Exhibit 10.1

 

 

 

 

 

 

 

 

 

 

                                                                                                                                              

    SHARE PURCHASE AGREEMENT  

by and between

 

JOHN PENA

JP09 & Associates, Inc. 

      And   WIKIFAMILIES, INC.   Dated as of May 8, 2013    

 

 

 

 

 

 

 

 

 

 

 

 

 

  

SHARE PURCHASE AGREEMENT

 

THIS SHARE PURCHASE AGREEMENT is made and entered into as of the May 8, 2013
(this "Agreement"), by and among JOHN PENA, an individual, and JP09 &
Associates, Inc., a California corporation, as owner ("Seller"), and
Wikifamilies, Inc. (aka ClairNET, Ltd.), a Nevada corporation ("Purchaser").

 

RECITALS

 

WHEREAS, as of the date of this Agreement, Seller is the owner of 100% of the
issued and outstanding capital stock of RC One, Inc., a Nevada corporation (the
“Company”), which owns the assets of the MMA business as set forth on Schedule A
hereto (“Company Assets”), and includes, but is not limited to, Respect in the
Cage, www.respectinthecage.com, the MMA promotions business, the MMA merchandise
business and all concessions for the MMA events business; and

 

WHEREAS, Purchaser is a publicly held company whose common stock trades on the
over the counter bulletin board; and

 

WHEREAS, pursuant to a Loan and Security Agreement by and between Seller and
Purchaser, dated July 15, 2010, Seller owes Purchaser $155,000 in principal
amount, $42,763.01 in interest and $9,888.15 in late fees, for a total of
$207,651.16 (the “Prior Note”); and

 

WHEREAS, Seller desires to sell and to transfer to Purchaser, and Purchaser
desires to purchase and accept from Seller, Shares representing 60% of the
issued and outstanding capital stock of the Company (the "Transferred Shares"),
upon the terms and subject to the conditions set forth herein.

 

NOW, THEREFORE, in consideration of the foregoing, the representations,
warranties, covenants and agreements set forth in this Agreement, and other good
and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereby agree as follows:

 

Article I

DEFINITIONS

 

Section 1.1            Definitions. The following terms, when used in this
Agreement, shall have the meanings assigned to them in this Section 1.1.

 

"Affiliate" means a Person that directly, or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
a specified Person. For the purposes of this definition, "control" means the
ownership, directly or indirectly, of more than 50% of the voting shares or
other voting equity interest of the relevant person, provided that a Person
shall be deemed to control another Person if such first Person possesses,
directly or indirectly, the power to direct, or cause the direction of, the
management and policies of such other Person, whether through the ownership of
voting securities, by contract or otherwise.

 

"Agreement" shall have the meaning set forth in the first paragraph of this
Agreement.

 

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"Assets" shall mean all of the assets of the Company, including but not limited
to all intellectual property which shall include all computer source code for
its back office operations.

 

"Benefit Plans" shall mean all benefit plans of the Company in effect on the
date of this Agreement.

 

"Cash" means unencumbered and unrestricted cash on hand in banks, cash
equivalents, and the accounts in which such items are deposited and held.

 

"Company" shall have the meaning set forth in the recitals to this Agreement.

 

"Confidential Information" means information with respect to the terms of the
transactions contemplated by this Agreement, and trade secrets, discoveries,
ideas, concepts, know-how, techniques, designs, specifications, data, computer
programs, pricing information, interpretations, financial statements, forecasts,
reports, records, plans, studies, information regarding potential acquisitions
or the target companies or assets, and other technical and business information
of the disclosing party, and any company in which the disclosing party is
contemplating an investment, joint venture, acquisition or business combination,
whether in oral, written, graphic, electronic or other form as well as analyses,
compilations, studies or other documents, whether or not prepared by the
receiving party or its representatives, which contain or otherwise reflect such
information. Notwithstanding the foregoing, the following information shall not
be Confidential Information: information which has become generally available to
the general public or industry other than as a result of a disclosure by the
receiving party or its representatives.

 

"Confidentiality Agreement" means that certain Mutual Non-Disclosure Agreement
between Purchaser and Seller dated as of May 7, 2013.

 

"Effective Time" means 11:59 p.m., New York City time, on the Closing Date.

 

"Encumbrance" means any lien, encumbrance, security interest, option right,
adverse ownership interest, pledge, mortgage or similar third party rights or
restrictions on transfer of title, except for any Encumbrances relating to
limitations on the transfer or ownership of the Transferred Shares arising under
applicable Laws, including securities Laws.

 

"GAAP" means generally accepted accounting principles in the United States as in
effect from time to time.

 

"Governmental Entity" means any governmental or quasi-governmental, national,
federal, state, municipal, local or multinational (including the European
Union), judicial, court, legislative, regulatory or administrative authority,
agency, bureau, department, tribunal, or commission or similar body or
instrumentality thereof.

 

"Intellectual Property" means:

 

a.                 patents, trade marks, service marks, registered designs,
applications and rights to apply for any of those rights, trade, business and
company names, internet domain names and e-mail addresses, unregistered trade
marks and service marks, copyrights, database rights, rights in software,
knowhow, rights in designs and inventions;

 

b.                rights under licenses, consents, orders, common law, statutes
or otherwise in relation to a right in paragraph (a);

 

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c.                 rights of the same or similar effect or nature as or to those
in paragraphs (a) and (b) which now or in the future may subsist; and

 

d.                the right to sue for past infringements of any of the
foregoing rights.

 

"Intellectual Property Rights" means all Intellectual Property owned or used by
the Company.

 

"Knowledge of Seller" (or similar phrases) means the actual knowledge of:
Seller, in each case after reasonable inquiry of relevant senior officers of the
Company who are responsible for the management and operation of the Company.

 

"Law" means any statute, law, code, judicial decision, judgment, rule,
regulation, ordinance, order, decree, injunction or other pronouncement of any
Governmental Entity having the effect of law.

 

"Liability" means any liability or obligation (whether known or unknown, whether
asserted or unasserted, whether absolute or contingent, whether accrued or
unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes.

 

"Material Adverse Effect" means any event or occurrence that, when taken
individually or in the aggregate with all other events and occurrences, has a
material adverse effect on the business, results of operations or financial
condition of the Company.

 

"Ordinary Course of Business" means, with respect to the Company, the ordinary
course of commercial operations customarily engaged in by the Company,
consistent with past practices.

 

"Person" means an association, a corporation, an individual, a partnership, a
limited liability company, an unlimited liability company, a trust or any other
entity or organization, including a Governmental Entity.

 

“Purchase Price” means $807,651.16 to be paid as follows: (i) at Closing, by
satisfaction by Purchaser of the Prior Note; and (ii) in installments of $50,000
per month over the next 12 months commencing on the first month anniversary of
the Closing Date and continuing on each subsequent month anniversary for 11
consecutive months.

 

Article II

PURCHASE AND SALE OF TRANSFERRED SHARES

 

Section 2.1            Purchase and Sale of Transferred Shares. Upon the terms
set forth herein and at Closing, Seller hereby agrees to sell to Purchaser, and
Purchaser hereby agrees to purchase and accept from Seller, the Transferred
Shares free and clear of any Encumbrances and liabilities (other than the Prior
Note) in consideration of payment of the Purchase Price.

 

Section 2.2            Closing. The closing of the transactions contemplated by
this Agreement (the "Closing") shall take place out of an escrow closing to be
held by Jolie Kahn, Esq. The Closing shall take place on May 24, 2013, or such
other date and time as mutually agreed to by Seller and Purchaser but no later
than May 31, 2013 (the "Closing Date”). Seller and Purchaser agree that the
Closing shall be effective as of the Effective Time.

 

Section 2.3            Closing Deliveries.

 

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(a)           At Closing, Seller shall deliver, or cause to be delivered:

 

(i)      to Purchaser, certificates evidencing the Transferred Shares duly
endorsed in blank, or accompanied by stock powers duly executed in blank, in
form satisfactory to the Purchaser;

 

(ii)      a copy of the Certificate of Incorporation of the Company in effect as
of the Effective Time, accompanied by a certificate of an executive officer of
the Company, dated as of the date hereof, stating that no amendments have been
made to such Certificate of Incorporation since such date;

 

(iii)      written evidence of consent, as required as obtained by Company, from
any lessors of real property and from other third parties prior to or in
connection with the consummation of the transactions contemplated by this
Agreement;

 

(iv)      the written release of all Encumbrances (if any), other than Permitted
Encumbrances, relating to the assets and properties of the Company and the
Transferred Shares, executed by the holder of or parties to each such
Encumbrance, in form and substance satisfactory to Purchaser;

 

(v)      the certificate referred to in Section 6.1;

 

(vi)      certified true copies of resolutions of the board of directors or
similar governing body of the Company, and the resolutions of the shareholders
of the Company, authorizing and approving this Agreement and the transactions
contemplated hereby;

 

(viii) such other documents as may be reasonably required to transfer good title
to the Shares and to enable Purchaser to become the registered holder thereof;
and

 

(b)            At Closing, Purchaser shall deliver, or cause to be delivered, to
Seller:

 

(i)      the cancelled Prior Note;

 

(ii)      a true and complete copy, certified by the Secretary of the Purchaser,
of the resolutions duly and validly adopted by the Board of Directors of the
Purchaser evidencing its authorization of the execution and delivery of this
Agreement and the agreements related thereto and the consummation of the
transactions contemplated hereby and thereby; and

 

(iii)      the certificate referred to in Section 6.2.

 

Section 2.4            Due Diligence Contingency. Purchaser’s obligation to
close hereunder is expressly conditioned upon satisfactory completion of due
diligence to its sole satisfaction.

 

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ARTICLE III

 

OPERATION OF THE COMPANY

 

 

Section 3.1            Operation of the Company. The business of the Company
shall be managed and operated by the Parties during the five-year period
following the Closing Date of this transaction (the “Transition Period”)
pursuant to the following guidelines:

  

(a)            John Pena shall serve as CEO of the Company and Trisha Malone
shall serve as CFO and Secretary both pursuant to the forms of employment
agreements attached hereto as Schedule 3.1.

 

(b)            The Board shall consist of five directors: three appointed by
John Pena and two appointed by Purchaser.

 

Section 3.2            MMA Business. The parties shall work together to operate
the MMA business encompassing the Transferred Assets.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Seller represents and warrants to Purchaser that the statements contained in
this Article IV are true, correct and complete as of the date hereof, and will
be true, correct and complete as of the Closing Date, except as specified to the
contrary in the corresponding schedule referenced below and incorporated by
reference herein, which schedules shall be prepared by Seller.

 

Section 4.1            Corporate Status.

 

(a)           Seller has all requisite power and authority to enter into this
Agreement and to perform his obligations hereunder.

 

(b)          The Company (i) is duly incorporated, organized, validly existing
and in good standing as a corporation in the State of Nevada, (ii) has all
requisite power and authority required to own, operate or lease the properties
and assets now owned, operated or leased by it as of the date of this Agreement
and to carry on its business as it is being conducted as of the date of this
Agreement; and (iii) the Company is duly licensed or qualified to do business in
each of the jurisdictions in which the ownership, operation or leasing of its
properties and assets and the conduct of its business requires it to be so
licensed or qualified, except in the case of clause (iii) where any such failure
has not had, or would not reasonably be expected to have, a Material Adverse
Effect.

 

Section 4.2            Authorization. The execution and delivery by Seller of
this Agreement and the agreements related hereto to which Seller is a party, and
the consummation by Seller of the transactions contemplated hereby and thereby,
have been duly and validly authorized by Seller. Each of this Agreement and the
agreements related hereto to which Seller is a party has been duly executed and
delivered by Seller, and (assuming due authorization, execution and delivery by
Purchaser) this Agreement and the agreements related hereto to which Seller is a
party constitute valid and binding obligations of Seller, enforceable against
Seller in accordance with their respective terms, except as enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium and other
similar Laws relating to or affecting creditors' rights generally or by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at Law). The copies of the charters and governing
documents of the Company that have been previously delivered to Purchaser are
the complete, true and correct charters and governing documents of the Company,
as applicable, in effect as of the Effective Time.

 

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Section 4.3            Capitalization. The Transferred Shares represent all of
the Shares. All of the Transferred Shares are, as of the Effective Time, and
were when issued, duly authorized and validly issued in accordance with the
charter and governing documents of the Company and in compliance with all
relevant Laws of the jurisdictions in which the Company was formed, fully paid
and not repaid and non-assessable, and are not as of the Effective Time, and
were not when issued, subject to any preemptive rights. Neither the sale of the
Transferred Shares by Seller to Purchaser pursuant to the terms of this
Agreement, nor any of the transactions contemplated hereby are subject to any
preemptive rights, rights of first refusal or any other similar restrictions on
transfer. Except as set forth on Schedule 4.3, there are no employee equity
incentive plans or programs of the Company currently in effect. There are no
outstanding (i) securities of the Company convertible into or exchangeable for
Shares, (ii) options or other rights to acquire from the Company, or any
obligation of the Company to issue, sell, repurchase, redeem or otherwise
acquire, any of the Shares or securities convertible into or exchangeable for
the Shares or (iii) stock appreciation, profit sharing or phantom stock or
similar rights of the Company. Seller has not granted any voting rights, proxies
or agreements or understandings with respect to voting of the Transferred
Shares.

 

Section 4.4            Ownership of the Transferred Shares. Seller is the owner
of the Transferred Shares and holds valid title to the Transferred Shares, free
and clear of any Encumbrances. Except for this Agreement and the transactions
contemplated hereby, there are no agreements, arrangements, warrants, options,
puts, calls, rights or other commitments or understandings of any character to
which Seller is a party or by which any of its assets are bound and relating to
the issuance, sale, purchase, redemption, conversion, exchange, registration,
voting or transfer of the Transferred Shares. Seller has the full and exclusive
power, right and authority to vote the Transferred Shares, and, except as set
forth in Schedule 4.4, is not a party to or bound by any agreement affecting or
relating to its right to vote the Transferred Shares. Upon consummation of the
transactions contemplated hereby, Purchaser will own the Transferred Shares free
and clear of all Encumbrances.

 

Section 4.5            No Conflict. The execution, delivery and performance by
Seller of this Agreement and the agreements related hereto to which Seller is a
party and the consummation by Seller of the transactions contemplated hereby and
thereby do not and will not (i) conflict with or result in a violation or breach
of any provision of any Law or judgment, order, writ, injunction or decree of
any court or other Governmental Entity to which Seller or the Company is
subject, (ii) require the consent, notice or other action by any Person under,
conflict with, result in a violation or breach of, constitute a default or an
event that, with or without notice or lapse of time or both, would constitute a
default under, result in the acceleration of or create in any party the right to
accelerate, terminate, modify or cancel any Contract to which Seller or the
Company is a party or by which Seller or the Company is bound or to which any of
their respective properties and assets are subject or any permit, license or
other authorization affecting the properties, assets or business of the Company,
(iii) conflict with or result in a violation or breach of, or default under, any
provision of the organizational documents of Seller or the Company, or (iv)
result in the creation or imposition of any Encumbrance on any properties or
assets of the Company.

 

Section 4.6            Governmental Filings. No filing or registration with,
notification to, or authorization, consent, permit, waiver or approval of, any
Governmental Entity (collectively, "Governmental Filings") is required in
connection with the execution, delivery and performance of this Agreement by
Seller or the consummation by Seller of the transactions contemplated hereby.

 

Section 4.7            Books and Records. The books of account and other
financial records of the Company, all of which have been made available to
Purchaser, are complete and correct and represent actual, bona fide transactions
and have been maintained in accordance with sound business practices and, where
applicable, GAAP. The minute books of the Company, all of which have been made
available to Purchaser, contain accurate and complete records of all meetings
held of, and action taken by, the shareholders and the board of directors or
similar governing bodies of the Company, and no meeting of any such shareholders
or governing body has been held for which minutes are not contained in such
minute books.

 

Section 4.8            Absence of Material Adverse Effect; Ordinary Course of
Business; Material Transactions. Since December 31, 2012, except as set forth in
Schedule 4.8, there has not been with respect to the Company or its properties
or assets:

 

(a)          any adverse change in the business, condition, financial or
otherwise, or operations of the Company or the condition of the Company’s
properties or assets, and, to the Knowledge of Seller, no such change will arise
from the consummation of the Contemplated Transactions;

 

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(b)          any declaration, setting aside or payment of any dividend or any
distribution (in cash or in kind) to any Person or entity with respect to any
securities of the Company;

 

(c)           any transaction entered into or carried out by the Company other
than in the Ordinary Course of Business;

 

(d)          any material modification or termination of, or the occurrence of
an event that could reasonably give rise to any material modification or
termination of, any material oral or written contract or agreement of the
Company or any material term thereof or any Governmental Entity license, permit
or other authorization;

 

(e)           any change in any method of accounting or accounting policies of
the Company, or any write-down in the accounts receivable of the Company other
than in the Ordinary Course of Business; or

 

(f)           any binding commitment or agreement by Seller or the Company to do
any of the foregoing.

  

Section 4.9            Affiliate Transactions. No director, manager, officer,
employee, shareholder or Affiliate of the Company or any individual related by
blood, marriage or adoption to any such individual or any entity in which any
such individual or entity owns any beneficial interest is a party to any
agreement, contract, commitment or other form of transaction or arrangement with
the Company, written or oral, or has any interest in any of the Company's assets
or properties, except as specifically set forth in Schedule 4.9 and which
represents transactions conducted on arms-length terms.

 

Section 4.10           Pending Litigation.

 

(a)           There are no actions, proceedings or investigations pending
against Seller before any Governmental Entity or threatened in writing against
Seller which would reasonably be expected to restrict Seller's ability to
perform its obligations under the Agreement or consummate the transactions
contemplated hereby.

 

(b)          Except as set forth on Schedule 4.10, there is no, and since
January 1, 2011 there has not been, any suit, claim, litigation, proceeding
(administrative, judicial, or in arbitration, mediation or alternative dispute
resolution), Governmental Entity or grand jury investigation, or other action
(any of the foregoing, "Action") pending or, to the Knowledge of Seller,
threatened and, to the Knowledge of Seller, there have been no incidents,
actions or omissions that can reasonably be expected to result in the
commencement of any such suit, claim, litigation, proceeding, investigation or
other action, against the Company or involving its business, assets or
properties, or, in connection with the Company's business, any Company
shareholder or representative, including without limitation any Action
challenging, enjoining or preventing this Agreement or any agreement related
hereto or the consummation of the transactions contemplated hereby or thereby.

 

(c)           The Company is not and, since January 1, 2011 has not been,
subject to any judgment, order, writ, injunction or decree of any court or other
Governmental Entity.

 

Section 4.11           Environmental and Other Permits and Licenses(d). The
Company is in compliance with all applicable environmental Laws and all
environmental permits. The business operations of the Company do not involve any
contamination of soil or ground water, air pollution or other environmental
pollution that may result in remedial claims against the Company. For the
current business operations, the provision of fresh water and disposal of sewage
or gas and solid emissions or waste is fully ensured. There are no environmental
claims pending or, to the Knowledge of Seller, threatened against the Company.

 

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Section 4.12           Permits; Compliance with Law.

 

(a)           The Company, its directors and its employees have all governmental
authorizations, consents, licenses, permits (whether temporary or otherwise),
approvals, orders, waivers, registrations and other rights necessary, and have
provided all notices required, for the conduct of its business as it is being
conducted as of the date of this Agreement, and all of such authorizations,
consents, licenses, permits, approvals, orders, waivers, registrations, rights
and notices are in full force and effect. The Company is not in default or
violation under any such authorizations, consents, licenses, permits, approvals,
orders, waivers, registrations and rights and notices.

 

(b)          The Company is and has been at all times in compliance in all
material respects with all applicable Law. The Company has not received any
notice alleging such default, breach or violation. Neither the execution of this
Agreement nor the consummation of the transactions contemplated hereby does or
will constitute or result in any such breach, default or violation by the
Company.

 

Section 4.13           Tax.

 

(a)           The Company has timely filed all tax returns (“Tax Returns”)
required by Law, taking into account any extension of time to file granted to or
obtained on behalf of the Company. All such Tax Returns filed by or with respect
to the Company are true, correct and complete and were prepared in compliance
with all applicable Law. The Company has paid (or caused to be paid on its
behalf) all Taxes due and owing, whether or not shown on its Tax Returns. The
Company has not filed any Tax Return that is, or would be, subject to penalties
for underpayment of tax, understatement of income, negligence or disregard of
rules, valuation misstatements or other tax shelter transaction.

 

(b)          The Company is currently not a beneficiary of any extension of time
within which to file any Tax Return. The Company has not waived any statute of
limitations with respect to Taxes or agreed to any extension of time with
respect to a Tax assessment or deficiency, nor is any such waiver or extension
pending.

 

(c)           No Governmental Entity is asserting, or has asserted in the last
six (6) years as of the Closing any deficiency or claim for any amount of
additional Taxes against the Company.

 

(d)          Within the last six (6) years, no claim has ever been made by any
Governmental Entity in a jurisdiction where the Company does not file Tax
Returns that the Company is or may be subject to taxation in that jurisdiction.

 

(e)           The Company has withheld and paid all Taxes required to have been
withheld and paid in connection with any amounts paid or owing to any employee,
independent contractor, creditor, shareholder, or other third party.

 

(f)           No federal, state, local or foreign audits, administrative, court
or other proceedings is pending as of the Closing with regard to any Taxes or
Tax Returns of the Company.

 

(g)          For the purposes of this Agreement:

 

(i)      "Taxes" shall mean any and all taxes, charges, regulated by law and
imposed by any Governmental Entity or taxing authority, fees, levies, interest
or other assessments, or impositions of any kind payable to the relevant
Governmental Entity, including all interest and penalties thereon, and additions
to tax or additional amounts attributable to, imposed upon, or with respect to
such tax, charges, custom duties, social security payments, duties regulated by
public law and imposed by any Governmental Entity, fees, levies, interest,
assessments or impositions, as transferee or successor, by contract or
otherwise. The term "Income Tax" means any tax measured by net income or gross
income.

 

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(ii)      "Tax Returns" shall mean any report, return, document, declaration,
report, claim for refund, information return or statement, or other filing
relating to Taxes, including any schedule or attachment thereto, and including
any amendment thereof.

 

Section 4.13           Employees and Labor Relations.

 

(a)           The Company is, as of the date hereof, in compliance with all Laws
respecting employment, immigration, temporary workers, fixed term employment
contracts, employment practices, benefit plans, pension agreements and pension
promises, terms and conditions of employment, wages and hours, including any
notice, training and filing requirements there under, and there are no pending
or, to the Knowledge of the Seller, threatened investigations or claims by any
branch or department of any Governmental Entity regarding its compliance with
these Laws.

 

(b)       The Company is not a party to or otherwise bound by any collective
bargaining agreement such as tariff agreements or shop agreements, project labor
agreement, memorandum of understanding, letter agreement, side agreement,
contract or any other agreement or understanding with a labor union, labor
organization or group of employees acting in concert. As of the date hereof, the
Company is not subject to any charge, demand, request for recognition, petition
or representation proceeding seeking to compel, require or demand it to
recognize and/or bargain with any labor union, labor organization, works
council, joint works council, group works council or any other group of
employees acting in concert nor, as of the date hereof, is there pending or
threatened, any election procedure of a works council, labor strike, dispute,
walkout, work stoppage, slow-down or lockout involving the Company.

 

(c)       There is no basis for any action or proceeding against, and no action
or proceeding pending or threatened against, the Company: (i) breach of an
actual or implied contract of employment (including, but not limited to, any
claim of fraud, promissory fraud, promissory estoppels or fraudulent
misrepresentation in the making of any actual or implied contract of
employment), (ii) unjust, wrongful, discriminatory (incl. "mobbing"),
retaliatory or tortuous discharge (including any claim of whistle blowing),
(iii) slander, libel or other action claiming defamation, (iv) intentional tort
(including assault, battery, conversion and/or intentional infliction of
emotional distress) or (v) negligent infliction of emotional distress, negligent
hiring, negligent supervision or negligent retention.

 

(d)      There is no basis for any claim against, and no claim is pending or
threatened against, the Company arising out of any Law relating to
discrimination in employment or employment practices or occupational safety and
health standards.

 

(e)       Schedule 4.13 contains for the Company a complete and correct list of
all employees and officers, directors or appointed officials of the Company
(“Employees”).

 

(f)        Schedule 4.13 contains copies of all individual contracts including
all supplemental agreements (e.g. post contractual restraints from competition,
bonus agreements, company car agreements, pension agreements) of the employees,
officers or consultants of the Company which the Company is or can become liable
for.

 

(g)       There are no claims of any person, which are not listed in Schedule
4.13, to conclude or continue an employment arrangement. There are no unsettled
liabilities, entitlements, pending law suits or any other pending or threatened
requests of former employees, managing directors or officers, directors or other
appointed officials of the Company, which are not listed in Schedule 4.13.

 

(h)       There have been no transfers, purchases or sales of any businesses or
business lines by the Company within the last five (5) years.

 

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Section 4.14           Real Property.

 

(a)           The Company does not own any land or other interest in real
property.

 

(b)          Schedule 4.14 lists all leases and subleases of the Company for
real property (individually, a "Lease" and collectively, the "Leases"), and
identifies the property underlying such leases (the "Leased Real Property"), the
lessor, rental rate, lease term, expiration date and existence of a renewal
option. Seller has made available to Purchaser prior to the Closing correct and
complete copies of the Leases listed on Schedule 4.14. With respect to each
Lease, except as otherwise indicated on Schedule 4.14:

 

(i)      the Lease is in full force and effect and will remain in full force and
effect on identical terms on and after the Closing, and the Company is in
possession of the leased premises and all rental and other obligations of the
Company are current;

 

(ii)      the Company is not in breach or default (and has not received notice
of breach or default), and no event has occurred which, with notice or lapse of
time, would constitute a breach or default or permit termination, modification,
or acceleration under the Lease;

 

(iii)      the landlord party to such Lease is not in breach or default of such
Lease, and no event has occurred which, with notice or lapse of time, would
constitute a breach or default by such landlord party;

 

(iv)      to Seller's Knowledge, no party has repudiated any provision of such
Lease;

 

(v)      the Company has not assigned, transferred, conveyed, mortgaged, deeded
in trust, or encumbered any interest in the leasehold or subleasehold; and

 

(vi)      all facilities leased or subleased thereunder have received all
approvals, licenses and permits of Governmental Entities required in connection
with the operation thereof by the Company and have been operated and maintained
by the Company in compliance with applicable Law.

 

Section 4.15            Brokers' Fees. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission in connection with this Agreement
or the transactions contemplated hereby based upon arrangements made by or on
behalf of Seller or any of its Affiliates.

 

Section 4.16            Title and Condition to Assets. The Company has good and
indefeasible fee title to, or a valid leasehold interest in, all of its tangible
assets, free and clear of all Encumbrances. Immediately following the Closing,
the Company shall continue to be vested with good and indefeasible title to, or
a valid leasehold interest in, the Company’s assets.

 

Section 4.17            Material Contracts.

 

(a)           Except as set forth in Schedule 4.17, the Company is not a party
to or otherwise obligated under or has made (and under which any party thereto
still has remaining rights or obligations) any of the following, whether written
or oral (and with respect to oral agreements, the terms and obligations of the
parties thereto are set forth in reasonable detail in Schedule 4.17):

 

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(i)        promissory notes, loans, agreements, indentures, evidences of
Indebtedness or other instruments relating to the lending of money, whether as
borrower, lender or guarantor, in excess of $1,000;

 

(ii)       license agreements, consulting services agreements with customers or
software support agreements that either provide for payments in excess of $1,000
or cannot be terminated in one (1) year or less at no cost;

 

(iii)      lease and leasing agreements which provide for annual payments in
excess of $15,000;

 

(iv)      agreements with suppliers, clients and customers either with a
remaining term of more than one year or an annual contract value of more than
$25,000;

 

(v)       consignment, distributorship and agency agreements;

 

(vi)      guarantees and sureties granted with respect to any obligation of
third parties (including Seller and its Affiliates);

 

(vii)     services, joint venture and cooperation agreements;

 

(viii)    agreements concerning confidentiality or non-competition;

 

(ix)       agreements or commitments (other than those types covered above by
subsection (a) through (h)) in excess of $35,000 or which cannot be terminated
on three (3) months' notice or less at no cost;

 

(x)        any and all outstanding bids, proposals or other offers to customers
which individually have values in excess of $25,000;

 

(xi)       any contract or commitment not made in the Ordinary Course of
Business; and

 

(xii)      any other agreement that is material to the Company's business,
operations or prospects.

 

Seller has delivered to Purchaser a true, complete and accurate copy of each
written contract required to be disclosed in Schedule 4.17 and a true, complete
and accurate description of each oral contract required to be disclosed in
Schedule 4.17, and none of such contracts has been modified or amended in any
respect, except as reflected in such disclosure to Purchaser.

 

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(b)          With respect to each contract listed on Schedule 4.17:

 

(i)      the contract is legal, valid, binding, enforceable and in full force
and effect;

 

(ii)     the Company and, to the Seller’s Knowledge, the other parties to the
contract have performed, in all material respects, all of their material
respective obligations required to be performed under the contract; and

 

(iii)    the contract is not under negotiation (nor has written demand for any
renegotiation been made) and no party has repudiated any portion of the
contract.

  

Section 4.18           Intellectual Property.

 

(a)           To the Knowledge of Seller, each of the Intellectual Property
Rights used by the Company is:

 

(i)      valid and enforceable and nothing has been done or omitted to be done
by which it may cease to be valid and enforceable;

 

(ii)     legally and beneficially owned by, or licensed to, the Company; and

 

(iii)    not the subject of a claim or opposition from a Person (including,
without limitation, an employee of the Company) as to title, validity,
enforceability, entitlement or otherwise.

 

(b)          To the Knowledge of Seller, the Company owns or possesses all of
the Intellectual Property Rights necessary for the conduct of its business as
currently conducted, and such Intellectual Property Rights and conduct are not
in conflict with, or infringement of, the rights of others.

 

(c)           The Company has not granted or is obliged to grant a license,
assignment, consent, undertaking, security interest or other right in respect of
any of the Intellectual Property Rights owned by the Company.

 

(d)          The Company does not use or operate its business under a name other
than its corporate name.

 

Section 4.19           Insurance. The Company agrees to establish an insurance
policy prior to Closing and to maintain insurance with reputable insurance
companies in at least such amounts and against at least such risks as usually
insured against by companies engaged in the same or similar business. There are
no pending claims existing under any existing insurance policies of the Company.

 

Section 4.20           Disclosure of all Material Matters. None of this
Agreement, any of the schedules, attachments or exhibits hereto, or any
agreements or other documentation contemplated hereby contain any untrue
statement of material fact or omit a material fact necessary to make each
statement contained herein or therein, in light of the circumstances under which
they were made, not misleading. There is no fact that has not been disclosed to
Purchaser of which Seller has Knowledge which has had or could reasonably be
anticipated to have a Material Adverse Effect.

 

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Section 4.21           Fraudulent Conveyance.

 

The consummation of the transactions contemplated hereby will not constitute a
fraudulent conveyance by Seller. Seller has not been the subject of a
bankruptcy, solvency or similar proceeding or received written or constructive
notice of such a proceeding being contemplated to be brought against it within
the 5 years prior of the date hereof. In the case that a voluntary or
involuntary bankruptcy proceeding is brought against Seller with respect to or
affecting the Transferred Assets at any time, Seller agrees that this
transaction is immediately null and void at Purchaser’s option and will be
unwound, and the Purchaser shall have a springing security interest in all of
the Transferred Assets until the monies paid by Purchaser hereunder are repaid
to it in full.

  

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

 

Purchaser represents and warrants to Seller that the statements contained in
this Article V are true, correct and complete as of the date hereof, and will be
true, correct and complete as of the Closing Date.

 

Section 5.1            Corporate Status. Purchaser is duly organized as a
corporation under the Law of Nevada and validly existing under the Laws of its
governing jurisdiction and has all requisite power and authority to enter into
this Agreement and to perform its obligations hereunder.

 

Section 5.2            Authorization. The execution and delivery of this
Agreement and the agreements related hereto by Purchaser and the consummation by
Purchaser of the transactions contemplated hereby and thereby have been duly and
validly authorized by Purchaser and no other proceedings of Purchaser are
necessary to authorize this Agreement or the agreements related hereto or to
consummate the transactions contemplated hereby and thereby. Each of this
Agreement and the agreements related hereto has been duly executed and delivered
by Purchaser and (assuming due authorization, execution and delivery by Seller)
this Agreement and the agreements related hereto constitute a valid and binding
obligations of Purchaser enforceable against Purchaser in accordance with their
terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar Laws relating to or affecting
creditors' rights generally or by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at Law).

 

Section 5.3            No Conflict. The execution and delivery of this Agreement
and the agreements related hereto by Purchaser and the consummation by Purchaser
of the transactions contemplated hereby and thereby will not (i) violate any
applicable Law to which Purchaser is subject, (ii) conflict with, result in a
violation or breach of, or constitute a default under, result in the
acceleration of or create in any party the right to accelerate, terminate or
cancel any contract or agreement by which Purchaser is bound or (iii) violate
the organizational documents of Purchaser other than, in the case of clauses
(i) and (ii) above, any such violations, conflicts, breaches, defaults,
accelerations or rights that would not materially impair or delay Purchaser's
ability to perform its obligations under this Agreement or the agreements
related hereto or consummate the transactions contemplated hereby or thereby.

 

Section 5.4            Government Filings. No Governmental Filings are required
in connection with the execution and delivery of this Agreement by Purchaser or
the consummation by Purchaser of the transactions contemplated hereby,
except such Governmental Filings, the failure of such Governmental Filings to be
made or obtained would not materially impair or delay Purchaser's ability to
perform its obligations under this Agreement or consummate the transactions
contemplated hereby.

 

Section 5.5            Brokers' Fees. No broker, investment banker, financial
advisor or other Person is entitled to any broker's, finder's, financial
advisor's or other similar fee or commission from Seller or the Company in
connection with this Agreement or the transactions contemplated hereby based
upon arrangements made by or on behalf of Purchaser or any of its Affiliates.

 

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article vi

COVENANTS

 

Section 6.1            Publicity. Purchaser and Seller agree that no public
release or announcement concerning the terms of the transactions contemplated
hereby shall be issued by any party without the prior written consent of
Purchaser, Seller and the Company, except as a party has determined may be
required by Law, legal process or the rules and regulations of any stock
exchange upon which the securities of a party or one of its Affiliates are
listed, or as may be required or requested by any Governmental Entity, in which
case such party shall, to the extent practicable and to the extent permitted by
Law and legal process, allow the other party and the Company reasonable time to
comment on such release or announcement in advance of such issuance.
Notwithstanding the foregoing, the parties acknowledge that Seller or its
Affiliates may make public statements to securities analysts and other
investment community members regarding the transactions contemplated by this
Agreement. The parties may also make public statements to the extent consistent
with statements previously made publicly in accordance with this Agreement, or
consistent with an outline of disclosure agreed upon with the other party in
advance.

 

Section 6.2            Confidentiality. From and after the Closing, Seller will
treat and hold as confidential all of the Confidential Information of the
Company and its business, refrain from using any of the Confidential Information
of the Company and its business, and deliver promptly to Purchaser or destroy,
at the request and option of Purchaser, all tangible embodiments (and all
copies) of the Confidential Information of the Company and its business which
are in its possession. In the event that Seller is requested or required (by
oral question or request for information or documents in any legal proceeding,
interrogatory, subpoena, civil investigative demand, or similar process) to
disclose any Confidential Information of the Company and its business, Seller
will notify Purchaser promptly of the request or requirement so that Purchaser
may seek an appropriate protective order or waive compliance with the provisions
of this Section 6.2. If, in the absence of a protective order or the receipt of
a waiver hereunder, Seller is, on the advice of counsel, compelled to disclose
any Confidential Information of the Company and its business to any tribunal or
else stand liable for contempt, Seller may disclose the Confidential Information
of the Company and its business, as the case may be, to the tribunal; provided,
however, that Seller shall use its reasonable best efforts to obtain, at the
reasonable request of Purchaser and at the sole expense of Purchaser, an order
or other assurance that confidential treatment will be accorded to such portion
of the Confidential Information of the Company and its business, as the case may
be, required to be disclosed as Purchaser shall designate.

 

Section 6.3            Non-Competition. For a period starting as of the Closing
and ending on the second (2nd) anniversary of such date, without the prior
written consent of Purchaser, Seller and its subsidiaries, officers, directors
and affiliates shall not invest in, own, manage, operate or control any
Competing Business; provided, however, that the foregoing shall not restrict
Seller or any of its subsidiaries from (i) acquiring in the aggregate up to 10%
of the outstanding capital stock of any publicly traded company or (ii)
acquiring, merging with, or entering into a collaboration or joint venture with
a diversified business engaged in part (such part not to be more than 25% of the
aggregate revenues or net income of such business) in a Competitive Business.

 

Section 6.4            Non-Solicitation. From the date hereof, neither Seller
nor the Company will permit any officer, director, manager, employee,
contractor, representative or agent of any of them to directly or indirectly,
(a) solicit, initiate or encourage the submission or proposal of any offers, or
accept any offers, or enter into a confidentiality agreement, letter of intent,
or purchase agreement or other similar agreement with any Person other than
Purchaser, with respect to the acquisition of some or all of the Shares, or a
merger, consolidation, business combination, sale of all or any portion of the
assets of the Company, or any similar extraordinary transaction with respect to
the Company (an "Acquisition Proposal") or (b) participate in any discussions or
negotiations regarding, or furnish to any Person other than Purchaser any
information with respect to, or otherwise cooperate in any way with or assist,
facilitate or encourage any Acquisition Proposal by any Person other than
Purchaser. Each of Seller and the Company agrees to notify Purchaser (within two
(2) business days) of all relevant terms of any proposals by any other Person to
do any of the foregoing which Seller or the Company or any of their respective
officers, managers, employees, contractors, representatives or agents may
receive relating to any of such matters and, if such proposal is in writing,
Seller or the Company will deliver to Purchaser a copy of such inquiry or
proposal.

 

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ARTICLE VII

CONDITIONS TO CLOSING

 

Section 7.1            Conditions Precedent to Obligations of Purchaser.
Purchaser’s obligation to effect the Closing and to take the other actions
required to be taken by Purchaser at the Closing is subject to the satisfaction,
at or prior to the Closing, of each of the following conditions (any of which
may be waived by Purchaser in writing, in whole or in part):

 

(e)           All representations and warranties made by Seller in this
Agreement shall be true and correct on and as of the Closing Date as if made at
and as of the Closing Date, except that any such representation made as of a
specific date (other than the date hereof) shall only need to have been true on
and as of such date;

 

(f)           The covenants and obligations that Seller is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing must
have been duly performed and complied with;

 

(g)          There shall not be threatened, instituted or pending any action or
proceeding, before any court or Governmental Entity, (i) challenging or seeking
to make illegal, or to delay or otherwise directly or indirectly restrain or
prohibit, the consummation of the transactions contemplated hereby or seeking to
obtain material damages in connection with such transactions, (ii) seeking to
prohibit direct or indirect ownership or operation by Purchaser of the Shares,
(iii) seeking to invalidate or render unenforceable any material provision of
this Agreement, or (iv) otherwise relating to and materially adversely affecting
the transactions contemplated hereby;

 

(h)          The Company shall have not suffered a Material Adverse Effect;

 

(i)            Representatives of Purchaser shall have completed the due
diligence review of the operations, condition (financial and other), prospects,
assets and liabilities of, and other matters related to, the Company and its
business to Purchaser’s satisfaction;

 

(j)            All consents and approvals contemplated herein shall have been
obtained;

 

(k)          Seller shall have delivered to Buyer all of the deliverables
described herein; and

 

(l)            Seller shall have executed and delivered to Purchaser a
certificate of an appropriate officer of Seller dated the Closing Date, stating
that the conditions set forth herein have been satisfied.

 

Section 7.2            Conditions Precedent to Obligations of Seller. Seller’s
obligation to effect the Closing and to take the other actions required to be
taken by Seller at the Closing is subject to the satisfaction, at or prior to
the Closing, of each of the following conditions (any of which may be waived by
Seller in writing, in whole or in part):

 

(a)           All representations and warranties made by Purchaser in this
Agreement shall be true and correct on and as of the Closing Date as if made at
and as of the Closing Date, except that any such representation made as of a
specific date (other than the date hereof) shall only need to have been true on
and as of such date;

 

15

 

 

(b)          The covenants and obligations that Purchaser is required to perform
or to comply with pursuant to this Agreement at or prior to the Closing must
have been duly performed and complied with;

 

(c)           There shall not be threatened, instituted or pending any action or
proceeding, before any court or Governmental Entity, (i) challenging or seeking
to make illegal, or to delay or otherwise directly or indirectly restrain or
prohibit, the consummation of the transactions contemplated hereby or seeking to
obtain material damages in connection with such transactions, (ii) seeking to
prohibit direct or indirect ownership or operation by Purchaser of the Shares,
(iii) seeking to invalidate or render unenforceable any material provision of
this Agreement, or (iv) otherwise relating to and materially adversely affecting
the transactions contemplated hereby;

 

(d)          Representatives of Seller shall have completed the due diligence
review of the operations, condition (financial and other), prospects, assets and
liabilities of, and other matters related to, the Purchaser and its business to
Seller’s satisfaction;

 

(e)           Purchaser shall have delivered to Seller all of the deliverables
described herein; and

 

(f)           Purchaser shall have executed and delivered to Seller a
certificate of an appropriate officer of Purchaser dated the Closing Date,
stating that the conditions set forth in herein have been satisfied.

 

ARTICLE VIII

MISCELLANEOUS

 

Section 8.1            Survival of Representations and Warranties. The
representations and warranties in this Agreement shall survive the Closing
indefinitely.

 

Section 8.2            Indemnification.

 

(a)           Seller's Agreement to Indemnify. From and after the Closing,
Seller shall indemnify, defend and hold harmless Purchaser, its Affiliates, the
Company and their respective officers, directors, shareholders and successors
and assigns from and against any and all losses, damages, demands, claims,
actions or causes of action, assessments, awards, penalties, fines, costs,
expenses and liabilities (including reasonable attorneys' fees and expenses but
excluding punitive or exemplary damages, except in the case of fraud or to the
extent actually awarded to a Governmental Entity or other third party)
(collectively, "Damages") incurred or to be incurred by any of them to the
extent resulting from or arising out of:

 

(i)      any breach by Seller of any representation or warranty contained in
this Agreement, the schedules hereto, or other certificate or document delivered
by Seller pursuant to this Agreement;

 

(ii)      any breach by Seller of any covenant, agreement or obligation
contained in this Agreement or other document delivered by Seller pursuant to
this Agreement;

 

(iii)      any Litigation against Seller or the Company; and

 

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(iv)      all and any Taxes affecting, and to be borne by, the Company for the
time up to (and including) the Closing Date if and to the extent the specific
Tax in question has not been paid on or prior to the date hereof, or has not
been provided for in the annual accounts, or has not been fully disclosed by
Seller to Purchaser. Such indemnity or hold-harmless shall apply irrespective
and regardless of whether or not on the Closing Date the Seller had knowledge or
should have had knowledge of such obligation to pay Taxes. For the avoidance of
doubt, it is the intention of the parties that, in the case of any such Taxes
for any period in which the determination of the amount of such Taxes due for
such period does not coincide with or end on the Closing Date, the amount of
such Taxes deemed a liability of the Company for the time up to (and including)
the Closing Date shall be determined as if a separate Tax Return was due for a
period ending on the Closing Date and the amount of such Taxes due on that
separate Tax Return is determined based on actual events occurring up through
and including the Closing Date. In the event that any Taxes are assessed once
annually, for example, property taxes, then in lieu of the rules for proration
in the previous sentence, if such Tax is not yet been paid for the annual period
that includes the Closing Date, then liability of the Company for such Tax under
this section shall be equal to the amount of such Tax times a ratio of the days
in such period before and including the Closing date divided by 365.

 

(b)          Purchaser's Agreement to Indemnify. Upon the terms and subject to
conditions of this Section 8.2, from and after the Closing, Purchaser shall
indemnify, defend and hold harmless Seller, its Affiliates, and their respective
officers, directors and successors and assigns from and against any and all
Damages incurred or to be incurred by any of them to the extent resulting from
or arising out of

 

(i)      any breach by Purchaser of any representation or warranty contained in
this Agreement or other certificate or document delivered by Purchaser pursuant
to this Agreement; and

 

(ii)      any breach by Purchaser of any covenant, agreement or obligation
contained in this Agreement.

 

(c)           Third-Party Claims. The obligations and liabilities of Seller and
Purchaser with respect to any claims made by an indemnified party which arise or
result from claims for Damages made by third parties or for which liability may
be asserted by any third party including any Governmental Entity (a "Third-Party
Claim"), shall be subject to the following terms and conditions:

 

(i)      The indemnified parties shall give the indemnifying party prompt
written notice of any such Third-Party Claim; provided, however, that failure to
give such notification shall not affect the indemnification provided hereunder
except to the extent the indemnifying party shall have been prejudiced as a
result of such failure and provided that the indemnifying party shall not be
responsible for any costs or expenses incurred prior to the giving of such
notice or that arise as a result of such failure to give notice. The
indemnifying party shall have the right to undertake the defense of any Third
Party Claim by counsel reasonably satisfactory to the indemnified parties at the
indemnifying party's sole expense; provided, that if the indemnifying party
assumes such defense the indemnifying party shall control such defense and any
contacts with third parties with respect to such Third Party Claim, however, the
indemnified parties shall have the right to participate in the defense thereof
and to employ counsel, at their own expense, separate from the counsel employed
by the indemnifying party, it being understood that the indemnifying party shall
control such defense and all parties shall be afforded access to all information
pertinent to the defense; provided, further, that the reasonable fees and
expenses of one counsel to the indemnified parties will be indemnifiable
hereunder if, in the reasonable view of counsel to the indemnified party, (x) a
conflict of interest exists between the indemnifying party and the indemnified
parties or (y) there may be legal defenses available to the indemnified parties
which are different from or additional to those available to the indemnifying
party; and

 

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(ii)      Notwithstanding any provision in this Section 8.2(c) to the contrary,
without the prior written consent of the indemnified parties (which consent
shall not be unreasonably conditioned, withheld or delayed), the indemnifying
party shall not admit any liability with respect to, or settle, compromise or
discharge, any Third-Party Claim or consent to the entry of any judgment with
respect thereto. In addition, if notice of a Third Party Claim has not been
provided, or if notice has been provided and the indemnifying party shall have
assumed the defense of the Third-Party Claim, the indemnified party shall not
admit any liability with respect to, or settle, compromise or discharge, any
Third-Party Claim or consent to the entry of any judgment with respect thereto,
without the prior written consent of the indemnifying party (which consent shall
not be unreasonably conditioned, withheld or delayed), and the indemnifying
party will not be subject to any liability for any such admission, settlement,
compromise, discharge or consent to judgment made by an indemnified party
without such prior written consent of the indemnifying party.

 

(d)          Other Claims. In the event any indemnified party should have a
claim against any indemnifying party under Section 8.2 hereof that does not
involve a Third-Party Claim being asserted against or sought to be collected
from such indemnified party, the indemnified party shall, as promptly as
practicable after discovery of such claim, deliver written notice of such claim
to the indemnifying party. The failure by any indemnified party to so notify the
indemnifying party shall not relieve the indemnifying party from any liability
which it may have to such indemnified party under Section 8.2, except to the
extent that the indemnifying party shall have been materially prejudiced by such
failure.

 

(e)           Limitations; Sole Remedy, etc.

 

(i)      Notwithstanding any provision in this Agreement to the contrary, the
obligation of any indemnifying party to indemnify an indemnified party pursuant
to this Section 8.2 shall be limited to claims which an indemnified party has
given the indemnifying party written notice pursuant to Section 8.2(c) or (d),
as applicable, setting forth therein in reasonable detail the basis for such
claim.

 

(ii)      Notwithstanding anything to the contrary contained in this Agreement:
(a) an indemnifying party shall not be liable for any claim for indemnification
unless and until the aggregate amount of indemnifiable Damages which may be
recovered from the indemnifying party (taking into account clause (i) hereof)
equals or exceeds a one-time deductible amount of $25,000 (the "Deductible"), in
which case the indemnified party entitled to such indemnification shall be
entitled to recover all such Damages to which such indemnified party is entitled
in excess of the Damages constituting the Deductible, and (b) in no event shall
the aggregate amount of all claims for which Seller or Purchaser is liable
pursuant to Section 2.4(a)Section 8.2, as applicable, exceed an amount equal to
the Purchase Price; except in each case with respect to (i) Damages arising from
fraud, willful misconduct or intentional breach of covenants or other agreements
herein by Purchaser or Seller, as applicable, or (ii) a breach of a Fundamental
Rep by Seller or by Purchaser.

 

(iii)      Each of Seller and Purchaser acknowledges and agrees that its sole
and exclusive remedy (other than for fraud or intentional misconduct) following
the Closing with respect to any and all claims (whether Third-Party Claims or
otherwise) relating to the subject matter of this Agreement shall be pursuant to
the provisions set forth in this Section 8.2; provided, however, that nothing
contained herein shall prevent (A) an indemnified party from pursuing remedies
as may be available to such party under applicable Law in the event of an
indemnifying party's failure to comply with its indemnification obligations
hereunder or (B) any party from pursuing a claim for specific performance
pursuant to Section 8.14 hereof.

 

18

 

 

(iv)      Any liability for indemnification hereunder shall be determined
without duplication of recovery by reason of the state of facts giving rise to
such liability constituting a breach of more than one representation, warranty,
covenant or agreement.

 

(v)      Any indemnity payment made hereunder shall be treated by the parties as
an adjustment to the Purchase Price. Any indemnification obligation under this
Agreement shall be net of any tax benefits realized by the indemnified parties
or its Affiliates, and any insurance or indemnity, contribution or similar
amount received by the indemnified party or its Affiliates from any third party
with respect thereto. To the extent that any indemnity is not treated as a
Purchase Price adjustment and is subject to tax, such payment shall be increased
so that on an after-tax basis, the payment shall equal the amount of the
indemnity provided in Section 8.2.

 

(vi)      For purposes of determining the amount of any Damages under this
Section 8.2 (but not for purposes of determining whether a breach of any
representation or warranty has occurred) each of the representations and
warranties that contains any "Material Adverse Effect," "in all material
respects," or other materiality (or correlative meaning) qualification shall be
deemed to have been given as though there were no such qualification.

 

Section 8.3            Assignment; Binding Effect. This Agreement and the rights
hereunder are not assignable unless such assignment is consented to in writing
by both Purchaser and Seller and, subject to the preceding clause, this
Agreement and all the provisions hereof shall be binding upon and shall inure to
the benefit of the parties and their respective successors and permitted
assigns.

 

Section 8.4            Choice of Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW OR CONFLICTING PROVISION OR RULE (WHETHER OF THE
STATE OF NEVADA OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE LAWS OF ANY
JURISDICTION OTHER THAN THE STATE OF NEVADA TO BE APPLIED. IN FURTHERANCE OF THE
FOREGOING, THE INTERNAL LAW OF THE STATE OF NEVADA WILL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS AGREEMENT, EVEN IF UNDER SUCH
JURISDICTION'S CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF
SOME OTHER JURISDICTION WOULD ORDINARILY APPLY. EACH PARTY HERETO AGREES AND
CONSENTS TO THE EXCLUSIVE JURISDICTION OF ANY COURT SITTING IN NEVADA, NEVADA
AND ANY UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEVADA (IF FEDERAL
JURISDICTION EXISTS), AND ANY APPLICABLE APPELLATE COURTS, WITH RESPECT TO ALL
MATTERS RELATING TO THIS AGREEMENT AND TO THE TRANSACTIONS CONTEMPLATED HEREBY,
WAIVES ALL OBJECTIONS BASED ON LACK OF VENUE AND FORUM NON CONVENIENS, AND
IRREVOCABLY CONSENTS TO THE PERSONAL JURISDICTION OF ALL SUCH COURTS.

 

Section 8.5            Waiver of Jury Trial. Each of the parties hereto hereby
waives to the fullest extent permitted by applicable Law any right it may have
to a trial by jury with respect to any litigation directly or indirectly arising
out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement. Each of the parties hereto hereby (a) certifies
that no representative, agent or attorney of the other party has represented,
expressly or otherwise, that such other party would not, in the event of
litigation, seek to enforce the foregoing waiver and (b) acknowledges that it
has been induced to enter into this Agreement and the transactions contemplated
by this Agreement, as applicable, by, among other things, the mutual waivers and
certifications contained herein.

 

Section 8.6            Notices. All notices and other communications provided
for herein shall be dated and in writing and shall be deemed to have been duly
given when delivered, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid and when received if delivered
otherwise, to the party to whom it is directed:

 

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If to Seller, to:

 

John Pena

101 S. Main St.

Pomona, CA 91766

 

If to Purchaser, to:

 

Wikifamilies, Inc.

Attn: Trisha Malone, CFO

9025 Carlton Hills Blvd Ste. B

Santee, CA 92071

 

with copies, in the case of notice to Purchaser, to: Jolie Kahn, Esq. 1020
Riverview, Conshohocken, PA 19428, fax: 866-705-3071

 

Section 8.7            Headings. The headings contained in this Agreement are
inserted for convenience only and shall not be considered in interpreting or
construing any of the provisions contained in this Agreement.

 

Section 8.8            Fees and Expenses; Taxes. Except as otherwise provided
herein, Seller shall pay all cost and expenses of Seller and the Company
associated with the negotiation, preparation and execution of this Agreement,
and consummation of the transactions contemplated hereby. Purchaser shall pay
all costs and expenses incurred on its behalf in connection with the
negotiation, preparation and execution of this Agreement, and consummation of
the transactions contemplated hereby. Each of Seller and Purchaser shall timely
file with the competent taxation authorities any tax returns, reports and other
documents that are required to be filed by such party under the relevant tax
laws in relation to any taxes imposed on such party resulting from the
transaction contemplated herein, and each party shall timely pay such taxes to
the competent taxation authorities and deliver to the other party proof of due
settlement of such taxes (or of exemption therefrom).

 

Section 8.9            Entire Agreement. This Agreement (including the Exhibits
and schedules hereto) and the agreements related hereto constitute the entire
agreement between the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to such subject matter; provided, however, this Agreement shall not
supersede the terms and provisions of the Confidentiality Agreement, which shall
survive and remain in effect until expiration or termination thereof in
accordance with its terms and this Agreement.

 

Section 8.10            Interpretation

 

(a)           When a reference is made in this Agreement to an Article, Section
or Exhibit, such reference shall be to an Article, Section or Exhibit of or to
this Agreement unless otherwise indicated.

 

(b)          Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation."

 

(c)           When a reference in this Agreement is made to a "party" or
"parties," such reference shall be to a party or parties to this Agreement
unless otherwise indicated.

 

(d)          Unless the context requires otherwise, the terms "hereof,"
"herein," "hereby," "hereto" and derivative or similar words in this Agreement
refer to this entire Agreement.

 

(e)           Unless the context requires otherwise, the use of any gender
herein shall be deemed to include the other genders.

 

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(f)           References in this Agreement to "dollars" or "$" are to U.S.
dollars.

 

(g)          This Agreement was prepared jointly by the parties and no rule that
it be construed against the drafter will have any application in its
construction or interpretation.

 

Section 8.11            Waiver and Amendment. This Agreement may be amended,
modified or supplemented only by a written mutual agreement executed and
delivered by Seller and Purchaser. Except as otherwise provided in this
Agreement, any failure of any party to comply with any obligation, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, covenant, agreement or condition shall not operate as a waiver of,
or estoppel with respect to, any subsequent or other failure.

 

Section 8.12            Counterparts; Language; Facsimile Signatures. This
Agreement may be executed in any number of counterparts, each of which when
executed, shall be deemed to be an original and all of which together shall be
deemed to be one and the same instrument binding upon all of the parties
notwithstanding the fact that all of the parties are not signatory to the
original or the same counterpart. For purposes of this Agreement, facsimile
signatures or electronic .pdf copies shall be deemed originals.

 

Section 8.13            Third-Party Beneficiaries. This Agreement is for the
sole benefit of the parties and their successors and permitted assigns and
nothing herein express or implied shall give or be construed to give to any
Person, other than the parties and such successors and permitted assigns, any
legal or equitable rights hereunder, it being understood that the foregoing
shall not limit the right of any indemnified party to bring claims for
indemnification under Section 7.2 in respect of Damages.

 

Section 8.14            Specific Performance. The parties agree that if any of
the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at Law would exist and damages would be difficult to determine,
and that the parties shall be entitled to specific performance of the terms
hereof, in addition to any other remedy at Law or in equity.

 

Section 8.15            Severability. If any provision of this Agreement or the
application of any such provision to any Person or circumstance shall be held
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision hereof.

 

Section 8.16            Further Assurance. Seller and Purchaser shall and shall
procure that their respective Affiliates shall execute and deliver, or shall
cause to be executed and delivered, such documents and other papers and shall
take, or shall cause to be taken, such further actions as may be reasonably
required to carry out the provisions of, and give effect to, the transactions
contemplated by, this Agreement.

 

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date and year first above written.

 

 

 /s/ John Pena  By:John Pena as an Individual   Name: (“Seller”)

 

 

 /s/ John Pena  By:

John Pena for JP09 & Associates, Inc

  Name: (“Seller”)   Title: Owner

 

 /s/ Trisha Malone  By:

Trisha Malone for Wikifamilies, Inc.

  Name: (“Buyer”)   

Title: CEO, CFO & Secretary

 

 

 

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    AMENDMENT TO SHARE PURCHASE AGREEMENT  

by and between

JOHN PENA

      And   WIKIFAMILIES, INC.   Dated as of June 24, 2013    

 

 

 

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SHARE PURCHASE AGREEMENT

 

THIS AMENDMENT TO SHARE PURCHASE AGREEMENT is made and entered into as of the
24th day of June, 2013 (this "Agreement"), by and among JOHN PENA, an
individual, and JP09 & Associates, Inc., a California corporation, as owner
("Seller"), and Wikifamilies, Inc. (aka ClairNET, Ltd.), a Nevada corporation
("Purchaser").

 

RECITALS

 

WHEREAS, the parties entered into a Share Purchase Agreement on May 8, 2013; and

 

WHEREAS, the parties desire to amend the original Share Purchase Agreement to
extend the Closing Date to August 31, 2013 (except as amended hereby, the
original Share Purchase Agreement remains in full force and effect).

 

NOW, THEREFORE, in consideration of the foregoing, the representations,
warranties, covenants and agreements set forth in this Agreement, and other good
and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, the parties hereby agree as follows:

 

1. Section 2.1 of the Share Purchase Agreement is hereby amended so that in the
second sentence thereof, “May 31, 2013” is hereby replaced with “August 31,
2013”.

 

2. Except as amended hereby, the original Share Purchase Agreement remains in
full force and effect.

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to Share
Purchase Agreement to be executed as of the date and year first above written.

 

By: /s/ John Pena
(“Seller”)

 

 

 

 

WIKIFAMILIES, INC.

By:/s/ Trisha Malone
Name: Trisha Malone
Title: CEO

(“Buyer”)

 

 

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