Exhibit 10.1
 
ASSET PURCHASE AGREEMENT
 
by and among
 
VICTORY ELECTRONIC CIGARETTES CORPORATION,
 
HARDWIRE INTERACTIVE ACQUISITION COMPANY
 
HARDWIRE INTERACTIVE INC.
 
and
 
THE SELLING OWNERS IDENTIFIED HEREIN
 
Dated as of July 2, 2014
 
 
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ASSET PURCHASE AGREEMENT
 
THIS ASSET PURCHASE AGREEMENT (“Agreement”) is entered into and made effective
as of July 2, 2014 (“Effective Date”) by and among (i) VICTORY ELECTRONIC
CIGARETTES CORPORATION, a Nevada corporation (“Victory”), (ii) HARDWIRE
INTERACTIVE ACQUISITION COMPANY, a Delaware corporation and a wholly-owned
subsidiary of Victory (“Buyer”), (iii) HARDWIRE INTERACTIVE INC., a British
Virgin Islands company (“Seller”), (iv) MANTRA MEDIA CAPITAL INC., a British
Virgin Islands company (“MMCI”), and (v) DEVIN KEER, as the sole stockholder of
MMCI (“Keer” and, together with MMCI, the “Selling Owners”). Each of Seller and
the Selling Owners shall be referred to herein, individually, as a “Seller
Party,” and, collectively, as the “Seller Parties.”  Capitalized terms used
herein without definition are defined in Section 10.1.
 
W I T N E S S E T H
 
WHEREAS, among other lines of business, Seller is in the business of selling
electronic cigarettes via the internet (the “Business”);
 
WHEREAS, MMCI owns one hundred percent (100%) of the issued and outstanding
shares of the capital stock of Seller;
 
WHEREAS, Keer owns one hundred percent (100%) of the issued and outstanding
shares of the capital stock of MMCI; and
 
WHEREAS, Buyer wishes to purchase from Seller, and Seller wishes to sell, assign
and transfer to Buyer, all of Seller’s assets and properties held in connection
with, necessary for, or material to the Business, and Buyer has agreed to assume
and discharge the Assumed Liabilities (as defined below) in full as and when
they become due in accordance with the terms, and subject to the conditions, set
forth in this Agreement.
 
NOW, THEREFORE, the parties hereto agree as follows:
 
ARTICLE I
 
Sale and Purchase
 
1.1. Purchase of Assets.
 
(a) Subject to the terms and conditions hereof, at the Closing, Seller shall
sell, transfer, assign and deliver to Buyer, and Buyer will purchase from
Seller, all right, title and interest of Seller in and to the properties, assets
and rights of every nature as the same may exist on the Closing Date, whether
real, personal, tangible, intangible or otherwise and whether now existing or
acquired prior to the Closing, relating solely to the Business (other than the
Excluded Assets as defined below) set forth on Schedule 1.1 (collectively, the
“Assets”).
 
(b) Subject to the terms and conditions hereof, at the Closing, the Assets shall
be transferred to Buyer free and clear of all Liens excepting only Assumed
Liabilities and Permitted Liens.
 
1.2. Excluded Assets.  Notwithstanding anything to the contrary in Section 1.1
or elsewhere in this Agreement, Seller will retain and not transfer, and Buyer
will not purchase or acquire, any assets of Seller other than the Assets
(collectively, the “Excluded Assets”).
 
1.3. Assumption of Liabilities.  Subject to the terms and conditions hereof, at
the Closing, Buyer shall assume and agree to pay, perform and discharge when due
any Liability relating to or arising out of the Assigned Contracts, the
operation of the Business, the employment or leasing of employees or the
ownership (or leasing of), operation or use of the Assets on or following the
Closing Date (collectively, the “Assumed Liabilities”).
 
1.4. Excluded Liabilities.  Notwithstanding anything to the contrary herein,
Buyer shall not assume any Liability of Seller other than the Assumed
Liabilities (collectively, the “Excluded Liabilities”).
 
 
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1.5. Consent of Third Parties.  Notwithstanding anything to the contrary herein,
and subject to the provisions of this Section 1.5, this Agreement shall not
constitute an agreement to assign or transfer any interest in any Governmental
Approval, Permit or Assigned Contract (or any claim or right arising thereunder)
if such assignment or transfer without the Consent of a Person that is not a
party to this Agreement would constitute a breach thereof or affect adversely
the rights of Buyer thereunder, and any such transfer or assignment shall be
made subject to such Consent being obtained.  In the event any such Consent is
not obtained prior to the Closing, Buyer and Seller shall continue to use
commercially reasonable efforts to obtain any such Consent after the Closing,
and Seller will cooperate with Buyer in lawful and commercially reasonable
arrangements to provide that Buyer shall receive the interest of Seller in the
benefits under any such Governmental Approval, Permit or Assigned Contract,
including to the extent commercially reasonable, performance by Seller, as
agent, provided that Buyer shall undertake to pay or satisfy the corresponding
liabilities for the enjoyment of such benefit to the extent Buyer would have
been responsible therefor if such consent or approval had been obtained.  Once
the required Consent is obtained, Seller shall promptly assign and transfer to
Buyer the applicable interest in such Governmental Approval, Permit or Assigned
Contract (or any claim or right arising thereunder).  Nothing in this Section
1.5 shall be deemed a waiver by Buyer of its right to receive prior to the
Closing an effective assignment of all of the Assets nor shall this Section 1.5
be deemed to constitute an agreement to exclude from the Assets any assets
described under Section 1.1.
 
1.6. Closing.  The closing of the sale and purchase of the Assets (the
“Closing”) shall take place at the offices of Robinson Brog Leinwand Greene
Genovese & Gluck PC, 875 Third Avenue, New York, NY 10022, at 10:00 a.m. on the
date that is the first Business Day following the satisfaction (or waiver) of
all of the conditions precedent set forth in Article V (the “Closing Date”).
 
1.7. Purchase Price.  Subject to the terms and conditions hereof, at the
Closing, Buyer shall (a) pay to Seller Five Million Dollars ($5,000,000) in cash
(the “Closing Cash Payment”) which shall be delivered by Buyer by wire transfer
of immediately available cash funds to an account designated by Seller, such
account to be designated at least two (2) Business Days prior to the Closing
Date, (b) deliver to Seller 3,000,000 shares (the “Shares”) of Victory’s common
stock, par value $0.001 per share (the “Common Stock”), and (c) assume the
Assumed Liabilities as provided in Section 1.3.  The consideration set forth in
clauses (i) and (ii) shall be referred to collectively in this Agreement as the
“Purchase Price”.
 
1.8. Allocation of Purchase Price.  The parties agree to allocate the Purchase
Price, the Assumed Liabilities and other appropriate items among the Assets in
accordance with the allocation schedule annexed hereto as Schedule 1.8.  In
connection with the foregoing, the parties shall cooperate with each other and
provide such information as any of them shall reasonably request.  The parties
will each report the federal, state and local and other Tax consequences of the
purchase and sale contemplated hereby (including the filing of Internal Revenue
Service Form 8594) in a manner consistent with such allocation schedule.
 
1.9. Passage of Title and Risk of Loss.  Legal title, equitable title and risk
of loss with respect to the Assets shall not pass to Buyer until the Assets are
transferred at the Closing; provided, however, that if any loss of any of the
Assets occurs prior to the Closing, Buyer shall be entitled to the proceeds of
any insurance payable with respect to the loss of such Assets. If Buyer accepts
the insurance proceeds with respect to any such damaged Asset, the value of such
damaged Asset shall be deemed to be equal to the amount of such insurance
proceeds and there shall be no further adjustment to the Purchase Price or
indemnification with respect to such damaged Asset.
 
ARTICLE II
 
Representations and Warranties of the Seller Parties
 
As of the Effective Date and as of the Closing Date, the Seller Parties, jointly
and severally, hereby represent and warrant to Buyer as follows:
 
2.1. Authorization, etc.  Seller has the requisite corporate power and authority
to execute and deliver this Agreement and each of the Ancillary Agreements to
which it is or will be a party, to perform fully its obligations hereunder and
thereunder and to consummate the transactions contemplated hereby and
thereby.  The execution and delivery by Seller of this Agreement and each of the
Ancillary Agreements to which it is or will be a party, the performance of its
obligations hereunder and thereunder and the consummation by Seller of the
transactions contemplated hereby and thereby, have been duly authorized by the
requisite corporate action of Seller.  This Agreement has been, and each of the
Ancillary Documents to which Seller and each Seller Party is to be a party will
be, duly and validly executed by Seller and each Seller Party and, assuming due
authorization, execution and delivery by Buyer, constitute or will constitute
(as the case may be) legally and valid and binding obligations of Seller and
each Seller Party, enforceable against each such party in accordance with their
respective terms, subject to applicable bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and similar Laws relating to creditors’ rights
and general equity principles.
 
2.2. Status and Capitalization.
 
(a) Seller is a corporation duly formed, validly existing and in good standing
under the laws of the British Virgin Islands, with the requisite corporate power
and authority to carry on its business (including the Business) and to own or
lease and to operate its properties and assets (including the Assets).
 
(b) Seller is duly qualified or licensed to do business and is in good standing
in all jurisdictions in which Seller’s activities require qualification or
licensing.
 
(c) Seller has made available to Buyer complete and correct copies of its
Memorandum of Association and other organizational documents, in each case, as
amended and in effect on the Effective Date.  Seller is not in violation of any
of the provisions of its Memorandum of Association or other organizational
documents.
 
 
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(d) Schedule 2.2(d) sets forth as of the Effective Date all the stockholders of
Seller and the shares held by each of such stockholders.  Except as set forth in
or as contemplated by Schedule 2.2(d), as of the Effective Date there are no
outstanding (i) interests or other voting or equity interests in Seller,
(ii) securities of Seller convertible into or exercisable or exchangeable for
interests or other voting or equity interests in Seller or (iii) options or
other rights or agreements, commitments or understandings of any kind, to
acquire from Seller, or other obligation of Seller to issue, transfer or sell,
any interests of or other voting or equity interests in Seller or securities
convertible into or exercisable or exchangeable for interests or other voting or
equity interests in Seller.
 
(e) Except as set forth on Schedule 2.2(e), Seller does not own any equity
interest in another legal entity.
 
2.3. No Conflicts, etc.
 
Except as set forth in Schedule 2.3, the execution, delivery and performance by
Seller and each Seller Party of this Agreement and the Ancillary Agreements do
not, and the consummation of the transactions contemplated hereby and thereby,
do not, (i) violate or conflict with Seller’s Memorandum of Association, (ii)
cause the material modification of any obligation under, create in any party the
right to terminate, constitute a default or breach of, or violate or conflict
with the terms, conditions or provisions of any Contract to which Seller and
each Seller Party is a party; or (iii) result in a breach or violation by Seller
of any of the terms, conditions or provisions of any Law or notice to any
Governmental Authority.  No Governmental Approval or other Consent is required
to be obtained by Seller and each Seller Party in connection with the execution
and delivery of this Agreement and each Ancillary Agreement or the consummation
or performance of the transactions contemplated hereunder and thereunder, except
as provided in Schedule 2.3.
 
2.4. Financial Statements.  Annexed hereto as Schedule 2.4 are (i) the unaudited
financial statements of Seller as at and for the period ended December 31, 2013
(the “Annual Financial Statements”), and (ii) the unaudited financial statements
of Seller as at and for the quarter ending March, 2014 (the “Quarterly Financial
Statements”), including in each of clauses (i) and (ii) a balance sheet and
statements of income (the Annual Financial Statements, the Quarterly Financial
Statements, and after the date of delivery thereof, the Subsequent Quarterly
Financial Statements, collectively, the “Financial Statements”).  The Financial
Statements have been prepared on a cash basis applied consistently throughout
the periods indicated.  The Quarterly Financial Statements have been prepared in
all material respects on a basis consistent with the Annual Financial
Statements.  The Assets and the Excluded Assets, except for assets acquired or
sold after December 31, 2013, in the ordinary course of business, or as
permitted pursuant to the terms of this Agreement, constitute all the material
assets included in the balance sheets included in the Annual Financial
Statements as at December 31, 2013.  The statements of income included in the
Annual Financial Statements present fairly in all material respects the results
of operations and cash flows of the Business for the twelve month period ended
December 31, 2013.
 
2.5. Absence of Undisclosed Liabilities.  Except as set forth in Schedule 2.5,
Seller has not entered into any loan or credit agreement or arrangement with a
bank, financial institution or other lender (a “Credit Agreement”), and Seller
does not have any liabilities or obligations, whether known, unknown, absolute,
accrued, contingent or otherwise, and whether due or to become due, arising out
of or relating to the Business, except (a) as set forth in Schedule 2.5, (b) as
and to the extent disclosed or reserved against in the Annual Financial
Statements or specifically disclosed in the notes thereto; and (c) for
liabilities and obligations that were incurred after December 31, 2013 in the
ordinary course of business consistent with prior practice.
 
2.6. Absence of Changes.  Except as set forth in Schedule 2.6, since the Balance
Sheet Date, Seller has conducted the Business in the ordinary course consistent
with past practice and there has not been with respect to the Business:
 
(a) any event, development or state of circumstances directly relating to the
Business, Assets or the employees, that has had or would reasonably be expected
to have, individually or in the aggregate, a Material Adverse Effect;
 
(b) any incurrence of any Indebtedness by Seller other than (i) in the ordinary
course of business consistent with past practice or (ii) Indebtedness that would
not constitute an Assumed Liability;
 
(c) any creation or other incurrence by Seller of any Lien on any material asset
other than Permitted Liens or liens incurred in the normal and ordinary course
of business consistent with past practice, all of which Permitted Liens and
Liens are set forth on Schedule 2.6(c);
 
(d) any material damage, destruction or other casualty loss (whether or not
covered by insurance) affecting the Business or the Assets;
 
(e) any change in any method of accounting or accounting principles or practice
by Seller or any revaluation of any material Assets;
 
(f) any (i) grant of any severance or termination pay to (or amendment to any
existing arrangement with) any manager or officer of Seller or any employee or
former employee, (ii) increase in benefits payable under any existing severance
or termination pay policies or employment agreements, (iii) entering into any
employment, deferred compensation or other similar agreement (or any amendment
to any such existing agreement) with any director or officer of Seller or any
employee or former employee, (iv) establishment, adoption or amendment (except
as required by applicable law) of any collective bargaining, bonus,
profit-sharing, thrift, pension, retirement, deferred compensation,
compensation, option, restricted interest or other Seller Benefit Plan or
arrangement covering any director or officer of Seller or any employee or former
employee or (v) increase in compensation, bonus or other benefits payable to any
director or officer of Seller or any employee or former employee;
 
 
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(g) any capital expenditures, or commitments for capital expenditures, in an
amount in excess of Ten Thousand Dollars ($10,000) in the aggregate;
 
(h) any material payments, discount activity or any other consideration to
customers or suppliers, other than in the ordinary course of business consistent
with past practice;
 
(i) any failure to pay or satisfy when due any material liability of Seller,
other than where the amount or validity of such material liability is being
contested by Seller in good faith;
 
(j) any sale, transfer, lease, exclusive and irrevocable license, or other
disposition of any Asset, or any acquisition of a material amount of the assets
of any other Person, except in each case, in the ordinary course of business
consistent with past practice;
 
(k) any amendment, cancellation or compromise of any claim of Seller, or any
commencement or settlement by Seller, of any Litigation, relating to the
Business, the employees or the Assets involving amounts in excess of Ten
Thousand Dollars ($10,000);
 
(l) any license or sublicense of, or any Lien (other than Permitted Liens) on
any Owned Intellectual Property used in the Business other than in the ordinary
course of business consistent with past practice; or
 
(m) any agreement or commitment to do any of the foregoing, or any action or
omission that would result in any of the foregoing.
 
Notwithstanding anything to the contrary in this Section 2.6, the Seller Parties
may take any act necessary to effectuate the transactions contemplated by this
Agreement.
 
2.7. Material Contracts.
 
(a) As of the Effective Date, except as disclosed in Schedule 2.7(a), neither
Seller, the Assets nor any employees of Seller, in connection with the Business,
are subject to or bound by:
 
(i) any agreement currently in effect relating to Indebtedness (in either case,
whether incurred, assumed, guaranteed or secured by any Asset) and, excluding
Indebtedness that is not an Assumed Liability;
 
(ii) any joint venture, partnership, limited liability company or other similar
agreements currently in effect (including any agreement providing for joint
research, development or marketing);
 
(iii) any agreement or series of related agreements currently in effect,
including any option agreement, relating to the acquisition or disposition of
any business line or material real property of Seller (whether by merger, sale
of interests, sale of assets or otherwise);
 
(iv) any agreement currently in effect that (A) limits the freedom of Seller or
the Business to compete in any line of business or with any Person or in any
area or which would so limit the freedom of Buyer or the Business or Assets
after the Closing or (B) imposes exclusivity obligations or restrictions upon
Seller or the Business or that would be binding on Buyer or the Business or
Assets after the Closing;
 
(v) any agreement, including open purchase orders in effect as of the date that
is two (2) Business Days prior to the Effective Date (but excluding all other
purchase orders), for the purchase of materials, supplies, goods, services,
equipment or other assets providing for aggregate payments by Seller over the
remaining term of such agreement or related agreements of Ten Thousand Dollars
($10,000) or more;
 
(vi) any sales, distribution, agency or other similar agreement currently in
effect providing for the sale by Seller of materials, supplies, goods, services,
equipment or other assets that provides for aggregate payments to Seller over
the remaining term of the agreement of Ten Thousand Dollars ($10,000) or more;
 
(vii) any agreement (excluding those entered into in the ordinary course of
business) currently in effect under which (A) any Person has guaranteed any
liabilities or obligations of Seller or (B) Seller has guaranteed liabilities or
obligations of any other Person (in each case other than endorsements for the
purpose of collection in the ordinary course of business); and
 
(viii) any other agreement, commitment or arrangement that is (A) not made in
the ordinary course of business consistent with prior practice or (B) material
to the Assets or the Business, taken as a whole.
 
 
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(b) Each agreement disclosed in the Schedules or required to be disclosed
therein pursuant to this Section 2.7 or Sections  2.8, 2.9, 2.13 or 2.14 hereof
(each a “Material Contract”) is a valid and binding agreement of Seller, and is
in full force and effect, and neither Seller nor, to the Knowledge of Seller,
any other party thereto is in default or breach in any material respect under
the terms of, or except as contemplated herein, has provided any written notice
of any intention to terminate or modify, any such Material Contract, and, to the
Knowledge of Seller, or except as contemplated herein, no event or circumstance
has occurred that, with notice or lapse of time or both, would constitute an
event of default thereunder or would result in a termination or modification
thereof.
 
(c) Complete copies of (i) each Material Contract and (ii) all form contracts,
agreements or instruments used in the Business and that are material to the
Business have been made available to Buyer.
 
2.8. Assets.
 
(a) Title to Assets, Etc.  On the Effective Date, except as set forth on
Schedule 2.8(a), Seller has, and on the Closing Date will have, good and valid
title to, or otherwise has the right to use pursuant to a valid and enforceable
lease, license or similar contractual arrangement, all of the Assets (except as
may be disposed of in the ordinary course of business consistent with past
practice on or following the Effective Date or in accordance with this
Agreement), in each case free and clear of any Liens other than Permitted Liens.
 
(b) Sufficiency of Assets, etc.  Except as set forth in Schedule 2.8(b), the
Assets, together with the assets available to Buyer pursuant to the Ancillary
Agreements, and the employees, constitute all the assets, tangible and
intangible, and all the employees used for the Business as currently conducted
and as conducted as of the Closing Date. To the Knowledge of Seller, there are
no facts or conditions affecting any material Assets which would reasonably be
expected, individually or in the aggregate, to materially interfere with the
current use, occupancy or operation of such Assets.  Except as set forth in
Schedule 2.8(b), (i) Seller has conducted the Business only through Seller and
not through any other divisions or any direct or indirect subsidiary or any
Seller Affiliate and (ii) no part of the Business is operated by Seller through
any entity other than Seller.
 
2.9. Intellectual Property.
 
(a) Owned Intellectual Property.  Schedule 2.9(a) lists all Intellectual
Property owned by Seller or any Seller Affiliate used or held for use solely in
connection with the Business as presently conducted (the “Owned Intellectual
Property”) that is registered or subject to a pending application for
registration or that is otherwise material to the Business, other than Trade
Secrets.  Seller is the exclusive owner of the Owned Intellectual Property set
forth in Schedule 2.9(a) and, to the Knowledge of Seller, of the Trade Secrets
owned by Seller, free and clear of any Liens other than the Permitted Liens and
except as set forth further on Schedule 2.9(a)(i). The Owned Intellectual
Property together with the Intellectual Property used pursuant to the agreements
set forth in Schedule 2.9(b) constitutes all of the Intellectual Property used
or held for use in and material to the Business.  Immediately after the Closing,
Buyer will own all of the Owned Intellectual Property and except as set forth on
Schedule 2.9(a) will have a right to use all other Intellectual Property Assets,
free from any Liens (other than Permitted Liens and Liens imposed as a result of
Buyer’s or Buyer Affiliates’ actions) and, after Buyer timely and properly
registers or records such transfers with the appropriate Governmental Authority,
on the same terms and conditions as in effect prior to the Closing.
 
(b) Licenses and Other Agreements.  Schedule 2.9(b) sets forth all agreements
(other than licenses for “off-the-shelf” software such as Microsoft Word) to
which Seller or any Seller Affiliate is a party or by which Seller or any Seller
Affiliate is otherwise bound that relate to Intellectual Property licensed from
another Person that is used solely in connection with the Business.
 
(c) Licensed by Seller.  Schedule 2.9(c) sets forth the agreements material to
the conduct of the Business and by which Seller (i) licenses Owned Intellectual
Property to any other Person; or (ii) agreements otherwise transferring,
granting or restricting the right to use Owned Intellectual Property.
 
(d) No Infringement.  To Seller’s Knowledge, (i) the conduct of the Business
does not infringe the Intellectual Property rights of any Person, and (ii) none
of the Owned Intellectual Property is being infringed by any Person without a
license or permission from Seller.
 
(e) Domain Names.  Seller is the owner of the Domain Names set forth on Schedule
2.9(e) (by name, expiration date, and current registrar) free and clear, as of
the Closing Date, of any written claims of third parties.
 
(f) Protection of Intellectual Property.  Except as set forth on Schedule
2.9(e), Seller or the applicable Seller Affiliate has taken the actions it has
determined in its reasonable business judgment are necessary to protect the
Owned Intellectual Property under applicable Law (including making and
maintaining in force the filings, registrations and issuances it has determined
are necessary).  Except as set forth on Schedule 2.9(e), Seller or the
applicable Seller Affiliate has taken the actions it has determined in its
reasonable business judgment are necessary to maintain the confidentiality of
the confidential Intellectual Property used in the Business.  To the Knowledge
of Seller, neither Seller nor any Seller Affiliate is using or enforcing any
material Owned Intellectual Property in a manner that would reasonably be
expected to result in the cancellation or unenforceability of such Owned
Intellectual Property.
 
 
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2.10. Litigation.  Except as set forth in Schedule 2.10, there is no Litigation
pending or, to the Knowledge of Seller, threatened in writing against, or
instituted by or on behalf of or directly affecting Seller in connection with
the Business, the employees or the Assets, or relating to the transactions
contemplated under this Agreement.  Except as set forth in Schedule 2.10, there
are no settlement agreements or similar written agreements with any Governmental
Authority and, to the Knowledge of Seller, no outstanding orders, judgments,
stipulations, decrees, injunctions, determinations or awards issued by any
Governmental Authority against or directly affecting Seller or the Business.
 
2.11. Compliance with Laws; Governmental Approvals; Permits.
 
(a) Seller and all of the Seller Affiliates are and have been in compliance in
all material respects with, and have not been threatened in writing to be
charged with or given written notice of, any material violation of any law,
statute, ordinance, rule, regulation, judgment, injunction, order or decree
(“Laws”) applicable to the Business or the Assets, except that compliance with
Environmental Laws and Laws relating to Taxes is covered in Sections 2.12 and
2.15, respectively. Seller and, to Seller’s Knowledge, all of the Seller
Affiliates are and have been in compliance in all material respects with, and
have not been threatened in writing to be charged with or given written notice
of, any material violation of any Laws applicable to the employees.
 
(b) Schedule 2.11(b) sets forth all Governmental Approvals and other Consents
(other than Environmental Permits which are covered in Section 2.12) necessary
for the conduct of the Business as currently conducted.  Except as set forth in
Schedule 2.11(b), all such Governmental Approvals and Consents have been duly
obtained and are in full force and effect, and Seller is in compliance in all
material respects with each of such Governmental Approvals and Consents held by
it with respect to the Assets, the employees and the Business.
 
(c) Schedule 2.11(c) correctly describes each license, franchise, permit,
certificate, approval or other similar authorization (other than Environmental
Permits which are covered in Section 2.12) issued by a Governmental Authority
and held by Seller (the “Permits”) that are necessary for the conduct of the
Business, as currently conducted by Seller, together with the name of the
Government Authority or entity issuing such Permit, except for such Permits the
failure of which to hold would not be, individually or in the aggregate,
materially adverse to the Business, taken as a whole, or materially impair the
ability of Seller to consummate the transactions contemplated hereby.  Except as
set forth in Schedule 2.11(c), (i) such Permits are valid and in full force and
effect, (ii) Seller is not in default under, and no condition exists that with
notice or lapse of time or both would constitute a default under, such Permits
and (iii) none of such Permits will be terminated or impaired or become
terminable, in whole or in part, as a result of the transactions contemplated
hereby.
 
2.12. Environmental Matters.  Except as set forth in Schedule 2.12, to Seller’s
Knowledge, Seller has complied and is in compliance in all material respects
with all applicable Environmental Laws with respect to the Assets or the
operation of the Business and has obtained and is in compliance in all material
respects with all applicable Environmental Permits with respect to the Business
or the Assets.  No written notice of violation, notification of liability or
potential liability or request for information has been received by Seller and
no Litigation is pending or, to Seller’s knowledge, threatened in writing by any
Person involving the Business or the Assets relating to or arising out of any
Environmental Law.  To Seller’s knowledge, no written order naming Seller has
been issued, and no penalty or fine has been assessed to Seller, involving the
Business, the Assets or any real property leased by Seller relating to or
arising out of any applicable Environmental Law.  All Hazardous Substances at
any time used, generated or disposed of by Seller have been disposed of in
accordance with Environmental Laws.
 
2.13. Employees; Labor Matters.  To Seller’s Knowledge, Seller has complied in
all material respects, with applicable wage and hour, equal employment, safety,
and other legal requirements relating to its employees.  Except as set forth on
Schedule 2.13, Seller is not a party to or bound by any collective bargaining
agreement, and there are no labor unions or other organizations or groups
representing, or to Seller’s Knowledge, purporting to represent any
employees.  Since January 1, 2013, there has not occurred or, to the Knowledge
of Seller, been threatened any material strike, slowdown, picketing, work
stoppage, concerted refusal to work overtime or other similar material labor
activity which would affect the Business with respect to any employees.  Except
as set forth on Schedule 2.13, there are no labor disputes currently subject to
any grievance procedure, arbitration or litigation or, to the Knowledge of
Seller, threatened with respect to any employee.
 
2.14. Employee Benefit Plans and Related Matters.
 
(a) Employee Benefit Plans.  Schedule 2.14(a) lists all of the material Seller
Benefit Plans.  Except as set forth on Schedule 2.14(a), neither Seller, nor any
Seller Affiliate, has communicated to any employee or former employee any
intention or commitment to establish or implement any employee or retiree
benefit or compensation arrangement.
 
(b) No Acceleration of Benefits.  Except as set forth in Schedule 2.14(b), the
consummation of the transactions contemplated by this Agreement will not by
itself entitle any employee or director or former employee or any independent
contractor of the Business to severance or similar pay.
 
 
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2.15. Taxes.
 
(a) Seller has (or by the Closing will have) duly and timely filed or caused to
be filed all Tax Returns relating to the Business and the Assets required to be
filed on or before the Closing Date, subject to any applicable extension period
(“Covered Returns”).  All such Covered Returns are or will be true and correct
in all material respects.  All Taxes with respect to Seller, the Business or the
Assets required to be paid on or prior to the Closing Date have or will have
been so paid, other than those amounts being contested in good faith as set
forth on Schedule 2.15(a).  All Taxes required to be withheld by or on behalf of
Seller or any Seller Affiliate in connection with amounts paid or owing to any
employee, independent contractor, creditor, stockholder or other person with
respect to the Business or the Assets (“Withholding Taxes”) have been withheld,
and such withheld taxes have either been duly and timely paid to the proper
Governmental Authorities or set aside in accounts for such purpose.  Seller is
not a party to any tax sharing, indemnification or similar agreement with any
Person.
 
(b) Except as set forth on Schedule 2.15(b), no agreement or other document
extending, or having the effect of extending, the period of assessment or
collection of any Taxes or Withholding Taxes, and no power of attorney with
respect to any such Taxes, has been filed with the IRS or any other Governmental
Authority in respect of Seller or the Business.
 
(c) Other than in the ordinary course of business consistent with prior practice
or as set forth on Schedule 2.15(c), (i) there are no Taxes or Withholding Taxes
asserted in writing by any Governmental Authority to be due in respect of
Seller, the Business or the Assets, (ii) no issue has been raised in writing by
any Governmental Authority in the course of any open audit with respect to Taxes
or Withholding Taxes concerning Seller, the Business or the Assets, (iii) no
Taxes and no Withholding Taxes are currently under audit by any Governmental
Authority and (iv) neither the IRS nor any other Governmental Authority is now
asserting or, to the Knowledge of Seller, threatening to assert against Seller
or any Seller Affiliate, any deficiency or claim for additional Taxes or any
adjustment of Taxes.
 
(d) Buyer will not be required to deduct and withhold any amount pursuant to
section 1445(a) of the Code as a result of any of the transactions effected
pursuant to this Agreement and the Ancillary Agreements.
 
(e) Except as set forth on Schedule 2.15(e), there is no Litigation or
administrative appeal pending or, to the Knowledge of the Seller, threatened
against or relating to Seller, the Business, the Assets or any Seller Affiliate
in connection with Taxes.
 
2.16. Customers and Suppliers.
 
(a) Schedule 2.16(a) lists (i) the names and the address provided by each
customer that ordered products or services of the Business from Seller with an
aggregate purchase price of Ten Thousand Dollars ($10,000) or more during either
the year ended December 31, 2012, or the year ended December 31, 2013, or with
an aggregate purchase price of Ten Thousand Dollars ($10,000) or more thereafter
(a “Material Customer”), and (ii) the applicable amount of purchases by each
such Material Customer during each such period.  Except as set forth on Schedule
2.16(a), from the Balance Sheet Date to the Effective Date, Seller has not
received written notice that any Material Customer has materially reduced or
will materially reduce the use of products or services of the Business.
 
(b) Schedule 2.16(b) lists (i) the name and the address provided by each
supplier (including any Affiliates) from which Seller, individually or in the
aggregate, ordered raw materials, supplies or other products or services of the
Business with an aggregate purchase price of Ten Thousand Dollars ($10,000) or
more during either the year ended December 31, 2012, or the year ended December
31, 2013, or with an aggregate purchase price of Ten Thousand Dollars ($10,000)
or more thereafter (a “Material Supplier”), and (ii) the applicable amount of
purchases from each such Material Supplier during each such period.  Except as
set forth in Schedule 2.16(b) or as a result of general economic conditions or
conditions generally affecting the industry in which the Business competes, from
the Balance Sheet Date to the Effective Date, Seller has not received written
notice that any Material Supplier has materially altered or will materially
altered its relationship with Seller.
 
(c) Schedule 2.16(c) sets forth (i) each Warranty Statement that Seller
currently issues to its customers in respect of the products associated with the
Business (the “Seller Warranties”), (ii) the aggregate expenses incurred by
Seller in fulfilling its obligations under Seller Warranties during each of the
fiscal years covered by Seller’s Financial Statements and (iii) a detailed
description of Seller’s past and current practices with respect to returns and
allowances.  Except as listed on Schedule 2.16(c), none of the products
manufactured, sold, or delivered by Seller has been the subject of any product
recall since January 1, 2011 (which hereby expressly excludes a voluntary return
or withdrawal of any product by an individual customer or group of customers).
 
2.17. Affiliate Transactions.
 
(a) Except as disclosed on Schedule 2.17(a), Seller has made available to Buyer
copies of each agreement, contract, arrangement, understanding, transfer of
assets or liabilities or other commitment or transaction, in each case since
January 1, 2011, involving amounts in excess of Ten Thousand Dollars ($10,000),
between Seller, on the one hand, and any Seller Affiliate or any stockholder,
officer, director or employee of Seller or any Seller Affiliate (each a “Related
Party”), on the other hand (a “Related Party Transaction”), other than any
Related Party Transaction that is necessary to effectuate (i) the transactions
contemplated by this Agreement, and (ii) the matters to be concluded after the
Closing to effectuate the transactions contemplated under this Agreement.
 
 
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(b) Except as set forth on Schedule 2.17(b), no manager, officer or director of
Seller or any Seller Affiliate, (i) owns, directly or indirectly, and whether on
an individual, joint or other basis, any equity interest in (x) any material
property or asset, real or personal, tangible or intangible, used in or held for
use in connection with or pertaining to the Business other than the Assets, or
(y) any Person, that is a Material Supplier, Material Customer or competitor of
the Business, or (ii) serves as an officer or director of any Person that is a
Material Supplier, Material Customer or competitor of the Business.
 
2.18. Inventories.  The inventories included in the Balance Sheet were stated
thereon at cost.  Since the Balance Sheet Date, the inventories of Seller have
been maintained in the ordinary course of business consistent with prior
practice.  As of the Closing Date, all such inventories will be owned free and
clear of all Liens, except Permitted Liens.  All of the inventories recorded on
the Balance Sheet consist of, and all inventories of Seller on the Closing Date
will consist of, items of a quality usable or saleable in the normal course of
business consistent with past practices, are or will be, subject to market
conditions, in quantities sufficient for the normal operation of the business of
Seller in accordance with past practice.  Other than in the ordinary course of
business consistent with prior practice or as set forth on Schedule 2.7, Seller
has no obligation to purchase any inventory.
 
2.19. Receivables.  All accounts receivable, notes receivable and other
receivables (other than receivables collected since the Balance Sheet Date)
reflected non the Balance Sheet are, and all accounts receivable and notes
receivable arising from or otherwise relating to the Business of Seller as of
the Closing Date will be, valid and genuine.  All accounts receivable, notes
receivable and other receivables arising out of or relating to the business of
Seller as of the Balance Sheet Date have been included in the Balance Sheet, and
all accounts receivable, notes receivable and other receivables arising out of
or relating to the Business as of the Closing Date will be included in the
ordinary course of business consistent with prior practice.
 
2.20.           Investment Intent.  Seller has evaluated the risks of investing
in the common stock of Buyer by receiving the Shares as partial consideration
for the transactions contemplated under this Agreement, and has determined that
the common stock of Buyer is a suitable investment.  Seller has determined that
it can bear the economic risk of this investment and can afford a complete loss
of its investment.  In evaluating the suitability of an investment in the common
stock of Buyer, Seller acknowledges that Buyer has made available to it, during
the course of this transaction and prior to the delivery of the Shares, the
opportunity to ask questions of and receive answers from any of the officers of
Buyer concerning the terms and conditions of the issuance of the Shares, and to
obtain any documents or additional information necessary to verify the
information provided to Seller or otherwise related to the financial data and
business of Buyer, to the extent that such parties possessed such information or
could acquire it without unreasonable effort or expense, and all such questions,
if asked, have been answered satisfactorily and all such documents, if examined,
have been found to be fully satisfactory. Seller is an “accredited investor” as
defined in the Securities Act of 1933, as amended (“Securities Act”).

2.21.           Brokers; Finders.  Except for the services of YCDB Inc., whose
fees will be paid by Seller, no investment banker, broker, finder or other
intermediary has been retained by or is authorized to act on behalf of Seller,
and no such Person is entitled to any fee or commission from Seller or any
Seller Affiliate in connection with the transactions contemplated by this
Agreement.

2.22.           Disclosure.  To the Knowledge of Seller, no representation or
warranty in this Agreement contains any untrue statement of a material fact or
omits to state any statement necessary to make the representations and
warranties made herein not misleading in light of the circumstances under which
they were made.

2.23.           Other Representations and Warranties.  Except for the
representations and warranties contained in this Article II (as modified by the
Schedules hereto, as applicable), neither Seller nor any other Person makes any
other express or implied representation or warranty with respect Seller or the
transactions contemplated by this Agreement, and Seller disclaims any other
representations or warranties, whether made by Seller, the Selling Parties or
any of their respective Affiliates, officers, directors, employees, agents or
representatives.  Except for the representations and warranties contained in
Article II hereof (as modified by the Schedules hereto, as applicable), Seller
and the Selling Parties hereby disclaim all liability and responsibility for any
representation, warranty, projection, forecast, statement, or information made,
communicated, or furnished (orally or in writing) to Buyer or its Affiliates or
representatives (including any opinion, information, projection, or advice that
may have been or may be provided to Buyer by any manager, officer, employee,
agent, consultant, or representative of Seller or the Selling Party or any of
their respective Affiliates).  Seller and the Selling Parties make no
representations or warranties to Buyer regarding the probable success or
profitability of Seller.  The disclosure of any matter or item in any schedule
hereto shall not be deemed to constitute an acknowledgment that any such matter
is required to be disclosed.

ARTICLE III
 
Representations and Warranties of Victory and Buyer
 
As of the Effective Date and as of the Closing Date, Victory and Buyer, jointly
and severally, represent and warrants to Seller as follows:
 
3.1. Status; Authorization, etc.  Victory is a corporation duly organized,
validly existing and in good standing, under the laws of the State of Nevada
with full corporate power and authority to execute and deliver this Agreement
and the Ancillary Agreements to which it is a party, to perform fully its
obligations hereunder and thereunder and to consummate the transactions
contemplated hereby and thereby.  Buyer is a corporation duly organized, validly
existing and in good standing, under the laws of the State of Delaware with full
corporate power and authority to execute and deliver this Agreement and the
Ancillary Agreements to which it is a party, to perform fully its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.  The execution and delivery by Buyer and Victory of this Agreement
and each of the Ancillary Agreements to which they are a party, the performance
of Buyer and Victory of their respective obligations hereunder and thereunder,
and the consummation of the transactions contemplated hereby and thereby, have
been duly authorized by all requisite corporate action of Buyer and
Victory.  Buyer and Victory have duly executed and delivered this Agreement and
on the Closing Date Buyer and Victory will have duly executed and delivered the
Ancillary Agreements to which they are a party (other than those that are
required to be executed as of the Effective Date).  This Agreement is, and on
the Closing Date, each of the Ancillary Agreements to which Buyer and Victory
are a party, will be, valid and legally binding obligations of Buyer and
Victory, enforceable against Buyer and Victory in accordance with their
respective terms, subject to applicable bankruptcy, insolvency and similar Laws
relating to creditors’ rights and to general equity principles.
 
 
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3.2. No Conflicts, etc.  The execution, delivery and performance by Buyer and
Victory of this Agreement and each of the Ancillary Agreements to which they are
a party, and the consummation of the transactions contemplated hereby and
thereby, do not and will not conflict with or result in a violation of or under
(with or without the giving of notice or the lapse of time, or both) (i) the
certificate of incorporation or bylaws or other organizational documents of
Buyer or Victory, (ii) any Law applicable to Buyer or Victory or any of their
properties or assets or (iii) any contract, agreement or other instrument
applicable to Buyer or Victory or any of their properties or assets, except, in
the case of clause (iii), for violations and defaults that, individually and in
the aggregate, have not and will not materially impair the ability of Buyer or
Victory to perform their respective obligations under this Agreement or under
any of the Ancillary Agreements to which they are a party.  No Governmental
Approval or other Consent is required to be obtained or made by Buyer or Victory
in connection with the execution and delivery of this Agreement or the Ancillary
Agreements or the consummation of the transactions contemplated hereby or
thereby.
 
3.3. Litigation.  Except as disclosed in the Victory SEC Reports (as defined
below), there is no Litigation pending, or to Buyer’s Knowledge threatened,
against or affecting Buyer or Victory relating to (i) the transactions
contemplated under this Agreement or the Ancillary Agreements; or (ii) Buyer’s
or Victory’s properties and/or assets (including, without limitation, the Shares
or any other shares of Buyer’s or Victory’s common or preferred stock).
 
3.4. Brokers; Finders.  Except for the services of Fields Texas Limited, L.L.C.,
whose fees will be paid by Buyer or Victory, no investment banker, broker,
finder or other intermediary has been retained by or is authorized to act on
behalf of Buyer or Victory, and no such Person is entitled to any fee or
commission from Seller or any Seller Affiliate in connection with the
transactions contemplated by this Agreement.
 
3.5. Sufficiency of Funds.  Buyer or Victory possess or have immediate access to
sufficient cash funds to consummate the transactions contemplated by this
Agreement.
 
3.6. SEC Reports.  Victory has filed all required registration statements,
prospectuses, reports, schedules, forms, statements, and other documents
(including exhibits and all other information incorporated by reference)
required to be filed by it with the Securities Exchange Commission (“SEC”) since
January 1, 2013 (“Victory SEC Reports”).  As of their respective dates, the
Victory SEC Reports (a) were prepared in accordance and complied in all material
respects with the requirements of all Securities Laws applicable to such Victory
SEC Reports, and (b) did not at the time they were filed (or if amended or
superseded by a filing prior to the date of this Agreement then on the date of
such filing) contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  None of Victory’s subsidiaries is required to file any
forms, reports or other documents with the SEC.
 
3.7. Registration Statement.  Any registration statement (including any
amendments or supplements thereto) (“Registration Statement”) relating to the
Shares when filed with the SEC pursuant to the Securities Act, will comply as to
form in all material respects with the Securities Act and all other applicable
Laws, and at the time the Registration Statement becomes effective, the
Registration Statement will not contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein not misleading.
 
3.8. Absence of Buyer Material Adverse Effect. Since the date of the latest
Victory SEC Report, there has not occurred a material adverse effect on the
assets, properties, results of operations, condition (financial or otherwise),
or business of Victory or its Affiliates (taken as a whole) or any event,
change, circumstance or development (whether or not arising in the ordinary
course of business) which has had or could reasonably be expected to have,
individually or in the aggregate, such a material adverse effect.
 
3.9. Victory Financial Statements.  The financial statements of Victory included
in the Victory SEC Reports comply as to form in all material respects with
applicable accounting requirements and the published rules and regulations of
the SEC with respect thereto, have been prepared in accordance with GAAP
(except, in the case of unaudited statements, as permitted by Form 10-Q of the
SEC) applied on a consistent basis throughout the periods indicated (except as
may be indicated in the notes thereto), and fairly present in all material
respects the consolidated financial position of Victory and its consolidated
Subsidiaries as of the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements to normal year-end adjustments).
 
3.10.           Victory Common Stock.  The Shares issued pursuant to Section 1.7
of this Agreement will be duly authorized, validly issued, fully paid, and
nonassessable when issued to Seller.

3.11.           Disclosure.                      To the Knowledge of Buyer, no
representation or warranty in this Agreement contains any untrue statement of a
material fact or omits to state any statement necessary to make the
representations and warranties made herein not misleading in light of the
circumstances under which they were made.

ARTICLE IV
 
Covenants
 
4.1. Covenants of Seller.
 
4.1.1. Conduct of Business.  From the Effective Date until the Closing, the
Seller Parties shall, except as otherwise contemplated herein or under the
Ancillary Agreements, conduct the Business in the ordinary course consistent
with past practice and use reasonable efforts to preserve intact the Business,
the Assets and the relationships of Seller with its customers, suppliers and
others having business dealings with them, and make available the services of
the employees.  Without limiting the generality of the foregoing, from the
Effective Date until the Closing, except as otherwise required or contemplated
by this Agreement or the Ancillary Agreements or as set forth on Schedule 4.1.1,
without the consent of Buyer, Seller shall not, with respect to the Business or
the Assets:
 
 
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(a) merge or consolidate with any other Person;
 
(b) enter into, assume, terminate or amend any Material Contract or any
agreement that would be a Material Contract, other than (i) Material Contracts
entered into in the ordinary course of business consistent with past practice
and providing for payments over the term of such agreements of no more than Ten
Thousand Dollars ($10,000) with respect to any single agreement and One Hundred
Thousand Dollars ($100,000) in the aggregate and (ii) Material Contracts
necessary to cause all Assets owned by Global Northern Trading Ltd. to be
transferred to Seller prior to Closing;
 
(c) incur any Indebtedness, other than deposits or advances made in the ordinary
course by customers, or trade accounts payable and short-term working capital
financing, in each case, incurred in the ordinary course of business consistent
with past practice;
 
(d) make any capital expenditures, or commitments for capital expenditures, in
an amount in excess of One Hundred Thousand Dollars ($100,000) in the aggregate;
 
(e) forgive, cancel or compromise any debt or claim, or waive or release any
right of material value with respect to the Business;
 
(f) fail to pay or satisfy when due any material liability of the Business
(other than any such liability that is being contested in good faith);
 
(g) settle or compromise any on-going material Litigation with respect to the
Business;
 
(h) sell, transfer, lease, exclusively and irrevocably license, or otherwise
dispose of any Asset, or acquire assets of any other Person, except for
inventory purchased or sold in the ordinary course of business consistent with
past practice;
 
(i) license, sublicense or subject to any Lien (other than Permitted Liens) any
Owned Intellectual Property used in the Business other than in the ordinary
course of business consistent with past practice;
 
(j) except as expressly permitted under this Section 4.1.1, take any action or
omit to take any action if, as a result of such action or omission, any
representation and warranty (other than representations and warranties that
speak as of a particular date) of Seller hereunder would become materially
inaccurate in any respect at, or as of any time prior to, the Closing, and
Seller shall take or omit to take any such action;
 
(k) agree or commit to do any of the foregoing; and
 
(l) (A) hire any employees, (B) enter into any arrangement with or for the
benefit of any employee or former employee, or (C) grant any equity or
equity-based award.
 
4.1.2. No Solicitation.  Until the Closing Date, neither any Seller Party nor
any Seller Affiliate, or any Person acting on their behalf shall directly or
indirectly (i) solicit, initiate, entertain or encourage any inquiries or
proposals for, or enter into or hold any discussions with respect to, the
transfer of any Assets or any portion of the Business, other than with respect
to inventory sold in the ordinary course of business consistent with past
practice or (ii) furnish or cause to be furnished any non-public information
concerning the Business to any Person (other than Buyer and its agents,
representatives and financing sources), other than in the ordinary course of
business consistent with past practice or pursuant to applicable Law and after
prior written notice to Buyer.
 
4.1.3. Access and Information.
 
(a) From the Effective Date until the Closing Date, and upon Buyer providing
Seller written notice at least one (1) Business Day in advance, Seller will (and
will cause each Seller Affiliate and its respective accountants, counsel,
consultants, employees and agents to) afford Buyer, Buyer Affiliates and their
respective investors, lenders, accountants, counsel, consultants, employees and
agents (collectively, “Representatives”), reasonable access to, during normal
business hours, all documents, records, work papers and information with respect
to properties, assets, books, contracts, commitments, Governmental Approvals,
reports and records of Seller or a Seller Affiliate relating to the Business or
the Assets, as Buyer or any Buyer Affiliate shall from time to time reasonably
request in writing.
 
(b) On or prior to the Closing Date, Seller shall, at Seller’s sole expense,
deliver to Buyer, originals or copies of the Financial Records; provided,
however, that for a period of seven (7) years commencing on the Closing Date,
Seller shall make available to Buyer the original forms of the Financial Records
(i) that were not previously delivered to Buyer for the purposes of any audit of
the Business by Buyer, or (ii) otherwise as reasonably requested in writing by
Buyer.
 
 
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(c) To the extent Seller does not provide Buyer with the original form of the
Books and Records on or prior to the Closing Date, for a period of seven (7)
years commencing on the Closing Date, Seller will retain and not dispose of or
permit the disposal of such Books and Records without first giving sixty (60)
days’ prior notice to Buyer offering to deliver the same to Buyer at Buyer’s
sole expense.
 
4.1.4. Financial Statements.  Notwithstanding anything to the contrary in
Section 4.1.3, Buyer shall be entitled to inspect the Financial Records of
Seller (whether such Financial Records are held by Seller or a Seller Affiliate)
for the period covered by such Financial Records from the date of the Quarterly
Financial Statements until the Closing.
 
4.1.5. Public Announcements.  Seller shall not, nor shall it permit any Seller
Affiliate to, make any public announcement in respect of this Agreement or the
transactions contemplated under this Agreement or the Ancillary Agreements,
except as required by Law, and after prior express written consent by Buyer.
 
4.1.6. Further Actions.
 
(a) The Seller Parties agree to use commercially reasonable efforts to
consummate the transactions contemplated under this Agreement and the Ancillary
Agreements by the Closing Date.
 
(b) The Seller Parties will, as promptly as practicable, prepare, file or
supply, or cause to be filed or supplied, all applications, notifications and
information required to be filed or supplied by any of them pursuant to
applicable Law in connection with this Agreement, the Ancillary Agreements and
the consummation of the other transactions contemplated hereby and thereby.
 
(c) Seller, as promptly as practicable, will use its commercially reasonable
efforts to obtain, or cause to be obtained, the Consents (including all
Governmental Approvals, Permits and any Consents required under any Assigned
Contract) necessary to be obtained by Seller or a Seller Affiliate in order to
consummate the sale and transfer of the Assets pursuant to this Agreement and
other transactions contemplated hereby and by the Ancillary Agreements.
 
(d) Each Seller Party will, and will cause each Seller Affiliate to, coordinate
and cooperate with Buyer in exchanging such information and supplying such
assistance as may be reasonably requested by Buyer in connection with the
filings and other actions contemplated by Section 4.2.2.
 
(e) From the Effective Date until the Closing Date, each Seller Party shall,
upon becoming aware of, promptly notify Buyer in writing of: (i) any
circumstance, event or action such Seller Party becomes aware of, the existence,
occurrence or taking of which (A) has had or would reasonably be expected to
have, individually or in the aggregate, a Material Adverse Effect, (B) has
resulted in or would reasonably be expected to result in any representation or
warranty made by such Seller Party hereunder not being true and correct or
(C) would reasonably be expected to result in the failure of any of the
conditions set forth in Article V to be satisfied, (ii) any notice or other
communication received by such Seller Party, from any Person alleging that the
Consent of such Person is or may be required in connection with the transactions
contemplated by this Agreement, (iii) any notice or other communication received
by such Seller Party from any Governmental Authority in connection with the
transactions contemplated by this Agreement or any of the Assets, and (iv) any
Litigation commenced or, to the Knowledge of Seller, threatened in writing
against, relating to or involving or otherwise directly affecting any of the
Seller Parties or a Seller Affiliate, which if pending on the date of this
Agreement, would have been required to have been disclosed pursuant to
Section 2.10 or that relate to the consummation of the transactions contemplated
by this Agreement.  Buyer’s receipt of information pursuant to this
Section 4.1.6(e) or otherwise shall not operate as a waiver or otherwise affect
any representation, warranty or agreement given or made by the Seller Parties in
this Agreement.
 
(f) From the Effective Date until the Closing Date, each Seller Party shall,
upon becoming aware of Seller’s having entered into a Contract that would have
been a Material Contract if it had been entered into immediately prior to the
Effective Date, deliver a copy of such Contract (an “Additional Material
Contract”) to Buyer, together with such information as the Seller Parties would
have been obligated to provide if such Additional Material Contract had been
entered into immediately prior to the Effective Date.  The Seller Parties shall
provide Buyer promptly with such additional information with respect to each
such Additional Material Contract and the parties thereto as Buyer reasonably
requests in writing. Buyer shall have the right, exercisable from time to time
until the Closing, to designate one or more of such Additional Material
Contracts as Assigned Contracts, and thereafter such Additional Material
Contracts shall be deemed to be Assigned Contracts.  No additional consideration
shall be payable on account of any such inclusion of one or more of such
Additional Material Contracts as Assigned Contracts.
 
(g) The Seller Parties shall cause all Assets owned by Global Northern Trading
Ltd. to be transferred to Seller prior to Closing.
 
4.1.7. Further Assurances.  Following the Closing Date, each Seller Party,
shall, and shall cause each Seller Affiliate to, from time to time, to, execute
and deliver such additional instruments, documents, conveyances or assurances
and take such other actions as shall be necessary, or otherwise reasonably
requested by Buyer, to confirm and assure the rights and obligations provided
for in this Agreement and in the Ancillary Agreements and render effective the
consummation of the transactions contemplated hereby and thereby.
 
 
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4.1.8. Use of Business Name.  Following the Closing Date, Seller will not, and
will not permit any Seller Affiliate to directly or indirectly, use or do
business, or assist any third party in using or doing business, under the names
and marks set forth on Schedule 4.1.8.
 
4.1.9. Insurance.
 
(a) Schedule 4.1.9 sets forth all insurance policies (including bonds and other
similar instruments) currently in effect, relating to the Assets or the Business
(the “Insurance Policies”). Seller shall maintain or cause to be maintained
through the Closing Date, the Insurance Policies.  If Buyer requests at least
ten (10) days prior to the Closing Date, Seller shall purchase or cause to be
purchased, at Buyer’s expense, an extended reporting period with respect to such
Insurance Policies, to the extent available.  Following the Closing Date, Seller
shall (i) not seek to change any rights or obligations of the Business under
such insurance, (ii) cooperate with Buyer in making claims under such insurance,
and (iii) promptly pay over to Buyer any amounts that Seller or any Seller
Affiliate may receive under such insurance in respect of losses experienced by
the Business.  Seller shall cause Buyer to be named, at no cost to Buyer, as an
additional insured under such Insurance Policies designated by Buyer for the
period commencing on the Closing Date and Seller shall cause such Insurance
Policies designated by Buyer to be assigned to Buyer, at no cost to Buyer, if
such Insurance Policies are assignable.
 
(b)           Prior to the Closing Date, Seller shall deliver to Buyer (i)
copies of all of the Insurance Policies (as amended) in effect at the time of
the Closing and (ii) a certificate of insurance for the Insurance Policies,
certifying that such Insurance Policies are in full force and effect as of the
date specified on the certificate (such date to be prior to the Closing Date,
but no more than ten (10) days prior to the Closing Date).

4.1.10. Ancillary Agreements.  Prior to or contemporaneously with the Closing,
Seller shall, and shall cause each Seller Affiliate to, enter into each of the
Ancillary Agreements to which that Seller and each Seller Affiliate is a party.
 
4.1.11. Seller’s Environmental Compliance.  Seller acknowledges and agrees that
Seller shall be responsible for, at Seller’s sole cost and expense, taking all
necessary and required action in connection with, arising from or relating to
compliance with the provisions of all Environmental Laws (as hereinafter
defined) in connection with the transaction contemplated hereunder.
 
4.1.12. Transition.  For a reasonable period following the Closing, the Seller
Parties shall use their commercially reasonable efforts, at Buyer’s sole
expense, to encourage Seller’s customers, clients, suppliers, and other business
associates to maintain the same business relationships with Buyer after the
Closing as they maintained with Seller prior to the Closing.  The Seller Parties
will promptly refer to Buyer all customer inquiries relating to the
Business.  The Seller Parties agree to use their commercially reasonable efforts
to take such actions as may be necessary to entitle Buyer to use Seller’s
telephone numbers, domain names, website and e-mail addresses identified in
Section 1.1.  The Seller Parties agree to promptly forward to Buyer any mail or
e-mails received by them after the Closing that relate to the Assets, the
Assumed Liabilities or the operation of the Business after the Closing or
otherwise properly relates to the Buyer and not the Seller Parties.
 
4.1.13. Employee and Independent Contractor Payments.  Seller will retain all
obligations and liabilities arising prior to the Closing Date that it may have
with respect to any employee and independent contractor relating to the
Business.
 
4.1.14. Assignment of Cash.  Seller agrees to promptly turn over to Buyer any
funds it receives after the Closing in connection with the operation of the
Business following the Closing.
 
4.1.15. Seller’s Existence.  Until Seller has satisfied its obligations pursuant
to this Agreement, Seller shall continue to validly exist as a corporation, in
good standing under the laws of the British Virgin Islands, and Seller shall
take all necessary action, including the payment of any filing and other fees to
maintain such existence.
 
4.1.16. Tax Returns; Liability for Transfer Taxes and Fees.
 
(a) All sales (including, without limitation, bulk sales), use, value added,
documentary, stamp, gross receipts, registration, transfer, conveyance, excise,
recording, license and other similar Taxes and fees (“Transfer Taxes”) arising
out the transfer of the Assets to Buyer shall be borne by Seller.
 
(b) If requested by Seller, Buyer agrees to provide to Seller a “sale for
resale” certificate in a form acceptable to Seller certifying with respect to
applicable Inventory and other purchased property and assets as to Buyer’s
purchasing of such assets with an intent to resell them in the form purchased so
as to qualify such sale for exemption from otherwise applicable sales and/or use
tax collection obligations applicable to Seller.
 
(c) The Seller Parties will prepare and timely file all Tax Returns to be filed
with respect to Seller for 2013 and 2014 and will provide Buyer copies of all
such Tax Returns promptly after such Tax Returns are filled.
 
 
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4.1.17. Disclosure Schedules.  The Seller Parties shall promptly (and in any
case prior to the Closing) supplement the Schedules (each, a “Supplement”) to
this Agreement if events occur prior to the Closing that would have been
required to be disclosed had they existed at the time of executing this
Agreement.  No Supplement shall be deemed to cure any breach which would
otherwise have existed if the Seller Parties had not delivered such Supplement
for purposes of determining the satisfaction of the conditions set forth in
Article V. If, however, the Closing occurs, the Supplements shall be deemed to
cure any breach which would otherwise have existed if the Seller Parties had not
delivered such Supplement.
 
4.1.18.                      Reasonable Efforts.  Subject to the terms and
conditions of this Agreement, Seller hereby agrees to use all reasonable efforts
to promptly take, or cause to be taken, all actions and do, or cause to be done,
all things necessary, proper or advisable under applicable Laws and regulations
to consummate and make effective the transactions contemplated by this Agreement
and the Ancillary Agreements including the satisfaction of all conditions
hereto.

4.2. Covenants of Buyer and Victory.
 
4.2.1. Public Announcements.  Neither Buyer or Victory shall, or shall permit
any Buyer Affiliates to, make any public announcement in respect of this
Agreement or the transactions contemplated under this Agreement or the Ancillary
Agreements, except as required by applicable Law, without first obtaining the
prior written consent of Seller.
 
4.2.2. Further Actions.
 
(a) Buyer and Victory agree to use reasonable efforts to consummate the
transactions contemplated under this Agreement and the Ancillary Agreements by
the Closing Date.
 
(b) Buyer and Victory will, as promptly as practicable, prepare, file or supply,
or cause to be filed or supplied, all applications, notifications and
information required to be filed or supplied by Buyer and Victory pursuant to
applicable Law or an Assigned Contract (to the extent required to obtain any
Consent) in connection with this Agreement, the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby.
 
(c) Buyer and Victory will coordinate and cooperate with Seller in exchanging
such information and supplying such reasonable assistance as may be reasonably
requested by Seller in connection with the filings and other actions
contemplated by Section 4.1.6.
 
(d) Buyer will discharge, or will cause the discharge of, the Assumed
Liabilities, as and when the same shall become due and payable.
 
4.2.3. Further Assurances.  Following the Closing, Buyer and Victory shall, and
shall cause Buyer Affiliates, from time to time, to execute and deliver such
additional instruments, documents, conveyances or assurances and take such other
actions as shall be necessary, or otherwise reasonably requested by Seller, to
confirm and assure the rights and obligations provided for in this Agreement and
in the Ancillary Agreements and render effective the consummation of the
transactions contemplated hereby and thereby.
 
4.2.4. Access to Information.  To the extent that Seller provides Buyer with the
original form of the Books and Records under Section 1.1, for a period of seven
(7) years, commencing on the Closing Date, Seller shall, upon written notice to
Buyer setting forth a commercially reasonable purpose, be entitled to inspect
and make copies of, at Seller’s expense, such original Books and Records.
 
           4.2.5.           Reasonable Efforts.  Subject to the terms and
conditions of this Agreement, Buyer and Victory hereby agree to use all
reasonable efforts to promptly take, or cause to be taken, all actions and do,
or cause to be done, all things necessary, proper or advisable under applicable
Laws and regulations to consummate and make effective the transactions
contemplated by this Agreement and the Ancillary Agreements including the
satisfaction of all conditions hereto.

4.2.6. Hiring of Employees and Independent Contractors.  On the Closing Date,
Seller shall terminate the engagement of the independent contractors listed in
Schedule 4.2.6 and Buyer or Victory shall make good faith offers of employment
to all of those independent contractors on terms and for compensation
substantially similar to that provided by Seller immediately prior to the
Closing.

 
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ARTICLE V
 
Conditions Precedent
 
5.1. Conditions to Obligations of Each Party.  The obligations of the parties to
consummate the transactions contemplated hereby shall be subject to the
fulfillment on or prior to the Closing Date of the following conditions:
 
5.1.1. No Injunction, etc.  Consummation of the transactions contemplated hereby
or by the Ancillary Agreements shall not have been restrained, enjoined or
otherwise prohibited by any applicable Law, including any order, injunction,
decree or judgment of any court or other Governmental Authority, and no
proceeding challenging the transaction shall have been initiated or threatened
in writing by a party that has retained counsel.  No court or other Governmental
Authority shall have determined any applicable Law to make illegal the
consummation of the transactions contemplated hereby or by the Ancillary
Agreements, and no proceeding with respect to the application of any such
applicable Law to such effect shall be pending.
 
5.2. Conditions to Obligations of Buyer and Victory.  The obligations of Buyer
and Victory to consummate the transactions contemplated hereby shall be subject
to the fulfillment (or waiver by Buyer and Victory) on or prior to the Closing
Date of the following additional conditions:
 
5.2.1. Representations, Performance.  The representations and warranties of the
Seller Parties contained in this Agreement and the Ancillary Agreements shall be
true and correct at and as of the Effective Date (x) in the case of any other
representation or warranty (other than the representations and warranties
referenced in clause (y)) unless the breach or inaccuracy of such
representations and warranties would not have, individually or in the aggregate,
a Material Adverse Effect and (y) in all respects in the case of any
representation or warranty contained in Sections 2.1, 2.3, 2.4, 2.5, 2.6,
2.8(a), 2.11, 2.12 and 2.15.  The representations and warranties of the Seller
Parties contained in this Agreement and the Ancillary Agreements shall be true
and correct on and as of the Closing Date with the same effect as though made on
and as of such date, unless the representation or warranty speaks as of a
particular date other than the Effective Date or the Closing Date, (x) in all
respects in the case of any other representation or warranty (other than the
representations and warranties referenced in clause (y)) unless the breach or
inaccuracy of such representations and warranties would not have, individually
or in the aggregate, a Material Adverse Effect  and (y) in all respects in the
case of any representation or warranty contained in Sections 2.1, 2.3, 2.4, 2.5,
2.6, 2.8(a), 2.11, 2.12 and 2.15. Subject to Section 5.2.2, each Seller Party
and each Seller Affiliate shall have duly performed and complied in all respects
with all agreements, covenants and conditions required by this Agreement and
each of the Ancillary Agreements to be performed or complied with by it prior to
or on the Closing Date, unless the failure to perform or comply would not have,
individually or in the aggregate, a Material Adverse Effect.  Each Seller Party
shall have delivered to Buyer a certificate, dated the Closing Date and signed
by him (if an individual) or its duly authorized officers (if not an
individual), to the foregoing effect.
 
5.2.2. Consents.  Seller shall have obtained and shall have delivered to Buyer
copies of (i) all Governmental Approvals and Permits (including Environmental
Permits) required to be obtained by Seller and each Seller Affiliate in
connection with the execution and delivery of this Agreement and the Ancillary
Agreements and the consummation of the transactions contemplated hereby or
thereby and (ii) all Consents (including, without limitation, all Consents
required under any Assigned Contract) necessary to be obtained in order to
consummate the sale and transfer of the Assets pursuant to this Agreement and
the Ancillary Agreements and the consummation of the other transactions
contemplated hereby and thereby.
 
5.2.3. No Material Adverse Effect.  No event, development or state of
circumstances shall have occurred or come to exist since the Balance Sheet Date
that, individually or in the aggregate, constitutes or results in, or would
reasonably be expected to constitute or result in a Material Adverse
Effect.  Seller, during the period beginning on the Effective Date and ending on
the Closing, shall have continued to achieve sales, fulfill orders, bill
revenues, collect its Accounts Receivable and paid its vendors and liabilities
in its normal course, consistent with its past practices.
 
5.2.4. Transfer Documents.  Seller shall have delivered to Buyer at the Closing
all documents, certificates and agreements necessary to transfer to Buyer good
and marketable title to the Assets, free and clear of any and all Liens thereon,
other than Permitted Liens, including without limitation:
 
(a) the Bill of Sale, in a form mutually acceptable to the parties (the “Bill of
Sale”), executed and dated the Closing Date, with respect to the Assets,
including (i) the Inventory set forth on Schedule 1.1 and (ii) the Accounts
Receivable set forth on Schedule 1.1, in each case dated as of the date that is
one (1) day prior to the Closing Date; and
 
(b) assignments of all Assigned Contracts, in a form mutually acceptable to the
parties (the “Assignment of Contracts”), assignments of Owned Intellectual
Property for which applications or registrations are maintained, in a form
mutually acceptable to the parties (the “Assignments of Intellectual Property”),
and assignments of any other agreements and instruments constituting Assets, in
a form mutually acceptable to the parties (the “General Assignments”), dated the
Closing Date, assigning to Buyer all of Seller’s right, title and interest
therein and thereto, with any required Consent endorsed thereon.
 
5.2.5. Certificate of Insurance.  Buyer shall have received certificates of
insurances for the Insurance Policies, required under Section 4.1.9, certifying
that such Insurance Policies are in full force and effect as of the date
specified on the certificate (such date to be prior to the Closing Date, but no
more than ten (10) days prior to the Closing Date). Seller shall have caused
Buyer to be named, at no cost to Buyer, as an additional insured under the
Insurance Policies designated by Buyer under Section 4.1.9 for the period
commencing on the Closing Date and Seller shall have caused the Insurance
Policies designated by Buyer under Section 4.1.9 to be assigned to Buyer, at no
cost to Buyer
 
 
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5.2.6. Financing.  The Buyer or Victory shall have received financing, in forms
and substance satisfactory to Buyer and Victory, in an amount equal to at least
the Closing Cash Payment.
 
5.2.7. Financial Records.  Buyer shall have received copies of the Financial
Records.
 
5.2.8. Liens.  Any and all Liens on any of the Assets shall have been released
and all security agreements with respect to Seller or any of the Assets shall
have been terminated.
 
5.2.9. Asset Transfers.  The Seller Parties shall have caused all Assets owned
by Global Northern Trading Ltd. to be transferred to Seller.
 
5.2.10. Distributors Letter.  The Seller shall have delivered to the Buyer a
letter agreement substantially in the form annexed hereto as Exhibit 5.2.10 (the
“Distributors Letter”), signed by each of the Seller’s distributors agreeing to
direct all payments arising from and after the Closing Date and relating solely
to the Business from such distributors otherwise due to the Seller to a bank
account designated by Victory.
 
5.3. Conditions to Obligations of Seller.  The obligation of the Seller Parties
to consummate the transactions contemplated hereby shall be subject to the
fulfillment (or waiver by Seller), on or prior to the Closing Date, of the
following additional conditions:
 
5.3.1. Representations, Performance, etc.  The representations and warranties of
Buyer contained in this Agreement and the Ancillary Agreements (i) shall be true
and correct at and as of the Effective Date in all material respects and
(ii) shall be true and correct on and as of the Closing Date with the same
effect as though made on and as of such date in all respects. Buyer and Victory
shall have duly performed and complied in all respects with all agreements,
covenants and conditions required by this Agreement and each of the Ancillary
Agreements to which they are a party, to be performed or complied with by them
prior to or on the Closing Date. Buyer shall have delivered to Seller a
certificate, dated the Closing Date and signed by its duly authorized officer,
to the foregoing effect.
 
5.3.2. Ancillary Agreements.  Each of Buyer, Victory, Seller and all other
applicable parties shall have entered into each of the Ancillary Agreements to
which it is a party.
 
ARTICLE VI
 
Closing Deliveries
 
6.1. Seller’s Deliveries.  At the Closing, the Seller Parties shall deliver or
cause to be delivered to Buyer the following:
 
(a) the Bill of Sale executed by Seller and dated the Closing Date;
 
(b) the Assignment of Contracts executed by Seller and dated the Closing Date;
 
(c) the Assignments of Owned Intellectual Property for which applications or
registrations are maintained and executed by Seller and dated the Closing Date;
 
(d) the General Assignments, with any required Consent endorsed thereon executed
by Seller and dated the Closing Date;
 
(e) employment agreements substantially in the form annexed hereto as Exhibit
6.1(e) (the “Employment Agreements”) executed by each of Keer and Brian Phillips
dated the Closing Date;
 
(f) option agreements substantially in the form annexed hereto as Exhibit 6.1(f)
(the “Option Agreements”) executed by each of the distributors of the Business
and Buyer and dated the Closing Date;
 
(g) registration rights agreement substantially in the form annexed hereto as
Exhibit 6.1(g) (the “Registration Rights Agreement”) executed by Seller and
Victory dated the Closing Date;
 
(h) a long-form good standing certificate of Seller issued by the applicable
authority in the British Virgin Islands dated not more than ten (10) days prior
to the Closing and attesting to the existence and good standing of Seller;
 
 
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(i) a certificate of the Secretary of Seller dated the Closing Date annexing (i)
the Memorandum of Association of Seller as in effect on the Closing Date, (ii)
the resolutions authorizing the transactions contemplated by this Agreement, and
certifying that such resolutions have not been amended, modified or cancelled
and (iii) the incumbency of certain officers of Seller and specimen signatures
of those officers of Seller executing documents;
 
(j) the certificate of each Seller Party referred to in the last sentence of
Section 5.2.1;
 
(k) copies of the Governmental Approvals referred to in Section 5.2.2(a) (if
any);
 
(l) copies of the consents referred to in Section 5.2.2(a);
 
(m) copies of UCC-3 termination statements extinguishing all Liens, other than
Permitted Liens, on the Assets (if any);
 
(n) a full listing of all Inventory on Schedule 1.1 and evidence of the delivery
of the Inventory;
 
(o) a listing of all accounts payable of Seller as of the Closing;
 
(p) a schedule of all open purchase orders in effect as of the date that is two
(2) Business Days prior to the Closing Effective Date (but excluding all other
purchase orders), for the purchase of materials, supplies, goods, services,
equipment or other assets providing for aggregate payments by Seller over the
remaining term of such agreement or related agreements of Fifty Thousand Dollars
($50,000) or more (all such purchase orders shall be deemed to be Additional
Material Contracts);
 
(q) a listing of all Accounts Receivable of Seller as of the Closing;
 
(r) copies or originals of all Books and Records;
 
(s) the Distributors Letter executed by the Seller and each of its distributors;
and
 
(t) such other documents or certificates as are reasonably requested by Buyer to
consummate the transactions contemplated hereby.
 
6.2 Buyer’s Deliveries.  At the Closing Buyer or Victory shall deliver or cause
to be delivered to Seller the following:
 
(a) the Closing Cash Payment;
 
(b) the Assignment of Contracts executed by Buyer and dated the Closing Date;
 
(c) the Assignments of Owned Intellectual Property for which applications or
registrations are maintained and which are executed by Buyer and dated the
Closing Date;
 
(d) the Employment Agreements executed by Buyer and dated the Closing Date;
 
(e) the Option Agreements;
 
(f) the Registration Rights Agreement;
 
(g) a certificate of the Secretary of Buyer dated the Closing Date annexing (i)
the certificate of formation, as amended and the Operating Agreement of Buyer as
in effect on the Closing Date, (ii) the resolutions authorizing the transactions
contemplated by this Agreement, and certifying that such resolutions have not
been amended, modified or cancelled and (iii) the incumbency of certain officers
of Buyer and specimen signatures of those officers of Buyer executing documents;
 
(h) the certificate of Buyer referred to in the last sentence of Section 5.3.1;
 
 
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(i) a stock certificate evidencing the Shares (or commercially acceptable
electronic entry notification); and
 
(j) such other documents or certificates as are reasonably requested by Seller
to consummate the transactions contemplated hereby.
 
ARTICLE VII
 
Termination
 
7.1. Termination.  This Agreement may be terminated at any time prior to the
Closing Date:
 
(a) by the written agreement of Buyer and Seller; or
 
(b) by Buyer (i) if there has been a material breach by Seller of any of its
representations, warranties or covenants contained in this Agreement, or (ii) if
any condition set forth in Sections 5.1 or 5.2 hereof shall not be met or
becomes impossible to fulfill on or before July 31, 2014 (the “Termination
Date”) unless such fulfillment has been made impossible by any act or failure to
act of Buyer;
 
(c) by Seller (i) if there has been a material breach by Buyer of any of its
representations, warranties or covenants contained in this Agreement, or (ii) if
any condition set forth in Sections 5.1 or 5.3 hereof shall not be met or
becomes impossible to fulfill on or before the Termination Date unless such
fulfillment has been made impossible by any act or failure to act of Seller.
 
7.2. Effect of Termination.  In the event of the termination of this Agreement
pursuant to the provisions of Section 7.1, this Agreement (other than the last
sentence of this Section and Section 8.3) shall become void and have no effect,
without any liability to any Person in respect hereof or of the transactions
contemplated hereby on the part of any party hereto, or any of its directors,
officers, employees, agents, consultants, representatives, advisers, members or
Affiliates, except for any liability resulting from such party’s breach of this
Agreement.  If this Agreement is terminated as provided herein, each party will
redeliver all Confidential Information, Intellectual Property, documents, work
papers and any other tangible materials in its possession or control relating to
the transactions contemplated hereby, whether obtained before or after the
execution hereof, to the party furnishing the same, and each party shall abide
by the terms of any confidentiality agreement relating thereto.
 
ARTICLE VIII

 
Non-Competition, Non-Solicitation and Non-Disclosure
 
8.1. Non-Competition.  Each Seller Party agrees that it shall not, and it shall
take all commercially reasonable efforts to cause its spouse, children,
Affiliates and its and their directors, managers, officers and equityholders to
not, whether or not for compensation, directly or indirectly, individually or as
an officer, member, manager, trustee, employee, consultant, advisor, partner,
proprietor or otherwise, for a period commencing on the Closing Date and ending
twenty-four (24) months after the Closing Date (the “Restricted Period”)
participate or engage in or provide any services to, or have any direct or
indirect interest in, any business which is engaged in whole or in part in the
Business anywhere in the world (collectively, the “Territory”); provided,
however, that notwithstanding the foregoing, the Seller Parties may invest in
publicly traded stock of companies competitive with the Business so long as no
Seller Party at any time owns more than one percent (1%) of the outstanding
stock of any such company.
 
8.2. Non-Solicitation; Non-Disparagement.  Each Seller Party agrees that during
the Restricted Period it shall not, and it shall take all commercially
reasonable efforts to cause its spouse, children, Affiliates and its and their
directors, managers, officers and equityholders to not, either directly or
indirectly, for itself or any third party (1) solicit or induce, or cause the
solicitation or inducement, of any sales or services to, and shall not make any
sales to or provide any services to, any Person that was a customer or client of
Seller in connection with the Business during the twelve (12)-month period
ending on the Closing Date, (2) employ or otherwise engage, or offer to employ
or otherwise engage, any employee or any other person who is then an employee,
consultant or agent of Victory in connection with the Business, or (3) interfere
with or harm the contractual or business relationships with any vendor,
supplier, customer, client, licensor, licensee or independent contractor of
Victory in connection with the Business.  In addition, each party to this
Agreement hereby agrees that it shall not, and it shall take all commercially
reasonable efforts to cause its spouse, children, Affiliates and its directors,
managers, officers and equityholders to not, disparage any other party to this
Agreement, or its services, employees, officers, directors, managers,
stockholders, members or agents (as applicable).
 
 
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8.3. Non-Disclosure by the Seller Parties.  Each Seller Party agrees that it
shall not, and it shall take all commercially reasonable efforts to cause its
spouse, children, Affiliates, and its and their directors, managers, officers
and equityholders to not, use for itself or others, or publish, disclose or
otherwise reveal or divulge, any Confidential Information (as such term is
defined below).  Each Seller Party shall, and shall take all commercially
reasonable efforts to cause its spouse, children, Affiliates and its and their
directors, managers, officers and equityholders to, (1) maintain all
Confidential Information in the strictest confidence and keep the same secret
using at least the same degree of care as it uses for its own confidential
information, and (2) refrain from using or allowing to be used any Confidential
Information for its own benefit or for the benefit of any third party, except as
otherwise expressly provided in this Section 8.3; provided, however, that in the
event disclosure of Confidential Information is requested (i) by a Governmental
Authority under color of Law or applicable regulation, (ii) pursuant to subpoena
or other compulsory process or (iii) otherwise as may be required by Law, each
such Seller Party to the extent lawfully possible will give Buyer at least five
(5) days prior written notice before its disclosure and will provide Buyer with
copies of any responsive materials; and provided further, that the Seller
Parties may disclose such Confidential Information to their respective
directors, managers, officers, employees, consultants, agents, representatives,
equity holders and financing sources who need to know such information in
connection with the transactions contemplated under this Agreement.  For
purposes of this Agreement, “Confidential Information” shall mean non-public
information concerning the financial data, strategic business plans, product
development (or other proprietary product data), customer lists, customer
information, costs, pricing, materials, supplies, venders, products, database
information, services, information relating to governmental relations,
discoveries, practices, processes, methods, marketing plans, Trade Secrets,
Intellectual Property used or held for use in connection with the Business and
other material non-public, proprietary and confidential information of Seller,
Victory or Buyer or relating to the Business or the Assets, that, in any case,
is not otherwise generally available to the public and has not been disclosed by
Buyer to others not subject to confidentiality agreements.
 
8.4. Non-Disclosure by Buyer. Buyer agrees that, prior to the Closing, it shall
not, and it shall take all commercially reasonable efforts to cause its
shareholders, directors, officers, employees, consultants, agents,
representatives, equity holders to not, use for itself or others, or publish,
disclose or otherwise reveal or divulge, any Confidential Information except, as
necessary, to its directors, officers, employees, consultants, agents,
representatives, equity holders and financing sources who need to know such
information, solely for purposes of due diligence review or otherwise in
connection with the transactions contemplated hereby.  Until the Closing, Buyer
shall, and shall cause its Affiliates (including Victory) and its and their
directors, managers, officers, employees, consultants, agents and
representatives to, (1) maintain all Confidential Information in the strictest
confidence and keep the same secret using at least the same degree of care as it
uses for its personal confidential information, and (2) refrain from using or
allowing to be used any Confidential Information for its own benefit or for the
benefit of any third party, except as otherwise expressly provided in this
Section 8.4; provided, however, that in the event disclosure of Confidential
Information is requested (i) by a Governmental Authority under color of Law or
applicable regulation, (ii) pursuant to subpoena or other compulsory process or
(iii) otherwise as may be required by Law, Buyer to the extent lawfully possible
will give Seller at least five (5) days prior written notice before its
disclosure and will provide Seller with copies of any responsive materials; and
provided further, that Buyer may disclose such Confidential Information to its
directors, managers, officers, employees, consultants, agents, representatives,
equity holders and financing sources who need to know such information for
purposes of due diligence review or otherwise in connection with the
transactions contemplated hereby.
 
8.5. Enforcement.
 
(a) If any Seller Party commits a breach, or threatens to commit a breach, of
any of the provisions of Section 8.1 – Section 8.3, or if Victory or Buyer
commits a breach, or threatens to commit a breach of any of the provisions of
Section 8.4 (such person committing or threatening to commit a breach, the
“Breaching Party”), then Buyer (if any Seller Party is the Breaching Party) or
Seller (if Victory or Buyer is the Breaching Party) (the “Non-Breaching Party”)
shall have the following rights and remedies, each of which shall be independent
of the others and shall be severally enforceable, and all of such rights and
remedies shall be in addition to, and not in lieu of, any other rights and
remedies available to the Non-Breaching Party under law or in equity:
 
(i)           The right and remedy to have such provisions of this Article VIII
specifically enforced by any court having equity jurisdiction, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Non-Breaching Party and that money damages will not
provide an adequate remedy at law; and, in connection therewith, the right to
obtain, without notice to such Breaching Party  and without the need to post any
bond, a temporary restraining order, an injunction and any other equitable
relief.  Such right of injunctive relief shall be cumulative and in addition to
whatever other remedies the Non-Breaching Party may have at law or in equity,
including the right of the Non-Breaching Party to recover from such Breaching
Party as set forth in Section 8.5(a)(ii) below; and

(ii)           The right and remedy to require such Breaching Party to account
for and pay over to the Non-Breaching Party all compensation, profits, monies,
accruals, increments or other benefits (collectively “Benefits”) derived or
received by it as the result of any transactions constituting a breach of any of
the provisions of Section 8.1 – Section 8.4, and each Breaching Party hereby
agrees to accurately and fully account for and pay over such Benefits to the
Non-Breaching Party.

(b) The provisions of this Article VIII are severable, and if any provision or
any part of any provision of this Article VIII is found to be invalid or
unenforceable, the balance of that provision and the other provisions hereof
shall be given full force and effect and remain fully valid and enforceable.
 
(c) If any one, or any part, of the covenants contained in this Article VIII is
held to be unenforceable because of the duration of such provision or the area
covered thereby, the parties agree that the court making such determination
shall have the power to reduce the duration and/or area of such provision and,
in its reduced form, said provision shall then be enforceable.
 
(d) The parties hereto intend to and hereby confer jurisdiction to enforce the
covenants contained in this Article VIII upon the courts of any state within the
geographical scope of such covenants.  In the event that the courts of any one
or more of such states shall hold such covenants wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the foregoing
covenants in the courts of any other states within the geographical scope of
such covenants.
 
 
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ARTICLE IX
 
Indemnification
 
9.1. Indemnification by the Seller Parties.  Subject to the provisions of this
Article IX, each Seller Party shall jointly and severally defend, indemnify and
hold harmless each of Buyer and Buyer Affiliates and their respective
equityholders, officers, managers, directors, employees, agents, advisors and
representatives (collectively, the “Buyer Indemnitees”), from and against, and
pay or reimburse Buyer Indemnitees for, any and all Litigation, liabilities,
obligations, losses, fines, costs, expenses, royalties, deficiencies or damages
(whether absolute, accrued, conditional or otherwise and whether or not
resulting from third party claims), including interest and penalties with
respect thereto and out-of-pocket expenses and reasonable attorneys’ and
accountants’ fees and expenses incurred in the investigation or defense of any
of the same or in asserting, preserving or enforcing any of their respective
rights hereunder (collectively, “Losses”), resulting from, arising out of or
relating to (a) any inaccuracy in any representation or warranty when made or
deemed made by any Seller Party or any Seller Affiliate in or pursuant to this
Agreement or any Ancillary Agreement, (b) any breach by any Seller Party or a
Seller Affiliate of any covenant or agreement hereunder or under any Ancillary
Agreement, (c) any Excluded Liabilities or Excluded Assets of Seller, (d) any
and all Taxes of any Seller Party or any Seller Affiliate whether or not
relating to or arising out of the Business, (e) any and all Pre-Closing Taxes of
Seller, (f) environmental liabilities, (g) with respect to products sold by
Seller before the Closing or with respect to other products sold by Seller (x)
any product liability claim with respect to events or occurrences arising prior
to the Closing, (y) any Seller Warranties claim with respect to events or
occurrences arising prior to the Closing and (z) any warranties relating to such
products (whether expressed or implied by operation of Law) with respect to
events or occurrences arising prior to the Closing, (h) any failure of Seller to
comply with applicable bulk sales laws (in consideration of which
indemnification obligation, Buyer hereby waives compliance by Seller with any
applicable bulk sales laws), (i) Seller having failed to duly qualify or obtain
a license to do business in all of the jurisdictions in which the nature of
Seller’s activities required such qualification or licensing; or (j) any Losses
or other amounts (including with respect to disability and unemployment) with
respect to employees and former employees of Seller (other than to the extent
arising out of their employment by Buyer).
 
9.2. Indemnification by Victory and Buyer.  Victory and Buyer shall jointly and
severally defend, indemnify and hold harmless the Seller Parties and their
respective officers, managers, employees, agents, advisors and representatives
(collectively, the “Seller Indemnitees”) from and against any and all Losses
resulting from, arising out of or relating to (a) any inaccuracy in any
representation or warranty made by Victory and/or Buyer in or pursuant to this
Agreement or any Ancillary Agreement to which they are a party, (b) any breach
by Buyer or Victory of any covenant or agreement hereunder or under any
Ancillary Agreement to which it is a party, (c) the Assumed Liabilities or
(d) the operation of the Business following the Closing Date or the ownership,
operation or use of the Assets following the Closing Date, except, in the case
of clause (d), to the extent such Losses constitute Losses for which any Seller
Party is required to indemnify Buyer Indemnitees under Section 9.1.
 
9.3. Certain Limitations.
 
(a) The Seller Parties shall not be required to indemnify Buyer Indemnitees with
respect to any claim for indemnification pursuant to Section 9.1(a) unless and
until the aggregate amount of all claims against the Seller Parties under
Section 9.1(a) exceeds One Hundred Seventy-Five Thousand Dollars ($175,000) (the
“Threshold Amount”), in which event the Seller Parties shall be responsible for
the amount of such Losses back to the first dollar provided, however, that the
aggregate liability of the Seller Parties to Buyer Indemnitees under
Section 9.1(a) shall not exceed Five Million Dollars ($5,000,000) (the “Cap”).
Neither the Cap nor the Threshold Amount shall apply to indemnities for Losses
relating to any Sales Tax, the representations and warranties contained in
Section 2.1, 2.2, 2.8(a), 2.15 or 2.20 or any Losses to be indemnified pursuant
to Section 9.1(e).
 
(b) Except with respect to claims for indemnification based on inaccuracies in
the representations and warranties contained in Section 3.1, Victory and Buyer
shall not be required to indemnify Seller Indemnitees with respect to any claim
for indemnification pursuant to Section 9.2(a) unless and until the aggregate
amount of all claims against Victory and Buyer under Section 9.2(a) shall exceed
the Threshold Amount, in which event Victory and Buyer shall be responsible for
the amount of such Losses back to the first dollar; provided, however, that the
aggregate liability of Victory and Buyer to the Seller Parties under
Section 9.2(a) shall not exceed the Cap.
 
(c) Notwithstanding any other provision of this Agreement, the rights and
remedies of any party based upon, arising out of or otherwise in respect of any
inaccuracy or breach of any representation, warranty, covenant or agreement or
failure to fulfill any condition shall in no way be limited by the fact that a
set of facts upon which any claim of any such inaccuracy or breach is based may
also be the subject matter of any other representation, warranty, covenant or
agreement as to which there is no inaccuracy or breach, provided that such party
shall not be entitled to multiple indemnification for claims based upon the same
set of facts.
 
(d) Except as set forth in Section 8.5, The indemnity provided for in this
Article IX shall be the sole and exclusive remedy of Buyer or the Seller
Parties, as the case may be, after the Closing for any inaccuracy of any
representation or warranty of the Seller Parties or Buyer, respectively, herein
or any other breach of this Agreement; provided, that nothing herein shall limit
in any way any such party’s remedies in respect of fraud, intentional
misrepresentation or omission or intentional misconduct by the other party in
connection herewith or the transactions contemplated hereby.
 
 
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9.4. Payment Adjustments, etc.
 
(a) Any indemnity payment made by any Seller Party to Buyer Indemnitees, on the
one hand, or by Buyer to Seller Indemnitees, on the other hand, pursuant to this
Article IX in connection with any Losses, shall be net of an amount equal to
(x) any Tax obligation actually incurred by the Indemnified Party arising out of
or relating to any such indemnity payment, (y) any insurance proceeds actually
received by the Indemnified Party arising out of or relating to any such
indemnity payment, and (z) any related costs and expenses, including, without
limitation, the aggregate cost of pursuing any related insurance claims, plus
any correspondent increases in insurance premiums or other chargebacks;
provided, however, that neither party shall have any obligation to seek to
recover any insurance proceeds or Tax obligations in connection with making a
claim under this Article IX.  If the Indemnified Party receives any amounts
under applicable insurance policies, or from any other Person alleged to be
responsible for any Losses, subsequent to an indemnification payment by the
Indemnifying Party, then such Indemnified Party shall promptly reimburse the
Indemnifying Party for any payment made or expense incurred by such Indemnifying
Party in connection with providing such indemnification payment up to the amount
received by the Indemnified Party, net of any expenses incurred by such
Indemnified Party in collecting such amount.
 
(b) The parties agree that any indemnification payments made pursuant to this
Agreement shall be treated for Tax purposes as an adjustment to the Purchase
Price, other than as required by law.
 
9.5. Indemnification Procedures.  In the case of any Litigation asserted by a
third party (a “Third Party Claim”) against a party entitled to indemnification
under this Agreement (the “Indemnified Party”), notice (the “Notice”) shall be
given by the Indemnified Party to the party required to provide indemnification
(the “Indemnifying Party”) promptly after such Indemnified Party has actual
knowledge of such Third Party Claim, and the Indemnified Party shall permit the
Indemnifying Party (at the expense of such Indemnifying Party and so long as the
Indemnifying Party acknowledges in writing its obligation to indemnify the
Indemnified Party for Losses related to such third party claim) to assume the
defense of such Third Party Claim, provided, that (a) counsel for the
Indemnifying Party who shall conduct the defense of such Third Party Claim shall
be reasonably satisfactory to the Indemnified Party, and the Indemnified Party
may participate in such defense at such Indemnified Party’s expense, and (b) the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its indemnification obligation under this
Agreement except to the extent that such failure results in a lack of actual
notice to the Indemnifying Party and such Indemnifying Party is materially
prejudiced as a result of such failure to give notice.  If the Indemnifying
Party does not so assume the defense of such Third Party Claim within sixty (60)
days of receipt of the Notice, the Indemnified Party shall be entitled to assume
and control such defense and to settle or agree to pay in full such Third Party
Claim without the consent of the Indemnifying Party without prejudice to the
ability of the Indemnified Party to enforce its claim for indemnification
against the Indemnifying Party hereunder.  Except with the prior written consent
of the Indemnified Party, no Indemnifying Party, in the defense of any such
Third Party Claim, shall consent to entry of any judgment or enter into any
settlement that provides for injunctive or other nonmonetary relief affecting
the Indemnified Party or that does not include as an unconditional term thereof
the giving by each claimant or plaintiff to such Indemnified Party of an
irrevocable release from all liability with respect to such Third Party
Claim.  In the event that the Indemnified Party shall in good faith determine
that the conduct of the defense of any Third Party Claim subject to
indemnification hereunder or any proposed settlement of any such claim by the
Indemnifying Party would reasonably be expected to affect adversely the
Indemnified Party’s Tax liability or (in the case of an Indemnified Party that
is a Buyer Indemnitee) the ability of the Indemnified Party to conduct its
business, the Indemnified Party shall have the right at all times to take over
and assume control over the defense, settlement, negotiations or litigation
relating to any such Third Party Claim at the sole cost of the Indemnifying
Party, provided, that if the Indemnified Party does so take over and assume
control, the Indemnified Party shall not settle such Third Party Claim without
the written consent of the Indemnifying Party, such consent not to be
unreasonably withheld.  In any event, the Seller Parties and Buyer shall
cooperate in the defense of any Third Party Claim subject to this Article IX and
the records of each shall be available to the other with respect to such
defense.
 
9.6. Survival of Representations and Warranties, etc.  All claims for
indemnification under Section 9.1(a) and 9.2(a) with respect to the
representations and warranties contained herein must be asserted on or prior to
the date that is thirty (30) days after the termination of the respective
survival periods set forth in this Section 9.6.  The representations and
warranties contained in this Agreement shall survive the execution and delivery
of this Agreement, any examination by or on behalf of the parties hereto and the
completion of the transactions contemplated herein and in the Ancillary
Agreements, but only to the extent specified below:
 
(a) except as set forth in clause (b), (c), (d) or (e) below, the
representations and warranties contained in Articles II and III shall survive
for a period ending eighteen (18) months after the Closing Date;
 
(b) the representations and warranties of the Seller Parties contained in
Section 2.12 shall survive for a period ending on the 5th anniversary of the
Closing Date;
 
(c) the representations and warranties of the Seller Parties contained in
Sections 2.1 and 2.8(a), and of Buyer contained in Section 3.1 shall survive
without limitation;
 
(d) the representations and warranties of the Seller Parties contained in
Section 2.2 shall survive for a period ending on the 2nd anniversary of the
Closing Date; and
 
(e) the representations and warranties contained in Section 2.14 and 2.15 shall
survive for sixty (60) days beyond the expiration of the applicable statute of
limitations.
 
 
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ARTICLE X
 
Definitions
 
10.1. Definition of Certain Terms.  The terms defined in this Section 10.1,
whenever used in this Agreement, shall have the respective meanings indicated
below for all purposes of this Agreement.  All references herein to a Section,
Article or Schedule are to a Section, Article or Schedule of or to this
Agreement, unless otherwise indicated.
 
“Accounts Receivable” means all accounts receivable of Seller listed on
Schedule 1.1.
 
“Additional Material Contract” has the meaning given to such term in
Section 4.1.6(f).
 
“Affiliate” of a Person means a Person, other than a natural person, that
directly or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the first Person.
 
“Agreement” means this Asset Purchase Agreement, including the Schedules and
Exhibits hereto.
 
“Ancillary Agreements” means each of the Employment Agreements, the Option
Agreements, the Registration Rights Agreement, the Bill of Sale, the Assignment
of Contracts, the Assignments of Owned Intellectual Property and the General
Assignments.
 
“Annual Financial Statements” has the meaning given to such term in Section 2.4.
 
“Article” has the meaning given to such term in Section 10.2.
 
“Assets” has the meaning given to such term in Section 1.1.
 
“Assigned Contracts” means all Contracts of Seller listed on Schedule 1.1.
 
“Assignment of Contracts” has the meaning given to such term in
Section 5.2.4(b).
 
“Assignments of Intellectual Property” has the meaning given to such term in
Section 5.2.4(b).
 
“Assumed Liabilities” has the meaning given to such term in Section 1.3(a).
 
“Balance Sheet” means the balance sheet contained in the Annual Financial
Statements.
 
“Balance Sheet Date” means December 31, 2013.
 
“Benefit Liabilities” means liabilities, obligations, commitments, costs and
expenses, including reasonable fees and disbursements of attorneys and other
advisors, including any such expenses incurred in connection with the
enforcement of any applicable provision of this Agreement relating to the
employees other than liabilities arising out of such employees’ employment with
Buyer or any Buyer Affiliate from and after the Closing, former employees or
Seller Benefit Plans, including as to the payment of wages and the provision of
employment benefits to any employee.
 
“Benefits” has the meaning given to such term in Section 8.5(a).
 
“Bill of Sale” has the meaning given to such term in Section 5.2.4(a).
 
“Books and Records” means the books, records, manuals and other materials (in
any form), including records maintained at Seller’s headquarters, advertising,
catalogues, sales and promotional materials, price lists, correspondence,
customer, mailing and distribution lists, referral sources, photographs,
production data, purchasing materials and records, personnel records of the
employees, manufacturing and quality control records and procedures, blueprints,
research and development files, records, data and laboratory books, Intellectual
Property disclosures, service and warranty records, equipment logs, operating
guides and manuals, sales order files and litigation files, as such Books and
Records relate directly or indirectly to the Business, the Assets or the
employees, and excluding the Financial Records.
 
 
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“Breaching Party” has the meaning given to such term in Section 8.5(a).
 
“Business” has the meaning given to such term in the recitals of this Agreement.
 
“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City are authorized or required to close.
 
“Buyer” has the meaning given to such term in the preamble of this Agreement.
 
“Buyer Affiliate” means a Person, that directly or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common control with
Buyer.
 
“Buyer Indemnitees” has the meaning given to such term in Section 9.1.
 
“Cap” has the meaning given to such term in Section 9.3(a).
 
“Closing” has the meaning given to such term in Section 1.6.
 
“Closing Date” has the meaning given to such term in Section 1.6.
 
“Closing Cash Payment” has the meaning given to such term in Section 1.7.
 
“Code” means the Internal Revenue Code of 1986, as amended.
 
“Common Stock” has the meaning given to such term in Section 1.7.
 
“Confidential Information” has the meaning given to such term in Section 8.3.
 
“Consent” means any consent, approval, authorization, waiver, permit, grant,
franchise, concession, agreement, license, exemption or order of, registration,
certificate, declaration or filing with, or report or notice to, any Person,
including but not limited to any Governmental Authority.
 
“Contract” means any contract, license, lease or other agreement (whether
written or oral and including all amendments thereto).
 
“Control” (including the terms “controlled by” and “under common control with”)
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of a person, whether through the
ownership of voting securities, by contract or credit arrangement, as trustee or
executor, or otherwise.
 
“Covered Returns” has the meaning given to such term in Section 2.15(a).
 
“Credit Agreement” has the meaning given to such term in Section 2.5.
 
“$” or “dollars” means lawful money of the United States of America.
 
 
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“Domain Names” means the domain names listed on Schedule 1.1.
 
“Employment Agreement” has the meaning given to such term in Section 6.1.1(f).
 
“Environmental Law” means any foreign, federal, state or local law, treaty,
statute, rule, regulation, order, ordinance, decree, injunction, judgment,
governmental restrictions or any other requirement of law (including common law)
regulating or relating to the protection of human health, safety, natural
resources or the environment, including, without limitation, laws relating to
contamination and the use, generation, management, handling, transport,
treatment, disposal, storage, Release or threatened Release of Hazardous
Substances.
 
“Environmental Permit” means any permit, license, authorization or consent
required pursuant to applicable Environmental Laws.
 
“ERISA” means the employee Retirement Income Security Act of 1974, as amended.
 
“Excluded Assets” has the meaning given to such term in Section 1.2.
 
“Excluded Liabilities” has the meaning given to such term in Section 1.4.
 
“Exhibit” has the meaning given to such term in Section 10.2.
 
“Financial Records” means the financial, Tax and accounting records (in any
form), including books of original entry, such as general ledgers and trial
balances covering any accounting period ending through the Closing Date relating
directly or indirectly to the Business, the Assets or the employees.
 
“Financial Statements” has the meaning given to such term in Section 2.4.
 
“General Assignments” has the meaning given to such term in Section 5.2.4(b).
 
“Governmental Approval” means any Consent of, with or to any Governmental
Authority.
 
“Governmental Authority” means any nation or government, any state or other
political subdivision thereof, any entity, authority or body exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government, including any government authority, agency,
department, board, commission or instrumentality of the United States or a
foreign nation or jurisdiction, any State of the United States or any political
subdivision of any thereof, any court, tribunal or arbitrator, and any
self-regulatory organization.
 
“Hazardous Substances” means any substance or material that:  (i) is or contains
asbestos, urea formaldehyde insulation, polychlorinated biphenyls, petroleum or
petroleum products, radon gas or microbiological contamination, (ii) requires
investigation, remediation or corrective action pursuant to any Environmental
Law, or is defined, listed or identified as a “hazardous waste,” “hazardous
substance,” “toxic substance” or words of similar import thereunder, or (iii) is
regulated under any Environmental Law.
 
“Indebtedness” means, with respect to any Person, without duplication, (i) all
obligations of such Person for borrowed money, or with respect to deposits or
advances of any kind, (ii) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (iii) all obligations of such Person
upon which interest charges are customarily paid (other than trade payables
incurred in the ordinary course of business consistent with past practices),
(iv) all obligations of such Person under conditional sale or other title
retention agreements relating to any property purchased by such Person, (v) all
obligations of such Person issued or assumed as the deferred purchase price of
property or services (excluding obligations of such Person to creditors for raw
materials, inventory, services and supplies incurred in the ordinary course of
business consistent with past practices), (vi) all lease obligations of such
Person capitalized on the books and records of such Person, (vii) all
obligations of others secured by a Lien on property or assets owned or acquired
by such Person, whether or not the obligations secured thereby have been
assumed, (viii) all obligations of such Person under interest rate, currency or
commodity derivatives or hedging transactions, (ix) all letters of credit or
performance bonds issued for the account of such Person (excluding (a) letters
of credit issued for the benefit of suppliers to support accounts payable to
suppliers incurred in the ordinary course of business consistent with past
practices, (b) standby letters of credit relating to workers’ compensation
insurance and surety bonds and (c) surety bonds and customs bonds) and (x) all
guarantees and arrangements having the economic effect of a guarantee of such
Person of any Indebtedness of any other Person.
 
“Indemnified Party” has the meaning given to such term in Section 9.5.
 
 
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“Indemnifying Party” has the meaning given to such term in Section 9.5.
 
“Insurance Policies” has the meaning given to such term in Section 4.1.9(a).
 
“Intellectual Property” means all trademarks, service marks, trade names, trade
dress, including all goodwill associated with the foregoing, domain names,
copyrights, Software, internet web sites, mask works and other semiconductor
chip rights, and similar rights, and registrations and applications to register
or renew the registration of any of the foregoing, patents and patent
applications, Trade Secrets, and all similar intellectual property rights.
 
“Intellectual Property Assets” means all Intellectual Property of Seller listed
on Schedule 1.1.
 
“Inventory” means all inventory of Seller listed on Schedule 1.1.
 
“IRS” means the Internal Revenue Service.
 
“Knowledge” of any Person means the conscious awareness of facts after due
inquiry.
 
“Laws” has the meaning given to such term in Section 2.11(a).
 
“Liability” means any and all direct or indirect liabilities, obligations,
claims, losses, damages, deficiencies, assessments, penalties, or
responsibilities of any kind or nature, whether known or unknown, asserted or
unasserted, accrued or accrued, absolute or contingent, matured or unmatured,
determined or determinable, fixed or unfixed, secured or unsecured, choate or
inchoate, liquidated or Unliquidated, or due or to become due.
 
“Lien” means any mortgage, pledge, hypothecation, right of others, claim,
security interest, encumbrance, lease, sublease, license, occupancy agreement,
adverse claim or interest, easement, covenant, encroachment, burden, title
defect, title retention agreement, voting trust agreement, interest, equity,
option, lien, liability, obligation, right of first refusal, charge or other
restrictions or limitations of any nature whatsoever, including but not limited
to such as may arise under any Contracts.
 
“Litigation” means any action, cause of action, claim, cease and desist letter,
demand, suit, proceeding, citation, summons, subpoena or investigation of any
nature, civil, criminal, regulatory or otherwise, in law or in equity.
 
“Losses” has the meaning given to such term in Section 9.1.
 
“Material Adverse Effect” means any event, occurrence, fact, condition, change
or effect that has a materially adverse effect on the Business, Assets, Assumed
Liabilities, operations or results of operations of the Business, prospects, or
condition (financial or otherwise) of the Business taken as a whole.
 
“Material Contract” has the meaning given to such term in Section 2.7(b).
 
“Material Customer” has the meaning given to such term in Section 2.16(a).
 
“Material Supplier” has the meaning given to such term in Section 2.16(b).
 
“Non-Breaching Party” has the meaning given to such term in Section 8.5(a).
 
“Notice” has the meaning given to such term in Section 9.5.
 
“Owned Intellectual Property” has the meaning given to such term in
Section 2.9(a).
 
“Permits” has the meaning given to such term in Section 2.11(c).
 
 
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“Permitted Liens” means (i) Liens for Taxes not yet due and payable, or (ii)
mechanics, carriers, workers, materialmen’s, warehousemen’s or other similar
statutory liens, incurred in the ordinary course of business, consistent with
past practices and for which sums are not due and payable.
 
“Person” means any natural person, firm, partnership, association, corporation,
company, trust, business trust, Governmental Authority or other entity.
 
“Pre-Closing Taxes” means any Taxes relating to or arising out of the Business,
or any of the Assets (i) for any taxable period ending on or before the Closing
Date or (ii) that (in the case of any taxable period that begins on or before
the Closing Date and ends after the Closing Date) are apportioned to the period
of such taxable period that ends on the Closing Date (such apportionment being
computed on a per diem basis in the case of any property (or similar taxes) and
computed based on the closing of the books method in any other case).
 
“Product Warranties” means collectively Seller Warranties and the Supplier
Warranties.
 
“Providing Party” has the meaning given to such term in Section 4.1.18(b).
 
“Purchase Price” has the meaning given to such term in Section 1.7.
 
“Quarterly Financial Statements” has the meaning given to such term in Section
2.4.
 
“Registration Rights Agreement” has the meaning given to such term in
Section 6.1.1(g).
 
 “Related Party” has the meaning given to such term in Section 2.17(a).
 
“Related Party Transaction” has the meaning given to such term in
Section 2.17(a).
 
“Release” means any releasing, disposing, discharging, injecting, spilling,
leaking, leaching, pumping, dumping, emitting, escaping, emptying, seeping,
dispersal, migration, transporting, placing and the like, including without
limitation, the moving of any materials through, into or upon, any land, soil,
surface water, groundwater or air, or otherwise entering into the indoor or
outdoor environment.
 
“Representatives” has the meaning given to such term in Section 4.1.3(b).
 
“Restricted Period” has the meaning given to such term in Section 8.1.
 
“Sales Tax” means sales (including bulk sales), use, value added, gross receipts
and other similar tax, duty, governmental charge or assessment or deficiencies
thereof (including all interest and penalties thereon and additions thereto
whether disputed or not), other than Transfer Taxes arising out the transfer of
the Assets to Buyer.
 
“Schedule” has the meaning given to such term in Section 10.2.
 
“Section” has the meaning given to such term in Section 10.2.
 
“Securities Laws” means the Securities Act or any state securities laws.
 
“Seller” has the meaning given to such term in the recitals of this Agreement.
 
“Seller Affiliate” means a Person, that directly or indirectly through one or
more intermediaries, Controls, is Controlled by, or is under common control with
Seller.
 
 
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“Seller Benefit Plans” means each written or oral employee benefit plan, scheme,
program, policy, arrangement and contract (including, but not limited to, any
“employee benefit plan,” as defined in Section 3(3) of ERISA, whether or not
subject to ERISA, and any bonus, deferred compensation, interest bonus, interest
purchase, restricted interest, interest option or other equity-based
arrangement, and any employment, termination, retention, bonus, change in
control or severance plan, program, policy, arrangement or contract) for the
benefit of any (i) current or former officer, employee or director of Seller or
(ii) current or former officer, employee or director of any Buyer Affiliate that
is currently providing or formerly provided services to or in respect of the
Business (or any of their beneficiaries), in each case that is maintained or
contributed to by Seller, a Seller Affiliate, or any Seller Related Person or
with respect to which the Business would reasonably be expected to incur any
liability.
 
“Seller Indemnitees” has the meaning given to such term in Section 9.2.
 
“Seller Parties” has the meaning given to such term in the preamble of this
Agreement.
 
“Seller Warranties” has the meaning given to such term in Section 2.16(c).
 
“Seller’s Knowledge” “to the Knowledge of Seller” or words of like import shall
mean, the Knowledge of any of the Seller Parties.
 
“Seller Related Person” means, with respect to Seller or any Seller Affiliate,
any trade or business, whether or not incorporated, which, together with such
Person, is treated as a single employer under Section 414 of the Code.
 
“Shares” has the meaning given to such term in Section 1.7.
 
“Software” means all computer software, including but not limited to,
application software, system software and firmware, including all source code
and object code versions thereof, in any and all forms and media, and all
related documentation.
 
“Subsidiaries” means each corporation or other Person in which a Person owns or
controls, directly or indirectly, capital stock or other equity interests
representing at least 50% of the outstanding voting stock or other equity
interests.
 
“Supplement” has the meaning given to such term in Section 4.1.19.
 
“Supplier Warranties” means any guaranties, warranties, rights of return, rights
of credit or other indemnities in respect of products provided by a supplier to
Seller that Seller resells.
 
“Tax” means any federal, state, provincial, local, foreign or other income,
alternative, minimum, accumulated earnings, personal holding company, franchise,
capital stock, net worth, capital, profits, windfall profits, gross receipts,
value added, sales, use, goods and services, excise, customs duties, transfer,
conveyance, mortgage, registration, stamp, documentary, recording, premium,
severance, environmental (including taxes under Section 59A of the Code), real
property, personal property, ad valorem, intangibles, rent, occupancy, license,
occupational, employment, unemployment insurance, social security, disability,
workers’ compensation, payroll, health care, withholding, estimated or other
similar tax, duty or other governmental charge or assessment or deficiencies
thereof (including in each case all interest and penalties thereon and additions
thereto whether disputed or not).
 
“Tax Return” means any return, report, declaration, form, claim for refund or
information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
 
“Termination Date” has the meaning given to such term in Section 7.1.
 
“Territory” has the meaning given to such term in Section 8.1.
 
“Third Party Claim” has the meaning given to such term in Section 9.5.
 
“Threshold Amount” has the meaning given to such term in Section 9.3(a).
 
“Trade Secrets” means all inventions, processes, designs, trade secrets,
know-how, ideas, research and development, data, databases and confidential
information.
 
 
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“Transfer Taxes” has the meaning given to such term in Section 4.1.18(a).
 
“Treasury Regulations” means the regulations prescribed pursuant to the Code.
 
“Victory” has the meaning given to such term in the preamble of this Agreement.
 
“WARN” has the meaning given to such term in Section 4.1.15.
 
“Warranty Statement” means any written statement provided by Seller to the
purchasers of products manufactured by Seller, setting forth warranties,
guaranties, rights of return, rights of credit or other indemnities issued in
respect of such manufactured products.
 
“Withholding Taxes” has the meaning given to such term in Section 2.15(a).
 
10.2. Construction.  Unless the context otherwise requires, as used in this
Agreement: (i) “or” is not exclusive, (ii) “including” and its variants mean
“including, without limitation” and its variants, (iii) words defined in the
singular have the parallel meaning in the plural and vice versa, (iv) words of
one gender shall be construed to apply to each gender, (v) the terms “hereof”,
“herein”, “hereby”, “hereto”, and derivative or similar words refer to this
entire Agreement, including the Schedules and Exhibits hereto, (vi) the terms
“Article”, “Section”, “Exhibit” and “Schedule” refer to the specified Article,
Section, Exhibit or Schedule of or to this Agreement, (vii) any grammatical form
or variant of a term defined in this Agreement shall be construed to have a
meaning corresponding to the definition of the term set forth herein, (viii) a
reference to any Person includes such Person’s successors and permitted assigns,
and (ix) any reference to “days” means calendar days unless Business Days are
expressly specified.  If any action under this Agreement is required to be done
or taken on a day that is not a Business Day, then such action shall not be
required to be done or taken on such day but on the first succeeding Business
Day thereafter.
 
ARTICLE XI
 
Miscellaneous
 
11.1. Expenses.  Except as specifically provided otherwise elsewhere in this
Agreement, the Seller Parties, on the one hand, and Buyer and Victory, on the
other hand, shall bear their respective expenses, costs and fees (including
attorneys’, auditors’ and financing commitment fees) in connection with the
transactions contemplated hereby, including the preparation, execution and
delivery of this Agreement and compliance herewith, whether or not the
transactions contemplated hereby shall be consummated.
 
11.2. Severability.  If any provision of this Agreement or in any other document
referred to herein (including any phrase, sentence, clause, Section or
subsection), shall, for whatever reason, be held invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other term or provision of this Agreement or any other
document referenced herein.  Any term or provision of this Agreement held
invalid or unenforceable only in part, degree or within certain jurisdictions
will remain in full force and effect to the extent not held invalid or
unenforceable to the extent consistent with the intent of the parties hereto as
reflected by this Agreement.  To the extent permitted by applicable Law, each
party waives any term or provisions of this Agreement invalid, illegal or
unenforceable in any respect.
 
11.3. Notices.  All notices, requests, demands, waivers and other communications
required or permitted to be given under this Agreement shall be in writing and
shall be deemed to have been duly given if (a) delivered personally with receipt
acknowledged, (b) mailed by first-class, registered or certified mail, return
receipt requested, postage prepaid, or (c) sent by next-day or overnight mail or
delivery.
 
(i) if to Buyer or Victory to,
 
Victory Electronic Cigarettes Corporation
11335 Apple Drive
Nunica, MI 49448
Attention: Brent Willis

 
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with a copy to:
 
Robinson Brog Leinwand Greene
Genovese & Gluck P.C.
875 Third Avenue
New York, NY  10022
Attention: David E. Danovitch, Esq.

(ii) if to the Seller Parties
 
Hardwire Interactive Inc.
R.G. Hodge Plaza 3/fl, Upper Main Street
Wickham’s Cay 1, Road Town
Tortola, British Virgin Islands
Attention: Devin Keer

with a copy to:
 
Venable LLP
575 7th Street, NW
Washington, DC  20004
Attention: Frank A. Ciatto, Esq.

or, in each case, at such other address as may be specified in writing to the
other parties hereto.
 
All such notices, requests, demands, waivers and other communications shall be
deemed to have been received (x) if by personal delivery on the day after such
delivery, (y) if by certified or registered mail, on the third Business Day
after the mailing thereof, or (z) if by next-day or overnight mail or delivery,
on the day delivered.
 
11.4. Miscellaneous.
 
11.4.1. Headings.  The headings contained in this Agreement are for purposes of
convenience only and shall not affect the meaning or interpretation of this
Agreement.
 
11.4.2. Entire Agreement.  This Agreement (including the Schedules hereto) and
the Ancillary Agreements (when executed and delivered) constitute the entire
agreement between the parties with respect to the subject matter hereof, and
supersede all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.
 
11.4.3. Construction.  The parties hereto are sophisticated and have been
represented by counsel who have carefully negotiated the provisions of this
Agreement.  The parties have participated jointly in the negotiation and
drafting of this Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement
 
11.4.4. Counterparts.  This Agreement may be executed in several counterparts
(including Pdfs and other electronic counterparts), each of which shall be
deemed an original and all of which shall together constitute one and the same
instrument.
 
 
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11.4.5. Governing Law; Jurisdiction.  This Agreement shall be governed in all
respects, including as to validity, interpretation and effect, by the internal
laws of the State of New York, without giving effect to the conflict of laws
rules thereof to the extent that the application of the law of another
jurisdiction would be required or permitted thereby.  Buyer, Victory and the
Seller Parties hereby irrevocably submit to the exclusive jurisdiction of the
courts of the State of New York and the Federal courts of the United States of
America located in the State, City and County of New York solely in respect of
the interpretation and enforcement of the provisions of this Agreement and of
the documents referred to in this Agreement, and hereby waive, and agree not to
assert, as a defense in any action, suit or proceeding for the interpretation or
enforcement hereof or of any such document, that it is not subject thereto or
that such action, suit or proceeding may not be brought or is not maintainable
in said courts or that the venue thereof may not be appropriate or that this
Agreement or any of such document may not be enforced in or by said courts, and
the parties hereto irrevocably agree that all claims with respect to such action
or proceeding shall be heard and determined in such a New York State or Federal
court.  Buyer, Victory and the Seller Parties hereby consent to and grant any
such court jurisdiction over the person of such parties and over the subject
matter of any such dispute and agree that mailing or delivery of process or
other papers in connection with any such action or proceeding by next day or
overnight mail (i) in the case of Buyer or Victory, to the address of Buyer and
Victory specified in Section 11.3 hereof and (ii) in the case of the Seller
Parties, to the address of counsel to the Seller Parties specified in Section
11.3 hereof, or in such other manner as may be permitted by law, shall be valid
and sufficient service thereof.
 
11.4.6. Binding Effect.  Subject to Section 11.4.7, this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
heirs, successors and permitted assigns.
 
11.4.7. Assignment.  This Agreement shall not be assignable or otherwise
transferable by any party hereto (including by operation of law or in connection
with a merger or sale of substantially all the asset or equity interests of such
party) without the prior express written consent of the other parties, provided
that Buyer may assign this Agreement to any Subsidiary or Affiliate of Buyer or
to any lender to Buyer or any Subsidiary or Affiliate thereof as security for
obligations to such lender in respect of the financing arrangements entered into
in connection with the transactions contemplated hereby and any refinancings,
extensions, refundings or renewals thereof, provided, further, that no
assignment to any such lender shall in any way affect Buyer’s obligations or
liabilities under this Agreement.
 
11.4.8. No Third Party Beneficiaries.  Except as provided in Sections 9.1, 9.2
and 9.3 with respect to indemnification of Indemnified Parties hereunder,
nothing in this Agreement shall confer any rights upon any person or entity
other than the parties hereto and their respective heirs, successors and
permitted assigns.
 
11.4.9. Amendment; Waivers, etc.  No amendment, modification or discharge of
this Agreement, and no waiver hereunder, shall be valid or binding unless set
forth in writing and duly executed by the party against whom enforcement of the
amendment, modification, discharge or waiver is sought.  Any such waiver shall
constitute a waiver only with respect to the specific matter described in such
writing and shall in no way impair the rights of the party granting such waiver
in any other respect or at any other time.  Neither the waiver by any of the
parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure by any of the parties, on one or more occasions, to
enforce any of the provisions of this Agreement or to exercise any right or
privilege hereunder, shall be construed as a waiver of any other breach or
default of a similar nature, or as a waiver of any of such provisions, rights or
privileges hereunder.  The rights and remedies herein provided are cumulative
and are not exclusive of any rights or remedies that any party may otherwise
have at law or in equity.
 

[SIGNATURE PAGE FOLLOWS]

 
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date
first above written.
 

 
VICTORY ELECTRONIC CIGARETTES CORPORATION
         
 
By:
/s/ Brent David Willis       Name: Brent David Willis        Title: Chief
Executive Officer                     
HARDWIRE INTERACTIVE ACQUISITION COMPANY
           
By:
/s/ Brent David Willis       Name: Brent David Willis        Title: Chief
Executive Officer                     
HARDWIRE INTERACTIVE INC.
           
By:
/s/ Devin Keer      
Name: Devin Keer
     
Title: Director
                   
MANTRA MEDIA CAPITAL INC.
           
By:
/s/ Devin Keer      
Name: Devin Keer
     
Title: President
                      /s/ Devin Keer      
DEVIN KEER
 

 
 
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EXHIBITS AND SCHEDULES
 
Exhibit 6.1(e)
Employment Agreements
Exhibit 6.1(f)
Option Agreements
Exhibit 6.1(g)
Registration Rights Agreement
   
Schedule 1.1
Assets
Schedule 2.2(d)
Stockholders
Schedule 2.2(e)
Subsidiaries
Schedule 2.3
Conflicts
Schedule 2.4
Financial Statements
Schedule 2.5
Liabilities
Schedule 2.6
Changes
Schedule 2.6(c)
Certain Liens
Schedule 2.7(a)
Material Contracts
Schedule 2.8(a)
Title to Assets
Schedule 2.8(b)
Sufficiency of Assets
Schedule 2.9(a)
Owned Intellectual Property
Schedule 2.9(a)(i)
Permitted Liens
Schedule 2.9(b)
Licensed Intellectual Property
Schedule 2.9(c)
Intellectual Property Licenses by Seller
Schedule 2.9(e)
Seller Domain Names
Schedule 2.9(f)
Protection of Intellectual Property
Schedule 2.10
Litigation
Schedule 2.11(b)
Governmental Approvals
Schedule 2.11(c)
Permits
Schedule 2.12
Environmental Matters
Schedule 2.13
Employees
Schedule 2.14(a)
Employee Benefit Plans
Schedule 2.14(b)
Acceleration of Benefits
Schedule 2.15(a)
Taxes
Schedule 2.15(b)
Extensions, etc.
Schedule 2.15(c)
Tax Issues, etc.
Schedule 2.15(e)
Tax Litigation
Schedule 2.16(a)
Material Customers
Schedule 2.16(b)
Material Suppliers
Schedule 2.16(c)
Seller Warranties
Schedule 2.17
Related Party Transactions
Schedule 4.1.1
Conduct of Business
Schedule 4.1.8
Use of Business Name
Schedule 4.1.9
Insurance Policies
Schedule 4.2.6
Employees

 
 
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EXHIBIT 6.1(c)
Employment Agreements

EMPLOYMENT AGREEMENT

BETWEEN

VICTORY ELECTRONIC CIGARETTES CORPORATION

And

[__________]
(Executive)

THIS EMPLOYMENT AGREEMENT (this “Agreement”), dated effective as of June [    ],
2014 (the “Effective Date”) is entered into by and between Victory Electronic
Cigarettes Corporation, a Nevada corporation (the “Company”), and [          ],
an individual with a physical address at [           ], (the “Executive”)
(collectively, the “Parties,” individually, a “Party”).
 
W I T N E S S E T H:
 
WHEREAS, the Company desires to employ the Executive on the terms and conditions
set forth in this Agreement and the Executive desires to accept such employment;
and

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that
it is in the best interests of the Company, its affiliates, and its stockholders
to assure that the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat, or occurrence of a Change in Control
(as defined in Article Seven herein).
 
NOW, THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth herein, the Parties, intending to be legally and equitably
bound, hereby agree as follows:
 
ARTICLE ONE
 
DEFINITIONS
 
1.1  
Definitions.  As used in this Agreement:

(a) The term “Accrued Obligations,” when used in the case of the Executive’s
death or disability, shall mean the portion of Executive’s Base Salary that was
not previously paid to the Executive from the last payment date through the Date
of Termination.
 
(b) The term “Automatic Extension” shall have the meaning set forth in Section
2.1(b) herein.
 
(c) The term “Base Salary” shall have the meaning set forth in Section 3.1(a)
herein.
 
 
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(d) The term “Board” shall have the meaning set forth in the recitals.
 
(e) The term “Cause” shall have the meaning set forth in Section 4.3 herein.
 
(f) The term “Common Stock” shall mean the Common Stock, par value $0.001, of
the Company.
 
(g) The term “Compensation Committee” shall mean the Compensation Committee of
the Company.
 
(h) The term “Corporate Documents” shall mean the Company’s Articles of
Incorporation, as amended, and/or its Bylaws, as amended.
 
(i) The term “Effective Date” shall have the meaning set forth in the preamble.
 
(j) The term “Good Reason” shall have the meaning set forth in Section 4.4
herein.
 
(k) The term “Initial Term” shall have the meaning set forth in Section 2.1(b)
herein.
 
(l) The term “Without Cause” shall have the meaning set forth in Section 4.3
herein.
 
ARTICLE TWO
 
POSITION & DUTIES
 
2.1  
Employment.

 
(a) Title.  The Executive shall serve as the Co-Executive Vice President, Global
E-Commerce, of the Company and agrees to perform services for the Company and
such other affiliates of the Company, as described in Section 2.1(c) herein.
 
(b) Term.  The Executive’s employment shall be for an initial term of three (3)
years (the “Initial Term”), commencing on the Effective Date. The Executive’s
employment shall be automatically extended on the day after the third (3rd)
anniversary of the Effective Date (each, an “Automatic Extension”), and on each
anniversary date thereof, for additional one (1) year periods.  The Initial Term
and any Automatic Extensions shall be referred to as the “Employment Term”.
 
(c) Duties and Responsibilities. The Executive shall report to the Company’s
chief executive officer (the “CEO”).  During the term of this Agreement, the
Executive shall, subject to the direction of the CEO, oversee and direct global
e-commerce of the Company, and shall perform such duties as are customarily
performed by a vice-president of global e-commerce of a company such as the
Company or as are appropriate for the Executive’s position and otherwise
delegated to him from time to time by the CEO. Notwithstanding the foregoing, it
is hereby agreed and acknowledged that the Executive shall not be required to
permanently work from an office or fixed location designated by the Company
during the Employment Term.
 
 
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(d) Performance of Duties. During the term of the Agreement, except as otherwise
approved by the CEO or as provided below, the Executive agrees to devote his
substantial business time, effort, skill and attention to the affairs of the
Company and its subsidiaries, will use his best efforts to promote the interests
of the Company, and will discharge his responsibilities hereunder in a diligent
and faithful manner, consistent with sound business practices.  The foregoing
shall not, however, preclude Executive from devoting reasonable time, attention
and energy in connection with the following activities, provided that such
activities do not materially interfere with the performance of his duties and
services hereunder (the “Permitted Activities”):
 
(i) serving as a director or a member of a committee of any company or
organization, if serving in such capacity does not involve any conflict with the
business of the Company or any subsidiary and such other company or organization
is not in competition, in any manner whatsoever, with the business of the
Company or any of its subsidiaries;
 
(ii) fulfilling speaking engagements;
 
(iii) engaging in charitable and community activities;
 
(iv) managing his personal business and investments; and
 
(v) engaging in any other activity approved of by the Board.  For purposes of
this Agreement, any activity specifically listed on Schedule A shall be
considered as having been approved by the Board (collectively, the “Pre-Existing
Business Ventures”).
 
(e) Representations and Warranties of the Executive with Respect to Conflicts,
Past Employers and Corporate Opportunities.  The Executive represents and
warrants that:
 
(i) his employment by the Company will not conflict with any obligations which
he has to any other person, firm or entity;
 
(ii) he has not brought to the Company (during the period before the signing of
this Agreement) and he will not bring to the Company any materials or documents
of a former or present employer, or any confidential information or property of
any other person, firm or entity; and
 
(iii) he does not, as of the date hereof, directly or indirectly, assist or have
an active interest in (whether as a principal, stockholder, lender, employee,
officer, director, partner, venturer, consultant or otherwise) in any person,
firm, partnership, association, corporation or business organization, entity or
enterprise that competes with or is engaged in a business which is substantially
similar to the business of the Company; provided, however, that ownership of not
more than two percent (2%) of the outstanding securities of any class of any
publicly held corporation (“Exempted Securities”) shall not be deemed a
violation of this Section 2.1(e)(iii); and, provided, further, that the
Pre-Existing Business Ventures shall not be deemed a violation of this Section
2.1(e)(iii).
 
 
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(f) Activities and Interests with Companies Doing Business with the Company.  In
addition to the Pre-Existing Business Ventures, Executive shall promptly
disclose to the Board, in accordance with the Company’s policies, full
information concerning any interests, direct or indirect, he holds (whether as a
principal, stockholder, lender, executive, director, officer, partner, venturer,
consultant or otherwise) in any business which, as reasonably known to the
Executive, purchases or provides services or products to, the Company or any of
its subsidiaries; provided, however, that the Executive need not disclose any
such interest resulting from ownership of Exempted Securities.
 
(g) Other Business Opportunities.  Notwithstanding anything contained herein to
the contrary, and in addition to the Permitted Activities, the Executive shall
at all times during the Employment Term be permitted to participate in other
business opportunities if and to the extent that: (i) such business
opportunities are not directly competitive with the Company, similar to the
business of the Company, or would otherwise be deemed to constitute an
opportunity appropriate for the Company; (ii) the Executive’s activities with
respect to such business opportunities do not have a material adverse effect on
the performance of the Executive’s duties hereunder; and (iii) the Executive’s
activities with respect to such opportunity have been fully disclosed in writing
to the Board.
 
ARTICLE THREE
 
COMPENSATION
 
3.1  
Compensation.

 
(a) Base Salary.  Executive shall receive an initial annual base salary of Two
Hundred Thousand Dollars ($200,000), payable according to the Company’s normal
payroll policies and procedures (the “Base Salary”) and subject to all federal,
state, and municipal withholding requirements. The Base Salary shall be reviewed
by the Board annually for adequacy.
 
(b) Commission.  For each twelve (12)-month period during the Employment Term,
beginning on the Effective Date, in addition to the Base Salary, the Executive
will be entitled to receive a commission equal to five percent (5%) of Net Sales
(as defined below) of Hardwire Interactive Acquisition Company and its
successors and assigns (collectively, the “Operating Entity”) in excess of
Twenty-Five Million Dollars ($25,000,000) during such twelve (12)-month period.
Such commission will be paid within forty-five (45) days after each anniversary
of the Effective Date during the Employment Term.  For purposes of this
Agreement, “Net Sales” means, with respect to any twelve (12)-month period
during the Employment Term, gross sales of the Operating Entity less deductions
for taxes, duties, charge-backs, returns, damages, freight charges and customer
acquisition expenses.  Without limiting its implied duties of good faith and
fair dealing, at all times during the Employment Term, neither the Company nor
any of its affiliates shall undertake any actions the primary purpose of which
is to impede the ability of the Executive to earn the full commission or
compensation to which he may be entitled under Sections 3.1(b) and (c),
including, without limitation, effecting any changes in the strategy,
operations, financing, staffing, marketing or sales of the Operating Entity that
are materially and adversely inconsistent with the operation of the business of
the Operating Entity as conducted by Hardwire Interactive Inc. prior to the
Effective Date, or to promoting any products, services or companies that compete
either directly or indirectly with the Operating Entity’s products and
services.  Notwithstanding the foregoing, the sale of electronic cigarettes by
the Company or any of its subsidiaries shall not be deemed to be in competition
with the Operating Entity’s products and services; provided, however, that such
sale of electronic cigarettes by the Company or any of its subsidiaries shall
not be conducted in a manner the primary purpose of which is to impede the
ability of the Executive to earn the full commission or compensation to which he
may be entitled under Sections 3.1(b) and (c).
 
 
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(c) Equity-Based Compensation.  If Gross Profits (as defined below) of the
Operating Entity exceed Twenty Million Dollars ($20,000,000) (the “Gross Profit
Target”) during any twelve (12)-month period during the Initial Term, then
Executive will be entitled to receive Three Hundred Thirty-Three Thousand Three
Hundred Thirty-Three Dollars ($333,333) of Common Stock (the “Stock Grant”), for
up to a maximum of Nine Hundred Ninety-Nine Thousand Nine Hundred Ninety-Nine
Dollars ($999,999) of Common Stock during the Employment Term.  If the Operating
Entity does not achieve the Gross Profit Target during any twelve (12)-month
period during the Initial Term (an “Under-Performance Period”), but achieves
Gross Profits equal to the sum of (i) Gross Profit Target plus (ii) the
difference between (1) the Gross Profit Target minus (2) the Gross Profits
achieved during the immediately subsequent twelve (12)-month period (an
“Over-Performance Period”), then the Executive shall be entitled to receive the
Stock Grant for each of such Under-Performance Period and such Over-Performance
Period.  Any Common Stock issued to the Executive in connection with a Stock
Grant will be issued within forty-five (45) days after each anniversary of the
Effective Date during the Initial Term and will be valued as follows: (i) in the
event that the Common Stock is listed on a public U.S. stock exchange at the
time of issuance, the average closing market price of such Common Stock during
the period following the end of the twelve (12)-month period of the applicable
Stock Grant and the date of issuance and, (ii) in the event that the Common
Stock is not listed on a public U.S. stock exchange at the time of issuance, the
price determined by an independent accounting firm mutually acceptable to the
Executive and the Company (an “Independent Accountant”) the fees of which shall
be borne by the Company. For purposes of this Agreement, “Gross Profits” means,
with respect to any twelve (12)-month period during the Employment Term, Net
Sales less the FOB price of products sold by the Operating Entity.
 
(d) Dispute Resolution.
 
(i) Dispute Notice.  The calculation of Net Sales and Gross Profits shall become
final, binding and conclusive upon the Executive and the Company on the
thirtieth (30th) day following the Executive’s receipt of payment thereof
unless, prior to such thirtieth (30th) day, the Executive delivers to the
Company a written notice (a “Dispute Notice”) disputing the calculation of Net
Sales or Gross Profits and specifying in reasonable detail each item that the
Executive disputes (a “Disputed Item”), the amount in dispute for each such
Disputed Item and the reasons supporting the Executive’s positions.
 
(ii) Resolution Period.  If the Executive delivers a Dispute Notice, then the
Executive and the Company shall seek in good faith to resolve any Disputed Items
during the fifteen (15)-day period beginning on the date the Company receives
the Dispute Notice (the “Resolution Period”). If the Executive and the Company
reach agreement with respect to any Disputed Items, the Net Sales or Gross
Profits in dispute shall be revised to reflect such agreement.
 
 
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(iii) Independent Accountant.  If the Executive and the Company are unable to
resolve all of the Disputed Items during the Resolution Period, then the
Executive and the Company shall jointly engage and submit the unresolved
Disputed Items (the “Unresolved Items”) to an Independent Accountant. The
Executive and the Company shall use their reasonable efforts to cause the
Independent Accountant to issue its written determination regarding the
Unresolved Items within thirty (30) days after such items are submitted for
review.  The Independent Accountant shall make a determination with respect to
the Unresolved Items in accordance with GAAP and the Company’s accounting
procedures, methodologies and elections, consistently applied, and in no event
shall the Independent Accountant’s determination of the Unresolved Items be for
an amount that is outside the range of disagreement.  Each Party shall use its
reasonable efforts to furnish to the Independent Accountant such work papers and
other documents and information pertaining to the Unresolved Items as the
Independent Accountant may request.  The determination of the Independent
Accountant shall be final, binding and conclusive on the Executive and the
Company absent manifest error, and the Net Sales or Gross Profits in dispute
shall be revised to reflect such determination upon receipt thereof.  The fees,
expenses and costs of the Independent Accountant shall be borne in the same
proportion as the aggregate amount of the Unresolved Items that is
unsuccessfully disputed by each Party (as determined by the Independent
Accountant) bears to the total amount of the Unresolved Items submitted to the
Independent Accountant.
 
(iv) Access to Information.  As may be reasonably requested in connection with
the calculation of Net Sales or Gross Profits, as the case may be, the Company
shall promptly (but no later than two (2) business days after receiving such
request) provide the Executive and his designated representatives full access
during normal business hours to review the books and records of the Company
relating to calculation of Net Sales or Gross Profits, as the case may be, and
furnish them with all work papers, documents, records and information relating
to the calculation of Net Sales or Gross Profits, as the case may be.  The
Executive shall bear his costs and expenses in connection with his review
contemplated by this Section 3.1(d)(iv).  Each Party shall cooperate in good
faith with the other with respect to the implementation of this Section
3.1(d)(iv).
 
(e) Participation in Benefit Plans.
 
(v) Retirement Plans.  The Executive shall be entitled to participate, without
any waiting or eligibility periods, in all qualified retirement plans provided
to other executive officers and other key employees of the Company.
 
(vi) Employee Benefit Plans and Insurance.  The Executive shall have the right
to participate in employee benefit plans and insurance programs of the Company
that the Company may sponsor from time to time and to receive all other
customary Company benefits, if those benefits are so offered.  Nothing herein
shall obligate the Executive to accept such benefits if and when they are
offered.
 
 
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(vii) Vacation.
 
(1) The Executive shall be entitled to take fifteen (15) days of paid vacation
time per calendar year (the “Annual Paid Vacation Time Allotment”), which
vacation level shall be reviewed by the Compensation Committee from time to
time.  No more than 1.5 multiplied by the Annual Paid Vacation Allotment may be
accrued, at any given time. In the event that the Executive has reached his
maximum authorized vacation allocation during a given year, accrual will not
re-commence until the Executive uses some of his paid vacation credit and
thereby brings the balance below his maximum.  Accrued paid vacation credit
forfeited because of an excess balance cannot be retroactively reapplied.
 
(2) Provided that the Executive has been a regular full-time employee for three
(3) calendar months prior to the termination of his employment with the Company,
the Company shall pay the Executive for any unused, accrued paid vacation credit
at the time of the Executive’s termination of employment with the Company unless
such termination is effected by the Company for Cause or by the Executive
Without Cause, which will result in the forfeiture of any unused paid vacation
credit.
 
(viii) Paid Holidays.  The Executive shall be entitled to such paid holidays as
are generally available to all employees of the Company.  As of the date of this
Agreement, the Company’s employees are permitted to observe ten (10) paid
holidays per calendar year.
 
(ix) Taxes.  The Company shall pay, on a grossed-up basis for federal, state,
and local income taxes, the amount of any excise tax payable by the Executive as
a result of any payments triggered by this Agreement, or other compensation
agreements between the Executive and the Company or any of its subsidiaries and
any income tax payable by the Executive as a result of any payments in Common
Stock triggered by this Agreement or other compensation agreements between the
Executive and the Company or any of its subsidiaries.
 
(f) Reimbursement.   Provided they are properly documented and approved, the
Company shall reimburse business expenses of the Executive directly related to
Company business, including, but not limited to, airfare, lodging, meals, travel
expenses, medical expenses incurred while traveling not covered by insurance,
business entertainment, expenses associated with entertaining business persons,
local expenses to governments or governmental officials, tariffs, applicable
taxes outside of the United States, special expenses associated with travel to
certain countries, supplemental life insurance or supplemental insurance of any
kind or special insurance rates or charges for travel outside the United States
(unless such insurance is being provided by the Company), rental cars and
insurance for rental cars, and any other expenses of travel that are reasonable
in nature or that have been otherwise pre-approved.  The Executive shall be
governed by the travel and entertainment policy in effect at the Company.
 
 
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(g) Payroll Procedures and Policies.  All payments required to be made by the
Company to the Executive pursuant to this Article Three shall be paid on a
regular basis in accordance with the Company’s normal payroll procedures and
policies.
 
(h) Excise Tax Gross-Up.
 
(x) If any payment to or in respect of the Executive by the Company or any
affiliate, whether pursuant to this Employment Agreement or otherwise (a
“Payment”), is determined to be a “parachute payment” as defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the “Code”) (such
payment, a “Parachute Payment”) and also to be subject to the excise tax imposed
by Section 4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, being herein collectively referred to as the
“Excise Tax”), then the Executive shall be entitled to receive an additional
payment from the Company (the “Gross-Up Payment”) in an amount such that the net
amount of such additional payment retained by the Executive, after payment of
all federal, state and local income and employment and Excise Taxes imposed on
the Gross-Up Payment, shall be equal to the Excise Tax imposed on the Payment.
Notwithstanding the foregoing or any other provision of this Employment
Agreement, if it shall be determined that the Executive is entitled to a
Gross-Up Payment but that the net present value of the Parachute Payments
(calculated at the discount rate in effect under Section 280G of the Code) do
not exceed one hundred ten percent (110%) of the Reduced Amount (as defined
below), then no Gross-Up Payment shall be made to the Executive and the
aggregate amount of the Parachute Payments otherwise payable under this
Employment Agreement shall be reduced to the Reduced Amount; provided, that the
foregoing reduction shall not be made if the Accounting Firm (as defined below)
determines that the net after-tax benefit of the payments to the Executive
without the reduction imposed is more than one hundred ten percent (110%) of the
net after-tax benefit of the payments to the Executive with the reduction
imposed. For purposes of the foregoing, the term “Reduced Amount” shall mean the
greatest amount of Parachute Payments that could be paid to the Executive such
that the receipt of such Parachute Payments would not give rise to any Excise
Tax. The determination of which Payments shall be reduced pursuant to this
Section 3.1(h)(i) shall be made by an independent accounting firm of recognized
standing selected by the Company and reasonably acceptable to the Executive (the
“Accounting Firm”), in consultation with the Executive and shall be reasonably
acceptable to him, and such determination shall be made at the time it is
determined whether any payments made to the Executive are subject to the Excise
Tax.
 
(xi) Subject to the provisions of Section 3.1(h)(iii) hereof, all determinations
required to be made under this Section 3.1(h), including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be made by
the Accounting Firm. The initial determination of whether a Gross-Up Payment is
required, and if so, the amounts of the Excise Tax and Gross-Up Payment, shall
be determined by the Accounting Firm, whose written report shall be delivered to
the Company and to the Executive. Not later than sixty (60) days after any
Payment, the Accounting Firm shall determine whether a Gross-Up Payment is due
with respect to such Payment, and such Gross-Up Payment shall be paid by the
Company to the Executive (except to the extent any portion thereof is paid to
the taxing authorities on behalf of the Executive) not later than ten (10) days
following the Accounting Firm’s determination. The Executive and the Company
shall cooperate in good faith as to the treatment of a Payment for tax reporting
and withholding purposes.
 
 
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(xii) The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of a Gross-Up Payment. Such notification shall be given as soon as
practicable but in no event later than the earlier of (i) thirty (30) days after
the Executive is informed in writing of such claim or (ii) fifteen (15) days
before the date on which such claim is requested to be paid, and shall apprise
the Company of the nature of such claim and the date on which such claim is
requested to be paid.  The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which the Executive gives
such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
 
(1) give the Company any information reasonably requested by the Company
relating to such claim;
 
(2) take such action in connection with contesting such claim as the Company
shall reasonably request in writing from time to time, including without
limitation, accepting legal representation with respect to such claim by an
attorney selected by the Company and reasonably acceptable to the Executive;
 
(3) cooperate with the Company in good faith in order effectively to contest
such claim; and
 
(4) permit the Company to participate in any proceedings relating to such claim;
 
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless for any
Excise Tax or federal, state and local income and employment tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 3.1(h)(iii), the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or to contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the Company shall
advance the amount of such payment to the Executive, on an after-tax basis, and
shall hold the Executive harmless from any Excise Tax or federal, state or local
income or employment tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance. The Company’s control of the contest, however, shall be
limited to issues with respect to which a Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the case
may by, any other issue raised by the Internal Revenue Service or any other
taxing authority.
 
 
 
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(xiii) If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Section 3.1(h)(iii), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Company’s complying with the requirements of Section 3.1(h)(iii)) promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 3.1(h)(iii),
a determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of thirty (30) days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such advance
shall offset, to the extent thereof, the amount of Gross-Up Payment required to
be paid.
 
(xiv) In the event that the Excise Tax is subsequently determined to be less
than initially determined, the Executive shall repay to the Company at the time
that the amount of such reduction in Excise Tax is determined (but, if
previously paid to the taxing authorities, not prior to the time the amount of
such reduction is refunded to the Executive or otherwise realized as a benefit
by the Executive) the portion of the Gross-Up Payment that would not have been
paid if the Excise Tax as subsequently determined had been applied initially in
calculating the Gross-Up Payment, with the amount of such repayment determined
by the Accounting Firm; provided that the amount of required repayment by the
Executive shall be reduced, as the Accounting Firm may determine, in order to
avoid putting the Executive in a worse after-tax position than he would have
enjoyed had the amount of Excise Tax been correctly determined in the first
instance, such determination to be made on a basis consistent with the intention
of this Section 3.1(h), which is to make the Executive whole on an after-tax
basis on account of any Excise Tax (including related interest and penalties).
Similarly, if the amount of Gross-Up Payments actually made by the Company is
subsequently determined by the Accounting Firm to have been inadequate to
satisfy the Company’s obligation to protect the Executive against the Excise Tax
(including related interest and penalties), additional Gross-Up Payments shall
be made as directed by the Accounting Firm. The Executive and the Company shall
each have the right at all times to have the Accounting Firm review and confirm
or revise earlier calculations.
 
ARTICLE FOUR
 
TERMINATION OF EMPLOYMENT
 
4.1           Death. The Executive’s employment shall terminate automatically
upon the Executive’s death during the Employment Term.
 
4.2           Disability. If the Company determines in good faith that the
Disability (as defined below) of the Executive has occurred during the
Employment Term, the Company may give the Executive notice of its intention to
terminate the Executive’s employment. In such event, the Executive’s employment
hereunder shall terminate effective on the thirtieth (30th) day after receipt of
such notice by the Executive (the “Disability Effective Date”); provided, that,
within the thirty (30)-day period after such receipt, the Executive shall not
have returned to full-time performance of the Executive’s duties. For purposes
of this Agreement, “Disability” shall mean the absence of the Executive from the
Executive’s duties hereunder on a full-time basis for an aggregate of one
hundred eighty (180) days within any given period of two hundred seventy (270)
consecutive days (in addition to any statutorily required leave of absence and
any leave of absence approved by the Company) as a result of incapacity of the
Executive, despite any reasonable accommodation required by law, due to bodily
injury or disease or any other mental or physical illness.
 
 
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4.3           Termination by Company.
 
(a)           Termination for Cause.
 
The Company may terminate the Executive’s employment hereunder for Cause (as
defined below). For purposes of this Agreement, “Cause” shall mean:
 
(i)           the willful and continued failure of the Executive to perform
substantially the Executive’s duties hereunder (other than any such failure
resulting from bodily injury or disease or any other incapacity due to mental or
physical illness) after a written demand for substantial performance is
delivered to the Executive by the Board or the CEO of the Company, which
specifically identifies the manner in which the Board or the CEO believes the
Executive has not substantially performed the Executive’s duties;

(ii)           the willful engaging by the Executive in illegal conduct or gross
misconduct that is materially and demonstrably detrimental to the Company and/or
its affiliated companies, monetarily or otherwise; or

(iii)           the Executive’s conviction of, or plea of nolo contendere to,
any felony of theft, fraud, embezzlement or violent crime.

For purposes of this provision, no act, or failure to act, on the part of the
Executive shall be considered “willful” unless done, or omitted to be done, by
the Executive in bad faith or without reasonable belief that the Executive’s
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given pursuant to a resolution duly adopted by the
Board, upon the instructions of the CEO or a Board Member of Company, or based
upon the advice of counsel for the Company shall be conclusively presumed to be
done, or omitted to be done, by the Executive in good faith and in the best
interests of the Company and its affiliated companies.
 
(b)           Termination without Cause.
 
All terminations by the Company that are not for Cause shall be considered
Without Cause.
 
 
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4.4           Termination by the Executive. The Executive may terminate the
Executive’s employment hereunder at any time during the Employment Term for Good
Reason (as defined below). For purposes of this Agreement, “Good Reason” shall
mean any of the following (without the Executive’s express written consent):
 
(a)           the assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status, offices, titles and
reporting requirements), duties, functions, responsibilities or authority as
contemplated by Section 2.1(c) of this Agreement, or any other action by the
Company that results in a diminution in such position, duties, functions,
responsibilities or authority, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; or
 
(b)           any purported termination by the Company of the Executive’s
employment hereunder otherwise than as expressly permitted by this Agreement,
and for purposes of this Agreement, no such purported termination shall be
effective.
 
4.5           Notice of Termination. Any termination of the Executive’s
employment hereunder by the Company or by the Executive (other than a
termination pursuant to Section 4.1) shall be communicated by a Notice of
Termination (as defined below) to the other Party hereto. For purposes of this
Agreement, a “Notice of Termination” shall mean a notice which (a) indicates the
specific termination provision in this Agreement relied upon, (b) in the case of
a termination for Disability, Cause or Good Reason, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of
the Executive’s employment under the provision so indicated, and (c) specifies
the Date of Termination (as defined in Section 4.6 below); provided, however,
that notwithstanding any provision in this Agreement to the contrary, a Notice
of Termination given in connection with a termination for Good Reason shall be
given by the Executive within a reasonable period of time, not to exceed
120 days, following the occurrence of the event giving rise to such right of
termination. The failure by the Company or the Executive to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Disability, Cause or Good Reason shall not waive any right of the Company or the
Executive hereunder or preclude the Company or the Executive from asserting such
fact or circumstance in enforcing the Company’s or the Executive’s rights
hereunder.
 
4.6           Date of Termination. For purposes of this Agreement, the “Date of
Termination” shall mean the effective date of termination of the Executive’s
employment hereunder, which date shall be (a) if the Executive’s employment is
terminated by the Executive’s death, the date of the Executive’s death, (b) if
the Executive’s employment is terminated because of the Executive’s Disability,
the Disability Effective Date, (c) if the Executive’s employment is terminated
by the Company for Cause or by the Executive for Good Reason, the date on which
the Notice of Termination is given, (d)  the date on which the Employment Term
ends pursuant to Section 2.1(b), and (e) if the Executive’s employment is
terminated for any other reason, the date specified in the Notice of
Termination, which date shall in no event be earlier than the date such notice
is given; provided, however, that if within fifteen (15) days after any Notice
of Termination is given, the Party receiving such Notice of Termination notifies
the other Party that a dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is finally determined, either
by mutual written agreement of the parties or by a final judgment, order or
decree of a court of competent jurisdiction (the time for appeal therefrom
having expired and no appeal having been perfected).
 

 
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4.7           Obligations of the Company upon Termination.
 
(a)           Good Reason; Other Than for Cause. If, during the Employment Term,
the Company shall terminate the Executive’s employment hereunder other than for
Cause or the Executive shall terminate the Executive’s employment for Good
Reason the Company shall pay to the Executive in a lump sum (A) the Executive’s
Base Salary, if any, which has been earned but not paid through the Date of
Termination, and (B) any accrued vacation or other pay pursuant to the
Corporation’s vacation policy, to the extent not previously paid. To the extent
not theretofore paid or provided, the Company shall timely pay or provide to the
Executive any other amounts or benefits required to be paid or provided or which
the Executive is eligible to receive under any plan, program, policy, practice
or arrangement or contract or agreement of the Company and its affiliated
companies (such other amounts and benefits hereinafter referred to as the “Other
Benefits”).
 
(b)           Death. If the Executive’s employment is terminated by reason of
the Executive’s death during the Employment Term, this Agreement shall terminate
without further compensation obligations to the Executive’s legal
representatives under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive’s estate or beneficiary, as
applicable, in a lump sum in cash within ninety (90) days of the Date of
Termination) and the timely payment or settlement of any other amount pursuant
the Other Benefits and (ii) treatment of all other compensation under existing
plans as provided by the terms and rules of those plans.
 
(c)           Disability. If the Executive’s employment is terminated by reason
of the Executive’s Disability during the Employment Term, this Agreement shall
terminate without further compensation obligations to the Executive, other than
for (i) payment of Accrued Obligations (which shall be paid to the Executive in
a lump sum in cash within ninety (90) days of the Date of Termination) and the
timely payment or settlement of any other amount pursuant to the Other Benefits
and (ii) treatment of all other compensation under existing plans as provided by
the terms and rules of those plans.
 
(d)           Cause; Other than for Good Reason. If the Executive’s employment
is terminated for Cause during the Employment Term, this Agreement shall
terminate without further compensation obligations to the Executive other than
the obligation to pay to the Executive Base Salary through the Date of
Termination plus the amount of any compensation previously deferred by the
Executive and any accrued vacation or other pay pursuant to the Corporation’s
vacation policy, in each case to the extent theretofore unpaid. If the Executive
voluntarily terminates the Executive’s employment during the Employment Term,
excluding a termination either for Good Reason or (ii) a Change of Control, this
Agreement shall terminate without further compensation obligations to the
Executive, other than for that portion of the Executive’s Base Salary that was
not previously paid to the Executive from the last payment date through the
effective date of the Executive’s voluntary termination, any accrued vacation or
other pay pursuant to the Corporation’s vacation policy and the timely payment
or provision of the Other Benefits, as provided in any applicable plan, and the
Executive shall have no further obligations nor liability to the Company. In
such case, any amounts owed to the Executive shall be paid to the Executive in a
lump sum in cash within ninety (90) days of the Date of Termination subject to
applicable laws and regulations.
 
 
 
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4.8           Continuation of Payments During Disputes.  The Parties agree that
in the case of:
 
(a) termination which the Company contends is for Cause, but the Executive
claims is not for Cause; or
 
(b) termination by the Executive under Section 4.4 herein,
 
the Company shall continue to pay all compensation due to the Executive
hereunder until the resolution of such dispute, but the Company shall be
entitled to repayment of all sums so paid, if it ultimately shall be determined
by a court of competent jurisdiction, in a final non-appealable decision, that
the termination was for Cause or such termination by the Executive was not
authorized under Section 4.4 herein, and all sums so repaid shall bear interest
at the prime rate as published in The Wall Street Journal on the date on which
such court makes such determination.  Any such reimbursement of payments by the
Executive shall not include any legal fees or other loss, costs, or expenses
incurred by the Company.

 
ARTICLE FIVE
 
INDEMNIFICATION
 
5.1 Indemnification.  The Executive shall be indemnified and held harmless
pursuant to the terms and conditions of the Company’s Certificate of
Incorporation and By-Laws.

ARTICLE SIX
 
CONFIDENTIALITY
 
6.1 Confidentially; Non-Competition; and Non-Solicitation.
(i) Confidentiality.  In consideration of employment by the Company and the
Executive’s receipt of the salary and other benefits associated with the
Executive’s employment, and in acknowledgment that (a) the Company is engaged in
the electronic cigarette business, (b) maintains secret and confidential
information, (c) during the course of the Executive’s employment by the Company
such secret or confidential information may become known to the Executive, and
(d) full protection of the Company’s business makes it essential that no
employee appropriate for his or her own use, or disclose such secret or
confidential information, the Executive agrees that during the time of the
Executive’s employment and for a period of two (2) years following the
termination of the Executive’s employment with the Company, the Executive agrees
to hold in strict confidence and shall not, directly or indirectly, disclose or
reveal to any person, or use for his own personal benefit or for the benefit of
anyone else, any trade secrets, confidential dealings, or other confidential or
proprietary information of any kind, nature, or description (whether or not
acquired, learned, obtained, or developed by the Executive alone or in
conjunction with others) belonging to or concerning the Company or any of its
subsidiaries, except (i) with the prior written consent of the Company duly
authorized by its Board, (ii) in the course of the proper performance of the
Executive’s duties hereunder, (iii) for information (x) that becomes generally
available to the public other than as a result of unauthorized disclosure by the
Executive or his affiliates or (y) that becomes available to the Executive on a
non-confidential basis from a source other than the Company or its subsidiaries
who is not bound by a duty of confidentiality, or other contractual, legal, or
fiduciary obligation, to the Company, or (iv) as required by applicable law or
legal process.
 
 
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(j) Non-Competition.  During the Executive’s employment with the Company and for
a period of one (1) year thereafter, the Executive shall not be engaged as an
officer or executive of, or in any way be associated in a management or
ownership capacity with any corporation, company, partnership or other
enterprise or venture which conducts the sale and distribution of electronic
cigarettes or e-vapor products; provided, however, that the Executive may own
Exempted Securities.  It is expressly agreed that the remedy at law for breach
of this covenant is inadequate and that injunctive relief shall be available to
prevent the breach thereof.
 
(k) Non-Solicitation.  The Executive also agrees that he will not, directly or
indirectly, during the term of his employment or within one (1) year after
termination of his or her employment for any reason, in any manner, encourage,
persuade, or induce any other employee of the Company to terminate his
employment, or any person or entity engaged by the Company to represent it to
terminate that relationship without the express written approval of the
Company.  It is expressly agreed that the remedy at law for breach of this
covenant is inadequate and that injunctive relief shall be available to prevent
the breach thereof.
 
ARTICLE SEVEN
 
CHANGE OF CONTROL
 
7.1           Change of Control Effective Date. The “Change of Control Effective
Date” shall mean the first date on which a Change of Control occurs.
Notwithstanding anything in this Agreement to the contrary, if a Change of
Control occurs and if the Executive’s employment with the Company is terminated
prior to the date on which the Change of Control occurs, and if it is reasonably
demonstrated by the Executive that such termination of employment (i) was at the
request of a third party who has taken steps reasonably calculated to effect a
Change of Control or (ii) otherwise arose in connection with or anticipation of
a Change of Control, then for all purposes of this Agreement the “Change of
Control Effective Date” shall mean the date immediately prior to the date of
such termination of employment.
 
 
 
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7.2           Change of Control. For purposes of this Agreement, a “Change of
Control” shall mean:
 
(a)           the acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of fifteen percent (15%) or more of either (A) the then
outstanding Common Shares the Company (the “Outstanding Shares”) or (B) the
combined voting power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the “Outstanding Voting
Securities”); provided, however, that for purposes of this Section 7.2(a) the
following acquisitions shall not constitute a Change of Control: (w) a
Company-sponsored recapitalization that is approved by the Incumbent Board, as
defined below; (x) a capital raise initiated by the Company where the Incumbent
Board remains for at least one hundred eighty (180) days after the closing date
of the raise, or (y) an acquisition of another company or asset(s) initiated by
the Company and where the Company’s shareholders immediately after the
transaction own at least fifty-one percent (51%) of the shares of the combined
concern; or
 
(b)           individuals who, as of the date of this Agreement, constitute the
Company’s Board (the “Incumbent Board”) cease for any reason to constitute a
majority of such Board; provided, however, that any individual becoming a
director of the Company subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders was approved by a vote of
a majority of the directors of the Company then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Company Board; or
 
(c)           consummation of a reorganization, merger, amalgamation or
consolidation of the Company, with or without approval by the shareholders of
the Company, in each case, unless, following such reorganization, merger,
amalgamation or consolidation, (i) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock (or equivalent
security) of the company resulting from such reorganization, merger,
amalgamation or consolidation and the combined voting power of the then
outstanding voting securities of such company entitled to vote generally in the
election of directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Shares and Outstanding Voting
Securities immediately prior to such reorganization, merger, amalgamation or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger, amalgamation or consolidation,
of the Outstanding Shares and Outstanding Voting Securities, as the case may be,
(ii) no Person (excluding a parent of the Company that may come into being after
the date of this Agreement through any transaction deliberately undertaken by
the Company after an affirmative vote of its Incumbent Directors and the Company
shareholders, any employee benefit plan (or related trust) of the Company or
such company resulting from such reorganization, merger, amalgamation or
consolidation, and any Person beneficially owning, immediately prior to such
reorganization, merger, amalgamation or consolidation, directly or indirectly,
fifteen percent (15%) or more of the Outstanding Shares or Outstanding Voting
Securities, as the case may be) beneficially owns, directly or indirectly,
fifteen percent (15%) or more of, respectively, the then outstanding shares of
common stock (or equivalent security) of the company resulting from such
reorganization, merger, amalgamation or consolidation or the combined voting
power of the then outstanding voting securities of such company entitled to vote
generally in the election of directors, and (iii) a majority of the members of
the Board resulting from such reorganization, merger, amalgamation or
consolidation were members of the Incumbent Board at the time of the execution
of the initial agreement providing for such reorganization, merger, amalgamation
or consolidation; or
 
 
 
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(d)           consummation of a sale or other disposition of all or
substantially all the assets of the Company, with or without approval by the
shareholders of the Company, other than to a corporation, with respect to which
following such sale or other disposition, (i) more than fifty percent (50%) of,
respectively, the then outstanding shares of common stock (or equivalent
security) of such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote generally in
the election of directors is then beneficially owned, directly or indirectly, by
all or substantially all the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Shares and Outstanding Voting
Securities immediately prior to such sale or other disposition in substantially
the same proportion as their ownership, immediately prior to such sale or other
disposition, of the Outstanding Shares and Outstanding Voting Securities, as the
case may be, (ii) no Person (excluding the Company, any employee benefit plan
(or related trust) of the Company or such corporation, and any Person
beneficially owning, immediately prior to such sale or other disposition,
directly or indirectly, fifteen percent (15%) or more of the Outstanding Shares
or Outstanding Voting Securities, as the case may be) beneficially owns,
directly or indirectly, fifteen percent (15%) or more of, respectively, the then
outstanding shares of common stock (or equivalent security) of such corporation
or the combined voting power of the then outstanding voting securities of such
corporation entitled to vote generally in the election of directors, and (iii) a
majority of the members of the board of directors of such corporation were
members of the Incumbent Board at the time of the execution of the initial
agreement or action of the Incumbent Board providing for such sale or other
disposition of assets of the Company; or
 

(e)           approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
 
ARTICLE EIGHT
 
MISCELLANEOUS
 
8.1  
Miscellaneous.

 
(l) Benefit.  This Agreement shall inure to the benefit of and be binding upon
each of the Parties, and their respective successors.  This Agreement shall not
be assignable by any Party without the prior written consent of the other
Party.  The Company shall require any successor, whether direct or indirect, to
all or substantially all the business and/or assets of the Company to expressly
assume and agree to perform, by instrument in a form reasonably satisfactory to
the Executive, this Agreement and any other agreements between the Executive and
the Company or any of its subsidiaries, in the same manner and to the same
extent as the Company.
 
 
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(m) Governing Law.  This Agreement shall be governed by, and construed in
accordance with the laws of the State of Michigan without resort to any
principle of conflict of laws that would require application of the laws of any
other jurisdiction; provided, however, that Nevada law shall govern with respect
to the Executive’s rights under a Change of Control under Article Seven herein.
 
(n) Counterparts.  This Agreement may be executed in counterparts and via
facsimile, each of which shall be deemed to constitute an original, but all of
which together shall constitute one and the same Agreement.  Each such
counterpart shall become effective when one counterpart has been signed by each
Party thereto.
 
(o) Headings.  The headings of the various articles and sections of this
Agreement are for convenience of reference only and shall not be deemed a part
of this Agreement or considered in construing the provisions thereof.
 
(p) Severability.  Any term or provision of this Agreement that shall be
prohibited or declared invalid or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective only to the extent of such prohibition or
declaration, without invalidating the remaining terms and provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction, and if any term or provision of this Agreement is held by any
court of competent jurisdiction to be void, voidable, invalid or unenforceable
in any given circumstance or situation, then all other terms and provisions
hereof, being severable, shall remain in full force and effect in such
circumstance or situation, and such term or provision shall remain valid and in
effect in any other circumstances or situation.
 
(q) Construction.  Use of the masculine pronoun herein shall be deemed to refer
to the feminine and neuter genders and the use of singular references shall be
deemed to include the plural and vice versa, as appropriate.  No inference in
favor of or against any Party shall be drawn from the fact that such Party or
such Party’s counsel has drafted any portion of this Agreement.
 
(r) Equitable Remedies.  The Parties hereto agree that, in the event of a breach
of this Agreement by either Party, the other Party, if not then in breach of
this Agreement, may be without an adequate remedy at law owing to the unique
nature of the contemplated relationship.  In recognition thereof, in addition to
(and not in lieu of) any remedies at law that may be available to the
non-breaching Party, the non-breaching Party shall be entitled to obtain
equitable relief, including the remedies of specific performance and injunction,
in the event of a breach of this Agreement, by the Party in breach, and no
attempt on the part of the non-breaching Party to obtain such equitable relief
shall be deemed to constitute an election of remedies by the non-breaching Party
that would preclude the non-breaching Party from obtaining any remedies at law
to which it would otherwise be entitled.
 
 
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(s) Attorneys’ Fees.  If any Party hereto shall bring an action at law or in
equity to enforce its rights under this Agreement, the prevailing Party in such
action shall be entitled to recover from the Party against whom enforcement is
sought its costs and expenses incurred in connection with such action (including
fees, disbursements and expenses of attorneys and costs of investigation). In
the event that the Executive institutes any legal action to enforce the
Executive’s legal rights hereunder, or to recover damages for breach of this
Agreement, the Executive, if the Executive prevails in whole or in part, shall
be entitled to recover from the Company reasonable attorneys’ fees and
disbursements incurred by the Executive with respect to the claims or matters on
which the Executive has prevailed.
 
(t) No Waiver.  No failure, delay or omission of or by any Party in exercising
any right, power or remedy upon any breach or default of any other Party, or
otherwise, shall impair any such rights, powers or remedies of the Party not in
breach or default, nor shall it be construed to be a waiver of any such right,
power or remedy, or an acquiescence in any similar breach or default; nor shall
any waiver of any single breach or default be deemed a waiver of any other
breach or default theretofore or thereafter occurring.  Any waiver, permit,
consent or approval of any kind or character on the part of any Party of any
provisions of this Agreement must be in writing and be executed by the Parties
and shall be effective only to the extent specifically set forth in such
writing.
 
(u) Remedies Cumulative.  All remedies provided in this Agreement, by law or
otherwise, shall be cumulative and not alternative.
 
(v) Amendment.  This Agreement may be amended only by a written agreement signed
by the parties hereto.
 
(i) In addition, to the extent that any of the payments hereunder are or may be
governed by Section 409A of the Code, the parties will work together in a
commercially reasonable manner in good faith to amend any provisions as
necessary for compliance or to avoid the imposition of taxes or penalties under
Section 409A of the Code in a manner that maintains the basic financial
provisions of this Agreement. In this connection, each Party will make any
amendments or adjustments reasonably requested by the other Party which satisfy
the foregoing condition.
 
(ii) It is the intention of the Company and the Executive that this Agreement
comply with the requirements of Section 409A of the Code, and this Agreement
will be interpreted in a manner intended to comply with Section 409A. All
payments under this Agreement are intended to be excluded from the requirements
of Section 409A of the Code or be payable on a fixed date or schedule in
accordance with Section 409A(a)(2)(iv) of the Code. To the extent that
reimbursements or in-kind benefits due to the Executive under this Agreement
constitute “deferred compensation” under Section 409A of the Code, any such
reimbursements or in-kind benefits shall be paid to the Executive in a manner
consistent with Treasury Regulations Section 1.409A-3(i)(1)(iv).
 
(iii) Notwithstanding anything in this Agreement to the contrary, in the event
that the Executive is deemed to be a “specified employee” within the meaning of
Section 409A(a)(2)(B)(i) of the Code and the Executive is not “disabled” within
the meaning of Section 409A(a)(2)(C) of the Code, no payments hereunder that are
“deferred compensation” subject to Section 409A of the Code shall be made to the
Executive prior to the date that is six (6) months after the date of the
Executive’s “separation from service” (as defined in Section 409A of the Code)
or, if earlier, the Executive’s date of death. Following any applicable six (6)
month delay, all such delayed payments will be paid in a single lump sum on the
earliest permissible payment date. For purposes of Section 409A of the Code,
each of the payments that may be made under Sections 2 and 4 are designated as
separate payments for purposes of Treasury Regulations Section
1.409A-1(b)(4)(i)(F), 1.409A-1(b)(9)(iii) and 1.409A-1(b)(9)(v)(B).
 
 
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(iv) For purposes of this Agreement, with respect to payments of any amounts
that are considered to be “deferred compensation” subject to Section 409A of the
Code, references to “termination of employment” (and substantially similar
phrases) shall be interpreted and applied in a manner that is consistent with
the requirements of Section 409A of the Code.
 
(v) The Executive’s right to any deferred compensation, as defined under Section
409A of the Code, shall not be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, attachment, garnishment by creditors,
or borrowing, to the extent necessary to avoid tax, penalties and/or interest
under Section 409A of the Code.
 
(w) Entire Contract.  This Agreement and the documents and instruments referred
to herein constitute the entire contract between the parties to this Agreement
and supersede all other understandings, written or oral, with respect to the
subject matter of this Agreement.
 
(x) Survival.  This Agreement shall constitute a binding obligation of the
Company and any successor thereto.  Notwithstanding any other provision in this
Agreement, the obligations under Article 6 shall survive termination of this
Agreement.
 
(y) Savings Clause.  Notwithstanding any other provision of this Agreement, if
the indemnification provisions in this Agreement shall be invalidated on any
ground by any court of competent jurisdiction, then the Company shall
nevertheless indemnify the Executive as to expenses, judgments, fines, penalties
and amounts paid in settlement with respect to any proceeding to the full extent
permitted by any applicable portion of this Agreement that shall not have been
invalidated and to the fullest extent permitted by applicable law.
 
(z) Modifications and Waivers.  Notwithstanding any other provision of this
Agreement, the indemnification provisions in this Agreement and the Change of
Control provisions of Article Seven herein, may be amended from time to time to
reflect changes in Nevada law.
 
 
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(aa) Notices.  All notices, requests, demands and other communications hereunder
shall be in writing and shall be deemed to have been given (i) when delivered by
hand or (ii) if mailed by certified or registered mail with postage prepaid, on
the third day after the date on which it is so mailed:
 
 

 
(i) if to the Executive:
 
[______]

 
(ii) if to the Company:
 
 
 
Victory Electronic Cigarettes Corporation
11335 Apple Drive
Nunica MI 49448
Attn: CEO

 

or to such other address as may have been furnished to the Executive by the
Company or to the Company by the Executive, as the case may be.
 
(bb) No Limitation.  Notwithstanding any other provision of this Agreement, for
avoidance of doubt, the parties confirm that the foregoing does not apply to or
limit Executive’s rights under Nevada law or the Company’s Corporate Documents.
 
[signature page follows]

 
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IN WITNESS WHEREOF, the parties have set their hands and seals hereunto on the
date first above written.

VICTORY ELECTRONIC CIGARETTES CORPORATION
 
By:____________________________
Name:
Title:
THE EXECUTIVE
 
 
By:____________________________
Name: [   ]

 
 
 
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Schedule A

Outside Activities
[__________]

Company or
Project Name
Nature of Business
Date Hired or Commenced Involvement
Position
Compensation
Annual Time Commitment
(time away from office)
                                   

 
 
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EXHIBIT 6.1(f)
Option Agreements

OPTION AGREEMENT

THIS OPTION AGREEMENT (this “Agreement”) is made as of _________, 2014 by and
among (i) HARDWIRE INTERACTIVE ACQUISITION COMPANY, a Delaware corporation, and
its successors and assigns (collectively, “Optionee”), (ii) GREAT PLAINS
NUTRITION LLC, a Texas limited liability company  (“Optionor”), and (iii)
HARDWIRE INTERACTIVE INC., a corporation formed under the laws of the British
Virgin Islands (“Hardwire”).
 
WHEREAS, pursuant to the terms of that certain Asset Purchase Agreement, dated
as of May __, 2014 (the “Purchase Agreement”), by and among Optionee, Hardwire
and certain affiliates of Hardwire, Optionee purchased substantially all of the
assets relating to Hardwire’s electronic cigarette business (the “Acquired
Business”), including, without limitation, that certain Distribution Agreement
(as amended), dated January 1, 2013 (the “Distribution Agreement”), by and
between Optionor and Hardwire (as the successor-in-interests to Global Northern
Trading Limited);
 
WHEREAS, as contemplated in the Purchase Agreement, and in connection with the
Distribution Agreement, Optionor continues to maintain certain assets relating
to the Acquired Business (collectively, the “Assets”), including, without
limitation, (A) rights under merchant agreements establishing or relating to
merchant accounts used in connection with the Acquired Business, including,
without limitation, (collectively, the “Merchant Agreements”) that certain
Merchant Processing Agreement, dated as of April 2, 2014 with Deutsche Bank AG,
New York, EVO Merchant Services, LLC d/b/a EVO, and any other similar parties to
the Merchant Agreements (the “Merchant Parties”), and (B) certain deposit and/or
reserve accounts of the Merchant Parties associated with the Merchant
Agreements;
 
WHEREAS, in addition to the Assets, Optionor remains bound by certain duties and
obligations relating to the Acquired Business (collectively, the “Liabilities”),
including, without limitation, (i) all duties and obligations under the Merchant
Agreements and (ii) personal guaranty obligation for the benefit of applicable
Merchant Parties (the “Personal Guaranty”); and
 
WHEREAS, Optionor desires to grant, and Optionee desires to accept, an option to
acquire the Assets and assume the Liabilities upon the terms and conditions set
forth herein.
 
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do mutually covenant,
grant, promise and agree as follows:
 
1. Grant of Option.  Optionor hereby gives and grants to Optionee, subject to
the terms and conditions of this Agreement, the sole, exclusive and irrevocable
right and option to acquire all of Optionor’s right, title and interest in the
Assets and to assume all of the Liabilities (the “Option”). Upon Optionee’s
exercise of the Option, the Optionor shall transfer and assign to Optionee, and
Optionee shall accept and assume, each of the Assets and the Liabilities in
accordance with the terms of this Agreement.
 
 
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2. Option Period; Exercise of Option.

(a) Optionee shall have the right to exercise the Option at any time during the
period commencing on the date hereof and ending on December 31, 2014 (the
“Option Period”). Subject to Section 2(b) below, if Optionee shall have failed
to exercise the Option during the Option Period for any reason, time being of
the essence, then this Agreement shall become null and void immediately upon the
expiration of the Option Period without any further action of the parties
hereto.

(b) Optionee shall exercise the Option by providing Optionor with at least
forty-five (45) days’ prior written notice (the “Exercise Notice”) of Optionee’s
desire to exercise the Option. Optionee’s failure to provide Optionor with the
Exercise Notice at least forty-five (45) days prior to the expiration of the
Option Period shall be deemed an election by Optionee to decline its rights to
exercise the Option during the Option Period. Upon receipt of the Exercise
Notice, the parties hereto shall cooperate and take all commercially reasonable
efforts (i) to obtain any and all consents and approvals required by the
Merchant Parties and any other parties or beneficiaries under the Merchant
Agreements to assign Optionor’s rights thereunder to Optionee, (ii) to assign
Optionor’s reserve accounts to Optionee and (iii) to cause Optionee to assume
all liabilities of Optionor under the Merchant Agreements and otherwise
completely remove and release Optionor from its obligations under the Personal
Guaranty (the “Administrative Obligations”). Provided that the Exercise Notice
shall have been received by Optionor at least forty-five (45) days prior to the
expiration of the Option Period, if the parties are unable to complete the
Administrative Obligations prior to the end of the Option Period, then parties
shall continue to cooperate with respect to the Administrative Obligations for
an addition thirty (30) days (the “Extended Period”); provided, however, that no
party shall have any obligation to continue to achieve the Administrative
Obligations nor shall any party have any obligations to any other party under
this Agreement following the expiration of the Extended Period, if applicable.
For the avoidance of doubt, the Option shall be deemed to have been exercised by
Optionee upon the completion of the Administrative Obligations (the “Exercise
Date”).

3. Exercise Price.  On the Exercise Date, in consideration of the Option,
Optionee shall pay to Optionor an amount equal to the sum of (a) One Dollar ($1)
plus (b) all costs incurred by Optionor and/or Hardwire in connection with the
assumption of the Administrative Obligations, including, without limitation,
reasonable attorneys’ fees (the “Exercise Price”). The parties hereto
acknowledge and agree that the Exercise Price, in addition to Optionee’s
assumption of the Liabilities and the release of Optionor from the Personal
Guaranty, shall be fair consideration for the Option granted to Optionee
hereunder.

4. Representations and Warranties of Optionor.  Optionor hereby makes the
following representations and warranties, each and all of which shall be true
and correct as of the date hereof:
(a) Optionor has the full power and legal right and authority to execute,
deliver and perform this Agreement. This Agreement constitutes the valid and
legally binding obligations of Optionor, enforceable in accordance with its
terms.
 
(b) Except as may be provided in the Merchant Agreements or the Personal
Guaranty, the Assets are owned of record and beneficially by Optionor, free and
clear of any option, call, contract, commitment, demand, lien, claim, charge,
security interest or encumbrance whatsoever, and the consummation of the
transactions contemplated herein shall vest in Optionee good, marketable, legal
and equitable title in and to the Assets.
 
 
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5. Additional Covenants.

(a) At all times during the Option Period, Optionor shall continue to perform
its obligations under the Merchant Agreements as it has historically prior to
the date hereof. Optionor shall promptly notify Optionee and Hardwire of any
material amendments to the Merchant Agreements or any materially adverse changes
in the relationship with the Merchant Parties during the Option Period.
 
(b) Each party hereto, upon the reasonable request of any other party hereto,
shall duly execute and deliver, or cause to be duly executed and delivered, at
the cost and expense of the requesting party, such further agreements,
certificates, documents and instruments, and do such other acts and things, as
may be necessary or reasonably requested by any other party hereto to carry out
the provisions and purposes of this Agreement.
 
6. Notices.  All notices, consents or other communications under this Agreement
must be in writing and addressed to each party at the following address (or at
any other address which the respective parties may designate by notice given to
the other party from time to time):
 
 
 

 If to Optionor:  Great Plains Nutrition LLC    _____________________  
 _____________________     If to Optionee: Victory Electronic Cigarette
Corporation  
11335 Apple Drive
Nunica, MI 49448
Attention: Brent Willis
      with a copy to:      
Robinson Brog Leinwand Greene Genovese & Gluck P.C.
875 Third Avenue
New York, NY 1002
Attention: David E. Danovitch, Esq.
     If to Hardwire: 
Hardwire Interactive Inc.
R.G. Hodge Plaza 3/fl, Upper Main Street
Wickham’s Cay 1, Road Town
Tortola, British Virgin Islands
Attention: Devin Keer
      with a copy to:      
Venable LLP
575 7th Street, N.W.
Washington, DC 20004
Attention: Frank A. Ciatto, Esq.

 
 
 
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Any notice required by this Agreement shall be deemed given or made if sent by
fax with confirmed answer back received, or by registered or certified mail
(return receipt requested and postage and registry fees prepaid), or by
commercial express or courier service.  A notice sent by registered or certified
mail shall be deemed given on the date of receipt (or attempted delivery if
refused) indicated on the return receipt.  All other notices shall be deemed
given when actually received.

7. Governing Law.  The construction, validity and interpretation of this
Agreement shall be governed by the laws of the State of New York without giving
effect to any choice-of-law or conflict-of-laws provision or rule whether of the
State of New York or otherwise.

8. Successors and Assigns.  This Agreement shall be binding upon and inure to
the benefit of each of the parties hereto and their respective successors and
assigns.

9. Assignment. This Agreement shall not be assigned or transferred by Optionee
in whole or in part without first obtaining the written consent of Optionor,
which may be granted or withheld in Optionor’s sole discretion.  Any assignment
made without the prior written consent of Optionor shall render this Agreement
null and void.

10. Counterparts.  This Agreement may be executed in any number of counterparts,
each of which when executed and delivered shall be deemed to be an original and
all of which counterparts when taken together shall constitute but one and the
same instrument. Any electronic or facsimile copy of an executed signature page
hereto shall be deemed an original signature page hereto for all purposes.

[Signatures appear on the following page.]
 
 
 
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.

 
OPTIONOR:
          GREAT PLAINS NUTRITION LLC          
 
By:
       Name: 
Martin Glinsky
    Title:
Director
                 

  OPTIONEE:          
 
By:
      Name:        Title:             

  HARDWIRE:           HARDWIRE INTERACTIVE INC.                
 
By:
       Name: Devin Keer     Title: Director          

 
 
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EXHIBIT 6.1(g)
Registration Rights Agreements
 
REGISTRATION RIGHTS AGREEMENT

This Registration Rights Agreement (this “Agreement”) is made and entered into
as of July ___, 2014, between Victory Electronic Cigarettes Corporation, a
Nevada corporation (the “Company”), and Hardwire Interactive Inc. (“Holder” and,
collectively with its permitted successors and assigns, the “Holders”).

               This Agreement is made pursuant to the Asset Purchase Agreement
by and among the Company, Hardwire Interactive Acquisition Company, Holder,
Mantra Media Capital Inc., and Devin Keer, dated as of July ___, 2014 (the
“Purchase Agreement”).

               The Company and each Holder hereby agrees as follows:

        1.                      Definitions.

               Capitalized terms used and not otherwise defined herein that are
defined in the Purchase Agreement shall have the meanings given such terms in
the Purchase Agreement. As used in this Agreement, the following terms shall
have the following meanings:

            “Advice” shall have the meaning set forth in Section 6(c).

“Commission” means the United States Securities and Exchange Commission.

“Effectiveness Date” means, with respect to the Initial Registration Statement
required to be filed hereunder, the 90th calendar day following the Filing Date,
and with respect to any additional Registration Statements which may be required
pursuant to Section 2(c) or Section 3(c), the 90th calendar day following the
date on which an additional Registration Statement is required to be filed
hereunder; provided, however, that in the event the Company is notified by the
Commission that one or more of the above Registration Statements will not be
reviewed or is no longer subject to further review and comments, the
Effectiveness Date as to such Registration Statement shall be the fifth Trading
Day following the date on which the Company is so notified if such date precedes
the dates otherwise required above, provided, further, if such Effectiveness
Date falls on a day that is not a Trading Day, then the Effectiveness Date shall
be the next succeeding Trading Day.

“Effectiveness Period” shall have the meaning set forth in Section 2(a).

“Event” shall have the meaning set forth in Section 2(d).

“Event Date” shall have the meaning set forth in Section 2(d).

 
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“Filing Date” means, with respect to the Initial Registration Statement required
hereunder, the 90th calendar day following the date of this Agreement, subject
to underwriter approval should the Company be involved in an underwritten public
offering and if such approval is not granted then Filing Date means the 90th
calendar day following the closing date of such underwritten public offering,
and, with respect to any additional Registration Statements which may be
required pursuant to Section 2(c) or Section 3(c), the earliest practical date
on which the Company is permitted by SEC Guidance to file such additional
Registration Statement related to the Registrable Securities.  Notwithstanding
the above, the Filing Date will not be prior to such date that the registration
rights granted pursuant to any existing Registration Rights Agreements of the
Company have been satisfied.

“Holder” or “Holders” means the holder or holders, as the case may be, from time
to time of Registrable Securities.

“Indemnified Party” shall have the meaning set forth in Section 5(c).

“Indemnifying Party” shall have the meaning set forth in Section 5(c).

“Initial Registration Statement” means the initial Registration Statement filed
pursuant to this Agreement.

“Losses” shall have the meaning set forth in Section 5(a).

“Plan of Distribution” shall have the meaning set forth in Section 2(a).

“Prospectus” means the prospectus included in a Registration Statement
(including, without limitation, a prospectus that includes any information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated by the Commission pursuant to
the Securities Act), as amended or supplemented by any prospectus supplement,
with respect to the terms of the offering of any portion of the Registrable
Securities covered by a Registration Statement, and all other amendments and
supplements to the Prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such Prospectus.

“Registrable Securities” means, as of any date of determination, (a) all of the
Shares issued to a Holder pursuant to the Purchase Agreement, and (b) any
securities issued or then issuable upon any stock split, dividend or other
distribution, recapitalization or similar event with respect to the foregoing;
provided, however, that any such Registrable Securities shall cease to be
Registrable Securities (and the Company shall not be required to maintain the
effectiveness of any, or file another, Registration Statement hereunder with
respect thereto) for so long as (a) a Registration Statement with respect to the
sale of such Registrable Securities is declared effective by the Commission
under the Securities Act and such Registrable Securities have been disposed of
by the Holder in accordance with such effective Registration Statement, (b) such
Registrable Securities have been previously sold in accordance with Rule 144, or
(c) such securities become eligible for resale without volume or manner-of-sale
restrictions and without current public information pursuant to Rule 144 as set
forth in a written opinion letter to such effect, addressed, delivered and
acceptable to the Transfer Agent and the affected Holders (assuming that such
securities and any securities issuable as a dividend upon which, such securities
were issued or are issuable, were at no time held by any Affiliate of the
Company), as reasonably determined by the Company, upon the advice of counsel to
the Company.

 
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“Registration Statement” means any registration statement required to be filed
hereunder pursuant to Section 2(a) and any additional registration statements
contemplated by Section 2(c) or Section 3(c), including (in each case) the
Prospectus, amendments and supplements to any such registration statement or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in any such registration statement.

“Rule 415” means Rule 415 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

“SEC Guidance” means (i) any publicly-available written or oral guidance of the
Commission staff, or any comments, requirements or requests of the Commission
staff and (ii) the Securities Act.

“Selling Stockholder Questionnaire” shall have the meaning set forth in Section
3(a).

        2.                      Registration with the SEC.

(a) On or prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the resale of all of the
Registrable Securities that are not then registered on an effective Registration
Statement for an offering to be made on a continuous basis pursuant to Rule 415,
if applicable.  Each Registration Statement filed hereunder shall be on Form S-3
(except if the Company is not then eligible to register for resale the
Registrable Securities on Form S-3, in which case such registration shall be on
another appropriate form in accordance herewith, subject to the provisions of
Section 2(e)) and shall contain (unless otherwise directed by at least 85% in
interest of the Holders) substantially the “Plan of Distribution” attached
hereto as Annex A.  Subject to the terms of this Agreement, the Company shall
use its best efforts to cause a Registration Statement filed under this
Agreement (including, without limitation, under Section 3(c)) to be declared
effective under the Securities Act as promptly as possible after the filing
thereof, but in any event no later than the applicable Effectiveness Date, and
shall use its best efforts to keep such Registration Statement continuously
effective under the Securities Act until all Registrable Securities covered by
such Registration Statement (i) have been sold, thereunder or pursuant to Rule
144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant
to Rule 144 and without the requirement for the Company to be in compliance with
the current public information requirement under Rule 144, as determined by the
counsel to the Company pursuant to a written opinion letter to such effect,
addressed and acceptable to the Transfer Agent and the affected Holders (the
“Effectiveness Period”).  The Company shall telephonically request effectiveness
of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day.   The
Company shall immediately notify the Holders via facsimile or by e-mail of the
effectiveness of a Registration Statement on the same Trading Day that the
Company telephonically confirms effectiveness with the Commission, which shall
be the date requested for effectiveness of such Registration Statement.  The
Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective
date of such Registration Statement, file a final Prospectus with the Commission
as required by Rule 424.  Failure to so notify the Holder within one (1) Trading
Day of such notification of effectiveness or failure to file a final Prospectus
as foresaid shall be deemed an Event under Section 2(d).

 
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(b)  Notwithstanding the registration obligations set forth in Section 2(a), if
the Commission informs the Company that all of the Registrable Securities
cannot, as a result of the application of Rule 415, be registered for resale as
a secondary offering on a single registration statement, the Company agrees to
promptly inform each of the Holders thereof and use its commercially reasonable
efforts to file amendments to the Initial Registration Statement as required by
the Commission, covering the maximum number of Registrable Securities permitted
to be registered by the Commission, on Form S-3 or such other form available to
register for resale the Registrable Securities as a secondary offering, subject
to the provisions of Section 2(e); with respect to filing on Form S-3 or other
appropriate form, and subject to the provisions of Section 2(d) with respect to
the payment of liquidated damages; provided, however, that prior to filing such
amendment, the Company shall be obligated to use commercially reasonable efforts
to advocate with the Commission for the registration of all of the Registrable
Securities in accordance with the SEC Guidance, including without limitation,
Compliance and Disclosure Interpretation 612.09.
 
(c) Notwithstanding any other provision of this Agreement and subject to the
payment of liquidated damages pursuant to Section 2(d), if the Commission or any
SEC Guidance sets forth a limitation on the number of Registrable Securities
permitted to be registered on a particular Registration Statement as a secondary
offering (and notwithstanding that the Company used commercially reasonable
efforts to advocate with the Commission for the registration of all or a greater
portion of Registrable Securities), unless otherwise directed in writing by a
Holder as to its Registrable Securities, the Company shall reduce or eliminate
any securities to be included on such Registration Statement by any Person other
than a Holder.
 
In the event of a cutback hereunder, the Company shall give the Holder at least
five (5) Trading Days prior written notice along with the calculations as to
such Holder’s allotment.  In the event the Company amends the Initial
Registration Statement in accordance with the foregoing, the Company will use
its best efforts to file with the Commission, as promptly as allowed by
Commission or SEC Guidance provided to the Company or to registrants of
securities in general, one or more registration statements on Form S-3 or such
other form available to register for resale those Registrable Securities that
were not registered for resale on the Initial Registration Statement, as
amended.
 
(d) If: (i) the Initial Registration Statement is not filed on or prior to its
Filing Date (if the Company files the Initial Registration Statement without
affording the Holders the opportunity to review and comment on the same as
required by Section 3(a) herein, the Company shall be deemed to have not
satisfied this clause (i)), or (ii) the Company fails to file with the
Commission a request for acceleration of a Registration Statement in accordance
with Rule 461 promulgated by the Commission pursuant to the Securities Act,
within five Trading Days of the date that the Company is notified (orally or in
writing, whichever is earlier) by the Commission that such Registration
Statement will not be “reviewed” or will not be subject to further review, or
(iii) prior to the effective date of a Registration Statement, the Company fails
to file a pre-effective amendment and otherwise respond in writing to comments
made by the Commission in respect of such Registration Statement within ten (10)
calendar days after the receipt of comments by or notice from the Commission
that such amendment is required in order for such Registration Statement to be
declared effective, or (iv) a Registration Statement registering for resale all
of the Registrable Securities is not declared effective by the Commission by the
Effectiveness Date of the Initial Registration Statement, or (v) after the
effective date of a Registration Statement, such Registration Statement ceases
for any reason to remain continuously effective as to all Registrable Securities
included in such Registration Statement, or the Holders are otherwise not
permitted to utilize the Prospectus therein to resell such Registrable
Securities, for more than ten (10) consecutive calendar days or more than an
aggregate of fifteen (15) calendar days (which need not be consecutive calendar
days) during any 12-month period (any such failure or breach being referred to
as an “Event”, and for purposes of clauses (i) and (iv), the date on which such
Event occurs, and for purpose of clause (ii) the date on which such five (5)
Trading Day period is exceeded, and for purpose of clause (iii) the date which
such ten (10) calendar day period is exceeded, and for purpose of clause (v) the
date on which such ten (10) or fifteen (15) calendar day period, as applicable,
is exceeded being referred to as “Event Date”), then, in addition to any other
rights the Holders may have hereunder or under applicable law, on each such
Event Date and on each monthly anniversary of each such Event Date (if the
applicable Event shall not have been cured by such date) until the applicable
Event is cured, the Company shall pay to each Holder an amount in cash, as
partial liquidated damages and not as a penalty, equal to the product of 2.0%
multiplied by the value of the Shares issued to a Holder pursuant to the
Purchase Agreement at the time of issuance.  If the Company fails to pay any
partial liquidated damages pursuant to this Section in full within seven days
after the date payable, the Company will pay interest thereon at a rate of 18%
per annum (or such lesser maximum amount that is permitted to be paid by
applicable law) to the Holder, accruing daily from the date such partial
liquidated damages are due until such amounts, plus all such interest thereon,
are paid in full. The partial liquidated damages pursuant to the terms hereof
shall apply on a daily pro rata basis for any portion of a month prior to the
cure of an Event.

 
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(e) If Form S-3 is not available for the registration of the resale of
Registrable Securities hereunder, the Company shall (i) register the resale of
the Registrable Securities on another appropriate form and (ii) undertake to
register the Registrable Securities on Form S-3 as soon as such form is
available, provided that the Company shall maintain the effectiveness of the
Registration Statement then in effect until such time as a Registration
Statement on Form S-3 covering the Registrable Securities has been declared
effective by the Commission.

3.           Registration Procedures.

               In connection with the Company’s registration obligations
hereunder, the Company shall:

(a) Not less than five (5) Trading Days prior to the filing of each Registration
Statement and not less than one (1) Trading Day prior to the filing of any
related Prospectus or any amendment or supplement thereto (including any
document that would be incorporated or deemed to be incorporated therein by
reference), the Company shall (i) furnish to each Holder copies of all such
documents proposed to be filed, which documents (other than those incorporated
or deemed to be incorporated by reference) will be subject to the review of such
Holders, and (ii) cause its officers and directors, counsel and independent
registered public accountants to respond to such inquiries as shall be
necessary, in the reasonable opinion of respective counsel to each Holder, to
conduct a reasonable investigation within the meaning of the Securities Act.
Notwithstanding the above, the Company shall not be obligated to provide the
Holders advance copies of any universal shelf registration statement registering
securities in addition to those required hereunder, or any Prospectus prepared
thereto.  The Company shall not file a Registration Statement or any such
Prospectus or any amendments or supplements thereto to which the Holders of a
majority of the Registrable Securities shall reasonably object in good faith,
provided that, the Company is notified of such objection in writing no later
than five (5) Trading Days after the Holders have been so furnished copies of a
Registration Statement or one (1) Trading Day after the Holders have been so
furnished copies of any related Prospectus or amendments or supplements thereto.
Each Holder agrees to furnish to the Company a completed questionnaire in the
form attached to this Agreement as Annex B (a “Selling Stockholder
Questionnaire”) on a date that is not less than two (2) Trading Days prior to
the Filing Date or by the end of the fourth (4th) Trading Day following the date
on which such Holder receives draft materials in accordance with this Section.

(b) (i) Prepare and file with the Commission such amendments, including
post-effective amendments, to a Registration Statement and the Prospectus used
in connection therewith as may be necessary to keep a Registration Statement
continuously effective as to the applicable Registrable Securities for the
Effectiveness Period and prepare and file with the Commission such additional
Registration Statements in order to register for resale under the Securities Act
all of the Registrable Securities, (ii) cause the related Prospectus to be
amended or supplemented by any required Prospectus supplement (subject to the
terms of this Agreement), and, as so supplemented or amended, to be filed
pursuant to Rule 424, (iii) respond as promptly as reasonably possible to any
comments received from the Commission with respect to a Registration Statement
or any amendment thereto and provide as promptly as reasonably possible to the
Holders true and complete copies of all correspondence from and to the
Commission relating to a Registration Statement (provided that, the Company
shall excise any information contained therein which would constitute material
non-public information regarding the Company or any of its Subsidiaries), and
(iv) comply in all material respects with the applicable provisions of the
Securities Act and the Exchange Act with respect to the disposition of all
Registrable Securities covered by a Registration Statement during the applicable
period in accordance (subject to the terms of this Agreement) with the intended
methods of disposition by the Holders thereof set forth in such Registration
Statement as so amended or in such Prospectus as so supplemented.

 
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(c) If during the Effectiveness Period, the number of Registrable Securities at
any time exceeds 100% of the number of shares of Common Stock of the Company
(the “Common Stock”) then registered in a Registration Statement, then the
Company shall file as soon as reasonably practicable, but in any case prior to
the applicable Filing Date, an additional Registration Statement covering the
resale by the Holders of not less than the number of such Registrable
Securities.

(d) Notify the Holders of Registrable Securities to be sold (which notice shall,
pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction
to suspend the use of the Prospectus until the requisite changes have been made)
as promptly as reasonably possible (and, in the case of (i)(A) below, not less
than one (1) Trading Day prior to such filing) and (if requested by any such
Person) confirm such notice in writing no later than one (1) Trading Day
following the day (i)(A) when a Prospectus or any Prospectus supplement or
post-effective amendment to a Registration Statement is proposed to be filed,
(B) when the Commission notifies the Company whether there will be a “review” of
such Registration Statement and whenever the Commission comments in writing on
such Registration Statement, and (C) with respect to a Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the Commission or any other federal or state governmental authority
for amendments or supplements to a Registration Statement or Prospectus or for
additional information, (iii) of the issuance by the Commission or any other
federal or state governmental authority of any stop order suspending the
effectiveness of a Registration Statement covering any or all of the Registrable
Securities or the initiation of any Proceedings for that purpose, (iv) of the
receipt by the Company of any notification with respect to the suspension of the
qualification or exemption from qualification of any of the Registrable
Securities for sale in any jurisdiction, or the initiation or threatening of any
Proceeding for such purpose, (v) of the occurrence of any event or passage of
time that makes the financial statements included in a Registration Statement
ineligible for inclusion therein or any statement made in a Registration
Statement or Prospectus or any document incorporated or deemed to be
incorporated therein by reference untrue in any material respect or that
requires any revisions to a Registration Statement, Prospectus or other
documents so that, in the case of a Registration Statement or the Prospectus, as
the case may be, it will not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under which they were
made, not misleading, and (vi) of the occurrence or existence of any pending
corporate development with respect to the Company that the Company believes may
be material and that, in the determination of the Company, makes it not in the
best interest of the Company to allow continued availability of a Registration
Statement or Prospectus, provided, however, in no event shall any such notice
contain any information which would constitute material, non-public information
regarding the Company or any of its Subsidiaries.

(e) Use its best efforts to avoid the issuance of, or, if issued, obtain the
withdrawal of (i) any order stopping or suspending the effectiveness of a
Registration Statement, or (ii) any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction, at the earliest practicable moment.

(f) Furnish to each Holder, without charge, at least one conformed copy of each
such Registration Statement and each amendment thereto, including financial
statements and schedules, all documents incorporated or deemed to be
incorporated therein by reference to the extent requested by such Person, and
all exhibits to the extent requested by such Person (including those previously
furnished or incorporated by reference) promptly after the filing of such
documents with the Commission; provided, that any such item which is available
on the EDGAR system (or successor thereto) need not be furnished in physical
form.

 
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(g) Subject to the terms of this Agreement, the Company hereby consents to the
use of such Prospectus and each amendment or supplement thereto by each of the
selling Holders in connection with the offering and sale of the Registrable
Securities covered by such Prospectus and any amendment or supplement thereto,
except after the giving of any notice pursuant to Section 3(d).

(h)  The Company shall cooperate with any broker-dealer through which a Holder
proposes to resell its Registrable Securities in effecting a filing with the
FINRA Corporate Financing Department pursuant to FINRA Rule 5110, as requested
by any such Holder, and the Company shall pay the filing fee required by such
filing within two (2) Business Days of request therefor.

(i) Prior to any resale of Registrable Securities by a Holder, use its
commercially reasonable efforts to register or qualify or cooperate with the
selling Holders in connection with the registration or qualification (or
exemption from the Registration or qualification) of such Registrable Securities
for the resale by the Holder under the securities or Blue Sky laws of such
jurisdictions within the United States as any Holder reasonably requests in
writing, to keep each registration or qualification (or exemption therefrom)
effective during the Effectiveness Period and to do any and all other acts or
things reasonably necessary to enable the disposition in such jurisdictions of
the Registrable Securities covered by each Registration Statement; provided,
that, the Company shall not be required to qualify generally to do business in
any jurisdiction where it is not then so qualified, subject the Company to any
material tax in any such jurisdiction where it is not then so subject or file a
general consent to service of process in any such jurisdiction.

(j) If requested by a Holder, cooperate with such Holder to facilitate the
timely preparation and delivery of certificates representing Registrable
Securities to be delivered to a transferee pursuant to a Registration Statement,
which certificates shall be free, to the extent permitted by the Purchase
Agreement, of all restrictive legends, and to enable such Registrable Securities
to be in such denominations and registered in such names as any such Holder may
request.
 
(k) Upon the occurrence of any event contemplated by Section 3(d), as promptly
as reasonably possible under the circumstances taking into account the Companys
good faith assessment of any adverse consequences to the Company and its
stockholders of the premature disclosure of such event, prepare a supplement or
amendment, including a post-effective amendment, to a Registration Statement or
a supplement to the related Prospectus or any document incorporated or deemed to
be incorporated therein by reference, and file any other required document so
that, as thereafter delivered, neither a Registration Statement nor such
Prospectus will contain an untrue statement of a material fact or omit to state
a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. If the Company notifies the Holders in accordance with clauses
(iii) through (vi) of Section 3(d) above to suspend the use of any Prospectus
until the requisite changes to such Prospectus have been made, then the Holders
shall suspend use of such Prospectus. The Company will use its best efforts to
ensure that the use of the Prospectus may be resumed as promptly as is
practicable. The Company shall be entitled to exercise its right under this
Section 3(k) to suspend the availability of a Registration Statement and
Prospectus, subject to the payment of partial liquidated damages otherwise
required pursuant to Section 2(d), for a period not to exceed 60 calendar days
(which need not be consecutive days) in any 12-month period.
 
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(l) Comply with all applicable rules and regulations of the Commission.

(m) The Company shall use its best efforts to maintain eligibility for use of
Form S-3 (or any successor form thereto) for the registration of the resale of
Registrable Securities.  After the Company has qualified for the use of Form
S-3, the Holders shall have the right, without limiting their other rights of
registration hereunder, at any time when they cannot sell their Registrable
Securities without any restriction under Rule 144, to request registration on
Form S-3.

(n) The Company may require each selling Holder to furnish to the Company a
certified statement as to the number of shares of Common Stock beneficially
owned by such Holder and, if required by the Commission, the natural persons
thereof that have voting and dispositive control over the shares. During any
periods that the Company is unable to meet its obligations hereunder with
respect to the registration of the Registrable Securities solely because any
Holder fails to furnish such information within three Trading Days of the
Company’s request, any liquidated damages that are accruing at such time as to
such Holder only shall be tolled and any Event that may otherwise occur solely
because of such delay shall be suspended as to such Holder only, until such
information is delivered to the Company.

        4.                      Registration Expenses. All fees and expenses
incident to the performance of or compliance with, this Agreement by the Company
shall be borne by the Company whether or not any Registrable Securities are sold
pursuant to a Registration Statement. The fees and expenses referred to in the
foregoing sentence shall include, without limitation, (i) all registration and
filing fees (including, without limitation, fees and expenses of the Company’s
counsel and independent registered public accountants) (A) with respect to
filings made with the Commission, (B) with respect to filings required to be
made with any Trading Market on which the Common Stock is then listed for
trading, (C) in compliance with applicable state securities or Blue Sky laws
reasonably agreed to by the Company in writing (including, without limitation,
fees and disbursements of counsel for the Company in connection with Blue Sky
qualifications or exemptions of the Registrable Securities) and (D) if not
previously paid by the Company in connection with an Issuer Filing, with respect
to any filing that may be required to be made by any broker through which a
Holder intends to make sales of Registrable Securities with FINRA pursuant to
FINRA Rule 5110, so long as the broker is receiving no more than a customary
brokerage commission in connection with such sale, (ii) printing expenses
(including, without limitation, expenses of printing certificates for
Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv)
fees and disbursements of counsel for the Company, (v) Securities Act liability
insurance, if the Company so desires such insurance, and (vi) fees and expenses
of all other Persons retained by the Company in connection with the consummation
of the transactions contemplated by this Agreement.  In addition, the Company
shall be responsible for all of its internal expenses incurred in connection
with the consummation of the transactions contemplated by this Agreement
(including, without limitation, all salaries and expenses of its officers and
employees performing legal or accounting duties), the expense of any annual
audit and the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange as required hereunder.  In no
event shall the Company be responsible for any broker or similar commissions of
any Holder or, except to the extent provided for in the Transaction Documents,
any legal fees or other costs of the Holders.

 
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      5.                      Indemnification.

(a) Indemnification by the Company. The Company shall, notwithstanding any
termination of this Agreement, indemnify and hold harmless each Holder, the
officers, directors, members, partners, agents, brokers (including brokers who
offer and sell Registrable Securities as principal as a result of a pledge or
any failure to perform under a margin call of Common Stock), investment advisors
and employees (and any other Persons with a functionally equivalent role of a
Person holding such titles, notwithstanding a lack of such title or any other
title) of each of them, each Person who controls any such Holder (within the
meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act)
and the officers, directors, members, stockholders, partners, agents and
employees (and any other Persons with a functionally equivalent role of a Person
holding such titles, notwithstanding a lack of such title or any other title) of
each such controlling Person, to the fullest extent permitted by applicable law,
from and against any and all losses, claims, damages, liabilities, costs
(including, without limitation, reasonable attorneys’ fees) and expenses
(collectively, “Losses”), as incurred, arising out of or relating to (1) any
untrue or alleged untrue statement of a material fact contained in a
Registration Statement, any Prospectus or any form of prospectus or in any
amendment or supplement thereto or in any preliminary prospectus, or arising out
of or relating to any omission or alleged omission of a material fact required
to be stated therein or necessary to make the statements therein (in the case of
any Prospectus or supplement thereto, in light of the circumstances under which
they were made) not misleading or (2) any violation or alleged violation by the
Company of the Securities Act, the Exchange Act or any state securities law, or
any rule or regulation thereunder, in connection with the performance of its
obligations under this Agreement, except to the extent, but only to the extent,
that (i) such untrue statements or omissions are based solely upon information
regarding such Holder furnished in writing to the Company by such Holder
expressly for use therein, or to the extent that such information relates to
such Holder or such Holder’s proposed method of distribution of Registrable
Securities and was reviewed and expressly approved in writing by such Holder
expressly for use in a Registration Statement, such Prospectus or in any
amendment or supplement thereto (it being understood that the Holder has
approved Annex A hereto for this purpose) or (ii) in the case of an occurrence
of an event of the type specified in Section 3(d)(iii)-(vi), the use by such
Holder of an outdated, defective or otherwise unavailable Prospectus after the
Company has notified such Holder in writing that the Prospectus is outdated,
defective or otherwise unavailable for use by such Holder and prior to the
receipt by such Holder of the Advice contemplated in Section 6(c), but only if
and to the extent that following the receipt of the Advice the misstatement or
omission giving rise to such Loss would have been corrected.  The Company shall
notify the Holders promptly of the institution, threat or assertion of any
Proceeding arising from or in connection with the transactions contemplated by
this Agreement of which the Company is aware. Such indemnity shall remain in
full force and effect regardless of any investigation made by or on behalf of
such indemnified person and shall survive the transfer of any Registrable
Securities by any of the Holders in accordance with Section 6(h).

 
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(b) Indemnification by Holders. Each Holder shall, severally and not jointly,
indemnify and hold harmless the Company, its directors, officers, agents and
employees, each Person who controls the Company (within the meaning of Section
15 of the Securities Act and Section 20 of the Exchange Act), and the directors,
officers, agents or employees of such controlling Persons, to the fullest extent
permitted by applicable law, from and against all Losses, as incurred, to the
extent arising out of or based solely upon: (x) such Holder’s failure to comply
with any applicable prospectus delivery requirements of the Securities Act
through no fault of the Company or (y) any untrue or alleged untrue statement of
a material fact contained in any Registration Statement, any Prospectus, or in
any amendment or supplement thereto or in any preliminary prospectus, or arising
out of or relating to any omission or alleged omission of a material fact
required to be stated therein or necessary to make the statements therein (in
the case of any Prospectus or supplement thereto, in light of the circumstances
under which they were made) not misleading (i) to the extent, but only to the
extent, that such untrue statement or omission is contained in any information
so furnished in writing by such Holder to the Company expressly for inclusion in
such Registration Statement or such Prospectus or (ii) to the extent, but only
to the extent, that such information relates to such Holder’s proposed method of
distribution of Registrable Securities and was reviewed and expressly approved
in writing by such Holder expressly for use in a Registration Statement (it
being understood that the Holder has approved Annex A hereto for this purpose),
such Prospectus or in any amendment or supplement thereto or (iii) in the case
of an occurrence of an event of the type specified in Section 3(d)(iii)-(vi), to
the extent, but only to the extent, related to the use by such Holder of an
outdated, defective or otherwise unavailable Prospectus after the Company has
notified such Holder in writing that the Prospectus is outdated, defective or
otherwise unavailable for use by such Holder and prior to the receipt by such
Holder of the Advice contemplated in Section 6(c), but only if and to the extent
that following the receipt of the Advice the misstatement or omission giving
rise to such Loss would have been corrected.  In no event shall the liability of
any selling Holder under this Section 5(b) be greater in amount than the dollar
amount of the net proceeds received by such Holder upon the sale of the
Registrable Securities giving rise to such indemnification obligation.

(c) Conduct of Indemnification Proceedings. If any Proceeding shall be brought
or asserted against any Person entitled to indemnity hereunder (an “Indemnified
Party”), such Indemnified Party shall promptly notify the Person from whom
indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying
Party shall have the right to assume the defense thereof, including the
employment of counsel reasonably satisfactory to the Indemnified Party and the
payment of all fees and expenses incurred in connection with defense thereof;
provided, that, the failure of any Indemnified Party to give such notice shall
not relieve the Indemnifying Party of its obligations or liabilities pursuant to
this Agreement, except (and only) to the extent that it shall be finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) that such failure shall have materially and
adversely prejudiced the Indemnifying Party.

               An Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel shall be at the expense of such
Indemnified Party or Parties unless:  (1) the Indemnifying Party has agreed in
writing to pay such fees and expenses, (2) the Indemnifying Party shall have
failed promptly to assume the defense of such Proceeding and to employ counsel
reasonably satisfactory to such Indemnified Party in any such Proceeding, or (3)
the named parties to any such Proceeding (including any impleaded parties)
include both such Indemnified Party and the Indemnifying Party, and counsel to
the Indemnified Party shall reasonably believe that a material conflict of
interest is likely to exist if the same counsel were to represent such
Indemnified Party and the Indemnifying Party (in which case, if such Indemnified
Party notifies the Indemnifying Party in writing that it elects to employ
separate counsel at the expense of the Indemnifying Party, the Indemnifying
Party shall not have the right to assume the defense thereof and the reasonable
fees and expenses of no more than one separate counsel shall be at the expense
of the Indemnifying Party).  The Indemnifying Party shall not be liable for any
settlement of any such Proceeding effected without its written consent, which
consent shall not be unreasonably withheld or delayed.  No Indemnifying Party
shall, without the prior written consent of the Indemnified Party, effect any
settlement of any pending Proceeding in respect of which any Indemnified Party
is a party, unless such settlement includes an unconditional release of such
Indemnified Party from all liability on claims that are the subject matter of
such Proceeding.

 
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               Subject to the terms of this Agreement, all reasonable fees and
expenses of the Indemnified Party (including reasonable fees and expenses to the
extent incurred in connection with investigating or preparing to defend such
Proceeding in a manner not inconsistent with this Section) shall be paid to the
Indemnified Party, as incurred, within ten Trading Days of written notice
thereof to the Indemnifying Party; provided, that, the Indemnified Party shall
promptly reimburse the Indemnifying Party for that portion of such fees and
expenses applicable to such actions for which such Indemnified Party is finally
determined by a court of competent jurisdiction (which determination is not
subject to appeal or further review) not to be entitled to indemnification
hereunder.

(d) Contribution. If the indemnification under Section 5(a) or 5(b) is
unavailable to an Indemnified Party or insufficient to hold an Indemnified Party
harmless for any Losses, then each Indemnifying Party shall contribute to the
amount paid or payable by such Indemnified Party, in such proportion as is
appropriate to reflect the relative fault of the Indemnifying Party and
Indemnified Party in connection with the actions, statements or omissions that
resulted in such Losses as well as any other relevant equitable considerations.
The relative fault of such Indemnifying Party and Indemnified Party shall be
determined by reference to, among other things, whether any action in question,
including any untrue or alleged untrue statement of a material fact or omission
or alleged omission of a material fact, has been taken or made by, or relates to
information supplied by, such Indemnifying Party or Indemnified Party, and the
parties’ relative intent, knowledge, access to information and opportunity to
correct or prevent such action, statement or omission.  The amount paid or
payable by a party as a result of any Losses shall be deemed to include, subject
to the limitations set forth in this Agreement, any reasonable attorneys’ or
other fees or expenses incurred by such party in connection with any Proceeding
to the extent such party would have been indemnified for such fees or expenses
if the indemnification provided for in this Section was available to such party
in accordance with its terms.

               The parties hereto agree that it would not be just and equitable
if contribution pursuant to this Section 5(d) were determined by pro rata
allocation or by any other method of allocation that does not take into account
the equitable considerations referred to in the immediately preceding
paragraph.  Notwithstanding the provisions of this Section 5(d), no Holder shall
be required to contribute pursuant to this Section 5(d), in the aggregate, any
amount in excess of the amount by which the net proceeds actually received by
such Holder from the sale of the Registrable Securities subject to the
Proceeding exceeds the amount of any damages that such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission.

 
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The indemnity and contribution agreements contained in this Section are in
addition to any liability that the Indemnifying Parties may have to the
Indemnified Parties.

        6.                      Miscellaneous.

(a) Remedies.  In the event of a breach by the Company or by a Holder of any of
their respective obligations under this Agreement, each Holder or the Company,
as the case may be, in addition to being entitled to exercise all rights granted
by law and under this Agreement, including recovery of damages, shall be
entitled to specific performance of its rights under this Agreement.  Each of
the Company and each Holder agrees that monetary damages would not provide
adequate compensation for any losses incurred by reason of a breach by it of any
of the provisions of this Agreement and hereby further agrees that, in the event
of any action for specific performance in respect of such breach, it shall not
assert or shall waive the defense that a remedy at law would be adequate.

(b) Compliance. Each Holder covenants and agrees that it will comply with the
prospectus delivery requirements of the Securities Act as applicable to it
(unless an exemption therefrom is available) in connection with sales of
Registrable Securities pursuant to a Registration Statement.

(c) Discontinued Disposition.  By its acquisition of Registrable Securities,
each Holder agrees that, upon receipt of a notice from the Company of the
occurrence of any event of the kind described in Section 3(d)(iii) through (vi),
such Holder will forthwith discontinue disposition of such Registrable
Securities under a Registration Statement until it is advised in writing (the
“Advice”) by the Company that the use of the applicable Prospectus (as it may
have been supplemented or amended) may be resumed.  The Company will use its
best efforts to ensure that the use of the Prospectus may be resumed as promptly
as is practicable.  The Company agrees and acknowledges that any periods during
which the Holder is required to discontinue the disposition of the Registrable
Securities hereunder shall be subject to the provisions of Section 2(d).

(d) Piggy-Back Registrations. If, at any time starting on the Filing Date and
during the Effectiveness Period, there is not an effective Registration
Statement covering all of the Registrable Securities and the Company shall
determine to prepare and file with the Commission a registration statement
relating to an offering, including an underwritten offering, for its own account
or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act) or their then equivalents relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with the Company’s stock option or
other employee benefit plans, then the Company shall deliver to each Holder a
written notice of such determination and, if within fifteen days after the date
of the delivery of such notice, any such Holder shall so request in writing, the
Company shall include in such registration statement all or any part of such
Registrable Securities such Holder requests to be registered, subject to any
applicable underwriter cutbacks or limits as a result of the application of Rule
415; provided, however, that the Company shall not be required to register any
Registrable Securities pursuant to this Section 6(d) that are eligible for
resale pursuant to Rule 144 (without volume restrictions, manner of sale or
current public information requirements) promulgated by the Commission pursuant
to the Securities Act or that are the subject of a then effective Registration
Statement covering all of the Holder’s Registrable Securities.

 
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(e) Lock-up Agreements. In the event an underwriter in connection with an
underwritten offering requests a lock-up of the securities held by shareholders
of the Company, the Holders will agree to such lock-up of their shares,
provided, such lock-up (i) is requested in good faith, (ii) does not exceed 180
days, and (iii) includes the officers and directors of the Company or its
subsidiaries in similar capacities.

(f) Amendments and Waivers. The provisions of this Agreement, including the
provisions of this sentence, may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless the same shall be in writing and signed by the Company and the Holders of
51% or more of the then outstanding Registrable Securities (for purposes of
clarification, this includes any Registrable Securities issuable upon exercise
or conversion of any Security).  If a Registration Statement does not register
all of the Registrable Securities pursuant to a waiver or amendment done in
compliance with the previous sentence, then the number of Registrable Securities
to be registered for each Holder shall be reduced pro rata among all Holders and
each Holder shall have the right to designate which of its Registrable
Securities shall be omitted from such Registration Statement. Notwithstanding
the foregoing, a waiver or consent to depart from the provisions hereof with
respect to a matter that relates exclusively to the rights of a Holder or some
Holders and that does not directly or indirectly affect the rights of other
Holders may be given only by such Holder or Holders of all of the Registrable
Securities to which such waiver or consent relates; provided, however, that the
provisions of this sentence may not be amended, modified, or supplemented except
in accordance with the provisions of the first sentence of this Section 6(f). No
consideration shall be offered or paid to any Person to amend or consent to a
waiver or modification of any provision of this Agreement unless the same
consideration also is offered to all of the parties to this Agreement.

(g) Notices. Any and all notices or other communications or deliveries required
or permitted to be provided hereunder shall be delivered as set forth in the
Purchase Agreement.

(h) Successors and Assigns. This Agreement shall inure to the benefit of and be
binding upon the successors and permitted assigns of each of the parties and
shall inure to the benefit of each Holder. The Company may not assign (except by
merger) its rights or obligations hereunder without the prior written consent of
all of the Holders of the then outstanding Registrable Securities.

 
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(i) No Inconsistent Agreements. Neither the Company nor any of its Subsidiaries
has entered, as of the date hereof, nor shall the Company or any of its
Subsidiaries, on or after the date of this Agreement, enter into any agreement
with respect to its securities, that would have the effect of impairing the
rights granted to the Holders in this Agreement or otherwise conflicts with the
provisions hereof.  Except as set forth on Schedule 6(i), neither the Company
nor any of its Subsidiaries has previously entered into any agreement granting
any registration rights with respect to any of its securities to any Person that
have not been satisfied in full.

(j) Execution and Counterparts. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to the other party, it being understood that both
parties need not sign the same counterpart.  In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

(k) Governing Law.  All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be determined in
accordance with laws of the State of Nevada, without giving effect to the
principles of conflicts of laws thereof.

(l) Cumulative Remedies. The remedies provided herein are cumulative and not
exclusive of any other remedies provided by law.

(m) Severability. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction to be invalid, illegal,
void or unenforceable, the remainder of the terms, provisions, covenants and
restrictions set forth herein shall remain in full force and effect and shall in
no way be affected, impaired or invalidated, and the parties hereto shall use
their commercially reasonable efforts to find and employ an alternative means to
achieve the same or substantially the same result as that contemplated by such
term, provision, covenant or restriction. It is hereby stipulated and declared
to be the intention of the parties that they would have executed the remaining
terms, provisions, covenants and restrictions without including any of such that
may be hereafter declared invalid, illegal, void or unenforceable.

(n) Headings. The headings in this Agreement are for convenience only, do not
constitute a part of the Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

(o) Independent Nature of Holders’ Obligations and Rights. The obligations of
each Holder hereunder are several and not joint with the obligations of any
other Holder hereunder, and no Holder shall be responsible in any way for the
performance of the obligations of any other Holder hereunder. Nothing contained
herein or in any other agreement or document delivered at any closing, and no
action taken by any Holder pursuant hereto or thereto, shall be deemed to
constitute the Holders as a partnership, an association, a joint venture or any
other kind of group or entity, or create a presumption that the Holders are in
any way acting in concert or as a group or entity with respect to such
obligations or the transactions contemplated by this Agreement or any other
matters, and the Company acknowledges that the Holders are not acting in concert
or as a group, and the Company shall not asset any such claim, with respect to
such obligations or transactions. Each Holder shall be entitled to protect and
enforce its rights, including without limitation the rights arising out of this
Agreement, and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose. The use of a single
agreement with respect to the obligations of the Company contained was solely in
the control of the Company, not the action or decision of any Holder, and was
done solely for the convenience of the Company and not because it was required
or requested to do so by any Holder.  It is expressly understood and agreed that
each provision contained in this Agreement is between the Company and a Holder,
solely, and not between the Company and the Holders collectively and not between
and among Holders.

********************

 
(Signature Pages Follow)

 
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        IN WITNESS WHEREOF, the parties have executed this Registration Rights
Agreement as of the date first written above.
 

  VICTORY ELECTRONIC CIGARETTES CORPORATION          
 
By:
        Name:        Title:           

 

[SIGNATURE PAGE OF HOLDERS FOLLOWS]
 
 
 
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  HOLDER          
 
By:
        Name:        Title:           

 
 
 
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Annex A

Plan of Distribution

Each Selling Stockholder (the “Selling Stockholders”) of the securities and any
of their pledgees, assignees and successors-in-interest may, from time to time,
sell any or all of their securities covered hereby on the OTC Bulletin Board or
any other stock exchange, market or trading facility on which the securities are
traded or in private transactions.  These sales may be at fixed or negotiated
prices.  A Selling Stockholder may use any one or more of the following methods
when selling securities:
 
●  
ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;

 
●  
block trades in which the broker-dealer will attempt to sell the securities as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;

 
●  
purchases by a broker-dealer as principal and resale by the broker-dealer for
its account;

 
●  
an exchange distribution in accordance with the rules of the applicable
exchange;

 
●  
privately negotiated transactions;

 
●  
in transactions through broker-dealers that agree with the Selling Stockholders
to sell a specified number of such securities at a stipulated price per
security;

 
●  
through the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;

 
●  
a combination of any such methods of sale; or

 
●  
any other method permitted pursuant to applicable law.

 
The Selling Stockholders may also sell securities under Rule 144 under the
Securities Act of 1933, as amended (the “Securities Act”), if available, rather
than under this prospectus.
 
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales.  Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of securities, from the purchaser) in amounts to be
negotiated, but, except as set forth in a supplement to this Prospectus, in the
case of an agency transaction not in excess of a customary brokerage commission
in compliance with FINRA Rule 2440; and in the case of a principal transaction a
markup or markdown in compliance with FINRA IM-2440.
 
 
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In connection with the sale of the securities or interests therein, the Selling
Stockholders may enter into hedging transactions with broker-dealers or other
financial institutions, which may in turn engage in short sales of the
securities in the course of hedging the positions they assume.  The Selling
Stockholders may also sell securities short and deliver these securities to
close out their short positions, or loan or pledge the securities to
broker-dealers that in turn may sell these securities.  The Selling Stockholders
may also enter into option or other transactions with broker-dealers or other
financial institutions or create one or more derivative securities which require
the delivery to such broker-dealer or other financial institution of securities
offered by this prospectus, which securities such broker-dealer or other
financial institution may resell pursuant to this prospectus (as supplemented or
amended to reflect such transaction).
 
The Selling Stockholders and any broker-dealers or agents that are involved in
selling the securities may be deemed to be “underwriters” within the meaning of
the Securities Act in connection with such sales.  In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the securities purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.  Each Selling Stockholder has
informed the Company that it does not have any written or oral agreement or
understanding, directly or indirectly, with any person to distribute the
securities.
 
The Company is required to pay certain fees and expenses incurred by the Company
incident to the registration of the securities.  The Company has agreed to
indemnify the Selling Stockholders against certain losses, claims, damages and
liabilities, including liabilities under the Securities Act.
 
Because Selling Stockholders may be deemed to be “underwriters” within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act including Rule 172 thereunder.  In addition,
any securities covered by this prospectus which qualify for sale pursuant to
Rule 144 under the Securities Act may be sold under Rule 144 rather than under
this prospectus. The Selling Stockholders have advised us that there is no
underwriter or coordinating broker acting in connection with the proposed sale
of the resale securities by the Selling Stockholders.
 
We agreed to keep this prospectus effective until the earlier of (i) the date on
which the securities may be resold by the Selling Stockholders without
registration and without regard to any volume or manner-of-sale limitations by
reason of Rule 144, without the requirement for the Company to be in compliance
with the current public information under Rule 144 under the Securities Act or
any other rule of similar effect or (ii) all of the securities have been sold
pursuant to this prospectus or Rule 144 under the Securities Act or any other
rule of similar effect.  The resale securities will be sold only through
registered or licensed brokers or dealers if required under applicable state
securities laws. In addition, in certain states, the resale securities covered
hereby may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
 
 
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Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale securities may not simultaneously
engage in market making activities with respect to the common stock for the
applicable restricted period, as defined in Regulation M, prior to the
commencement of the distribution.  In addition, the Selling Stockholders will be
subject to applicable provisions of the Exchange Act and the rules and
regulations thereunder, including Regulation M, which may limit the timing of
purchases and sales of securities of the common stock by the Selling
Stockholders or any other person.  We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale (including by compliance with Rule 172 under the Securities Act).
 
 
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Annex B
 
VICTORY ELECTRONIC CIGARETTES CORPORATION
 
Selling Stockholder Notice and Questionnaire
 
The undersigned beneficial owner of common stock (the “Registrable Securities”)
of VICTORY ELECTRONIC CIGARETTES CORPORATION (the “Company”), understands that
the Company has filed or intends to file with the Securities and Exchange
Commission (the “Commission”) a registration statement (the “Registration
Statement”) for the registration and resale under Rule 415 of the Securities Act
of 1933, as amended (the “Securities Act”), of the Registrable Securities, in
accordance with the terms of the Registration Rights Agreement (the
“Registration Rights Agreement”) to which this document is annexed.  A copy of
the Registration Rights Agreement is available from the Company upon request at
the address set forth below.  All capitalized terms not otherwise defined herein
shall have the meanings ascribed thereto in the Registration Rights Agreement.
 
Certain legal consequences arise from being named as a selling stockholder in
the Registration Statement and the related prospectus.  Accordingly, holders and
beneficial owners of Registrable Securities are advised to consult their own
securities law counsel regarding the consequences of being named or not being
named as a selling stockholder in the Registration Statement and the related
prospectus.
 
NOTICE
 
The undersigned beneficial owner (the “Selling Stockholder”) of Registrable
Securities hereby elects to include the Registrable Securities owned by it in
the Registration Statement.
 
 
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The undersigned hereby provides the following information to the Company and
represents and warrants that such information is accurate:
 
QUESTIONNAIRE
 
 
1.
Name.

 
 
(a)
Full Legal Name of Selling Stockholder

 

       

 
(b)
Full Legal Name of Registered Holder (if not the same as (a) above) through
which Registrable Securities are held:

 

       

 
(c)
Full Legal Name of Natural Control Person (which means a natural person who
directly or indirectly alone or with others has power to vote or dispose of the
securities covered by this Questionnaire):

 

       

 
 
2.  Address for Notices to Selling Stockholder:

 

     
Telephone:______________________________________________________________________________________________________________________________________________________________________
Fax:    
_________________________________________________________________________________________________________________________________________________________________________
Contact Person: 
_________________________________________________________________________________________________________________________________________________________________

 
3.  Broker-Dealer Status:

 
 
(a)
Are you a broker-dealer?

 
Yes   o                      No   o
 
 
(b)
If “yes” to Section 3(a), did you receive your Registrable Securities as
compensation for investment banking services to the Company?

 
Yes   o                     No   o
 
 
Note:
If “no” to Section 3(b), the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 
 
 
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(c)
Are you an affiliate of a broker-dealer?

 
Yes   o                      No   o
 
 
(d)
If you are an affiliate of a broker-dealer, do you certify that you purchased
the Registrable Securities in the ordinary course of business, and at the time
of the purchase of the Registrable Securities to be resold, you had no
agreements or understandings, directly or indirectly, with any person to
distribute the Registrable Securities?

 
Yes   o                      No   o
 
 
Note:
If “no” to Section 3(d), the Commission’s staff has indicated that you should be
identified as an underwriter in the Registration Statement.

 
 
4.  Beneficial Ownership of Securities of the Company Owned by the Selling
Stockholder.

 
Except as set forth below in this Item 4, the undersigned is not the beneficial
or registered owner of any securities of the Company other than the securities
issuable pursuant to the Purchase Agreement.
 
 
(a)
Type and Amount of other securities beneficially owned by the Selling
Stockholder:

 

           

 

 
 
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5.  Relationships with the Company:

 
Except as set forth below, neither the undersigned nor any of its affiliates,
officers, directors or principal equity holders (owners of 5% of more of the
equity securities of the undersigned) has held any position or office or has had
any other material relationship with the Company (or its predecessors or
affiliates) during the past three years.
 
 
State any exceptions here:

 

     

 
The undersigned agrees to promptly notify the Company of any inaccuracies or
changes in the information provided herein that may occur subsequent to the date
hereof at any time while the Registration Statement remains effective.
 
By signing below, the undersigned consents to the disclosure of the information
contained herein in its answers to Items 1 through 5 and the inclusion of such
information in the Registration Statement and the related prospectus and any
amendments or supplements thereto.  The undersigned understands that such
information will be relied upon by the Company in connection with the
preparation or amendment of the Registration Statement and the related
prospectus and any amendments or supplements thereto.
 
IN WITNESS WHEREOF the undersigned, by authority duly given, has caused this
Notice and Questionnaire to be executed and delivered either in person or by its
duly authorized agent.
 
 
 

Date: ______________________________________ Beneficial Owner:
______________________________________       By:
_________________________________________________    Name:   Title:

 
 
PLEASE FAX A COPY (OR EMAIL A .PDF COPY) OF THE COMPLETED AND EXECUTED NOTICE
AND QUESTIONNAIRE, AND RETURN THE ORIGINAL BY OVERNIGHT MAIL, TO:
 
 
 
 
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EXHIBIT 5.2.10
Distributors Letters

[HARDWIRE INTERACTIVE INC. LETTERHEAD]

July __, 2014

[Distributor name]
[Address]
[Address]

Dear [     ]:

Reference is hereby made to that certain [Name of Agreement] between you and
Hardwire Interactive Inc. (the “Company”), dated [Date] (the “Agreement”).  As
you are aware, the Company is selling the assets related to its online
e-cigarette business (the “Business”) to Victory Electronic Cigarettes
Corporation or one of its affiliates (“Victory”), pursuant to the terms of an
Asset Purchase Agreement, dated as of the date hereof (the “Sale
Transaction”).  Please be advised that upon the closing of the Sale Transaction,
which is expected to occur on or prior to July 31, 2014 (but of which you shall
be notified by electronic mail), you should direct all payments arising under
the Agreement that pertain solely to the Business (the “Business Funds”) to the
following bank account controlled by Victory (the “Victory Account”), rather
than to the existing Company bank account:

Victory Electronic Cigarettes Corporation
Chase Bank
101 West Savidge Street
Spring Lake, MI 49456
616.842.1445

Routing number: 072-000-326
Account number: 195-892-772

In the interim, we ask that you begin taking the necessary steps in advance to
ensure that you will be in a position to direct the payment of the Business
Funds to the Victory Account immediately upon receiving notice of the closing of
the Sale Transaction.

[Remainder of page intentionally left blank; signature page follows]

 
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    Please sign and return a copy of this letter agreement to confirm your
agreement to the foregoing.
 

 
THE COMPANY:
          HARDWIRE INTERACTIVE INC.          
 
By:
        Name: Devin Keer      
Title: Director
         

 
ACCEPTED AND AGREED:
                 
[NAME]
                          By:
 
      Name: 
 
      Title: 
 
     

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