if specific performance is not obtained the Non-Defaulting Party may then
terminate this document and also seek damages for breach of this document.

 

5. Post Completion     5.1 Assistance       For a period of 40 Business Days
after the Completion Date, the Seller will execute any forms or other documents
necessary to assist the Buyer register, at its sole cost, the sale and purchase
of the Intellectual Property.     5.2 Limit on assistance       The assistance
in clause 5.1 does not require the Seller to pay any fees, or carry out any
action outside of Australia, or require the Seller to give any guarantee,
warranty, representation or other assurance to any other person.     6. Title,
risk and liabilities     6.1 Title       The Seller’s right, title and interest
in the Intellectual Property passes to the Buyer at Completion.     6.2
Possession       With effect from Completion, possession of the Intellectual
Property and risk related to the Intellectual Property is given by the Seller
and taken by the Buyer at the Specified Time.

 

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6.3Income, profits and benefits

 

With effect from Completion, all income, profits and benefits of or related to
the Intellectual Property:

 

  (a) up to the Specified Time, belong to the Seller; and         (b) after the
Specified Time, belong to the Buyer.

 

6.4Liabilities

 

With effect from Completion, all Liabilities of or related to the Intellectual
Property, after the Specified Timeare the responsibility of the Buyer and the
Buyer indemnifies the Seller from and against those Liabilities.

 

7.Limitation of liability

 

7.1“As is, where is”basis

 

  (a) The Buyer unconditionally agrees that the Intellectual Property is to be
sold and purchased on an “as is, where is” basis without recourse to, or
warranty by, the Seller or NAB.         (b) The Buyer cannot make any claim,
objection or requisition against the Seller or NAB, or rescind or terminate this
document in respect of the condition of the Intellectual Property.

 

7.2No warranties

 

The Buyer acknowledges that no term, condition, warranty, representation or
covenant of any kind has been made or is given by the Seller or NAB, their
employees, officers, representatives, agents or advisors, in respect of any
aspect of any of the Intellectual Property, or is implied in this document, and
the execution of this document by the Buyer will be conclusive proof that the
Intellectual Property are in every way satisfactory to the Buyer.

 

7.3Liability of the Seller and NAB

 

The Seller and NAB are not liable to the Buyer for any Liability arising from or
relating to any statement, representation, warranty, promise, undertaking or
agreement in connection with the sale of the Intellectual Property, including
any information provided for in the Due Diligence Material.

 

7.4Buyer acknowledgments

 

(a)The Buyer acknowledges that it has made its own assessment as to the
condition, value, fitness for purpose and title to the Intellectual Property and
the quality or suitability of the Intellectual Property and has placed no
reliance in that assessment on any statement, conduct or representation by the
Seller or NAB in relation to those matters.

 

(b)The Buyer acknowledges, represents and warrants, and agrees with the Seller
and NAB that:

 

(i)it enters into this document solely as a result of its own due diligence,
investigations, inquiries, advice and knowledge concerning the Intellectual
Property, relying only on its own judgment after such investigation and
enquiries;

 

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(ii)neither the Seller nor NAB, nor their representatives,nor any person acting
on their behalf, have made any representation, warranty or other inducement to
the Buyer to enter into this document;

 

(iii)it has not and will not rely on representations, warranties, forecasts,
opinions, statements of belief, or other inducements by or on behalf of the
Seller,NAB, or their representatives or any other person;

 

(iv)it has undertaken a due diligence investigation in relation to the
Intellectual Property and irrespective of whether or not the due diligence was
as full or exhaustive as the Buyer would have wished, it has nevertheless
independently and without the benefit of any inducement, representation or
warranty from the Seller or NAB, determined to enter into this document; and

 

(v)

 

any estimate, budget or forecast made, or opinion expressed, in relation to the
financial position or prospects related to the Intellectual Property (whether
written or oral) was made or expressed to and accepted by the Buyer and this
document is entered into, on the basis and condition that:

 

(A)neither the Seller nor NAB, nor their representatives have made or does make
any representation or warranty as to the accuracy or completeness of such
estimate, budget, forecast or expression of opinion or that any such estimate,
budget, forecast, or expression of opinion will be achieved; and

 

(B)

 

neither the Seller nor NAB, nor their representatives, will be liable to the
Buyer or any other person in respect thereof and neither the Seller nor NAB, nor
their representatives, will be liable to the Buyer or any other person in the
event that, for whatever reason, such estimate, budget, forecast or expression
of opinion is or becomes inaccurate, incomplete or misleading in any respect.

 

(c)To the fullest extent permitted by law, all conditions, representations or
terms implied or imposed by State or Commonwealth laws are excluded, and the
Buyer waives any rights it may have in respect of them.

 

(d)To the fullest extent permitted by law, the Seller and NAB will under no
circumstances be liable in any way whatsoever to the Buyer nor will the Buyer
have any remedy in respect of any Claim (whether contractual, tortious,
statutory or otherwise) for any form of damages, losses, costs, injury or harm
sustained or incurred by the Buyer in consequence of or resulting directly or
indirectly out of the supply, performance or the use of the Intellectual
Property, or by any third party or in connection with this document or
otherwise.

 

(e)The Buyer acknowledges and agrees that no warranties with respect to this
document or the Intellectual Property are given by the Seller or NAB. The Buyer
further acknowledges and agrees that:

 

(i)the aggregate maximum liability of the Seller and NAB (including legal costs
and expenses incurred defending a Claim) as a result of any Claim under this
clause 7.4(e) or any other Claim relating to this document is limited to
$20,000; and

 

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(ii)the Seller will not be liable for any Claim unless:

 

(A)as soon as the Buyer becomes aware of anything which is or may be reasonably
likely to give rise to a Claim, the Buyer notifies the Seller in writing:

 

(I)setting out the act, matter or thing relied on as giving rise to the Claim,
the subject of the Claim, and all relevant details of the Claim; and

 

(II)within 10 Business Days after it has first come to the Buyer’s attention and
no later than one month after the Completion Date; and

 

(B)if the relevant Claim has not already been satisfied, settled or withdrawn,
legal proceedings for the relevant Claim have been properly issued and served on
the Seller within one month after the Completion Date.

 

7.5Due diligence

 

The Buyer acknowledges that:

 

(a)the Due Diligence Material was provided to the Buyer solely to assist with
its due diligence enquiries;

 

(b)the Due Diligence Material was intended as a guide only and does not
constitute all or any part of an offer or of this document;

 

(c)any calculations contained in the Due Diligence Material have not been
independently verified by the Seller or NAB;

 

(d)any projections contained in the Due Diligence Material represent best
estimates only and may be based on assumptions which, while reasonable, may be
incorrect;

 

(e)it has not relied on any material contained in the Due Diligence Material as
a statement or representation of fact or as to any further matter, but has
satisfied itself as to the correctness and completeness (or otherwise) of the
information by its own enquiries, inspections and independent investigations;

 

(f)except for rights and remedies provided by statute which may not be excluded,
no liability (under statute, in contract or tort for negligence or otherwise) is
assumed by the Seller or NAB, or any of their representatives for any material
contained in the Due Diligence Material; and

 

(g)neither the Seller nor NAB, nor their representatives,make any warranty or
representation as to the accuracy or the reliability of any of the contents of
the Due Diligence Material and the Seller and NAB are not responsible for any of
the their representatives in respect of the contents of or omissions from the
Due Diligence Material.

 

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7.6Indemnities

 

The Buyer indemnifies and will keep indemnified the Seller and NAB from and
against any of the following:

 

(a)all Claims which may be asserted against or suffered or incurred by the
Seller or NAB to the extent that such Claims arise out of, result from or relate
to:

 

(i)the ownership, sale, use or dealing with the Intellectual Property;

 

(ii)any intellectual property rights asserted, claimed or proven by any third
party in respect of the Intellectual Property; or

 

(iii)any Tax (including GST), royalty or impost of a like nature which may be
payable in respect of the Intellectual Property,

 

provided that all such Claims are in respect of the period after the Specified
Time; and

 

(b)any and all losses and other Liabilities which may be asserted against or
suffered or incurred by the Seller or NAB and which arise out of or result from:

 

(i)any misrepresentation, breach of warranty or breach of or non-compliance with
any of the provisions of this document by the Buyer; or

 

(ii)any misrepresentation or breach of warranty in or occasioned by any
certificate or other document furnished or caused to be furnished by the Buyer
to the Seller or NAB.

 

The Seller and NAB need not incur any cost or make any payment before enforcing
any right of indemnity under this clause 7.6.

 

7.7Release

 

In consideration of the Seller entering into this document, the Buyer covenants
and agrees that it unequivocally releases the Seller and NAB, and their
representatives, from all Liabilities or Claims in connection with the
Intellectual Property, or any other asset of the Seller or NAB, and further
agrees not to make any Claim against the Seller or NAB in connection with the
Intellectual Property, or any other asset of the Seller or NAB, or in any way
whatsoever connected with any act done or omitted to be done in relation to the
sale of the Intellectual Property under this document.

 

7.8No claim

 

The Buyer may not make a claim or requisition, delay completion, rescind or
terminate because of any matter disclosed in or arising from any of the Due
Diligence Material or other documents comprising annexures or schedules to this
document.

 

7.9Capacity of Seller

 

(a)Mr Hall is not executing this document in his personal capacity, and does not
assume personal liability under any warranty or obligation of the Seller in this
document.

 

(b)The Buyer releases Mr Hall from any personal liability whatsoever and must
not seek to bring proceedings against him in his personal capacity.

 

(c)The Buyer is not entitled to make any requisition, objection or claim or
rescind or terminate this document in relation to the appointment of Mr Hall as
agent for NAB.

 

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7.10Liability for future events

 

The Seller and NAB are not liable to the Buyer for any Liabilities attributable
to anything done or not done after the date of this document by the Buyer or any
person acting, or purporting to act, on behalf of the Buyer.

 

7.11No rescission

 

The Buyer agrees that its sole remedy for a Claim for breach of this document,
however arising, is a Claim for damages in contract only, and the Buyer waives
any right to Claim any other remedy, including rescission of this document or
any related document, for a Claim for breach of this document.

 

7.12Exclusion of certain losses

 

Notwithstanding any provision of this document, the Seller and NAB will not,
under any circumstances, be liable to another party for any breach of this
document or any other duty it may owe to the Buyer (including any duty of care
for the purposes of the tort of negligence):

 

(a)for any special or indirect losses of any nature or description;

 

(b)for any consequential losses of any nature or description; or

 

(c)for loss of profit, loss of revenue, loss of use, loss of contract, loss of
goodwill or increased cost of working, whether that loss is direct or indirect
or normal or consequential in nature.

 

7.13Obligations of the Buyer

 

(a)Within 10 Business Days of receiving any Claim or demand or being served with
any legal proceedings which may lead to Liability on the part of the Seller, the
Buyer must give written notice to the Seller setting out full details of the
Claim, demand or legal proceedings.

 

(b)The Buyer must not accept, compromise or pay any Claim or demand or agree to
arbitrate, compromise or settle any legal proceedings which may lead to
Liability on the part of the Seller without the prior written approval of the
Seller.

 

7.14Survival

 

This clause 7 remains in full force and effect after Completion.

 

8.Representations and warranties

 

8.1Representations

 

The Buyer represents and warrants to the Seller that each of the following
statements is true and accurate at the date of this document and will be true
and accurate on the Completion Date:

 

(a)the Buyer is validly existing under the laws of its place of incorporation or
registration;

 

(b)the Buyer has the power to enter into and perform its obligations under this
document and to carry out the transactions contemplated by this document;

 

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(c)the Buyer has taken all necessary actions to authorise its entry into and
performance of this document and to carry out the transactions contemplated by
this document;

 

(d)the Buyer’s obligations under this document are valid and binding and
enforceable against it in accordance with the terms;

 

(e)neither the Buyer nor any party related to it has taken any action under
which any person is or may be entitled to a commission, brokerage or finder’s
fee in connection with the sale and purchase of the Intellectual Property;

 

(f)the Buyer, and each of its officers, employees, agents and representatives
holds or is able upon application to hold, all permits, licences and
authorisations to conduct its business in accordance with all applicable laws;

 

(g)none of the following has occurred and is subsisting, or is threatened, in
relation to the Buyer:

 

(i)a meeting has been convened, resolution proposed, petition presented or order
made for the winding up of the Buyer;

 

(ii)a receiver, receiver and manager, provisional liquidator, liquidator or
other officer of the Court has been appointed in relation to all or any material
asset of the Buyer; or

 

(iii)amortgagee or chargee has taken, attempted or indicated an intention to
exercise its rights under any security of which the Buyer is the mortgagor or
chargor; and

 

(h)the Buyer is not, and is not likely to:

 

(i)become insolvent within the meaning of section 95A of the Corporations
Act2001(Cth);

 

(ii)stop paying its debts as and when they fall due; or

 

(iii)become subject to voluntary administration under Part 5.3A of the
Corporations Act 2001 (Cth).

 

8.2Application of representations by the Buyer

 

Each of the representations made by the Buyer under clause 8.1 remains in full
force and effect on and after Completion

.

9.Confidentiality and publicity

 

9.1Confidentiality

 

The Buyer:

 

(a)must keep confidential any Confidential Information of the Seller and all
Confidential Information disclosed to the Buyer by or on behalf of the Seller,
or of which the Buyer becomes aware (whether before or after the date of this
document); and

 

(b)may disclose any Confidential Information in respect of which the Buyer has
an obligation of confidentiality under clause 9.1(a) only:

 

(i)to those of the Buyer’s officers or employees or advisers (Permitted
Disclosees) who:

 

15

 

 

 [img1.jpg]

 

(A)have a need to know for the purposes of this document and the transactions
contemplated by it; and

 

(B)undertake to the Buyer (and, where required by the Seller, to the Seller
also) a corresponding obligation of confidentiality to that undertaken by the
Buyer under clause 9.1(a);

 

(ii)if required to do so by law, a court of law or the Listing Rules of ASX; or

 

(iii)with the prior written approval of the Seller.

 

9.2Confidential Information

 

Clause 9.1 applies:

 

(a)with respect to Confidential Information:

 

(i)until Completion; or

 

(ii)until the information is public knowledge (otherwise than as a result of a
breach of confidentiality by the Buyer or any of its permitted disclosees),

 

whichever occurs first; and

 

(b)with respect to any other confidential information of the Seller, until the
information is public knowledge (otherwise than as a result of a breach of
confidentiality by the Buyer or any of its Permitted Disclosees).

 

9.3Announcements

 

The Buyer must not make or authorise a press release or public announcement
relating to the negotiations of the parties or the subject matter or provisions
of this document (Announcement) unless:

 

(a)it is required to be made by law or the Listing Rules of the ASX and before
it is made, the Buyer has:

 

(i)notified the Seller; and

 

(ii)given the Seller a reasonable opportunity to comment on the contents of, and
the requirement for, the Announcement; or

 

(b)it has the prior written approval of the Seller.

 

9.4Return of documents

 

If Completion does not occur for any reason, the Buyer must immediately return
to the Seller all the Confidential Information obtained by the Buyer and the
Permitted Disclosees, including all copies of the Confidential Information made
by the Buyer and its Permitted Disclosees.

 

9.5Indemnity

 

The Buyer indemnifies the Seller, and will keep the Seller indemnified, against
all Claims which the Seller may suffer or incur directly or indirectly in
connection with or arising from breach of this clause 9by the Buyer or the
Permitted Disclosees.

 

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9.6Survival

 

This clause 9 remains in full force and effect after Completion.

 

10.Termination

 

10.1Event of Default

 

If any one or more of the following occur, an Event of Default at the
non-defaulting party’s option will have occurred:

 

(a)the Buyer defaults in the performance of its obligations under this document;

 

(b)an Insolvency Event occurs in respect of the Buyer; or

 

(c)any action is initiated by any competent authority with a view to striking
the Buyer’s name off any register of companies.

 

10.2Default

 

If an Event of Default occurs and the default:

 

(a)is not capable of being remedied; or

 

(b)if capable of being remedied, is not remedied within 5 Business Days after
notice requiring it to be remedied is given to the defaulting party by the
Seller,

 

the Seller may immediately terminate this document by giving written notice to
the Buyer.

 

10.3After termination

 

(a)On termination of this document for any reason, the Buyer must stop, and must
require its permitted disclosees to stop, using Confidential Information of the
Seller and at the Seller’s option:

 

(i)return to the Seller;

 

(ii)destroy and certify in writing to the Seller the destruction of; or

 

(iii)destroy and permit a representative of Seller to witness the destruction
of,

 

all Confidential Information in its possession or control.

 

(b)If this document is terminated, then:

 

(i)each party will be released from its obligations to further perform this
document, except for those obligations that are expressly stated to continue in
force; and

 

(ii)in the case of termination before Completion, each party must do all acts
and things at their own cost, including the execution of all such documents
necessary to reverse an action done, if any, according to clause 4.2.

 

(c)If this document is terminated for any reason (including under clause 4.5 or
clause 10) other than due to a material default of the Seller under this
document, the Buyer must pay to the Seller the Penalty Amount within 10 Business
Days of receiving a notice from the Buyer that the Intellectual Property have
been sold to a third party or parties.

 

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(d)For the avoidance of doubt, the Penalty Amount due under clause 10.3(b) is an
amount that must be paid in addition to any other amounts due under this
document, including forfeiture of the Purchase Price and payment of interest
amounts under clause 12.

 

10.4Survival

 

Clauses Error! Reference source not found., 4.5, 7, 8, 9, 10.3, 10.4, 10.5, 11,
12 and 13 remain in full force and effect after termination of this document.

 

10.5Accrued rights

 

Termination of this document does not affect any accrued rights or remedies of a
party.

 

11.Tax

 

11.1Consideration

 

Subject to clause 11.2, any consideration to be paid or provided for a supply
under this document or any related transaction documents, unless specifically
expressed to include GST, does not include an amount on account of GST.

 

11.2GST

 

(a)If GST is payable by a supplier (or by the representative member for a GST
group of which the supplier is a member) on any supply made under or in relation
to this document, the recipient must pay to the supplier an amount (GST Amount)
equal to the GST payable on the supply. The GST Amount is payable by the
recipient in addition to and at the same time as the net consideration for the
supply.

 

(b)If a party is required to make any payment or reimbursement, that payment or
reimbursement must be reduced by the amount of any input tax credits or reduced
input tax credits to which the other party (or the representative member for a
GST group of which it is a member) is entitled for any acquisition relating to
that payment or reimbursement.

 

(c)This clause 11.2 is subject to any other specific agreement regarding the
payment of GST on supplies.

 

11.3Indemnity

 

The recipient must indemnify the supplier against, and pay the supplier on
demand, the amount of any damage or cost directly or indirectly arising from or
caused by any failure by the recipient to pay any amount (including any
additional tax, penalty tax, fine, interest or other charge under the GST Law)
from the date GST would have been payable had the supply been correctly treated
as a taxable supply.

 

11.4Buyer responsible for duty

 

The Buyer must pay all stamp duty, duty or similar tax payable in relation to
the execution, performance and registration of this document, or any other
document executed or effected under this document.

 

18

 

 

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11.5Buyer indemnity

 

The Buyer indemnifies the Seller and NAB against any loss incurred by the Seller
or NAB in relation to any duty and penalties specified in clause 11.4, whether
through default by the Buyer under clause 11.4 or otherwise.

 

12.Interest

 

12.1Failure to pay amount due

 

If the Buyer fails to pay any amount payable under this document on the due date
for payment, the Buyer must pay interest on the amount unpaid at the higher of
12% per annum or the rate (if any) fixed or payable under a judgment or other
thing referred to in clause 12.2.

 

12.2Interest accrual

 

Any interest payable under clause 12.1:

 

(a)accrues from day to day from and including the due date for payment of the
amount payable under this document up to the actual date of payment, before and,
as an additional and independent obligation, after any judgment or other thing
into which the liability to pay the amount becomes merged; and

 

(b)may be capitalised by the Seller at fortnightly intervals.

 

13.General provisions

 

13.1Costs

 

Each party must pay its own costs in relation to:

 

(a)the negotiation, preparation, execution, performance, amendment or
registration of, or any consent given or made; and

 

(b)the performance of any action by that party in compliance with any liability
arising,

 

under this document, or any document or agreement executed or effected under
this document, unless this document provides otherwise.

 

13.2Assignment

 

A party must not transfer any right or liability under this document without the
prior written consent of each other party, except where this document provides
otherwise.

 

13.3Notices

 

(a)Any notice may be served by delivery in person or by post, or transmission by
facsimile or email, to the address, number or email address of the recipient
specified in clause 13.3(c), or most recently notified by the recipient to the
sender.

 

(b)Any notice is effective for the purposes of this document on delivery to the
recipient, or production to the sender of a facsimile transmittal confirmation
report, or the sender not receiving an automated out of office or undelivered
email from the recipient email address, before 4.00 pm on a Business Day in the
place in or to which the written notice is delivered or received, or otherwise
at 9.00 am on the next Business Day following delivery or receipt.

 

19

 

 

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(c)The addresses for service for notices of the parties are:

 

Seller

Mr Gregory Winfield Hall as agent for National Australia Bank Limited (as
Mortgagee in Possession)

PwC, 201 Sussex Street, Sydney, NSW, 2000

 

Fax: None

Email: greg.hall@au.pwc.com

 

Buyer

Barfresh Inc

Suite 701, 90 Madison Street, CO, 80206 USA

fax: 303 3293819

 

13.4Governing law and jurisdiction

 

(a)This document is governed by and construed under the law in the State of New
South Wales.

 

(b)Any legal action in relation to this document against any party or its
property may be brought in any court of competent jurisdiction in the State of
New South Wales.

 

(c)Each party by execution of this document irrevocably, generally and
unconditionally submits to the non-exclusive jurisdiction of any court specified
in this clause 22.5 in relation to both itself and its property.

 

13.5Amendments

 

Any amendment to this document has no force or effect, unless effected by a
document executed by the parties.

 

13.6Pre-contractual negotiation

 

This document:

 

(a)expresses and incorporates the entire document between the parties in
relation to its subject-matter, and all the terms of that document; and

 

(b)supersedes and excludes any prior or collateral negotiation, understanding,
communication or document by or between the parties in relation to that subject
matter or any term of that document.

 

13.7Further assurance

 

Each party must execute any document and perform any action necessary to give
full effect to this document, whether before or after performance of this
document.

 

13.8Continuing performance

 

(a)The provisions of this document do not merge with any action performed or
agreement executed by any party for the purposes of performance of this
document.

 

20

 

 

 [img1.jpg]

 

(b)Any representation in this document survives the execution of any agreement
for the purposes of, and continues after, performance of this document.

 

(c)Any indemnity agreed by any party under this document:

 

(i)constitutes a liability of that party separate and independent from any other
liability of that party under this document or any other agreement; and

 

(ii)survives and continues after performance of this document.

 

13.9Waivers

 

Any failure by any party to exercise any right under this document does not
operate as a waiver and the single or partial exercise of any right by that
party does not preclude any other or further exercise of that or any other right
by that party.

 

13.10Remedies

 

Subject to clause 7, the rights of a party under this document are cumulative
and not exclusive of any rights provided by law.

 

13.11Severability

 

Any provision of this document which is invalid in any jurisdiction is invalid
in that jurisdiction to that extent, without invalidating or affecting the
remaining provisions of this document or the validity of that provision in any
other jurisdiction.

 

13.12Third party rights and benefits

 

(a)Except as provided in this clause 13.12, this document confers rights only on
a person expressed to be a party, and not on any other person.

 

(b)Without prejudice to the rights of NAB under this clause 13.12, the Buyer
agrees that NAB has the benefit of the provisions of this document given in
favour of the Seller.

 

(c)The Buyer acknowledges and agrees that a breach of this document or
negligence by the Buyer in relation to performance or failure to perform this
document may result in a loss being suffered by NAB and/or the Seller (NAB
Loss).

 

(d)Subject to the limitations and exclusions of liability set out in this
document, and to any claim, defence, counter-claim or right of set-off which at
law, in equity or under statute would be available to the Buyer if NAB were the
Seller and the loss were suffered by it, the Buyer agrees that any NAB Loss will
be treated as a loss suffered by the Seller and the Seller may enforce any
rights in relation to that loss.

 

(e)The Seller enters into this document as agent for NAB for the sole purpose
of:

 

(i)NAB obtaining (and being able to enforce through the Seller) any rights
granted to NAB (which, to avoid doubt, includes the indemnities of clause 7.6
and the payment obligation in sub-clause (d) above); and

 

(ii)NAB obtaining (and being able to enforce) the benefit of the caps and
exclusion on the Seller’s liability in this document, including those of clause
7.

 

21

 

 

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13.13Counterparts

 

This document may be executed in any number of counterparts, all of which taken
together are deemed to constitute one and the same document.

 

22

 

 

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Schedule 1 – Intellectual Property

 

Part 1 – Patents

 

Australia

 

#   Applicant   Inventor   PATENT
Title   PATENT
Application
Details   Filing
Date   Status                           1.   Smoo Pty Limited   Riccardo Dario
Coste Delle   Sealed pack of ingredients for an individual smoothie, and
associated methods and apparatuses   2012254903   15 November 2012   Filed      
                    2   Smoo Pty Limited   Riccardo Dario Coste Delle   Sealed
pack of ingredients for an individual smoothie, and associated methods and
apparatuses   2005274678   16 August 2005   Granted

 

Brazil

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   PIO514480.9   Exam Requested

 

China

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   ZL200580033724.5   Registered

 

Europe

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   05773978   Response lodged to
Examiner’s report

 

23

 

 

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Hong Kong

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   07109841.5   Application
lodged: filing receipt received

 

Indonesia

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   W-00200700882   Accepted

 

Israel

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   181335   Registered

 

India

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   01616/DELNP/07   Exam
requested

 

Japan

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   5057975   Registered

 

24

 

 

 [img1.jpg]

 

Republic of Korea

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   1157907   Registered

 

Mexico

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   282747   Registered

 

Malaysia

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   MY-142467-A   Registered

 

New Zealand

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   553358   Registered

 

The Philippines

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   1-2007-500384   Registered

 

25

 

 

 [img1.jpg]

 

Russian Federation

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   2376228   Registered

 

Singapore

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   130396   Registered

 

Thailand

 

PATENT
Title   PATENT
Official Number   Status           Sealed pack of ingredients for an individual
smoothie, and associated methods and apparatuses   103337   Examination request

 

South Africa

 

Part 2 – Trade Marks

 

Australia

 

#   Owner   TRADEMARK  Description   TRADEMARK
Number   Filing Date   Classes   Status   Renewal
Due/Comments                               1   Smoo Pty Limited   [img2.jpg]  
1043654   25 February 2005   30,32   Registered   25 February 2015q            
                  2   Smoo Pty Limited   [img3.jpg]   1427159   24 May 2011  
29,30   Opposed  

Accepted for registration on 17 January 2013

 

Opposed by Geoffrey Chesworth and Tania Chesworth.

 

Notice of Opposition lodged on 11 April 2013

Hearing Pending

 

26

 

 

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India

 

#   Owner   TRADEMARK
Description   TRADEMARK  
Number   Filing  Date   Classes   Status                           1   Smoo Pty
Limited   [img4.jpg]   1661025   4/3/2008   30,32   Opposed                    
      2   Smoo Pty Limited   [img4.jpg]   1661026   4/3/2008   30,32  
Registered

 

South Africa

 

TRADEMARK  Description   TRADEMARK  Number   Status           [img4.jpg]  
1043654   Registered

 

27

 

 

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Schedule 2 – Encumbrances

 

Part 1 – Bank Security Interests

 

Item   Secured Party   Registration number   Class/Description               1.
  National Australia Bank Limited   201208150032747   All Present and After
Acquired Property No Exceptions

 

28

 

 

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Signing page

 

Executed as a deed.

 

Signed sealed and delivered on behalf of Gregory Winfield Hall as agent for
National Australia Bank Limited (as Mortgagee in Possession):           /s/
Margaret Jamison   /s/ Gregory Winfield Hall

Witness signature

  Gregory Winfield Hall       Margaret Jamison     Print witness name    

 

Signed sealed and delivered on behalf of Barfresh Inc. by its duly authorised
signatory:           Director           /s/ Steven Lang   Steven Lang     Print
name

 

29