EXECUTION COPY 

  

 

ASSET PURCHASE AGREEMENT

 

THE GRILLED CHEESE TRUCK, INC.

 

And

 

GCT TEXAS MASTER, LLC

 

as Buyers

 

AND

 

HOOK & LADDER DRAUGHT HOUSE, LLC

 

And

 

KOW LEASING CO., LLC

 

as Sellers

 

AND

 

DEEPAK DEVARAJ

 

as Sole Member

 

Dated As Of August __, 2013 

 

 

 

 

 

RECITALS   1 ARTICLE I DEFINITIONS 1 1.1 Certain Defined Terms 1 1.2 Other
Defined Terms 5 ARTICLE II PURCHASE AND SALE OF ASSETS 6 2.1 Purchase of Assets
6 2.2 Excluded Assets 7 2.3 Purchase Price and Payment 8 2.4 Additional
Considerations 8 2.5 Full Possession 11 2.6 No Assignment in Certain
Circumstances 12 ARTICLE III ASSUMPTION OF LIABILITIES 12 3.1 Assumption of
Liabilities 12 3.2 Retained Liabilities 13 ARTICLE IV CLOSING 14 4.1 Closing 14
4.2 Sellers' Obligations at Closing 14 4.3 Buyer Obligations at Closing 15 4.4
Proration of Taxes and Expenses 15 ARTICLE V REPRESENTATIONS AND WARRANTIES OF
SELLER AND DEVARAJ 16 5.1 Organization and Qualification 16 5.2 Authorization 17
5.3 Non-Contravention 17 5.4 Financials 17 5.5 Absence of Certain Changes 17 5.6
Title to Assets 18 5.7 Personal Property Leases 19 5.8 Real Property Leases 19
5.9 Intellectual Property Rights 19 5.10 Litigation; Legal Matters 22 5.11
Permits and Other Operating Rights 22 5.12 Compliance with Laws 22 5.13 Tax
Matters 23 5.14 Insurance 23 5.15 Disclosure 23 5.16 No Brokers 23 ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER 24 6.1 Organization and Qualification 24
6.2 Authorization 24 6.3 Capitalization 24 6.4 Non-Contravention 25 6.5 Form
10-K and Form 10-Q Filings 25 6.6 Compliance with Law 25 6.7 No Violation 25    
   

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6.8 No Brokers 25 6.9 Litigation; Legal Matters 26 ARTICLE VII [INTENTIONALLY
OMITTED] 26 ARTICLE VIII CERTAIN COVENANTS 26 8.1 Confidentiality 26 8.2
Authorizations 27 8.3 Publicity 27 8.4 Notification 27 8.5 Bulk Sale Compliance
27 8.6 Agreement Not to Compete 27 8.7 State Unemployment Tax Accounts 29 8.8
Books and Records 29 ARTICLE IX INDEMNIFICATION 29 9.1 Survival 29 9.2
Indemnification by Sellers 30 9.3 Indemnification by Buyer 30 9.4 General
Indemnification Provisions 31 9.5 Tax Matters 32 9.6 Materiality 32 ARTICLE X
TAX MATTERS 33 10.1 Allocation of Purchase Price 33 10.2 Taxes Before and After
the Closing Date 33 10.3 Notification and Defense 34 10.4 Access 34 10.5 Taxes
Relating to Transactions Contemplated by This Agreement 35 10.6 Payments 35 10.7
Confidentiality and Related Agreements 35 10.8 No Third-Party Beneficiaries 35
10.9 COBRA 35 ARTICLE XI GENERAL PROVISIONS 36 11.1 Expenses, Taxes, Etc. 36
11.2 Notices 36 11.3 Disclosure Schedule 37 11.4 Interpretation; Conflict
Between Agreements 37 11.5 Severability 38 11.6 Assignment 38 11.7 No
Third-Party Beneficiaries 38 11.8 Amendment, Other Remedies and Waiver 38 11.9
Further Assurances 39 11.10 Mutual Drafting 39 11.11 Governing Law 39 11.12
Consent to Jurisdiction; Waiver 39 11.13 Waiver of Jury Trial 40 11.14
Counterparts 40 11.15 Entire Agreement 40        

 

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EXHIBIT:

Exhibit A – GCT Employment Agreement

Exhibit B – GCT-TX Employment Agreement

Exhibit C – Form of Warrant

Exhibit D –Bill of Sale

Exhibit E – Assignment and Assumption Agreement

Exhibit F – Lease Assignment and Assumption Agreement

 

DISCLOSURE SCHEDULES:

 

Schedule 2.1(a) Equipment Schedule 2.1(b) Contracts Schedule 2.2(e) Excluded
Assets Schedule 3.1 Assumed Liabilities Schedule 4.4 Taxes and Expenses Schedule
5.1 Organization and Qualification of H&L and KOW Schedule 5.3 Non-Contravention
Schedule 5.4 Financials Schedule 5.5 Absence of Certain Changes Schedule 5.6(a)
Title to Assets Schedule 5.6(b) Condition of Assets, Properties and Equipment
Schedule 5.7(a) Personal Property Leases Schedule 5.8(a) Real Property Leases
Schedule 5.9(b) Owned Intellectual Property Schedule 5.9(c) Licensed
Intellectual Property Schedule 5.10 Litigation; Legal Matters Schedule 5.11
Permits and Other Operating Rights Schedule 5.12 Compliance with Laws Schedule
5.14 Insurance     Schedule 6.2(b) Required Consents Schedule 10.1 Allocation of
Purchase Price

 

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ASSET PURCHASE AGREEMENT

 

This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of August __, 2013
(the “Effective Date”), by and among Hook & Ladder Draught House, LLC, a Texas
limited liability company (“HL”), KOW Leasing Co., LLC, a Texas limited
liability company (“KOW” and together with HL, the “Sellers”), Deepak Devaraj,
as sole member of HL and KOW, respectively (“Devaraj”), and The Grilled Cheese
Truck, Inc., a Nevada corporation (“GCT”) and GCT Texas Master, LLC, a Nevada
limited liability company and Affiliate of GCT (“GCT-TX”, together with GCT,
collectively, the “Buyer”).

 

RECITALS

 

WHEREAS, Sellers are engaged in the Business (as hereinafter defined); and

 

WHEREAS, Sellers desire to sell and cause to be transferred to Buyer, and Buyer
desires to purchase and accept the transfer from Sellers, all of the assets and
properties of Sellers used or usable in the Business, as hereinafter
specifically provided (the “Purchase”);

 

NOW, THEREFORE, in consideration of the premises and the respective
representations, warranties and agreements herein contained, the parties hereto
hereby agree as follows:

 

ARTICLE I
DEFINITIONS

 

1.1.          Certain Defined Terms. As used in this Agreement, the following
terms shall have the following meanings (such definitions to be equally
applicable to both the singular and plural forms of the terms defined):

 

“Accounts Receivable” means (a) all trade accounts receivable and other rights
to payment from customers of Sellers, whether or not billed by Sellers as of the
Closing Date, arising out of or in connection with the services provided sold,
to such customers and the full benefit of all security for such accounts or
rights to payment, including all trade accounts receivable arising out of or in
connection with such services and products representing amounts receivable in
respect of goods shipped or products sold or services rendered, through the date
immediately preceding the Closing Date, to customers of Sellers, and (b) any
claim, remedy or other right related to any of the foregoing.

 

“Action” means any notice of noncompliance or violation, or any claim, demand,
action, suit, audit, assessment or arbitration, or any request (including any
request for information), proceeding or investigation, by or before any
Governmental Authority.

 

“Affiliate” has the meaning set forth in Rule 12b-2 of the regulations under the
Securities Exchange Act of 1934, as amended.

 

“Agreement” means this Asset Purchase Agreement, including all schedules and
exhibits hereto, as it may be further amended from time to time as herein
provided.

 

 

 

 

“Ancillary Agreements” means the GCT Employment Agreement, the GCT-TX Employment
Agreement and the Form of Warrant.

 

“Assets” has the meaning specified in Section 2.1.

 

“Assumed Liabilities” has the meaning specified in Section 3.1.

 

“Books and Records” means all of the following which pertain to the Assets,
Assumed Liabilities or the Business: books, records, manuals and other
materials, files, originals and copies of all written Customer Contracts, other
Contracts, purchase orders, invoices, items of payment, tax receipts, computer
tapes, disks, other storage media and records, advertising matter, catalogues,
price lists, correspondence, memoranda, forecast, price lists, sales records,
customer lists, vendor and supplier lists, financial records, mailing lists,
lists of customers and suppliers, distribution lists, photographs, sales and
promotional materials and records, purchasing materials and records, personnel
records, credit records, quality control records and procedures, research and
development files, records, data, trademark files and disclosures, media
materials and plates, sales order files and litigation files.

 

“Business” means the food truck and food service business as conducted by
Sellers prior to the Effective Date.

 

“Buyer Indemnified Parties” has the meaning specified in Section 9.2.

 

“Buyer Loss” has the meaning specified in Section 9.2.

 

“Buyer” means, The Grilled Cheese Truck, Inc., a Nevada corporation and GCT
Texas Master, LLC, a Nevada limited liability company.

 

“Bylaws” means a company’s bylaws, code of regulations or equivalent document.

 

“Charter” means a company’s articles of incorporation, certificate of
incorporation, articles of formation or equivalent organizational documents.

 

“Closing” means the closing of the transactions contemplated by this Agreement
as specified in Section 4.1.

 

“Closing Date” has the meaning specified in Section 4.1.

 

“Code” means the Internal Revenue Code of 1986 and any successor statute
thereto, as amended. Reference to a specific section of the Code shall include
such section, any valid regulation promulgated thereunder, and any comparable
provision of any future legislation amending, supplementing or superseding such
section.

 

“Date of Survival” has the meaning specified in Section 9.1.

 

“Disclosure Schedule” means the Disclosure Schedule dated as of the date hereof
delivered to Buyer by Sellers and forming a part of this Agreement.

 

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“Encumbrance” means any interest (including any security interest), pledge,
mortgage, lien (including environmental liens), charge, claim (including any
adverse claim) or other right of third parties, whether created by law or in
equity, including any such restriction on the use, voting, transfer, receipt of
income or other exercise of any attributes of ownership.

 

“Equipment” has the meaning specified in Section 2.1.

 

“ERISA” means the Employee Retirement Income Security Act of 1974 and any
successor statute thereto, as amended. Reference to a specific section of ERISA
shall include such section, any valid regulation promulgated thereunder, and any
comparable provision of any future legislation amending, supplementing or
superseding such section.

 

“Excluded Assets” has the meaning specified in Section 2.2.

 

“Financials” has the meaning specified in Section 5.5.

 

“GAAP” means United States generally accepted accounting principles applied on a
consistent basis.

 

“GCT Employment Agreement” means the Employment Agreement by and between GCT and
Devaraj, the form of which is attached hereto as Exhibit A.

 

“GCT-TX Employment Agreement” means the Employment Agreement by and between
GCT-TX and Devaraj, the form of which is attached hereto as Exhibit B.

 

“Geographic Area” means the State of Texas.

 

“Governmental Authority” means any federal or national, state or provincial,
municipal or local government, governmental authority, regulatory or
administrative agency, governmental commission, department, board, bureau,
agency or instrumentality, political subdivision, court, tribunal, official
arbitrator or arbitral body in each case whether domestic or foreign.

 

“Governmental Order” means any order, writ, rule, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.

 

“Indemnitee” has the meaning specified in subsection 9.4(a).

 

“Indemnitor” has the meaning specified in subsection 9.4(a).

 

“IRS” means the Internal Revenue Service or any successor entity.

 

“Knowledge” and “known” and words of similar import mean:

 

(i)          with respect to any Seller shall mean the knowledge of a particular
matter by Devaraj or any executive officer, director or member of such Seller,
and shall be deemed to include the knowledge that any such person would have
obtained after making a reasonable inquiry of those employees of such Seller
with principal day-to-day operational responsibility with respect to a
particular matter; and

 

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(ii)         with respect to Devaraj shall mean the knowledge of a particular
matter by Devaraj, and shall be deemed to include the knowledge that Devaraj
would have obtained after making a reasonable inquiry of those employees of
Sellers with principal day-to-day operational responsibility with respect to a
particular matter; and

 

(iii)         with respect to Buyer shall mean the actual present knowledge of a
particular matter by any of the directors or executive officers of Buyer, and
shall be deemed to include the knowledge that such directors or executive
officers would have obtained after making a reasonable inquiry with respect to a
particular matter.

 

“Liabilities” means any and all debts, liabilities and obligations of any nature
whatsoever, whether accrued or fixed, absolute or contingent, mature or
unmatured or determined or determinable, including those arising under any law,
rule, regulation, Action, Governmental Order, and those arising under any
contract, agreement, commitment or undertaking.

 

“Losses” has the meaning specified in subsection 9.4(a).

 

“Material Adverse Effect” means a material adverse effect on (a) the assets,
properties, Liabilities, operations, business, or condition (financial or
otherwise) of the named party, taken as a whole, or (b) the ability of the named
party to perform its obligations hereunder; provided, however, that any event,
occurrence, fact, condition or change resulting from any of the following shall
not be deemed a Material Adverse Effect so long as each of the following, after
the Effective Date, regarding does not adversely affect the Sellers, taken as a
whole, in a materially disproportionate manner relative to the other
participants in the industries or markets in which they operate: (i) the
announcement of the transactions contemplated by this Agreement; (ii) any
general market, economic, financial, labor or political conditions in the United
States or in any foreign country; (iii) any outbreak or escalation of
hostilities or act of terrorism involving, or any declaration of war by, the
United States or any other country in which the named party operate; (iv)
earthquakes, hurricanes, tornadoes, floods or other natural disasters; or (v)
changes in applicable laws.

 

“Operating Agreement” means a limited liability company’s operating agreement,
code of regulations or equivalent document.

 

“Permitted Exceptions” means bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the enforcement of creditors’ rights generally
and general principles of equity (regardless of whether enforceability is
considered in a proceeding at law or in equity).

 

“Permitted Liens” means any (a) liens encumbering the Equipment in favor of
lessors of the Personal Property Leases with respect to which no default exists;
and (b) liens for current taxes not yet due and payable.

 

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“Person” shall include any individual, trustee, firm, corporation, partnership,
limited liability company, Governmental Authority or other entity, whether
acting in an individual, fiduciary or any other capacity.

 

“Purchase” has the meaning specified in the Recitals to this Agreement.

 

“Purchase Price” has the meaning specified in Section 2.3.

 

“Retained Liabilities” has the meaning specified in Section 3.2.

 

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

 

“Seller Indemnified Parties” has the meaning specified in Section 9.3.

 

“Seller Loss” has the meaning specified in Section 9.3.

 

“Sellers” means, collectively, HL and KOW.

 

“Tax” means any federal, state, local, or foreign income, gross receipts,
license, payroll, parking, employment, excise, severance, stamp, occupation,
premium, windfall profits, environmental (including taxes under Code
Section 59A), customs duties, capital stock, franchise, profits, withholding,
social security (or similar), unemployment, disability, real property, personal
property, sales, use, transfer, registration, value added, alternative or add-on
minimum, estimated tax, or other tax of any kind whatsoever, including any
interest, penalty, or addition thereto, whether disputed or not, including such
item for which Liability arises from the application of Treasury Regulation
1.1502-6, as a transferee or successor-in-interest, by contract or otherwise.

 

“Tax Return” means any return, report, information return, schedule,
certificate, statement or other document (including any related or supporting
information) filed or required to be filed with a Taxing Authority in connection
with any Tax, or, where none is required to be filed with a Taxing Authority,
the statement or other document issued by a Taxing Authority in connection with
any Tax.

 

“Taxing Authority” means any Governmental Authority responsible for the
imposition or collection of any Tax.

 

“Third Party Claims” has the meaning specified in subsection 9.4(c).

 

“Transfer Taxes” shall have the meaning specified in Section 10.6.

 

1.2.          Other Defined Terms. In addition to the terms defined in
Section 1.1, certain other terms are defined elsewhere in this Agreement and,
whenever such terms are used in this Agreement, they shall have their respective
defined meanings.

 

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ARTICLE II
PURCHASE AND SALE OF ASSETS

 

2.1.          Purchase of Assets. Upon the terms and subject to the conditions
herein set forth, in reliance upon the representations and warranties contained
herein and in consideration of the payment of the Purchase Price at the Closing,
Sellers hereby sell, convey, assign, transfer and deliver to Buyer, and Buyer
hereby purchases and acquires from Sellers, free and clear of any and all
Encumbrances, all of Sellers’ rights, title and interests in and to the
following assets (collectively the “Assets”):

 

(a)          all owned or leased tangible personal property, machinery,
fixtures, furniture, inventory, equipment, motor vehicles, including those motor
vehicles set forth on Disclosure Schedule 2.1(a), and communications equipment,
computers, parts, raw materials and supplies, together with all deposits and
prepaid assets associated therewith (“Equipment”);

 

(b)          all rights of Sellers arising prior and subsequent to the Effective
Date in, to and under any of the contracts, personal property leases, real
property leases, commitments, understandings, arrangements, agreements or
restrictions of any kind or character to which Sellers are a party, or by which
the Sellers or any of the Purchased Assets may be bound or affected, whether
oral or written, that are set forth on Schedule 2.1(b) hereto (each, a
“Contract”);

 

(c)          all rights of Sellers arising prior and subsequent to the Effective
Date under all of their customer contracts, whether written or oral, customer
files, lists of supplies and vendors (including without limitation, all
addresses, phone numbers, facsimile numbers and email addresses), rights and
claims under sales contracts, service agreements;

 

(d)          all patents and patent applications, copyrights, trade secrets,
know-how, inventions and processes, trade names, trademarks, service marks,
logos, brand names, assumed names, domain names, URLs, websites, software,
technology rights, licenses and all other intellectual property, and all
registrations and applications therefor, together with the goodwill symbolized
thereby;

 

(e)          all technical, design, processing, manufacturing or marketing
information, including new developments, technology, inventions, know-how,
processes, ideas, data and databases and trade secrets and documentation thereof
(including related papers, drawings, chemical compositions, formulae, diaries,
notebooks, specifications, methods of manufacturing and software) and other
similar information and all claims and rights related thereto;

 

(f)          all of Sellers’ rights, title and interest to the name “Hook &
Ladder Draught House” and “Hook & Ladder Pizza Co.” and other corporate and
trade names and phrases used in the Business;

 

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(g)          all telephone and facsimile numbers and all email addresses used in
the Business;

 

(h)           to the extent their transfer is permitted by law, all governmental
licenses, permits, approvals, license applications, and license amendment
applications, with respect to the Assets;

 

(i)          to the extend assignable, all licenses, franchises, notices,
permits, authorizations, approvals or certificates of authority of or relating
to the Assets (“Licenses”); and

 

(j)           all rights to indemnification, warranties, claims and causes of
action against third parties relating to the Assets subsequent to the Effective
Date, including any right to receive payment for products sold or services
rendered pursuant to, and to receive goods and services pursuant to, such
contracts and to assert claims and take other rightful actions in respect of
breaches, defaults and other violations of such contracts and otherwise.

 

2.2.        Excluded Assets. Nothing in this Agreement shall constitute or be
construed as conferring on Buyer, and Buyer shall not acquire hereby, any right,
title or interest to or in the following assets (collectively, the “Excluded
Assets”):

 

(a)          any Seller’s cash, cash equivalents, all interest payable in
connection with any such items, all tax refunds, and rights in and to bank
accounts, investment accounts, marketable and other securities and similar
investments of any Seller as of the Closing Date;

 

(b)          all insurance policies and rights and proceeds thereunder;

 

(c)          any rights of the Sellers under this Agreement and the Ancillary
Agreements;

 

(d)          the formation documents, qualifications to conduct business as a
foreign entity, arrangements with registered agents relating to foreign
qualifications, taxpayer and other identification numbers, seals, minute books,
original tax returns and other documents relating to the organization,
maintenance, and existence of each Seller as a limited liability company;

 

(e)          all rights in and to those customer contracts and arrangements
listed on Disclosure Schedule Section 2.2(e), including each Seller’s right to
perform, collect and enforce such agreements (collectively the “Retained
Contracts”);

 

(f)          claims or causes of action of any Seller against any third party in
connection with disputes for which the operative facts occurred prior to
Closing, provided, however, in the event that the Seller’s claim against any
third party is an individual or entity that Buyer conducts business with, the
Seller shall be required to obtain the consent of the Buyer to commence any
claims or causes of action against such third party, which such consent shall
not be unreasonably withheld by the Buyer; and

 

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(g)          those assets of Seller that are listed on the Disclosure Schedule
Section 2.2(e) attached hereto.

 

Nothing in this Section 2.2 shall limit the rights and obligations of the
parties under this Agreement and the Ancillary Agreements.

 

2.3.        Purchase Price and Payment. Upon the terms and subject to the
conditions herein set forth, and in consideration of the sale, assignment,
transfer and delivery to Buyer of the Assets, at the Closing Buyer shall issue
or cause to be issued to Devaraj an aggregate purchase price of GCT Common
Stock, Class A Membership Units and Warrants as described in (a) and (b) below
(the “Purchase Price”) as follows:

 

(a)          500,000 shares of common stock, par value $.001 per share of GCT
(the “GCT Common Stock”);

 

(b)          Class A Membership Units of GCT-TX equal to twenty (20%) percent of
the issued and outstanding membership units in GCT-TX, determined on a
fully-diluted basis as of the Closing Date and Devaraj shall be admitted as a
member of GCT-TX;

 

(c)          a warrant (the “Warrant”) issued by GCT to Deveraj regarding the
purchase of up to 250,000 shares of GCT Common Stock, which such Form of Warrant
is attached hereto as Exhibit C. The Warrant shall be exercisable at a price of
$1.00 per share, contain customary piggyback registration rights and shall be
exercisable for a period of three (3) years;

 

Buyer shall assume, as of the Effective Date, only the Assumed Liabilities as
and to the extent provided in Article III. The Purchase Price (including the
Assumed Liabilities) shall be allocated in accordance with Section 10.1.

 

2.4.         Additional Consideration. In addition to the Purchase Price in
Section 2.4, the Buyer shall also provide the following consideration:

 

(a)          The 500,000 shares of GCT Common Stock issued to Devaraj (the
“Registrable Securities”), will be subject to certain registration rights with
respect to such GCT Common Stock as follows:

 

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(A)         Piggy-Back Rights. If at any time GCT proposes to file a
registration statement under the Securities Act with respect to an offering of
equity securities, or securities or other obligations exercisable or
exchangeable for, or convertible into, equity securities, by GCT for its own
account or for security holders of GCT for their account (or by GCT and by
security holders of GCT), other than a registration statement (i) filed in
connection with an offering of securities to employees or directors of GCT
pursuant to any employee stock option 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 GCT’s existing security holders, (iv) for an
offering of debt that is convertible into equity securities of GCT, (v) for a
dividend reinvestment plan, or (vi) 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 GCT’s shareholders having the right to exchange their common
stock for cash, securities or other property of a non-capital raising bona fide
business transaction, then GCT shall (x) give written notice of such proposed
filing to the holders of Registrable Securities as soon as practicable but in no
event less than three (3) business 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 the holder of Registrable Securities in such notice the opportunity
to register the sale of such number of the Registrable Securities as such
holders may request in writing within three (3) business days following receipt
by such holder of such notice (a “Piggy-Back Registration”), provided, however,
the holder of the Registrable Securities shall only be entitled to one
Piggy-Back Registration right. GCT shall include in such registration statement
such Registrable Securities that are requested to be included therein within
three (3) business days after the receipt by such holder of any such notice, on
the same terms and conditions as any similar securities of GCT. 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, GCT shall determine for any reason not to register or to
delay registration of such securities, GCT may, at its election, give written
notice of such determination to each holder of Registrable Securities, and
(x) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Securities in connection with such
registration, and (y) in the case of a determination to delay registering, shall
be permitted to delay registering any Registrable Securities 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 the holder
making a request for its Registrable Securities to be included therein must, and
permit the sale or other disposition of such Registrable Securities in
accordance with the intended method(s) of distribution thereof. The holder of
Registrable Securities proposing to distribute their securities through a
Piggy-Back Registration that involves an underwriter or underwriters shall enter
into an underwriting agreement in customary form with the underwriter or
underwriters selected for such Piggy-Back Registration and the holder of the
Registrable Securities shall be responsible for any fees or commissions due to
such underwriters in connection with the sale of such Registrable Securities.

 

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(B)         Reduction of Offering. If the managing underwriter or underwriters
for a Piggy-Back Registration that is to be an underwritten offering advises GCT
and the holder of Registrable Securities in writing that the dollar amount or
number of the common stock which GCT desires to sell, as to which registration
has been demanded pursuant to written contractual arrangements with persons
other than the holders of Registrable Securities, the Registrable Securities as
to which registration has been requested under this Section, as to which
registration has been requested pursuant to the written contractual piggy-back
registration rights of other securityholders of GCT, exceeds the maximum dollar
amount or maximum number of securities that can be sold in such offering without
adversely affecting the proposed offering price, the timing, the distribution
method, or the probability of success of such offering (such maximum dollar
amount or maximum number of securities, as applicable, the “Maximum Number of
Securities”), then GCT shall include in any such registration:

 

(1)         If the registration is undertaken for GCT’s account: (A) first, the
shares of common stock that GCT desires to sell; and (B) to the extent of the
Maximum Number of Securities, the shares of common stock, pro-rata among
holders, for the account of any persons, including Devaraj for which GCT is
obligated to register pursuant to contractual piggy-back registration rights
such as in this Agreement; provided, however that Devaraj shall not be allowed
to register Registrable Securities unless Robert Lee shall register his shares
at the same time and in the same proportion.

 

(C)         Withdrawal. Any holder of Registrable Securities may elect to
withdraw such holder’s request for inclusion of Registrable Securities in any
Piggy-Back Registration by giving written notice to GCT of such request to
withdraw prior to the effectiveness of the registration statement. GCT (whether
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.
Notwithstanding any such withdrawal, GCT shall pay all expenses incurred by the
holders of Registrable Securities in connection with such Piggy-Back
Registration.

 

(D)         Limitations on Piggy-Back Registration Rights.  Devaraj’s Piggy-Back
Registration Rights granted pursuant to this Section shall expire upon the date
such Registrable Securities are eligible for sale without registration pursuant
to Rule 144.  Further, GCT has the right to exclude the holder of Registrable
Securities from any registration statement in the event GCT is contractually
obligated to exclude such securities.

 

(E)         Obligations of the Devaraj.  In connection with any registration
statement utilized by GCT to satisfy the registration rights pursuant to this
Section, Devaraj agrees to cooperate with GCT in connection with the preparation
of the registration statement, and Seller agrees that it will (i) respond within
three (3) Business Days to any written request by GCT to provide or verify
information regarding Devaraj or his Registrable Securities (including 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 Securities and Exchange Commission, and (ii) provide in a
timely manner information regarding the proposed distribution by Devaraj of the
Registrable Securities and such other information as may be requested by GCT
from time to time in connection with the preparation of and for inclusion in the
registration statement and related prospectus.

 

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(b)          After the Closing Date, GCT shall appoint Devaraj (such
appointment, the “Initial Appointment”) to the Board (the “Seller Director”) for
a period of one (1) year. Following the Initial Appointment, for so long as
Devaraj (or his family members, trust or estate planning entities or his
Affiliates) holds any shares of the Common Stock of GCT, the Board of Directors
of GCT shall take all reasonable action such that the Seller Director to be
nominated to serve as a member of the Board of GCT. The rights herein of Devaraj
to serve as a director of GCT, and the obligations of GCT, the Board of GCT, any
committee of the Board of GCT and Devaraj, as provided in this Section with
respect to the Seller Director, shall not be affected, limited or modified by
any change in the size or classification of the Board of GCT.

 

(c)          After the Closing Date, Deveraj shall be admitted as a member of
GCT-TX and shall be appointed as Manager of GCT-TX. For so long as Devaraj (or
his family members, trust or estate planning entities or his Affiliates), owns
at least a 5.0% membership interest in GCT-TX, Devaraj shall have the right, but
not the obligation, to serve as manager of GCT-TX.

 

(d)          Devaraj will be employed by GCT as the Director of Business
Development, for a period of three (3) years, which employment will be evidenced
by an employment agreement by and between GCT and Devaraj (the “GCT Employment
Agreement”), substantially in the form attached as Exhibit A, which such GCT
Employment Agreement shall contain compensation, commission structure, stock
benefits and other customary provisions to be mutually negotiated and agreed
upon by GCT and Devaraj; and

 

(e)          Devaraj will also be employed by GCT-TX as the Chief Executive
Officer, which such employment will be evidenced by an employment agreement by
and between GCT-TX and Devaraj (the “GCT-TX Employment Agreement”),
substantially in the form attached as Exhibit B, which such GCT-TX Employment
Agreement shall contain a term, compensation, insurance benefits and other
customary provisions to be mutually negotiated and agreed upon by GCT-TX and
Devaraj.

 

2.5.          Full Possession. Subject to the terms and conditions of this
Agreement, concurrently with the execution and delivery of this Agreement,
Sellers shall, and Sellers shall cause their respective Affiliates to, put Buyer
into full and actual possession of the Assets. The sale of the Assets
contemplated hereby shall be effected by instruments of conveyance, transfer and
assignment as Buyer may request that are necessary to vest in Buyer all of the
rights, title and interests of Sellers in the Assets and, subject to the
obtaining of any required authorizations, approvals, consents and waivers to
such sale of the Assets, to put Buyer in full and actual possession of the
Assets.

 

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2.6.          No Assignment in Certain Circumstances. Notwithstanding anything
else contained in this Agreement to the contrary, this Agreement shall not
constitute an agreement to sell, convey, assign, transfer or deliver any
interest in any instrument, commitment, contract, lease, permit or other
agreement or arrangement or any claim, right or benefit arising thereunder or
resulting therefrom, if a sale, conveyance, assignment, transfer or delivery or
an attempt to make such a sale, conveyance, assignment, transfer or delivery
without the authorization, approval, consent or waiver of a third Person would
constitute a breach or violation thereof or affect adversely the rights of Buyer
or Sellers thereunder; and any sale, conveyance, assignment, transfer or
delivery to Buyer of any interest under any such instrument, commitment,
contract, lease, permit or other agreement or arrangement that requires the
authorization, approval, consent or waiver of a third Person shall be made
subject to such authorization, approval, consent or waiver being obtained. In
the event that any such authorization, approval, consent or waiver is not
obtained on or prior to the Closing Date, Sellers shall, and they shall cause
their Affiliates to, at Buyer’s sole cost and expense use their commercially
reasonable efforts to obtain any such authorization, approval, consent or waiver
(provided that, in obtaining any such authorization, approval, consent or
waiver, (i) Sellers shall not, and shall cause their Affiliates not to, agree to
any amendment, modification or supplement of any such instrument, commitment,
contract, lease, permit or other agreement or arrangement, except with Buyer’s
consent, and (ii) Buyer shall use their commercially reasonable efforts to
assist Sellers in obtaining any such authorization, approval, consent or
waiver), and Sellers (at Buyer’s cost and expense) shall, and they shall cause
their Affiliates to, to the greatest extent permitted by law and any such
instrument, commitment, contract, lease, permit or other agreement or
arrangement (including by acting as an agent of Buyer), hold such instrument,
commitment, contract, lease, permit or other agreement or arrangement or any
claim, right or benefit arising thereunder or resulting therefrom in trust for
the benefit of Buyer or otherwise for the exclusive use and benefit of Buyer
such that Buyer receives the interest of Sellers in the benefits therefrom until
such time as such authorization, approval, consent or waiver is obtained.

 

ARTICLE III
ASSUMPTION OF LIABILITIES

 

3.1.          Assumption of Liabilities. Effective as of the Closing Date, Buyer
shall, without any further responsibility or Liability of or recourse to
Sellers, Devaraj or any of Sellers’ or Devaraj’s respective Affiliates,
subsidiaries, stockholders, officers, directors, members, employees, agents,
successors or assigns, absolutely and irrevocably assume, pay, perform and be
liable and responsible for only the following Liabilities of Sellers
(collectively, the “Assumed Liabilities”):

 

(a)          only Liabilities set forth on Schedule 3.1(a) hereto; and

 

(b)          all lease payments after the Closing;

 

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3.2.          Retained Liabilities. Except as provided in Section 3.1, Buyer
shall not assume and shall not be responsible for, and there shall not be
transferred to or assumed by Buyer, any Liabilities (other than Assumed
Liabilities) of the Sellers, or any of their respective Affiliates (or any
predecessor thereof) arising from or relating to, in whole or in part, (x) the
operations, activities, conduct or transactions of the Business or the use,
operation, ownership, lease, possession, control, occupancy, maintenance or
condition of the Assets up through and including the Closing Date, whether or
not any of the foregoing continues past the Closing Date, and (y) any and all
other operations, activities or transactions of Sellers and their respective
Affiliates or the use, operation, ownership, lease, possession, control,
occupancy, maintenance or condition of any other assets or properties of Sellers
and their respective Affiliates, at any time, all of which Liabilities shall be
and remain the sole responsibility of Sellers and their respective Affiliates,
including all of the following (collectively, all of the Liabilities described
in this Section 3.2 being referred to in this Agreement as the “Retained
Liabilities”):

 

(a)          all Liabilities arising from the breach, failure to perform or
default by Sellers or any of their respective Affiliates prior to the Closing
Date of any contract, agreement, purchase order, lease, license or commitment
included in the Assets;

 

(b)          with respect to contracts, agreements, purchase orders, leases,
licenses and commitments included in the Assets, any Liability of Sellers or
their respective Affiliates arising thereunder up to and including the Closing
Date, whether or not such contract, agreement, purchase order, lease, license or
commitment is assumed by Buyer in connection with the assignment thereof to
Buyer (regardless of any contrary provisions in any instrument of assumption or
conveyance);

 

(c)          all Liabilities in respect of causes of action, claims, suits or
proceedings of or involving third parties against Sellers relating to the
Business or the Assets arising out of incidents or events occurring on or prior
to the Closing Date, including all workers compensation, general liability and
other insurance claims with an incident date on or prior to the Closing Date;

 

(d)          any labor or employment related Liabilities (including accrued
vacation pay, and severance and other payments payable to employees of the
Business in connection with termination of such employment), Actions, judgments,
damages, costs, expenses (including any Action for severance pay, accrued
vacation pay or wrongful discharge), grievances, unfair labor practices and
violations of any applicable law, rule, regulation, ordinance or Governmental
Order which any Buyer Indemnified Party may be subject to or incur by reason of
any act, omission or matter occurring on or prior to the Closing Date relating
to any employees of Sellers or their respective Affiliates, agents,
representatives or contractors, including the termination of any union or
nonunion employees, the termination or violation of any collective bargaining
agreement or any unfair labor practice or charge, and any and all Actions,
Liabilities or grievances that may have been asserted under any collective
bargaining agreement arising from or relating to the period prior to the Closing
Date;

 

(e)          any Liability associated with the employee benefit plans of Sellers
and their respective Affiliates, arising from or relating to the period prior to
the Closing Date;

 

(f)          any Liability associated with employee health or safety arising
from or relating to the period prior to the Closing Date;

 

(g)          any Liability with respect to self-insured retention, retrospective
premiums and/or deductibles, if applicable, for claims arising from or relating
to the period prior to the Closing Date;

 

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(h)          all accounts payable, trade payables and indebtedness for borrowed
money of Sellers or any of their respective Affiliates (other than with respect
to the operation and ownership of the Assets by Buyer or its Affiliates for the
period commencing immediately after the Closing Date);

 

(i)          all Taxes now or hereafter owed by the Sellers or any Affiliate of
any Seller, or attributable to the ownership, operation or use of the Assets
relating to any period up to and including the Closing Date, including
liabilities and obligations for Taxes resulting from the transaction
contemplated by this Agreement, except as otherwise provided in Article X;

 

(j)          any Liability imposed upon or incurred by Buyer or its Affiliates
by operation of any applicable law, rule, regulation, ordinance or Governmental
Order which Liability, if not for the operation of such law, rule, regulation,
ordinance or Governmental Order, would have been a Retained Liability;

 

(k)          any Liability of the Sellers or their respective Affiliates under
the this Agreement and/or the Ancillary Agreements, whether such Liability
arises before, on or after the Closing Date; and

 

(l)          any Liability relating to or arising from the Business prior to the
Closing Date.

 

ARTICLE IV
CLOSING

 

4.1.          Closing. The consummation of the purchase and sale of the Assets
(the “Closing”) shall take place on the Effective Date, or such other date as
mutually agreed upon by the parties. Regardless of the date on which this
Agreement is executed and the transactions contemplated by this Agreement are
consummated, the Closing is deemed to have occurred as of 12:01 a.m. local time
on the Closing Date.

 

4.2.          Sellers’ Obligations at Closing. At the Closing, Sellers shall
deliver or cause to be delivered to Buyer:

 

(a)          a Bill of Sale substantially in the form of Exhibit D hereto (the
“Bill of Sale”);

 

(b)          an Assignment and Assumption Agreement substantially in the form of
Exhibit E hereto (the “Assignment and Assumption Agreement”);

 

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(c)          a Lease Assignment and Assumption Agreement for each of the Leases
substantially in the form of Exhibit F hereto (each one a “Lease Assignment and
Assumption Agreement” and, together, the “Lease Assignment and Assumption
Agreements”);

 

(d)          The Ancillary Agreements duly executed by Sellers and the other
signatories thereto, as applicable, including but not limited to the GCT
Employment Agreement, the GCT-TX Employment Agreement and Form of Warrant; and

 

(e)          Un-audited financial statements of each Seller since inception (the
“Financials”), which shall be provided in accordance with GAAP and in form and
substance satisfactory to Buyer in its sole discretion; and

 

(f)          Any and all actions necessary to transfer ownership in the
vehicles.

 

4.3.          Buyer Obligations at Closing. At the Closing, Buyer shall deliver
or cause to be delivered to Sellers and to Devaraj, as applicable:

 

(a)          The GCT Common Stock, Warrant and Class A Membership Units, as
defined in Section 2.2, which shall be delivered to Devaraj;

 

(b)          the Bill of Sale;

 

(c)          the Assignment and Assumption Agreement;

 

(d)          the Lease Assignment and Assumption Agreements; and

 

(e)          The Ancillary Agreements duly executed by Buyer, including but not
limited to the GCT Employment Agreement, the GCT-TX Employment Agreement and
Form of Warrant.

 

4.4.          Proration of Taxes and Expenses. All personal property taxes and
special assessments payable but not yet due with respect to any of the Assets,
if any, will be prorated between Sellers and Buyer on the basis of actual days
elapsed between the commencement of the current fiscal tax year and the Closing
Date, based on a 365-day year. In connection with such proration of taxes, in
the event that actual tax figures for the year of Closing are not available at
the Closing Date, an estimated, provisional proration of taxes will be made
using tax figures from the preceding year together with such increases or
decreases thereof as Buyer and Sellers may agree. The Parties further agree to
prorate at the Closing all prepaid items, expenses, and costs (including, but
not limited to, rent, telephone, and electrical and utility charges) associated
with conducting the Business prior to the Closing Date, which such items are
provided on Disclosure Schedule 4.4. To the extent such amounts can be
determined at the Closing, the Purchase Price will be adjusted to reflect an
increase or decrease, and to the extent such amounts cannot be determined at the
Closing, Seller and Buyer will agree upon and pay to the other any amount owing
based on such proration of prepaid items, expenses, and costs within thirty (30)
days following the Closing Date, as provided on Disclosure Schedule 4.4.

 

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ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLERS AND DEVARAJ

 

Sellers and Devaraj, jointly and severally, represent and warrant to Buyer, as
of the Closing Date, as follows:

 

5.1.          Organization and Qualification.

 

(a)          HL is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it was
organized and has full company power and authority to own the Assets owned by it
and conduct the Business as and where it is being conducted by it. HL is duly
licensed or qualified to do business, and is in good standing as a foreign
corporation, in all jurisdictions in which its assets or its business makes such
licensing or qualification necessary, including the jurisdictions set forth in
Disclosure Schedule Section 5.1. HL has delivered to Buyer true, complete and
accurate copies of HL’s Charter and Operating Agreement, as currently in effect.
Devaraj is the sole manager and member of HL. There are no contracts,
commitments or arrangements relating to the issuance, sale or transfer of any
securities of HL. HL does not own, and since its formation has not owned,
directly or indirectly, securities or other ownership interest in any subsidiary
of HL.

 

(b)          KOW is a limited liability company duly organized, validly existing
and in good standing under the laws of the jurisdiction in which it was
organized and has full company power and authority to own the Assets owned by it
and conduct the Business as and where it is being conducted by it. KOW is duly
licensed or qualified to do business, and is in good standing as a foreign
corporation, in all jurisdictions in which its assets or its business makes such
licensing or qualification necessary, including the jurisdictions set forth in
Disclosure Schedule Section 5.1. KOW has delivered to Buyer true, complete and
accurate copies of KOW’s Charter and Operating Agreement, as currently in
effect. Devaraj is the sole manager and member of KOW. There are no contracts,
commitments or arrangements relating to the issuance, sale or transfer of any
securities of KOW. KOW does not own, and since its formation has not owned,
directly or indirectly, securities or other ownership interest in any subsidiary
of KOW.

 

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5.2.          Authorization. Each of the Sellers and Devaraj have full power and
authority to enter into this Agreement and the Ancillary Agreements to which it
is a party and to consummate the transactions contemplated hereby and thereby.
The execution and delivery of this Agreement and the Ancillary Agreements and
the consummation of the transactions contemplated hereby and thereby (i) have
been duly authorized by all necessary company action on the part of the Sellers,
and (ii) requisite board and shareholders’ or members’ approval of the Sellers
has been obtained. This Agreement has been duly executed and delivered by
Sellers and Devaraj. This Agreement constitutes, and upon the execution and
delivery thereof by Sellers and Devaraj, as applicable, each Ancillary
Agreements to which any of them is a party will constitute, a legal, valid and
binding obligation of such Seller and Devaraj, as applicable, enforceable
against such Seller and Devaraj, as applicable, in accordance with their
respective terms, except as the enforceability thereof may be limited by the
Permitted Exceptions. No consent, waiver, approval, order or authorization of,
notice to, or registration, declaration, designation, qualification or filing
with, any Governmental Authority or third Person, domestic or foreign, is or has
been or will be required on the part of Sellers in connection with the execution
and delivery of this Agreement or any Ancillary Agreements or the consummation
by them of the transactions contemplated hereby or thereby, other than where the
failure to obtain such consents, waivers, approvals, orders or authorizations or
to make or effect such registrations, declarations, designations, qualifications
or filings is not reasonably likely to (i) prevent or delay consummation of the
transactions contemplated by this Agreement or any Ancillary Agreements or (ii)
prevent Sellers and Devaraj from performing their obligations under this
Agreement or any Ancillary Agreements.

 

5.3.          Non-Contravention. Neither the execution and delivery of this
Agreement or any Ancillary Agreements, nor the consummation of the transactions
contemplated hereby or thereby, will violate or conflict with or provide a right
of termination to any Person under (a) any provision of the Charters or
Operating Agreements of Sellers, (b) any law, rule, regulation or Governmental
Order to which any Seller or Devaraj, the Business or the Assets, are bound or
subject, or (c) any agreement, indenture, undertaking, permit, license or other
instrument to which any Seller or Devaraj is a party or by any Seller or Devaraj
or any of their respective properties may be bound or affected, except for
contracts as to which a consent to assignment reasonably satisfactory in form
and substance to Buyer is obtained and delivered to Buyer prior to or at the
Closing, other than as set forth in Disclosure Schedule Section 5.3.

 

5.4.          Financials. Disclosure Schedule Section 5.4 sets forth the
financial information and materials in respect of the Business provided by
Sellers to Buyer, including the Financials. The Financials have been prepared in
accordance with GAAP and present fairly in accordance with GAAP the financial
condition of the Business as at the respective dates therein. The books and
records of Sellers from which the Financials were prepared were complete and
accurate at the time of such preparation. Sellers maintain a system of internal
accounting controls sufficient to provide reasonable assurance that
(a) transactions are executed in accordance with management’s general or
specific authorization; (b) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (c) access to assets is permitted only in accordance
with management’s general or specific authorization; and (d) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.

 

5.5.          Absence of Certain Changes. Except as set forth on Disclosure
Schedule Section 5.5, or where no Material Adverse Effect on the Sellers has or
is likely to occur, since the latest date of the Financials:

 

(a)          There has not been any event, change or effect with respect to the
Assets or the business, operations, condition (financial or otherwise), working
capital, Liabilities, earnings, reserves or operating results of the Business or
the Business Employees or, to Sellers’ and Devaraj’s knowledge, customers of the
Business under the Customer Contracts, which has had or is reasonably likely to
have a material adverse effect.

 

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(b)          the Assets have not suffered any loss, damage, destruction or other
casualty adversely affecting any of the Assets, whether or not covered by
insurance;

 

(c)          Sellers have not incurred, assumed or become subject to, whether
directly or by way of guarantee or otherwise, any Liability arising from or
relating to the Assets except for trade or business obligations incurred in the
ordinary course of business and consistent with past practice in connection with
the purchase of goods and services;

 

(d)          Sellers have not sold, transferred, leased or otherwise disposed of
any Assets or permitted or allowed any of the Assets to be subject to any
Encumbrance (other than the Permitted Liens) of any kind, other than in the
ordinary course of business and consistent with past practice;

 

(e)          Sellers have not instituted, settled or agreed to settle any Action
before any Governmental Authority relating to the Assets;

 

(f)          Sellers have not entered into any other transaction, contract or
commitment in respect of the Assets other than in the ordinary course of
business and consistent with past practice which calls for fixed and/or
contingent payments thereunder;

 

(g)          Sellers have not paid or agreed to pay any brokerage or finders’
fee in connection with, and Sellers have not incurred any severance pay
obligations by reason of, this Agreement;

 

(h)          Sellers have not made any capital expenditure or commitment
therefore relating to the Business for additions to its property, facilities or
equipment;

 

(i)          Sellers have not made, with respect to the Business, any change in
any method of its accounting or accounting practice or any change in its
depreciation or amortization policies or rates theretofore adopted or revalued
any of its assets; and

 

5.6.          Title to Assets.

 

(a)           Except as set forth in Disclosure Schedule Section 5.6(a), Sellers
have good and marketable title to all of the Assets. Except for Permitted Liens
or as otherwise explained on Disclosure Schedule Section 5.6(a), none of the
Assets is subject to any Encumbrance of any kind.

 

(b)          Except as set forth in Disclosure Schedule Section 5.6(b), the
tangible personal property included in the Assets is in operating condition and
repair, normal wear and tear excepted, and is adequate for the uses to which it
is intended and is being put.

 

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5.7.          Personal Property Leases.

 

(a)          Disclosure Schedule Section 5.7(a) contains an accurate and
complete list and description of leases in respect of the Equipment included in
the Assets (collectively, the “Personal Property Leases”).

 

(b)          The Personal Property Leases are valid, binding and enforceable in
accordance with their terms and are in full force and effect. With respect to
the Personal Property Leases, there are no existing defaults under the
applicable lease by Sellers or, to the knowledge of Sellers, any other party
thereto, and no event of default on the part of Sellers or, to the knowledge of
Sellers, on the part of any other party thereto has occurred which (whether with
or without notice, lapse of time or the happening or occurrence of any other
event) would constitute a default thereunder. Sellers have delivered to Buyer
true and correct copies of the Personal Property Leases.

 

5.8.          Real Property Leases.

 

(a)          Disclosure Schedule Section 5.8(a) contains an accurate and
complete list and description of real property leases relating to the Business
(collectively, the “Real Property Leases”).

 

(b)          The Real Property Leases are valid, binding and enforceable in
accordance with their terms and are in full force and effect. With respect to
the Real Property Leases, there are no existing defaults under the applicable
lease by Sellers or, to the knowledge of Sellers, any other party thereto, and
no event of default on the part of Sellers or, to the knowledge of Sellers, on
the part of any other party thereto has occurred which (whether with or without
notice, lapse of time or the happening or occurrence of any other event) would
constitute a default thereunder. Sellers have delivered to Buyer true and
correct copies of the Real Property Leases.

 

5.9.          Intellectual Property Rights.

 

(a)          As used herein, “Intellectual Property” means any and all of the
following: (i) patent registrations and applications in any and all
jurisdictions, including but not limited to: re-issues, continuations,
continuations-in-part, renewals, re-examinations, extensions or divisions; (ii)
registered, pending and common law trademarks including but not limited to:
service marks, trade dress, trade names, logos, corporate or company names and
domain names in any and all jurisdictions, together with all of the goodwill
associated therewith; (iii) registered, pending or unregistered copyrights in
websites, writings, graphic works, designs or other copyrightable works in any
and all jurisdictions; (iv) software; (v) registered, pending or unregistered
mask works in any and all jurisdictions; (vi) trade secrets and other
confidential information regarding the Business (including, without limitation,
ideas, discoveries, formulas, compositions, inventions (whether patentable or
not and whether or not reduced to practice), know-how, methodology, models,
algorithms, systems, manufacturing and production processes and techniques,
research and development information, drawings, specifications, designs, plans,
proposals, technical data, financial and marketing plans and customer and
supplier lists and information, marketing and business data, databases, pricing
and cost information; (vii) other intellectual property rights including but not
limited to claims or causes of action arising out of or related to past, present
or future third-party infringement or misappropriation of the foregoing; (viii)
rights under all agreements relating to the foregoing; and (ix) copies and
tangible embodiments of the foregoing (in whatever form or medium).

 

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(b)          Disclosure Schedule Section 5.9(b) sets forth a true and complete
list of all patents and patent applications, registered trademarks, registered
service marks, and trademark and service mark applications, registered
copyrights and copyright applications and Internet domain names and websites, in
all jurisdictions, in each case that are owned by the Sellers or exclusively
held by the Sellers for use in the Business (collectively, together with any
other unregistered intellectual property, copyrights, trademarks and trade
secrets, know-how and similar confidential and/or proprietary information owned
by the Sellers or exclusively held for use in the Business, the “Owned
Intellectual Property”).

 

(c)          Disclosure Schedule Section 5.9(c) sets forth a true and complete
list of all licenses, sublicenses and other agreements pertaining to
Intellectual Property, to which any Seller is a party, in each case which are
valid and used or held for use by or otherwise in connection with the Business
(collectively, “Licensed Intellectual Property”). Each of the agreements on
Disclosure Schedule Section 5.9(c) is in full force and effect and enforceable
in accordance with its terms on the parties thereto. Sellers have not: (i)
received any written notice of termination or cancellation under any agreements
to Licensed Intellectual Property (ii) received any written notice of a breach
or default under agreements to such Licensed Intellectual Property, which breach
has not been cured, or (ii) granted to any other third party any rights, adverse
or otherwise in or to the Licensed Intellectual Property that would constitute a
breach of rights to the Licensed Intellectual Property. To Knowledge of the
Sellers and Devaraj, no party is in breach of any of the agreements on
Disclosure Schedule Section 5.9(c). The Sellers have not granted any license or
other right currently outstanding to any third party with respect to the Owned
Intellectual Property or Licensed Intellectual Property, except for those
licenses set forth in Disclosure Schedule Section 5.9(c) hereto.

 

(d)          The Owned Intellectual Property and the Licensed Intellectual
Property include all of the Intellectual Property used or intended to be used in
the ordinary day-to-day conduct of the Business and there are no other items of
Intellectual Property that are material to such ordinary day-to-day conduct of
the Business as currently conducted or planned to be conducted. Each of the
Owned Intellectual Property and the Licensed Intellectual Property owned or
developed by the Sellers has not been adjudged invalid or unenforceable in whole
or in part, and, to the Knowledge of the Sellers and Devaraj, each of the other
Owned Intellectual Property and the Licensed Intellectual Property is
subsisting, valid and enforceable. The Owned Intellectual Property and the
Licensed Intellectual Property is current and unexpired.

 

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(e)          No claims or legal proceedings have been asserted in writing
against the Sellers and not disposed of, or are pending, or, to the Knowledge of
the Sellers and Devaraj, are threatened against the Sellers: (i) based upon or
challenging or seeking to deny or restrict the use by Sellers of any of the
Owned Intellectual Property, or Licensed Intellectual Property; (ii) alleging
that any of Sellers’ current or proposed products or services provided by or
processes used or intended to be used by Sellers infringe upon or misappropriate
any Intellectual Property right of any third party; (iii) alleging that any of
the Licensed Intellectual Property infringes upon any Intellectual Property
right or software of any third party or is being licensed or sublicensed to any
Seller in conflict with the terms of any license or other agreement; (iv)
challenging Sellers’ ownership of the Owned Intellectual Property; or (v)
challenging the legality, validity, enforceability of any of the Owned
Intellectual Property or Licensed Intellectual Property.

 

(f)          To the Knowledge of the Sellers and Devaraj, no Person is engaged
in any activity that infringes upon the Owned Intellectual Property or the
Licensed Intellectual Property.

 

(g)          Sellers have delivered or made available to Buyer correct and
complete copies of all written agreements, documents, licenses, royalty
agreements or other rights relating to Owned Intellectual Property and Licensed
Intellectual Property to which any of the Sellers is a party.

 

(h)          Sellers have taken commercially reasonable steps customary in the
industry to maintain the confidentiality of its trade secrets and other
confidential Intellectual Property, and (i) to the Knowledge of the Sellers and
Devaraj, there has been no misappropriation of any trade secrets or other
confidential Intellectual Property of Sellers by any current or former employee,
independent contractor, consultant or agent of Sellers or Devaraj, or by any
other Person; (ii) to the Knowledge of Sellers and Devaraj, no current or former
employee, independent contractor, consultant or agent of the Sellers has
misappropriated any trade secrets of any other Person in the course of his
performance as an employee, independent contractor, consultant or agent of the
Sellers; and (iii) to the Knowledge of Sellers and Devaraj, no current or former
employee, independent contractor, consultant or agent of any of the Sellers or
Devaraj in default or breach of any term of any employment agreement,
non-disclosure agreement, non-compete obligation, assignment of invention
agreement or similar agreement or contract with any of the Sellers or Devaraj
relating in any way to the protection, ownership, development, use or transfer
of Owned Intellectual Property.

 

(i)          All Owned Intellectual Property was developed by Sellers’ own
agents, shareholders, members, managers, directors, officers, employees or
consultants under a valid assignment of invention agreement or similar agreement
or contract.

 

(j)          Sellers have not entered into any contracts with the United States
government (or any of its agencies) pursuant to which Sellers or any employees
or consultants of Sellers are required to assign any Intellectual Property
rights in favor of the United States government (or any of its agencies).

 

(k)          The consummation of the transactions contemplated by this Agreement
and the other Ancillary Documents will not result in the termination or
impairment of any of the Owned Intellectual Property or Licensed Intellectual
Property and will not constitute a breach or default under any of the agreements
related thereto and will not give any of the parties to any agreement with
respect to the Licensed Intellectual Property the right to terminate such
agreement.

 

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5.10.         Litigation; Legal Matters. Except as set forth on Disclosure
Schedule Section 5.10, with respect to the Business, the Assets or the Business
Employees, there is no Action pending or, to the knowledge of Sellers and
Devaraj , threatened, whether at law or in equity, or before or by any
Governmental Authority, nor any Governmental Order of any Governmental Authority
against or affecting or which could affect (without regard to the availability
of insurance) any of the Business, the Assets or the Business Employees, and
Sellers and Devaraj do not know of any valid basis for any such Action.
Disclosure Schedule Section 5.10 sets forth for each matter disclosed therein
whether any loss as a result of such matter is wholly or partly insured or
uninsured.

 

5.11.         Permits and Other Operating Rights. Except as set forth in
Disclosure Schedule Section 5.11, Sellers do not require the consent of any
third Person to permit Sellers to operate the Business in the manner in which it
currently is being conducted, and Sellers possess all permits (including health
and safety permits), licenses, orders, approvals and authorizations from third
Persons, including Governmental Authorities, currently required by applicable
provisions of any law, statute, regulation, existing judicial decision or
Governmental Order, or by the property and contract rights of third Persons,
necessary to permit the operation of the Business and the Assets in the manner
in which it currently is being conducted and used. All such permits, licenses,
orders, approvals and authorizations are in full force and effect and, except as
explained in Disclosure Schedule Section 5.11, will remain in full force and
effect following the consummation of the transactions contemplated hereby, no
suspension or cancellation of any of them had been threatened in writing, and no
such permit, license, order, approval or authorization will be adversely
affected by the consummation of the transactions contemplated by this Agreement.

 

5.12.         Compliance with Laws. Except as set forth on Disclosure Schedule
Section 5.12, Sellers are in material compliance with all laws, statutes,
regulations and Governmental Orders in respect of the operation, activities,
conduct and transactions of the Business and the ownership, operation, use or
possession of the Assets and the employment of the Business Employees. None of
the operation, activity, conduct and transactions of the Business or the
ownership, operation, use or possession of the Assets or the employment of the
Business Employees materially conflicts with the rights of any other Person or
violates, or with or without the giving of notice or passage of time, or both,
will materially violate, conflict with or result in a default, right to
accelerate or loss of rights under, any terms or provisions of any Encumbrance,
lease, license, agreement, contract, agreement, commitment or understanding or
any law, statute, regulation or Governmental Order to which any Seller is a
party or by which Sellers or any of the Business or the Assets may be bound or
affected.

 

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5.13.         Tax Matters. Sellers have, or prior to the Closing will have,
accurately prepared and duly and timely filed all Tax Returns which they are
required to file on or before the Closing Date and have paid all Taxes required
to be paid with respect to the periods covered by such Tax Returns. Such Tax
Returns are true and correct in all material respects. No deficiencies for any
Taxes have been asserted in writing or assessed against Sellers which remain
unpaid and no state of facts exists or has existed which would constitute
grounds for the assessment of any additional Taxes for any period for which Tax
Returns have been filed. There are to Seller’s and Devaraj’s Knowledge, no
pending or threatened actions, proceedings, investigations, audits or claims
related to Taxes of Sellers or the Assets. Sellers have properly withheld and
paid over to the appropriate Taxing Authorities all Taxes required by them so to
be withheld. There are no agreements, waivers or arrangements providing for the
extension of time with respect to the assessment of any Tax owed by Sellers.
There are no tax liens upon any Assets of Sellers. Sellers have not made any
payments, are not obligated to make any payments, and are not a party to any
agreements that under any circumstances could obligate them to make any payments
that will not be deductible under Section 280G of the Code. Sellers are not
party to any Tax allocation or sharing agreement. Sellers have not been a United
States real property holding corporation within the meaning of Section 897(c) of
the Code during the applicable period specified in Section 897 (c)(1)(A)(ii) of
the Code.

 

5.14.         Insurance. Sellers have maintained over the past year and now
maintain insurance in amounts sufficient for the Assets and in such amounts and
covering such risks as are usually carried by companies engaged in similar
businesses and owning similar properties in the same general areas in which
Sellers operate. Disclosure Schedule Section 5.14 contains an accurate and
complete description of all policies of fire, general liability, theft, life,
workers’ compensation, health, partners, and other forms of insurance owned or
held by Sellers relating to the Assets at any time within the past three years,
specifying the insurer (including an indication of whether the coverage was on a
claims made, occurrence or other basis) and amount (including a description of
how deductibles and ceilings are calculated and operate and the portion of the
coverage and the deductible that has been consumed) of coverage, type of
insurance, policy number and any pending claims thereunder. All such policies
are in full force and effect and all premiums with respect thereto are currently
paid and none are due or delinquent; are sufficient for compliance with all
requirements of law and of all agreements to which any Seller is a party; are
valid, outstanding and enforceable policies; provide adequate insurance coverage
for the Assets; will cover claims for matters occurring prior to the Closing
regardless of when such claims are made; and will not in any way be adversely
affected by, or terminate or lapse by reason of, the transactions contemplated
by this Agreement. Sellers have delivered to Buyer a complete and accurate list
of all open, pending and outstanding claims history (and threats of claims) of
Sellers for bodily injury, workers’ compensation benefits, contractual
liability, personal injury, property damage, loss, breach of contract or bad
faith for the last three years, whether or not such claims are covered by
insurance and whether or not Sellers have received a reservation of rights by
any insurers. Disclosure Schedule Section 5.14 is an accurate and complete list
for the past three years of all reservations of rights by insurers, deductibles,
self-insured retentions, retrospective rating plans and dividend plans.

 

5.15.         Disclosure. No representations or warranties by Sellers, singly or
collectively, in this Agreement or any Ancillary Agreements and no statement
contained in any document (including, without limitation, financial statements
and the Schedules hereto), certificate or other writing furnished or to be
furnished by Sellers to Buyer pursuant to the provisions hereof or in connection
with the transactions contemplated hereby, contain any untrue statement of fact
or omit to state any fact necessary in order to make the statements herein or
therein not misleading.

 

5.16.         No Brokers. Neither Sellers, Devaraj nor any of their Affiliates,
representatives, agents, directors, officers or employees has employed any
broker, finder or investment banker or incurred any liability for any brokerage
fees, commissions, finders’ fees or similar fees in connection with the
transactions contemplated by this Agreement.

 

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ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Sellers and Devaraj, as of the Closing Date, as
follows:

 

6.1.          Organization and Qualification. GCT is a corporation duly
organized, validly existing and in good standing under the laws of Nevada.
GCT-TX is a limited liability duly organized, validly existing and in good
standing under the laws of Nevada

 

6.2.          Authorization.

 

(a)          Each Buyer has full corporate power and authority to enter into
this Agreement and the Ancillary Agreements to which it is a party and to
consummate the transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the Ancillary Agreements and the consummation of
the transactions contemplated hereby and thereby have been duly authorized by
all necessary corporate action on the part of Buyer. This Agreement has been
duly executed and delivered by Buyer. This Agreement constitutes, and upon the
execution and delivery thereof by Buyer, each Ancillary Agreements will
constitute, a legal, valid and binding obligation of Buyer, enforceable against
Buyer, as applicable, in accordance with its terms, except as the enforceability
thereof may be limited by the Permitted Exceptions.

 

(b)          Except as described in Disclosure Schedule Section 6.2(b), no
consent, waiver, approval, order or authorization of, notice to, or
registration, declaration, designation, qualification or filing with, any
Governmental Authority or third Person, domestic or foreign, is or has been or
will be required on the part of Buyer in connection with the execution and
delivery of this Agreement or any Ancillary Agreement or the consummation of the
transactions contemplated hereby or thereby, other than where the failure to
obtain such consents, waivers, approvals, orders or authorizations or to make or
effect such registrations, declarations, designations, qualifications or filings
is not reasonably likely to (i) prevent or delay consummation of the
transactions contemplated by this Agreement or any Ancillary Agreement or
(ii) prevent Buyer from performing its obligations under this Agreement or any
Ancillary Agreement.

 

6.3.          Capitalization. (a) The authorized capital stock of GCT currently
consists of 100,000,000 shares of Common Stock and 10,000,000 shares of
Preferred Stock of which 1,000,000 is designated as Series A Preferred Shares.
All issued and outstanding shares have been duly authorized and validly issued
and are fully paid and nonassessable.  Before giving effect to the transactions
contemplated by this Agreement, 10,882,834 shares of GCT’s Common Stock are
issued and outstanding and 3,520,000 shares of GCT’s Common Stock are issuable
upon the exercise, conversion or exchange of outstanding subscriptions, options,
warrants, convertible or exchangeable securities, or other rights to acquire
Common Stock.  No shares of GCT’s Preferred Stock are issued and outstanding. 
Except as otherwise provided in the GCT’s Certificate of Incorporation, there
are no outstanding rights or obligations of GCT to repurchase or redeem any of
its securities. All outstanding securities have been issued in compliance with
state and federal securities laws.  The 500,000 shares of GCT Common Stock, when
issued, will be duly authorized and validly issued and are fully paid and
nonassessable.

 

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(b) The authorized capitalization of GCT-TX consists of 80 Class A Membership
Units.   As of the date of this Agreement, GCT has outstanding 34 shares of its
Class A Membership Units. All issued and outstanding Class A Membership Units
have been duly authorized and validly issued and are fully paid and
nonassessable. Except as otherwise provided in the GCT-TX’s Articles of
Formation or Operating Agreement, there are no outstanding rights or obligations
of GCTX to repurchase or redeem any of its securities. All outstanding
securities have been issued in compliance with state and federal securities
laws.  The shares of GCT-TX Class A Membership Units, when issued, will be duly
authorized and validly issued and are fully paid and nonassessable.

 

6.4.          Non-Contravention. Neither the execution and delivery of this
Agreement or any Ancillary Agreement, nor the consummation of the transactions
contemplated hereby or thereby, will violate or conflict with (a) any provision
of the Charter or Bylaws of Buyer, (b) any law, rule, regulation or Governmental
Order to which Buyer or any of its business or assets are bound or subject or
(c) any agreement, indenture, undertaking, permit, license or other instrument
to which Buyer is a party or by which Buyer or any of its properties may be
bound or affected, other than such violations and conflicts which are not
reasonably likely to (i) prevent or delay consummation of the transactions
contemplated by this Agreement or any Ancillary Agreement or (ii) prevent Buyer
from performing its obligations under this Agreement or any Ancillary Agreement.

 

6.5.          Form 10-K and Form 10-Q Filings. GCT’s most recent Form 10-K, as
amended and Form 10-Q, as amended, in each case, as filed by GCT with the
Securities and Exchange Commission, complied (as of its filing date) in all
material respects with the requirements of the Securities Exchange Act of 1934,
as amended, and did not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading. The financial statements of GCT, including the notes
thereto, included in such Form 10-K and Form 10-Q comply as to form in all
material respects with applicable accounting requirements and with the published
rules and regulations of the Securities and Exchange Commission with respect
thereto, have been prepared in accordance with GAAP consistently applied and
fairly present the consolidated financial position of GCT at the dates thereof
and of its operations and cash flows for the periods then ended.

 

6.6.          Compliance with Law. Buyer, GCT-TX and each of their Affiliates is
and has been in compliance in all material respects with all federal, state, and
local laws, regulations, statutes, and ordinances applicable to it in connection
with the conduct or operation of their respective business and the ownership or
use of their respective assets.

 

6.7.          No Violation. Neither GCT or GCT-TX is in violation of or default
on any term of its Charter or Bylaws or Operating Agreement, as each is in
effect on the date hereof.

 

6.8.          No Brokers. Neither Buyer nor any of its Affiliates,
representatives, agents, directors, officers or employees has employed any
broker, finder or investment banker or incurred any liability for any brokerage
fees, commissions, finders’ fees or similar fees in connection with the
transactions contemplated by this Agreement.

 

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6.9.          Litigation; Legal Matters. There is no Action pending or, to the
knowledge of Buyer, threatened against or involving Buyer or any of its
officers, directors, stockholders, properties, assets or businesses, whether at
law or in equity, or before or by any Governmental Authority, nor any
Governmental Order of any Governmental Authority against or affecting or which
could affect Buyer ability to complete the transactions set forth under this
Agreement or any Ancillary Agreement, and Buyer does not know of any valid basis
for any such Action.

 

ARTICLE VII
[INTENTIONALLY OMITTED]

 

ARTICLE VIII
CERTAIN COVENANTS

 

8.1.          Confidentiality. Sellers and Devaraj shall, and shall cause their
respective representatives, Affiliates and employees: (a) to treat and hold as
confidential (and not to disclose or provide access to any Person to) any
information relating to the Business or the Assets or any other confidential
information with respect to the Business or the Assets; (b) in the event that
any of them becomes legally compelled to disclose any such information, to
provide Buyer with prompt written notice of such requirement so that Buyer or an
Affiliate thereof may seek a protective order or other remedy or waive
compliance with this Section 8.1; (c) in the event that such protective order or
other remedy is not obtained, or Buyer waives compliance with this Section 8.1,
to furnish only that portion of such information which is legally required to be
provided and to exercise their commercially reasonable efforts to obtain
assurances that confidential treatment will be accorded such information; (d) to
the extent permitted by law, to promptly furnish (prior to, at, or as soon as
practicable following, the Closing) to Buyer any and all copies (in whatever
form or medium) of all such information and to destroy any and all additional
copies of such information and any analyses, compilations, studies or other
documents prepared, in whole or in part, on the basis thereof; provided,
however, that this sentence shall not apply to any information which, at the
time of disclosure, is available publicly and was not disclosed in breach of
this Agreement by Sellers and Devaraj or their respective representatives,
Affiliates or employees. Sellers agree and acknowledge that remedies at law for
any breach of their obligations under this Section 8.1 are inadequate and that
in addition thereto Buyer (or an Affiliate thereof) shall be entitled to seek
equitable relief, including injunction and specific performance, in the event of
any such breach.

 

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8.2.          Authorizations. Each of Buyer and Sellers, as promptly as
practicable after the Closing Date, shall and shall cause their respective
Affiliates to (i) deliver, or cause to be delivered, all notices and make, or
cause to be made, all such declarations, designations, registrations, filings
and submissions under all laws, rules and regulations applicable to it as may be
required for it to consummate the transfer of the Assets and the other
transactions contemplated hereby in accordance with the terms of this Agreement;
(ii) use commercially reasonable efforts to obtain, or cause to be obtained, all
authorizations, approvals, orders, consents and waivers from all Persons
necessary to consummate the foregoing; and (iii) use commercially reasonable
efforts to take, or cause to be taken, all other actions necessary, proper or
advisable in order for it to fulfill its respective obligations hereunder and to
carry out the intentions of the parties expressed herein. Nothing in this
Section shall require, or be deemed to require, Buyer to agree to or effect any
divestiture or take any other action which would reasonably be expected to
impair Buyer’s ability to achieve the overall benefits expected, as of the date
hereof, to be realized from the consummation of the transactions contemplated
hereby. The cost and expense of obtaining any required authorizations,
approvals, consents or waivers from Governmental Authorities shall be shared
equally between Buyer, on the one hand, and Sellers on the other.

 

8.3.          Publicity. Neither Buyer, Sellers, Devaraj, nor any of their
respective Affiliates, shall disclose, make or issue, or cause to be disclosed,
made or issued, any statement or announcement concerning this Agreement or the
transactions contemplated hereby (including the terms, conditions, status or
other facts with respect thereto) to any third parties (other than its officers,
directors, employees, authorized representatives, legal advisors and financial
advisors 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 parties hereto, except (i) as required by law and after
conferring with the other parties concerning the timing and content of such
required disclosure, and (ii) in the case of Buyer, as may be required of Buyer
by applicable law, regulation or Securities and Exchange Commission position, by
any court order or judicial process. Buyer and Sellers and Devaraj will consult
with each other concerning the means by which employees, customers and suppliers
and others having dealings with Sellers and their respective Affiliates with
respect to the Business and the Assets will be informed of the transactions
contemplated hereby, and Buyer shall be allowed to have present for any such
communication a representative of Buyer.

 

8.4.          Notification. Sellers and Devaraj shall give prompt notice to
Buyer, and Buyer shall give prompt notice to Sellers and Devaraj, of any known
failure of Sellers or Devaraj or Buyer to comply with, perform or satisfy any
covenant or comply with, perform or satisfy any condition contained in this
Agreement or any Ancillary Agreement to be complied with, performed or satisfied
by any such party.

 

8.5.          Bulk Sales Compliance. Buyer and Sellers hereby waive compliance
with the provisions, to the extent applicable, of any bulk sales or transfers
law or similar law of any jurisdiction in respect of the transactions
contemplated by this Agreement and the Ancillary Agreement. Sellers shall
indemnify and hold the Buyer Indemnified Parties harmless from and against any
and all Buyer Losses in connection with any Action incurred or suffered by any
such Buyer Indemnified Party arising out of or related to such waiver, unless
and to the extent that such Buyer Losses constitute Assumed Liabilities.

 

8.6.          Agreement Not to Compete.

 

(a)          Except as provided on Disclosure Schedule 8.6, from the Closing
Date through the date that is three (3) years after the Closing Date (the
“Restricted Period”), Sellers and Devaraj shall not, directly or indirectly, and
Sellers and Devaraj shall cause each of their respective Affiliates not to, own,
lease, manage, operate or control, or participate in the ownership, lease,
management, operation or control of, or be connected with or have any interest
in (as a stockholder, member, director, officer, employee, agent, partner,
creditor or otherwise) any Person which is engaged in the business of providing
food services within the Geographic Area. For purposes of this Section 8.6,
neither the manufacture, servicing and repair of food trucks, nor the actions
necessary to complete and perform any of the retained contracts, with the
services of the Buyer or GCT-TX, and Buyer specifically agrees and acknowledges
that such actions by Sellers, Devaraj or any of their Affiliates, shall not
violate the restrictive covenants set forth in this section;

 

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(b)          During the Restricted Period, Sellers and Devaraj shall not,
directly or indirectly, either for themselves or for any other Person, (i)
solicit, encourage, or take any other intentional action which is reasonably
intended to induce any person employed by Buyer, to terminate his or her
employment with such employer or, (ii) without the prior written consent of
Buyer, which consent shall be made in Buyer’s discretion, employ any such
individual during his or her employment with Buyer, and for a period of one year
after such individual terminates his or her employment with such employer;

 

(c)          During the Restrictive Period, Sellers and Devaraj shall not,
directly or indirectly, either for themselves or for any other Person, take any
action aimed at causing any then customer of Buyer to sever its business
relationship with Buyer or the Business or otherwise interfere with such
relationship; provided, however that Sellers’ or Devaraj’s solicitation of
Buyer’s customers for products or services other than those directly competing
with Buyer, will not be deemed to violate this Section 8.6(c);

 

(d)          Sellers and Devaraj each acknowledge and agree that the extent of
damages to Buyer in the event of a breach by Sellers of a covenant contained in
this Section 8.7 would be impossible to ascertain and there is and will be
available to Buyer no adequate remedy at law to compensate them in the event of
such a breach. Consequently, Sellers agree that, in the event of such a breach,
Buyer shall be entitled, in addition to any other relief to which they may be
entitled including money damages, to enforce any or all of such covenants by
injunctive or other equitable relief ordered by any Governmental Authority of
competent jurisdiction.

 

(e)          The provisions of this Section 8.6 shall be enforced to the fullest
extent permissible under the laws, common law and public policies applied in the
State of Texas. In such regard, the parties express the foregoing intention with
full knowledge that the covenants contained in this Section 8.6 are necessary to
assure that Buyer receive and maintain the bargained-for business and the
Assets, if the final judgment of a Governmental Authority of competent
jurisdiction declares that any term or provision of this Section is invalid or
unenforceable, the Governmental Authority making the determination of invalidity
or unenforceability shall have the power to reduce the scope, duration or area
of such term or provision, to delete specific words or phrases, or to replace
any invalid or unenforceable term or provision of this Section 8.6 with a term
or provision that is valid and enforceable in such jurisdiction and that comes
closest to expressing the intention of the invalid or unenforceable term or
provision, and this Agreement shall be enforceable in such jurisdiction as so
modified after the expiration of the time within which the judgment may be
appealed, without invalidating the remaining provisions of this Agreement or
affecting the validity or enforceability of such provision in any other
jurisdiction.

 

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8.7.          State Unemployment Tax Accounts. In every state in which Sellers
have reported payroll and/or operative state unemployment tax accounts, Sellers
agree to cooperate with Buyer to facilitate Buyer’ obtaining successor state
unemployment tax account treatment in all such jurisdictions in a timely and
complete manner without reservation, interference or limitation.

 

8.8.          Books and Records. Each of the Parties agrees that all books and
records of Sellers related to the Business, wherever located, that a Party is
entitled to retain or acquire hereunder (including, but not limited to,
correspondence, memoranda, Tax information, books of account, personnel and
payroll records and the like) (the “Business Records”) shall be preserved by
such Party (or the other Party where applicable) for a period of at least seven
(7) years following the Closing Date. After the Closing Date, where there is
some reasonable business purpose, the Party in possession of any Business
Records shall provide the other Party and its authorized representatives with
access, upon prior reasonable notice specifying the need therefore, during
regular business hours, to the Business Records, and the other Party or its
representatives shall have the right to examine and make copies of such Business
Records; provided that the foregoing right shall not be exercisable in such a
manner as to unreasonably interfere with the normal operations of such Party.

 

ARTICLE IX
INDEMNIFICATION

 

9.1.          Survival. All representations and warranties of Sellers, Devaraj
and Buyer contained in this Agreement and the Ancillary Agreements (including
all schedules and exhibits hereto and thereto and all certificates, documents,
instruments and undertakings furnished pursuant to this Agreement and the
Ancillary Agreements) shall survive the consummation of the transactions
contemplated hereby and thereby only through and until the third anniversary of
the Closing Date; provided, however, he representations and warranties contained
in Sections 5.4 (Title to Assets) shall survive until 60 days after the
applicable statute of limitations has expired (in each case, the date until each
such representation shall survive is herein referred to as the “Date of
Survival”). With respect to the representations and warranties that are subject
to the Date of Survival, if written notice of a claim for breach of any such
representations and warranties has been given on or before the Date of Survival
by a party in whose favor such representations and warranties have been made to
the party that made such representations and warranties, then the relevant
representations and warranties shall survive as to such claim, until the claim
has been finally resolved. All indemnification obligations of Sellers, Devaraj
and Buyer in this Agreement or the Ancillary Agreements (including all schedules
and exhibits thereto and all certificates, documents, instruments and
undertakings furnished pursuant to this Agreement and the Ancillary Agreements)
shall survive indefinitely. All covenants, obligations and agreements of Sellers
and Buyer contained in this Agreement and the Ancillary Agreements (including
all schedules and exhibits hereto and thereto and all certificates, documents,
instruments and undertakings furnished pursuant to this Agreement and the
Ancillary Agreements) shall survive the consummation of the transactions
contemplated hereby and thereby.

 

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9.2.          Indemnification by Sellers. Except as otherwise limited by this
Article IX, the Sellers and Devaraj shall, jointly and severally, indemnify,
defend and hold harmless Buyer and its Affiliates, any assignee or successor
thereof, and each officer, director, employee, agent and representative of each
of the foregoing (collectively, the “Buyer Indemnified Parties”) from and
against, and pay or reimburse the Buyer Indemnified Parties for, any and all
losses, Actions, Liabilities, damages, claims, costs and expenses (including
reasonable expenses of investigation and legal fees and costs in connection
therewith), interest, awards, judgments, penalties and Encumbrances suffered or
incurred by any of the Buyer Indemnified Parties (hereinafter a “Buyer Loss”),
arising in whole or in part out of or resulting directly or indirectly from:

 

(a)          any breach of any representation or warranty of Sellers and/or
Devaraj in this Agreement or the Ancillary Agreements to which any of them is a
party (including all schedules and exhibits hereto and thereto and all
certificates, documents, instruments and undertakings furnished pursuant to this
Agreement and the Ancillary Agreements to which any of them is a party or made
in connection herewith or therewith);

 

(b)          any breach of any covenant, obligation or agreement of Sellers
and/or Devaraj in this Agreement or the Ancillary Agreements to which any of
them is a party (including all schedules and exhibits hereto and thereto and all
certificates, documents, instruments and undertakings furnished pursuant to this
Agreement and the Ancillary Agreements to which any of them is a party or made
in connection herewith and therewith);

 

(c)          any and all Actions of any nature that are pending or threatened
against Sellers on or before the Closing Date.

 

The amount that Sellers and Devaraj are obligated to indemnify Buyer under this
Agreement shall not exceed the value of the Purchase Price ($1,000,000),
provided, however, that the Seller shall not be obligated to pay any amounts to
Buyer owed in connection to the indemnification obligations under this Section
until such indemnification amounts exceed $75,000 in the aggregate.
Notwithstanding the forgoing or anything else to the contrary, Sellers and
Devaraj’s sole obligation to satisfy their indemnification duties under this
Section 9.2, and Buyer’s sole collection remedy against Sellers and Devaraj,
shall be to return to the number of shares of GCT Common Stock with a current
value, measured at the time of such return, equal to the amount of
indemnification obligation determined under this Article IX.

 

9.3.          Indemnification by Buyer. Except as otherwise limited by this
Article IX, Buyer shall indemnify, defend and hold harmless Sellers and Devaraj,
their respective subsidiaries and Affiliates, any assignee or successor thereof,
and each officer, director, member, manager, employee, agent and representative
of each of the foregoing (collectively, the “Seller Indemnified Parties”) from
and against, and pay or reimburse the Seller Indemnified Parties for, any and
all losses, Actions, Liabilities, damages, claims, costs and expenses (including
reasonable expenses of investigation and legal fees and costs in connection
therewith), interest, awards, judgments, penalties and Encumbrances suffered or
incurred by any of the Seller Indemnified Parties (hereinafter a “Seller Loss”)
arising solely out of or resulting directly from:

 

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(a)          any breach of any representation or warranty of Buyer in this
Agreement (including all schedules and exhibits hereto and thereto and all
certificates, documents, instruments and undertakings furnished pursuant to this
Agreement or made in connection herewith and therewith);

 

(b)          any breach of any covenant, obligation or agreement of Buyer in
this Agreement to which either of them is a party (including all schedules and
exhibits hereto and thereto and all certificates, documents, instruments or
undertakings furnished pursuant to this Agreement or made in connection herewith
and therewith);

 

(c)          any Assumed Liability.

 

(d)          That result from the operation of the Business following the
closing Date.

 

9.4.          General Indemnification Provisions.

 

(a)          For the purposes of this Section 9.4, the term “Indemnitee” shall
refer to the Person or Persons indemnified, or entitled, or claiming to be
entitled, to be indemnified, pursuant to the provisions of Section 9.2 or 9.3,
as the case may be; the term “Indemnitor” shall refer to the Person having the
obligation to indemnify pursuant to such provisions; and “Losses” shall refer to
Seller Losses or Buyer Losses, as the case may be.

 

(b)          The amount of any Losses suffered or incurred by any Indemnitee
shall be reduced by the amount of any insurance proceeds or other cash receipts
paid or payable to the Indemnitee or any Affiliate thereof as a reimbursement
with respect to such Losses (and no right of subrogation shall accrue to any
insurer hereunder, except to the extent that such waiver of subrogation would
prejudice any applicable insurance coverage or such Loss is related to a breach
of the kind described in subsection 9.2(a) or 9.3(a)), including any
indemnification received by the Indemnitee or such Affiliate from an unrelated
party with respect to such Losses.

 

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(c)          Within a reasonable time following the determination thereof, an
Indemnitee shall give the Indemnitor written notice of any matter which such
Indemnitee has determined has given rise to a right of indemnification under
this Agreement, stating the amount of the Loss, if known, and method of
computation thereof, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises (subject to the last sentence of this
subsection). The obligations and Liabilities of any party under this Article IX
with respect to Losses arising from claims, assertions, events or proceedings of
any third party (including claims by any assignee or successor of the Indemnitee
or any Governmental Authority), which are subject to the indemnification
provided for in this Article IX (“Third Party Claims”) shall be governed by and
be subject to the following additional terms and conditions: If any Indemnitee
shall receive written notice of any Third Party Claim, the Indemnitee shall
promptly give the Indemnitor written notice of such Third Party Claim (subject
to the last sentence of this subsection) and shall permit the Indemnitor, at its
option, to participate in the defense of such Third Party Claim by counsel of
its own choice and at its expense. If the Indemnitor acknowledges in writing its
obligation to indemnify the Indemnitee hereunder against any Loss (without
limitation) that may result from such Third Party Claim, then the Indemnitor
shall be entitled, at its option, to assume and control the defense against such
Third Party Claim at its expense and through counsel of its choice if it gives
written notice of its intention to do so to the Indemnitee within 15 calendar
days of the receipt of notice of such Third Party Claim from Indemnitee, unless,
in the reasonable opinion of counsel for the Indemnitee, there is a conflict or
a potential conflict of interest between the Indemnitee and the Indemnitor in
such Action, in which event the Indemnitee shall be entitled to direct the
defense with respect to only those issues as to which such conflict exists with
one separate counsel of its choice reasonably acceptable to the Indemnitor. The
reasonable fees and expenses of any such separate counsel shall be borne by the
Indemnitor. In the event that the Indemnitor exercises its right to undertake
the defense against any such Third Party Claim as provided above, the Indemnitee
shall cooperate with the Indemnitor in such defense and make available to the
Indemnitor, at Indemnitor’s expense, all witnesses, pertinent records, materials
and information in its possession or under its control reasonably relating
thereto as is required by the Indemnitor. Similarly, in the event the Indemnitee
is, directly or indirectly, conducting the defense against any Third Party
Claim, the Indemnitor shall cooperate with the Indemnitee in such defense and
make available to it all witnesses, pertinent records, materials and information
in its possession or under its control reasonably relating thereto as is
reasonably required by the Indemnitee. No such Third Party Claim, except the
settlement thereof which involves the payment of money only either by a party or
parties other than the Indemnitee or for which the Indemnitee is totally
indemnified (without limitation) by the Indemnitor and the unconditional release
from all related liability of the Indemnitee, may be settled by the Indemnitor
without the written consent of the Indemnitee. The foregoing notwithstanding,
the failure of any Indemnitee to give any notice required to be given hereunder
shall not affect such Indemnitee’s right to indemnification hereunder except to
the extent the Indemnitor from whom such indemnity is sought shall have been
actually prejudiced in its ability to defend the claim or action for which such
indemnification is sought by reason of such failure.

 

(d)          Payment by an Indemnitee to a third party with respect to a Loss
shall not affect such Indemnitee’s rights to indemnification pursuant to this
Article IX, provided that the written consent of the Indemnitor is obtained,
such consent not to be unreasonably withheld.

 

9.5.          Tax Matters. In addition to this Article IX, the rights and
obligations of the parties with respect to indemnification for any and all Tax
matters shall be governed by Article IX to the extent expressly provided
therein.

 

9.6.          Materiality. Notwithstanding anything in this Agreement to the
contrary, for purposes of application of the indemnification provisions of this
Article IX, the amount of any Loss arising from the breach of any
representation, warranty, covenant, obligation or agreement contained in this
Agreement or any Ancillary Agreements shall be the entire amount of any Loss
actually incurred by the respective Indemnitee as a result of such breach and
not just that portion of the Loss that exceeds the relevant level of
materiality, if any.

 

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ARTICLE X
TAX MATTERS

 

10.1.          Allocation of Purchase Price. The parties hereto agree that the
Purchase Price shall be allocated among the Assets as set forth in Schedule 10.1
and agree that such allocation is based upon Section 1060 of the Code and
related Treasury Regulations (and any similar provision of state, local or
foreign law). Such allocation shall be conclusive and binding on the parties
hereto, and Buyer and Sellers shall not take any position in any Tax Return, Tax
proceeding or audit that is inconsistent with such allocation unless required to
do so under applicable law. All values contained in such allocation shall be
consistently reported by the parties hereto and their Affiliates for Tax
purposes in accordance with the procedures reflected herein. Notwithstanding the
forgoing, the Parties agree that $5,000 of the Purchase Price shall be allocated
to Sellers and Devaraj non-compete restriction set forth herein.

 

10.2.          Taxes Before and After the Closing Date.

 

(a)          Notwithstanding any provision of local law, custom, practice or Tax
sharing agreement or arrangement to the contrary, the Sellers shall be liable
for, and shall jointly and severally indemnify the Buyer Indemnified Parties
from and against (i) all Taxes of Sellers or any Affiliate thereof, (ii) all
Taxes attributable to the ownership, use, operations, activities or transactions
of the Assets or the Business for all periods up to and including the Effective
Date, and (iii) all Sellers Taxes attributable to the transactions contemplated
hereby.

 

(b)          Buyer shall be liable for, and shall jointly and severally
indemnify the Seller Indemnified Parties from and against, all Taxes payable by,
or due from, Buyer, any Affiliate of Buyer, Sellers, or any of Affiliate of any
Seller attributable to (i) the operation or the ownership of the Assets after
the Closing Date (ii) all Buyer’s Taxes attributable to the transactions
contemplated hereby.

 

(c)          Sellers or their designated Affiliates shall be entitled to any
credits or refunds of any Tax paid by Sellers or any Affiliate of any Seller,
and not indemnified by Buyer or any Affiliate thereof, and any interest thereon.
Buyer or its designated Affiliate shall be entitled to any credits or refunds of
any Tax paid by Buyer or any Affiliate thereof, and any interest thereon. A
party entitled to a credit or refund under this Section 10.2 shall be entitled
to reasonably prosecute the Action for refund at its own expense and in the name
of the party nominally entitled thereto, which party shall execute all documents
and do any and all things reasonably requested by the party entitled to such
credit or refund, provided that such party is promptly reimbursed by the party
entitled to credit or refund for its costs and expenses in connection therewith
other than general and administrative expense. A party receiving an amount in
respect of a refund or credit to which another party is entitled pursuant to
this Section 10.2 shall make payment thereof to such party in immediately
available funds promptly upon receipt of any such refund or credit.

 

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10.3.          Notification and Defense.

 

(a)          Buyer shall promptly notify Sellers in writing upon receipt by
Buyer or any Affiliate of Buyer of notice of any pending or threatened Action
(including determinations as to the timing of payment of Taxes not yet required
to be paid) relating to any Tax of the Business, or to Tax Returns reflecting
operations of the Business, for periods ending on or prior to the Closing Date.
Sellers shall have the sole right to represent the taxpayer’s interest in any
such Action, and to employ counsel of their choice at their expense, upon
reaffirming their obligation to jointly and severally indemnify the Buyer
Indemnified Parties in respect thereof. Sellers shall reasonably keep Buyer
advised and shall reasonably consult with Buyer with respect to such controversy
and prior to entering into any consensual resolution of such controversy that
may affect Buyer. Buyer agrees that they will, and will cause their Affiliates
to, cooperate fully with Sellers and their counsel, at Sellers’ sole cost and
expense, in the defense against or compromise of any claim in any such Action.

 

(b)          Buyer shall have full responsibility and discretion in handling of
any Tax controversy involving their business or the Assets for periods ending
after the Closing Date. Sellers shall promptly notify Buyer in writing upon
receipt by any Seller or any of their Affiliates of notice of any pending or
threatened Action relating to any Tax of or relating to Buyer’s business or the
Assets, or to Tax Returns relating to Buyer’s business or the Assets, for
periods after the Effective Date. Buyer shall have the sole right to represent
the taxpayer’s interest in any such Action (including determinations as to the
timing of payment of Taxes not yet required to be paid) and to employ counsel of
its choice at its expense, upon reaffirming its obligation to indemnify the
Seller Indemnified Parties in respect thereof. Buyer shall reasonably keep
Sellers advised and shall reasonably consult with Sellers with respect to such
controversy and prior to entering into any consensual resolution of such
controversy that may affect any Seller or Devaraj. Devaraj and Sellers each
agrees that it will, and will cause its Affiliates to, cooperate fully with
Buyer and its counsel, at Buyer’s sole cost and expense, in the defense against
or compromise of any claim in any such Action.

 

(c)          Buyer and Sellers shall not enter into any compromise or agree to
settle any claim pursuant to any Action that would adversely affect the other
party for such year or a subsequent year without the written consent of the
other party.

 

10.4.          Access. Without limiting the generality of Section 8.1, after the
Closing, Buyer and Sellers shall make available to the other, and to any Taxing
Authority, as reasonably requested, all information, records or documents
relating to Tax Liabilities or potential Tax Liabilities of or relating to the
Business for all periods prior to or including the Effective Date and shall
preserve all such information, records and documents until the expiration of any
applicable statute of limitations or extensions thereof.

 

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10.5.          Taxes Relating to Transactions Contemplated by This Agreement.
All Taxes imposed in connection with the transfer of the Assets (“Transfer
Taxes”), whether such Taxes are assessed initially against Buyer or any
Affiliate of Buyer or any Seller or any Affiliate thereof, shall be borne and
paid equally by (i) Sellers, on the one hand, and (ii) Buyer and any Affiliate
of Buyer, on the other hand. The Sellers, jointly and severally, hereby agree to
indemnify the Buyer Indemnified Parties from and against their share of any and
all such Transfer Taxes imposed in connection with the transfer of the Assets.
The Buyer, hereby agrees to indemnify the Seller Indemnified Parties from and
against their share of any and all such Transfer Taxes imposed in connection
with the transfer of the Assets.

 

10.6.          Payments. Unless otherwise provided herein, all payments of
indemnification of Tax to be made under this Article X shall be made in
immediately available funds within ten business days of receipt of a written
notice from the party entitled to indemnification which sets forth in reasonable
detail the basis and an explanation of the claim hereunder, but in no event
earlier than one business day before the date on which such Tax is required to
be paid to the relevant Taxing Authority.

 

10.7.          Confidentiality and Related Agreements. Sellers agree that any
and all rights under the provisions of any trade secret, confidentiality,
non-compete or comparable agreements entered into prior to the Closing between
Sellers or their Affiliates, on the one hand, and any Person who becomes an
employee of Buyer or an Affiliate thereof in connection with the transactions
contemplated hereby, on the other hand, shall be assigned to, and enforceable
by, Buyer, provided that if such assignment is restricted or prohibited by
applicable law, any such agreement shall be deemed terminated and of no further
force or effect as of the Closing Date to the extent, and only to the extent,
such provision relates to information of the Business or the Assets.

 

10.8.          No Third-Party Beneficiaries. No provision of this Agreement
shall create any third party beneficiary or other right in any Business Employee
(including any beneficiary or dependent thereof) in respect of continued
employment with Buyer or any Affiliate thereof or in respect of any benefits
that may be provided, directly or indirectly, under any benefit plan or program
maintained by Buyer or its Affiliates.

 

10.9.          COBRA. With respect to the Business Employees, Sellers will to
the extent required by law, continue to provide for “continuation coverage” to
or for the benefit of each “covered employee” and each “qualified beneficiary”
entitled thereto by applicable law (as such terms are defined in Code Section
4980B) and shall otherwise comply in all respects with the requirements
(including notice requirements) of Code Section 4980B as to each such covered
employee and each such qualified beneficiary with respect to whom a “qualifying
event” (as defined in Code Section 4980B) has occurred (or will occur) through
the Closing Date, including any such qualifying event that may occur as of the
Closing Date or as a result of the consummation of the transactions contemplated
by this Agreement. Notwithstanding the foregoing, nothing in this Section 10.4
shall prohibit Sellers from terminating such “continuation coverage” as
permitted by Code Section 4980B(f)(2)(B)(ii) if Sellers cease to provide any
group health plan to any “covered employee”.

 

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ARTICLE XI
GENERAL PROVISIONS

 

11.1.       Expenses, Taxes, Etc. Except as otherwise expressly provided in this
Agreement, each party will pay all fees and expenses incurred by it in
connection with this Agreement, the Ancillary Agreements and the transactions
contemplated hereby and thereby.

 

11.2.       Notices. All notices and other communications given or made pursuant
hereto shall be in writing and shall be deemed to have been duly given or made
as of the date delivered or mailed if delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested), or
sent by facsimile transmission, (confirmation received) to the parties at the
following addresses and facsimile transmission numbers (or at such other address
or number for a party as shall be specified by like notice), except that notices
after the giving of which there is a designated period within which to perform
an act and notices of changes of address or number shall be effective only upon
receipt:

 

(a)          if to Sellers or Devaraj:

 

Hook & Ladder Draught House, LLC

6116 N. Central Expressway, Suite 909

Dallas, Texas 75206

tashuahill@gmail.com

Attention: Deepak Devaraj
Telephone No.: 312.504.2819

 

KOW Leasing Co., LLC

6116 N. Central Expressway, Suite 909

Dallas, Texas 75206

tashuahill@gmail.com

Attention: Deepak Devaraj
Telephone No.: 312.504.2819

 

with a copy to:

 

Mark A. Girtz, Esq.

Munsch Hardt Kopf & Harr, P.C.

500 N. Akard Street, Suite 3800

Dallas, Texas 75201

mgirtz@munsch.com

Facsimile No.: (214) 978-4349 

Telephone No.: (214) 855-7526

 

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(b)          if to Buyer:

 

The Grilled Cheese Truck, Inc.
641 Lexington Avenue, Suite 1520
New York, New York 10022
Attention: Robbie Lee
Robbie@trig-capital.com
Telephone No.: 212-521-4406

 

GCT Texas Master, LLC
641 Lexington Avenue, Suite 1520
New York, New York 10022
Attention:
Facsimile No.:
Telephone No.:

with a copy to:

Ellenoff Grossman & Schole LLP

150 East 42nd Street, 11th Floor

New York, New York 10017

Attention: Barry I. Grossman, Esq.

Facsimile No.: (212) 370-7889

Telephone No.: (212) 370-1300

 

11.3.       Disclosure Schedule. The Disclosure Schedule shall be divided into
sections corresponding to the sections and subsections of this Agreement. If any
information required to be disclosed pursuant to any particular provision hereof
or Schedule hereto is disclosed and such information is also required to be
disclosed pursuant to any other provision hereof or Schedule hereto, then the
initial disclosure shall be deemed to satisfy all other disclosure requirements
with respect to the subject matter thereof for purposes of this Agreement and
any Schedule hereof. Any Section or subsection herein for which there is no
specific exception in the Disclosure Schedule and lacks a disclosure in the
corresponding section of the Disclosure Schedule shall be construed to have been
made without any such disclosure. Disclosure of any matter in the Disclosure
Schedule shall not constitute an admission or raise any inference that such
matter constitutes a violation of law or an admission of liability or facts
supporting liability.

 

11.4.       Interpretation; Conflict Between Agreements.

 

(a)          When a reference is made in this Agreement to Sections,
subsections, Schedules or Exhibits, such reference shall be to a Section,
subsection, Schedule or Exhibit to this Agreement unless otherwise indicated.
The words “include,” “includes” and “including” when used herein shall be deemed
in each case to be followed by the words “without limitation.” The word “herein”
and similar references mean, except where a specific Section or Article
reference is expressly indicated, the entire Agreement rather than any specific
Section or Article. The table of contents and the headings contained in this
Agreement are for reference purposes only and shall not affect in any way the
meaning or interpretation of this Agreement. Except as otherwise expressly
provided herein, all monetary amounts referenced in this Agreement shall mean
U.S. dollars.

 

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(b)          In the event of any inconsistency, conflict or ambiguity as to the
rights and obligations of the parties under this Agreement and any Ancillary
Agreement, the terms of this Agreement shall control and supersede any such
inconsistency, conflict or ambiguity.

 

11.5.       Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of statute, law,
regulation, Governmental Order or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner adverse to any party. In such event, any
such term or provision shall be deemed, without further action on the part of
the parties hereto, modified, amended and limited to the extent necessary to
render the same and the remainder of this Agreement valid, enforceable and
lawful.

 

11.6.       Assignment. This Agreement may not be assigned by operation of law
or otherwise, except that Buyer (including its Affiliates) may assign their
rights and benefits hereunder and under the Ancillary Agreements (provided that
Buyer shall remain primarily responsible for its obligations hereunder and the
assignee expressly assumes Buyer’s obligations hereunder) (i) to any Affiliate
of Buyer, or (ii) to any Person acquiring all or substantially all of the Assets
without the advanced written consent of the non-assigning party(s). This
Agreement will apply to, be binding in all respects upon and inure to the
benefit of the successors and permitted assigns of Buyer and Sellers.

 

11.7.       No Third-Party Beneficiaries. This Agreement is for the sole benefit
of the parties hereto and their permitted assigns and nothing herein expressed
or implied shall give or be construed to give to any Person, other than the
parties hereto and such assigns, any legal or equitable rights hereunder.

 

11.8.       Amendment, Other Remedies and Waiver.

 

(a)          This Agreement may not be amended or modified except by an
instrument in writing signed by Sellers and Buyer.

 

(b)          The rights and remedies of the parties to this Agreement are
cumulative and not alternative of any other remedy conferred hereby or by law or
equity, and the exercise of any remedy will not preclude the exercise of any
other.

 

(c)          Neither the failure nor any delay by any party in exercising any
right, power or privilege under this Agreement or any Ancillary Agreement will
operate as a waiver of such right, power or privilege, and single or partial
exercise of any such right, power or privilege will preclude any other or
further exercise of such right, power or privilege or the exercise of any other
right, power or privilege. To the maximum extent permitted by law, (i) no Action
or right arising out of this Agreement or the Ancillary Agreements can be
discharged by one party, in whole or in part, by a waiver or renunciation of the
Action or right unless in a writing signed by the party against which such
waiver or renunciation is charged; (ii) no waiver that may be given by a party
will be applicable except in the specific instance for which it is given; and
(iii) no notice to or demand on one party will be deemed to be a waiver of any
obligation of such party or of the right of the party giving such notice or
demand to take further action without notice or demand as provided in this
Agreement or the documents referred to in this Agreement.

 

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11.9.      Further Assurances. Buyer and Sellers agree to (a) cooperate fully
with the other parties, and to cause its Affiliates to cooperate fully, (b)
execute and cause such Affiliates to execute such further instruments, documents
and agreements, and (c) give such further written assurances as may be
reasonably requested by Buyer or Sellers, as the case may be, to evidence and
reflect the transactions described herein and contemplated hereby and to carry
into effect the intents and purposes of this Agreement, including the assumption
of Liabilities as provided in Article XI. If at any time and from time to time
after the Closing Date (without limitation as to time or otherwise) Buyer
reasonably determines that Sellers or their respective Affiliates’ rights, title
and interests in and to an Asset has failed to be fully transferred and conveyed
in accordance with this Agreement to Buyer, then Sellers shall cause such Asset
to be transferred and conveyed to Buyer in accordance with this Agreement as
soon as reasonably practicable after notice from Buyer to Seller. If requested
by Buyer, the Sellers shall prosecute or otherwise enforce in their own name (or
that of an Affiliate thereof) for the benefit of Buyer any claims, rights or
benefits that are or shall be transferred to Buyer by this Agreement and that
require prosecution or enforcement in the name of Sellers (or any such
Affiliate). Any prosecution or enforcement of claims, rights or benefits under
this Section 11.9 shall be solely at Buyer’s expense, unless the prosecution or
enforcement is made necessary by a breach of this Agreement by the Sellers or
any Affiliate thereof. Following the Closing Date, Sellers and their respective
Affiliates shall refer to Buyer as promptly as practicable any telephone calls,
letters, orders, notices, requests, inquiries and other communications relating
to the Assets or the Business.

 

11.10.    Mutual Drafting. This Agreement is the joint product of the Sellers,
Devaraj and Buyer and each provision hereof has been subject to the mutual
consultation, negotiation and agreement of Buyer, on the one hand, and Sellers
on the other, and shall not be construed for or against any party hereto.

 

11.11.    Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (without giving effect to its
choice of law principles).

 

11.12.    Consent to Jurisdiction; Waivers.

 

(a)          For purposes of any Action arising out of this Agreement, the
Ancillary Agreements or any transaction contemplated hereby or thereby, each of
the parties hereto irrevocably submits to the exclusive jurisdiction of (i) the
courts of the State of Texas, and (ii) the United States District Courts in the
State of Texas. Each of the parties hereto agrees to commence any such Action
either in the United States District Court in the State of Texas or if such
Action may not be brought in such court for jurisdictional reasons, in the
courts of the State of Texas.

 

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(c)          Each of the parties hereto further agrees that service of any
process, summons, notice or document by U.S. registered mail to such party’s
respective address set forth in Section 11.2 shall be effective service of
process for any Action with respect to any matters to which it has submitted to
jurisdiction in this Section 11.13.

 

(d)          Each of the parties hereto irrevocably and unconditionally waives
any objection to the laying of venue of any Action arising out of this Agreement
or any transaction contemplated hereby in (i) the courts of the State of Texas,
(ii) the United States District Courts in the State of Texas, as appropriate,
and hereby further irrevocably and unconditionally waives and agrees not to
plead or claim in any such court that any such Action brought in any such court
has been brought in an inconvenient forum.

 

11.13.    Waiver of Jury Trial. Each of the parties hereto irrevocably and
unconditionally waives trial by jury in any Action relating to this Agreement,
the Ancillary Agreements or any transaction contemplated hereby or thereby, and
for any counterclaim with respect thereto.

 

11.14.    Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement. A photocopy, faxed,
scanned and/or emailed copy of this Agreement or any Ancillary Agreement or any
signature page to this Agreement or any Ancillary Agreement, shall have the same
validity and enforceability as an originally signed copy.

 

11.15.    Entire Agreement. This Agreement, together with the Ancillary
Agreements and all Schedules and Exhibits hereto, and the documents and
instruments and other agreements among the parties delivered pursuant hereto,
constitute the entire agreement and supersede all prior agreements and
undertakings, both written and oral, with respect to the subject matter hereof
and are not intended to confer upon any other Person any rights or remedies
hereunder, except as otherwise expressly provided herein.

 

[Signatures Appear on Following Page]

 

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IN WITNESS WHEREOF, Buyer Sellers and Devaraj have caused this Agreement to be
executed as of the date first written above by their respective officers
thereunto duly authorized.

 

THE GRILLED CHEESE TRUCK, INC.   HOOK & LADDER DRAUGHT HOUSE, a Nevada
corporation   LLC       a Texas limited liability company       By:     By:  
Name:   Name: Title:   Title:       GCT TEXAS MASTER, LLC.     a Nevada limited
liability company   KOW LEASING CO., LLC.   only with respect to Sections
2.3(b), 2.4(c),     2.4(e), 6.1, 6.2, 6.3(b), 6.4, 6.6, 6.7, 6.8, 6.9,    
Article IX and Article XI         a Texas limited liability company       By:  
  Name:   By:   Title:   Name:     Title:                       Deepak Devaraj

 

[Signature Page to Asset Purchase Agreement]