Exhibit 10.1

 

ASSET PURCHASE AGREEMENT

 

This Asset Purchase Agreement (the “Agreement”) is entered into as of September
20, 2018 (the “Effective Date”), between GreenBox POS LLC, a Washington Limited
Liability Company with a principal place of business located at 2305 Historic
Decatur Road, Suite 100, San Diego, CA 92106 (the “Seller”) and GreenBox POS
LLC, a Nevada Corporation with a principal place of business located at 2305
Historic Decatur Road, Suite 100, San Diego, CA 92106 (the "Buyer"). The Buyer
and Seller are referred to collectively herein as the "Parties."

 

WHEREAS, this Agreement contemplates a transaction previously effected by and
between the Buyer and Seller, in which the Buyer purchased substantially all of
the assets of the Seller in return for the assumption of substantially all the
liabilities of the Seller, as described in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and actual promises herein
made, and in consideration of the representations, warranties, and covenants
herein contained, the receipt and sufficiency of which being herein
acknowledged, the Parties agree as follows:

 

1.

SALE OF BUSINESS. Sellers shall sell, assign, and deliver, free and clear of any
security interests, to Buyer and Buyer shall purchase and accept substantially
all of the assets owned by Seller, (the “Assets”). The list of specific assets
to be purchased is attached hereto as Exhibit A and shall exclude certain assets
listed in Schedule 1 – Excluded Assets and Liabilities. This being subject to
reconsideration at a later time. The date on which such sale, assignment, or
delivery shall be effective (the “Closing Date”) shall be within thirty (30)
days of the date of this Agreement. At the Closing, the parties will execute and
deliver such instruments of assignment and conveyance as shall be reasonably
necessary to assign and transfer the assets to Buyer, including but not limited
to a Bill of Sale, Assignments of Patents, and other similar documents

 

2.

CONSIDERATION. In consideration of the sale of the Assets under this Agreement,
the Buyer shall assume and accept, on the effective date, certain liabilities of
the Seller which are to be compiled pursuant to this Agreement. A specific list
of the assets is attached hereto as Exhibit B. Exhibit B shall exclude certain
liabilities listed under Schedule 1 – Excluded Assets and Liabilities. This
being subject to reconsideration at a later time.

 

3.

ALLOCATION. The parties shall agree on an allocation of the Purchase Price to
the different Acquired Assets for U.S. Tax (as defined below) purposes (the
"Allocation Statements") prior to the Closing Date. The parties shall each file
all income, franchise and other Tax Returns (as defined below) and execute such
other documents as may be required by any governmental authority, in a manner
consistent with the Allocation Statements. The

 

1 of 8

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

 

 

 

Buyer shall prepare the Allocation Statements and any Forms 8594 in a manner
consistent with Section 1060 of the Internal Revenue Code of 1986, as amended,
and the Treasury Regulations promulgated thereunder (hereinafter, the "Code")
and other applicable legal requirements. The Parties agree to file the Form or
Forms 8594 with each relevant taxing authority and to refrain from taking any
position inconsistent with such Form or Forms or the agreed Allocation
Statements. At the Closing, the parties will execute and deliver such
instruments of assignment and conveyance as shall be reasonably necessary for
Buyer to assume the liabilities, including but not limited to an Assumption of
Liabilities agreement and other similar documents.

 

4.

REPRESENTATIONS OF SELLERS. The Seller represents, warrants, and agrees:

 

 

4.1.

Authority. The execution and the delivery of this Agreement by the Seller, and
the consummation of the transactions contemplated by this Agreement have been
duly authorized by its Members. There are no outstanding or authorized options,
warrants, purchase rights, subscription rights, exchange rights, or other
contracts or commitments that require the Seller to issue, sell, or otherwise
cause to become outstanding any of its equity interests. The Seller has full
power and authority to enter into this Agreement and to carry out all the terms
and provisions hereof to be carried out by him or her, and all authorizations
and consents necessary for the execution and delivery of this Agreement by him
or her have been given.

 

 

4.2.

No Conflict. Neither the execution and the delivery of this Agreement, nor the
consummation of the transactions contemplated hereby (including the assignments
and assumptions referred to in Sections 1 and 2 above), will violate any
constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Seller or a Shareholder is subject or any provision of the
charter or bylaws of the Seller.

 

5.

MISCELLANEOUS.

 

 

5.1.

Governing Law. This Agreement shall be governed by and construed in accordance
with the domestic laws of the state of California without giving effect to any
choice or conflict of law provision or rule (either of the state of California
or any other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the state of California.

 

 

5.2.

Venue. The Parties hereto agree that the exclusive venue for any action
hereunder shall be the state and federal courts located in San Diego County,
California. Each Party hereto hereby irrevocably waives, to the fullest extent
it may effectively do so, the

 

2 of 8

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

 

 

defense of an inconvenient forum to the maintenance of such action or
proceeding. The Parties hereto further agree, to the extent permitted by law
that a final and unappealable judgment against any of them in any action or
proceeding contemplated above shall be conclusive and may be enforced in any
other jurisdiction by suit on the judgment, a certified copy of which shall be
conclusive evidence of the fact and amount of such judgment. 

 

 

5.3.

Binding Arbitration. The Parties agree that any claim or dispute between them or
against any agent, employee, successor, or assign of the other, whether related
to this Agreement or otherwise, and any claim or dispute related to this
Agreement or the relationship or duties contemplated under this contract,
including the validity of this arbitration clause, shall be resolved by binding
arbitration by the American Arbitration Association, under the Commercial
Arbitration Rules then in effect. The Parties agree to keep the terms of any
agreement strictly confidential. This Agreement shall be interpreted under the
Federal Arbitration Act. The arbitration shall be held in San Diego, California.

 

 

5.4.

Amendments and Waivers. No amendment of any provision of this Agreement shall be
valid unless the same shall be in writing and signed by each of the Parties
hereto. No waiver by any Party of any default, misrepresentation, or breach of
warranty, covenant, or agreement hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty, covenant, or agreement hereunder or affect in any way any
rights arising by virtue of any prior or subsequent such occurrence.

 

 

5.5.

Severability. Any term or provision of this Agreement that is invalid or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.

 

 

5.6.

Construction. Nothing in the Exhibits or Schedules shall be deemed adequate to
disclose an exception to a representation or warranty made herein unless the
Exhibits or Schedules identify the exception with reasonable particularity and
describes the relevant facts in reasonable detail. The Parties intend that each
representation, warranty, and covenant contained herein shall have independent
significance. If any Party has breached any representation, warranty, or
covenant contained herein in any respect, the fact that there exists another
representation, warranty, or covenant relating to the same subject matter
(regardless of the relative levels of specificity) which the Party has not
breached shall not detract from or mitigate the fact that the Party is in breach
of the first representation, warranty or covenant. This Agreement was prepared
and negotiated by the Parties to this Agreement and all provisions hereof shall
be construed without prejudice to any Party.

 

3 of 8

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

 

 

 

 

GREENBOX POS LLC (WA LIMITED LIABILITY COMPANY):

 

 

 

___________________________________________

Fredi Nisan

 

 

 

___________________________________________

Ben Errez

 

GREENBOX POS LLC (NV CORPORATION)

 

 

 

___________________________________________

Fredi Nisan

 

 

 

___________________________________________

Ben Errez

 

 

 

 

 

4 of 8

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

 

 

EXHIBIT A

ASSETS OF GREEN BOX POS, LLC – A Washington Limited Liability Company

 

 

1.

Provisional Patents:

 

 

a.

Application Number: 62595266

Title: BLOCKCHAIN ESCROW FOR AUTOMATED TELLER MACHINE (ATM)

Description: The ability to instantly display cash deposited in ATM machines on
a Blockchain secured ledger.

 

 

b.

Application Number: 62595312

Title: BLOCKCHAIN ESCROW PAYMENT APPLICATION

Description: The ability to exchange control of encrypted keys on Blockchain
without any party having control of both keys at any point.

 

 

c.

Application Number: 62595439

Title: BLOCKCHAIN DELIVERY SERVICE WITH INSTANT PAYMENT APPLICATION

Description: The ability to make instant payments, including tipping and
upsales, in a remote settlement scenario, while being connected to the
point-of-sale system and real time inventory management.

 

 

d.

Application Number: 62595501

Title: BLOCKCHAIN POINT OF SALE SYSTEM WITH INSTANT PAYMENT APPLICATION

Description: The ability of a point of sale system to instantly record
transactions on a Blockchain secured ledger, with real time inventory
management, in such way that no installation or data maintenance is required and
recovery from catastrophic events is done nearly instantly.

 

 

e.

Application Number: 62597032

Title: BLOCKCHAIN DATA TRUST WITH INSTANT REVOCATION CAPABILITY

Description: The ability to revoke access to personal data after the authorized
use of it is completed, so that identity theft and compromising personal data
are minimized.

 

 

2.

Products and Any Associated IP Rights

 

 

a.

KIOSK: Blockchain implementation of equipment capable of accepting cash and
converting (tokenizing) it to an encrypted Blockchain secured ledger entry
instantly. The Machine is also capable of accepting debit and credit card
payments and producing payment cards for use in GreenBox ecosystem. GreenBox
owns both software and hardware development of this product.

 

5 of 8

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

 

 

 

b.

DEL: Complete delivery system with dispatcher backend and mobile applications
for driver and consumer, available for iOS and Android. GreenBox own all related
software for this product.

 

 

c.

POS: Complete point-of-sale system with integrated Blockchain connectivity for
inventory management, payment, and record keeping on secured Blockchain ledger.
This system requires no installation, backup or restore functionality and
recovers from catastrophic events nearly instantly. This system is also
available with customized hardware. GreenBox owns both software and hardware
development of this product.

 

 

d.

PAY: GreenBox core product. This system is capable of managing any amount of
tokenized assets, including cash and data, on a secured Blockchain ledger. All
patented technology from GreenBox is connected to this product. PAY is a
combination of a settlement and transactional subsystems, and includes TrustKey,
TrustGateway and Ledger Manager technologies operating over Blockchain
substrate. GreenBox owns both software and hardware development of this product.

 

 

3.

Website – All title and interest in and to the Website and Internet Domain Name,
greenboxpos.com and all of its respective contents (the "Website "), and any
other rights associated with the Website , including, without limitation , any
intellectual property rights , all related domains , logos , customer lists and
agreements , email lists, passwords, usernames and trade names; and all of the
related social media accounts including but not limited to, Instagram , Twitter
, Facebook , Instagram, and Pinterest at closing and associated other rights.

 

 

4.

Services Agreements. All of sellers current and future point of sale agreements,
payment gateway agreements, and services agreements and contracts including but
not limited to Merchant, Payment Services, Payment Processing, Agent, and
Referral, agreements and contracts.

 

 

5.

Locations and Subsidiaries

 

 

a.

GreenBox Canada: Wholly owned federally registered subsidiary company with an
office in Vancouver, British Columbia, Canada. This office location has all
products and equipment described earlier installed in it and available for
customer engagement.

 

 

b.

GreenBox San Diego: Corporate headquarters are in San Diego, California. Home
base for all corporate executives, accounting, development and architecture,
level 2 customer service, demo lab, public relations and department heads.

 

 

c.

GreenBox Seattle: Corporate regional virtual office.

 

6 of 8

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

 

 

 

d.

GreenBox Las Vegas: Corporate shared office space and customer service hub.

 

 

6.

Any and all rights to the Sky MIDS Assets that are pending final acquisition
including but not limited to:

 

 

a.

Book of Business: Sky entire book of business, capable of processing over $1B
annually, primarily through the PAY product line.

 

 

b.

Personnel: Sky former president transitioned into the Senior Vice President,
payment systems position with GRBX.

 

 

c.

Agent network: Sky’s network of agents includes approximately 50 active agents,
which now deliver new business to GRBX exclusively.

 

 

d.

IP assets: Sky’s development software products, including CRM system pertaining
to onboarding and relations management with merchants, and custom payment
security features, are now wholly owned by GRBX.

 

 

 

 

 

 

 

7 of 8

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

 

 

EXHIBIT B

 

Liabilities of GreenBox POS, LLC – A Washington Corporation

 

Any and all liabilities incurred pursuant to regular business operations, which,
as of this date is $309,472.61

 

 

 

 

 

 

 

 

 

 

8 of 8