Exhibit 10.2

 

Execution Copy

License Agreement

 

This License Agreement (this “Agreement”), effective as of October [ ], 2017
(the “Effective Date”), is by and among Recruiter.com, Inc., a Delaware
corporation (“Recruiter”), VocaWorks, Inc. a New Jersey corporation (“Sub”) and
Truli Media Group, Inc., a Delaware corporation (“Parent”). Recruiter, Sub and
Parent may be referred to herein collectively as the “Parties” or individually
as a “Party.”

 

WHEREAS, Recruiter desires to license to Sub (but solely in the Field of Use)
the exclusive right to use its Intellectual Property with respect to the
Licensed Technology, including the domain names and websites set forth on
Exhibit A attached hereto (each referred to as a “Website” and collectively, as
the “Websites”) including all tangible and intangible property of the Websites,
including, but not limited to, all algorithms, trade names, trademarks,
know-how, Software, including all Updates to the Software and all other
Intellectual Property (as defined herein) used for and in connection with the
development, maintenance and operation of the Websites (the “Website Assets”),
including, but not limited to, the description contained in Exhibit A attached
hereto, (collectively, the “Licensed Technology”); and

 

WHEREAS, Sub desires to obtain an exclusive license in the Field of Use to the
Licensed Technology for its business purposes, upon the terms and conditions set
forth in this Agreement; and

 

NOW, THEREFORE, in consideration of the mutual covenants, terms, and conditions
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

Article 1.
Definitions

 

1.1 Definitions. Capitalized words and terms used in this Agreement have the
following meanings:

 

“4% Notes” has the meaning ascribed to such term as defined in Section 7.5(a).

 

“10% Notes” has the meaning ascribed to such term as defined in Section 7.5(b).

 

“Action” means any claim, action (including any cross-claim or counterclaim),
cause of action, demand, lawsuit, charges, disputes, arbitration, inquiry,
audit, notice of violation, proceeding (including any civil, criminal,
administrative, investigative or appellate proceeding), litigation, complaints,
citation, summons, subpoena or investigation of any nature, civil, criminal,
administrative, regulatory or otherwise, whether at law or in equity, whenever
or however arising.

 

“Adverse Consequences” means all claims, charges, penalties, judgments, fines,
amounts paid in settlement, assessments, remediation, liabilities, obligations,
losses, damages, deficiencies, diminutions in value, Taxes, fees, costs and
expenses, including all reasonable attorneys’ fees and court costs and the
reasonable costs incurred by any Person to enforce another Person’s
indemnification obligations under this Agreement.

 

 

 

 

“Agreement” is defined in the preamble.

 

“Affiliate” or “Affiliates” of a Person means any other Person that directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with, such Person. The term “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 and policies of a Person, whether through the ownership of voting
securities, by contract or otherwise.

 

“Affiliated Group” means two or more corporations that are related through
common ownership, but are treated as one for federal income tax purposes. An
affiliated group consists of a parent corporation and one or more subsidiary
corporations. The parent corporation must own at least 80% of its subsidiary’s
stock and consolidates the subsidiaries financial statements with its own.

 

“Charter Documents” means an entity’s certificate or articles of incorporation,
certificate defining the rights and preferences of securities, articles of
organization, general or limited partnership agreement, certificate of limited
partnership, joint venture agreement or similar document governing the entity.

 

“Closing” has the meaning ascribed to such term as defined in Section 5.1.

 

“Closing Date” has the meaning ascribed to such term as defined in Section 5.1.

 

“Code” means the Internal Revenue Code of 1986, as amended.

 

“Contract” means any contract, agreement, indenture, note, bond, loan, mortgage,
license, instrument, lease, understanding, commitment or other arrangement or
agreement, whether written or oral.

 

“Customizations” has the meaning ascribed to such term as defined in Section
6.2(e)(9)(B).

 

“Delivery Date” has the meaning ascribed to such term as defined in Section 2.3.

 

“Derivative Works” means a work which is based upon one or more preexisting
works, such as a revision, modification, translation, abridgement, condensation,
expansion, or any other form in which such preexisting works may be recast,
transformed, or adapted, and which, if prepared without authorization of the
owner of the copyright in such preexisting work, would constitute a copyright
infringement. For purposes hereof, a Derivative Work shall also include any
compilation that incorporates such a preexisting work. For purposes hereof,
Derivative Work shall also include all versions, improvements, modifications,
enhancements, bug fixes, and updates of the Licensed Technology.

 

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“Disclosure Schedules” means the Disclosure Schedules delivered concurrently
with the execution and delivery of this Agreement.

 

“Documentation” means Recruiter’s user manuals, handbooks and installation
guides relating to the Licensed Technology provided in writing or by any
electronic means by Recruiter to Sub.

 

“Effective Date” has the meaning ascribed to such term as defined in the
preamble.

 

“Encumbrance” means any charge, claim, community property interest, pledge,
condition, equitable interest, lien (statutory or other), option, security
interest, mortgage, easement, encroachment, right of way, right of first
refusal, or restriction of any kind, including any restriction on use, voting,
transfer, receipt of income or exercise of any other attribute of ownership.

 

“Exchange Act” has the meaning ascribed to such term as defined in Section
6.3(d)(1).

 

“Equity Incentive Plan” has the meaning ascribed to such term as defined in
Section 7.2.

 

“FCPA” has the meaning ascribed to such term as defined in Section 6.2(d)(2).

 

“Field of Use” means the use of the Licensed Technology in connection with
providing a platform for Persons to directly contact and hire personnel,
including but not limited to project consultants, by searching active candidates
who have created a free and publicly accessible profile to all on the platform.
For avoidance of doubt, Recruiter’s existing Resume Distribution business shall
not be treated as within the Field of Use and part of the Licensed Technology.

 

“GAAP” means accounting principles generally accepted in the United States of
America, as in effect from time to time, applied on a consistent basis
throughout the periods indicated.

 

“General Expiration Date” has the meaning ascribed to such term as defined in
Section 7(b)(1).

 

“Governmental Authority” means any foreign, federal, national, state or local
judicial, legislative, executive or regulatory body, authority or
instrumentality.

 

“Indemnified Party” or “Indemnified Parties” has the meaning ascribed to such
term as defined in Section 7.1(c)1.

 

“Indemnifying Party” or “Indemnifying Parties” has the meaning ascribed to such
term as defined in Section 7.1(c)1.

 

“Information Statement” has the meaning ascribed to such term as defined in
Section 7.6.

 

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“Intellectual Property” means with respect to the Licensed Technology all of the
following in any jurisdiction throughout the world, whether registered or
unregistered: (i) all inventions (whether patentable or unpatentable and whether
or not reduced to practice), all improvements thereto, and all U.S. and foreign
patents, patent applications, and patent disclosures, together with all
reissuances, continuations, continuations-in-part, revisions, extensions, and
reexaminations thereof, (ii) all trademarks, service marks, brand names,
certification marks, trade dress, logos, trade names, domain names, assumed
names and corporate names, together with all colorable imitations thereof, and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (iii) all copyrights, and
all applications, registrations, and renewals in connection therewith, (iv) all
trade secrets under applicable state laws and the common law and know-how
(including formulas, techniques, technical data, designs, drawings,
specifications, customer and supplier lists, pricing and cost information, and
business and marketing plans and proposals), (v) all computer software
(including source code, object code, diagrams, data and related documentation)
(collectively, the “Software”), (vi) the Websites and Website Assets including
the domain name and website ProjectManagers.net and CIOs.com, and (vii) all
copies and tangible embodiments of the foregoing (in whatever form or medium).

 

“Knowledge of Recruiter” or “Recruiter’s Knowledge” or any other similar
knowledge qualification, means the actual or constructive knowledge of any
director or officer of Recruiter, after due inquiry.

 

“Knowledge of Parent” or “Parent’s Knowledge” or any other similar knowledge
qualification, means the actual or constructive knowledge of Elliot Maza as
Chief Executive Officer of Parent, after due inquiry.

 

“Knowledge of Sub” or “Sub’s Knowledge” or any other similar knowledge
qualification, means the actual or constructive knowledge of any director or
officer of Sub, after due inquiry.

 

“Law” or “Laws” means any federal, state or local law, statute, rule,
regulation, judgment, decree, injunction, order, ordinance, code, regulation,
arbitration award, grant, franchise, permit and license or other legally
enforceable requirement of or by any Governmental Authority or self-regulatory
organization.

 

“Liability” or “Liabilities” means obligations or commitments of any nature
whatsoever, asserted or unasserted, known or unknown, absolute or contingent,
accrued or unaccrued, matured or unmatured or otherwise.

 

“License” has the meaning ascribed to such term as defined in Section 2.1.

 

“Licensed Technology” means the rights to the Intellectual Property including
the Websites and Website Assets within the Field of Use as defined in the first
whereas clause and as more fully set forth on Exhibit A attached to this
Agreement.

 

“License Fee” has the meaning ascribed to such term as defined in Section 4.1.

 

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“License Updates” means any updates, bug fixes, patches, or other error
corrections to the Licensed Technology including the Software and Website Assets
and all Derivative Works of the Licensed Technology that Sub develops under this
Agreement or that are developed by Licensor in the course of providing the
Support Services as required in this Agreement.

 

“Malicious Code” has the meaning ascribed to such term as defined in Section
6.2(e)(12)(C).

 

“Material Adverse Effect” means any event, occurrence, fact, condition or change
that is, or could reasonably be expected to become, individually or in the
aggregate, materially adverse to (a) the business, results of operations,
condition (financial or otherwise) or assets of Recruiter’s business, (b) the
value of the Website Assets, or (c) the ability of Recruiter to consummate the
transactions contemplated hereby on a timely basis.

 

“Open Source Software” has the meaning ascribed to such term as defined in
Section 6.2(e)(11)(A).

 

“Ordinary Course of Business” means the ordinary course of business consistent
with past practices of Recruiter for the 12 months prior to the Effective Date.

 

“Parent” has the meaning ascribed to such term as defined in the preamble.

 

“Parent Financial Statements” means the audited financial statements consisting
of the balance sheet of the Parent as at March 31, 2017 and the related
statements of income and retained earnings, stockholders’ equity and cash flow
for the year then ended (the “Audited Financial Statements”), and unaudited
financial statements consisting of the balance sheet of the Business as at June
30, 2017 and the related statements of income and retained earnings,
stockholders’ equity and cash flow for the three month period then ended (the
“Interim Financial Statements” and together with the Audited Financial
Statements, the “Financial Statements”) that have been made available to
Recruiter.

 

“Parties” or “Party” has the meaning ascribed to such term as defined in the
preamble.

 

“Person” means all natural persons, corporations, business trusts, associations,
unincorporated organizations, limited liability companies, partnerships, joint
ventures and other entities and Governmental Authorities or any department or
agency thereof.

 

“Recruiter” has the meaning ascribed to such term as defined in the preamble.

 

“Recruiter IP Agreements” means all Intellectual Property agreements relating to
or otherwise involved with the Licensed Technology that are being licensed to
Sub under this Agreement.

 

“Recruiter IP Registrations” means all Intellectual Property Licensed Technology
that are subject to any issuance, registration, application or other filing by,
to or with any Governmental Authority or authorized private registrar in any
jurisdiction, including registered trademarks, domain names, and copyrights,
issued and reissued patents and pending applications for any of the foregoing.

 

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“Recruiter Product” has the meaning ascribed to such term as defined in Section
6.2(e)(9)(A).

 

“SEC” means the U.S. Securities and Exchange Commission.

 

“SEC Reports” has the meaning ascribed to such term as defined in Section
6.3(d)(1).

 

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

 

“Series A” has the meaning ascribed to such term as defined in Section 5.3.

 

“Series B” has the meaning ascribed to such term as defined in Section 4.1(b).

 

“Series C” has the meaning ascribed to such term as defined in Section 7.5(c).

 

“Series C-1” has the meaning ascribed to such term as defined in Section 7.5(c).

 

“Software” has the meaning ascribed to such term as defined in the definition of
Intellectual Property.

 

“Sub” has the meaning ascribed to such term as defined in the preamble.

 

“Sub Updates” means any Updates including Derivative Works that Sub develops in
connection with the use of the Licensed Technology under this Agreement.

 

“Support Services” means the technical support, marketing and advertising
services support listed on Exhibit B attached hereto.

 

“Tax” or “Taxes” means all taxes, fees or other assessments of any kind imposed
by any Governmental Authority, and any and all interest, penalties and additions
relating thereto. “Tax” or “Taxes” includes without limitation all add-on
minimum, alternative minimum, capital stock, currency, customs, documentary,
disability, employee, employer, environmental, estimated, excise, export, FICA,
franchise, FUTA, gross receipts, income, import, natural resources, license,
occupation, payroll, personal property, premium, real property, registration,
sales, severance, social security, stamp, transfer, unemployment, use, value
added, escheat, unclaimed property, windfall profit and withholding taxes and
duties. “Tax” or “Taxes” also includes any Liability for taxes of any other
Person, including transferee or secondary Liability for Taxes and any Liability
pursuant to an agreement or otherwise, including Liability arising as a result
of being or ceasing to be a member of any affiliated group, or being included or
required to be included in any Tax Return relating thereto.

 

“Tax Returns” means any tax return, filing document or information statement
required to be filed in connection with or with respect to any Taxes.

 

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“Transaction Document” means this Agreement, and the other agreements,
instruments and documents required to be delivered at the Closing.

 

“Updates” means any updates, bug fixes, patches, or other error corrections to
the Licensed Technology including the Software and Website Assets and all
Derivative Works of the Licensed Technology that Recruiter develops under this
Agreement.

 

“Website” or “Websites” have the meaning ascribed to such terms as defined in
the first whereas clause.

 

“Website Assets” has the meaning ascribed to such term as defined in the first
whereas clause.

 

Article 2.
License

 

2.1 License Grant. Recruiter hereby grants Sub an exclusive, perpetual,
worldwide, royalty free, fully-paid up, sublicenseable, and transferable license
solely in the Field of Use (the “License”) to use the Licensed Technology for
Sub’s business purposes. Sub may make copies of the Licensed Technology
including the Software for back-up, disaster recovery, and testing purposes;
provided that any such copies of the Licensed Technology containing such
Software: (x) remain Recruiter’s exclusive property; and (y) are subject to the
terms and conditions of this Agreement.

 

2.2 Use Restrictions. Sub shall not use the Licensed Technology for any purposes
beyond the scope of the License granted in this Agreement.

 

2.3 Delivery. Recruiter shall deliver the Licensed Technology electronically, on
tangible media, or by other means to Sub within ten business days following the
Effective Date (the “Delivery Date”) and such other Updates shall be delivered
promptly from time-to-time during the term of this Agreement and as otherwise
requested by Sub.

 

2.4 License Updates. All intellectual property rights in the License Updates
including but not limited to all of the following in any jurisdiction throughout
the world, whether registered or unregistered: (i) all inventions (whether
patentable or unpatentable and whether or not reduced to practice), all
improvements thereto, and all U.S. and foreign patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (ii)
all trademarks, service marks, brand names, certification marks, trade dress,
logos, trade names, domain names, assumed names and corporate names, together
with all colorable imitations thereof, and including all goodwill associated
therewith, and all applications, registrations, and renewals in connection
therewith, (iii) all copyrights, and all applications, registrations, and
renewals in connection therewith, (iv) all trade secrets under applicable state
laws and the common law and know-how (including formulas, techniques, technical
data, designs, drawings, specifications, customer and supplier lists, pricing
and cost information, and business and marketing plans and proposals), (v) all
computer software (including source code, object code, diagrams, data and
related documentation) (collectively, the “Software”), (vi) the Websites and
Website Assets including the domain name and website ProjectManagers.net and
CIOs.com, and (vii) all copies and tangible embodiments of the foregoing (in
whatever form or medium), shall be owned by Sub; and Sub hereby grants Recruiter
a non-exclusive, perpetual, worldwide, royalty-free, fully paid up,
sublicensable license to use the License Updates for Recruiter’s business
purposes outside of Sub’s Field of Use. Recruiter acknowledges and agrees that
the License Updates are provided to Recruiter “as is” and Sub disclaims all
implied warranties and similar obligations, including but not limited to those
of fitness for a particular purpose, non-infringement and merchantability,
whether otherwise arising by law, custom, usage, trade practice, course of
dealing, or course of performance.

 

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Article 3.
Support Services; Updates

 

3.1 Support Services.

 

(a) Recruiter shall provide Sub with the Support Services described on Exhibit B
attached hereto free of charge, which shall include (i) a total of 2,400 hours
of Technology and Development Services to be provided by Recruiter personnel
during the two year period following the Effective Date, with a total value of
$200,000; and (ii) Marketing and Advertising Services as detailed in Recruiter’s
Media Kit attached hereto as Exhibit B-1, which are available to Recruiter’s
general customers, and the Strategic Marketing Services listed on Exhibit B
attached hereto, to be provided by Recruiter each year during the four year
period following the Effective Date, with a total value of $500,000.

 

(b) Recruiter shall not be responsible or liable to Sub for nonperformance or
delay in performance of the Support Services due to acts or occurrences beyond
Recruiter’s control, including, but not limited to, a change in a third party
service provided to Recruiter and necessary for it to provide the Support
Services, such as a change in a social media company's policies, provided that
Recruiter promptly provides to Sub written notice of the existence of and the
reason for such nonperformance or delay; and notwithstanding anything to the
contrary herein, Recruiter shall not be excused from providing Technology and
Development Services to Sub with a total value of $200,000 during the two-year
period following the Effective Date and Marketing and Advertising Services to
Sub with a total value of $125,000 each year during the four-year period
following the Effective Date.

 

(c) As used in this Section 3.1, the word “year” refers to each 12-month period
beginning with the Effective Date.

 

(d) Upon the request of Sub, made not more than once during any year, Recruiter
shall provide documentary evidence supporting the value of the Support Services
provided by Recruiter to Sub during the previous year.

 

3.2 During the Term, Recruiter shall promptly provide Sub, at no additional
charge, all Updates, subject to the terms and conditions of this Agreement.

 

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Article 4.
License Fees

 

4.1 As consideration for the grant of the License, Parent shall issue and Sub
shall deliver to Recruiter 125 million shares of restricted common stock of
Parent with an agreed upon value of $625,000 or $0.005 per share (the “License
Fee”).

 

4.2 Preferred Stock: Milestone Payments.

 

(a) Parent shall issue to Recruiter a number of shares of Parent's Series B
Convertible Preferred Stock ("Series B") convertible into 125 million shares of
Parent common stock, subject to adjustment as provided in the Certificate of
Designation annexed as Exhibit C, and with a stated value of $625,000, upon the
launch by Sub of a functional software platform and the receipt of at least
$10,000 in sales revenue from an unrelated third party client using that
platform.

 

(b) Parent shall issue to Recruiter an additional number of shares of Series B,
as provided for in this Section 4(b), for which each Milestone shall be
convertible into 50 million shares of Parent common stock, subject to adjustment
as provided in the Certificate of Designation annexed as Exhibit C, and with a
stated value of $250,000, or $0.005 per share, on achievement by Sub of each of
the following milestones (each a “Milestone” and collectively, the “Milestones”)
during the term of this Agreement within (30) days after the achievement of the
relevant Milestone, as follows:

 

(1) upon Recruiter providing to Sub an aggregate of 1,200 hours of Technology
and Development Services and the completion and launch by Sub of the Website;

 

(2) upon Recruiter providing to Sub an additional 1,200 hours of Technology and
Development Services (for an aggregate of 2,400 hours of Technology and
Development Services) and the completion and launch by Sub of iOS and Android
Mobile Apps;

 

(3) upon Recruiter providing to Sub an aggregate of $125,000 of strategic
Marketing and Advertising Services and the first posting on the Website of 1,000
users that are profiled and live in the marketplace;

 

(4) upon Recruiter providing to Sub an additional $125,000 of strategic
Marketing and Advertising Services (for an aggregate of $250,000 of Marketing
and Advertising Services) and after Sub recognizes $500,000 in revenues,
calculated in accordance with GAAP;

 

(5) upon Recruiter providing to Sub an additional $125,000 of strategic
Marketing and Advertising Services (for an aggregate of $375,000 of Marketing
and Advertising Services) and after Sub recognizes $1 million in revenues (which
may include the milestone in Section 4.1(b)(4) during the preceding four
consecutive fiscal quarters, calculated in accordance with GAAP .

 

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Accordingly, the aggregate stated value of Series B to be delivered by Parent to
Recruiter in accordance with the terms of this Section 4(b) upon achievement of
the foregoing Milestones in subsections 4(b)(1) through (5) is $1,250,000, or
$0.005 per share, and convertible into a total of 250 million shares of Parent
common stock, subject to adjustment as provided in the Certificate of
Designation annexed hereto as Exhibit C.

 

4.3 Milestones Payable Only Once. Each specified Milestone payment shall be
payable only once, regardless of the number of times the corresponding Milestone
may be achieved. Each specified Milestone payment shall be payable not earlier
than six (6) months from the date of delivery of the previous Milestone payment.

 

4.4 Milestone Notice. Sub shall notify Parent within ten (10) Business Days of
the completion of any of the foregoing Milestones, which would trigger the
issuance by Parent to Sub of the shares of Series B required under Section 4.2.

 

Article 5.
Closing

 

5.1 The closing of the transactions contemplated hereby (the “Closing”) will
take place at 10:00 A.M., New York, NY time, on a date which is agreed to by the
Parties hereto (the “Closing Date”). The Closing shall take place electronically
or at such location as the Parties hereto shall mutually agree. If the Closing
has not taken place by October 30, 2017, or such later date as the Parties
hereto shall mutually agree in writing, this Agreement shall be terminated
without liability to either Party in connection with such termination.

 

5.2 At or prior to the Closing, Parent shall file with the Delaware Secretary of
State the Certificate of Designation annexed as Exhibit C for the issuance of
Series B. If the Delaware Secretary of State requires any changes to the
Certificate of Designation, Parent shall execute any necessary document
incorporating such changes, provided such changes are not inconsistent with and
do not result in any material change in the terms of this Agreement.

 

5.3 At or prior to the Closing, Parent shall file with the Delaware Secretary of
State the Certificate of Designation annexed as Exhibit D for the issuance of
Series A Convertible Preferred Stock (“Series A”). If the Delaware Secretary of
State requires any changes to the Certificate of Designation, Parent shall
execute any necessary document incorporating such changes, provided such changes
are not inconsistent with and do not result in any material change in the terms
of this Agreement.

 

5.4 At the Closing, Sub shall deliver certificates for the common stock and the
Series B to Recruiter in payment of the License Fee and the Series A to
investors who have purchased the Series A as required by Section 7.4 of this
Agreement.

 

5.5 The Closing shall occur only if each condition set forth in Section 8 herein
has either been met or waived by the all the Parties to this Agreement.

 

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Article 6.

Representations and Warranties

 

6.1 Each Party represents and warrants to the other that, to the best of its
knowledge as of the Effective Date:

 

(a) it has the legal right and power to enter into this Agreement and to perform
fully its obligations hereunder without the consent of any third party, court or
Governmental Authority;

 

(b) this Agreement has been duly authorized and approved as is required to
constitute a proper action by such party;

 

(c) this Agreement has been duly executed and delivered and is a legal, valid
and binding agreement that is enforceable in accordance with the terms and
conditions thereof (assuming due authorization, execution and delivery by each
of the other Parties hereto);

 

(d) the execution and delivery of this Agreement and the performance of such
Party's obligations hereunder will not violate, conflict with or breach the
terms of such Party’s organizational or governing documents or any covenant,
agreement or undertaking that such Party has with any third party as of the
Effective Date or any order, ruling decree, judgment, arbitration award or
stipulation to which such Party is subject;

 

(e) there are no Actions pending or threatened by or against any of the Parties
hereto involving more than, individually or in the aggregate, $25,000.

 

(f) no commitments have been made to any Person in conflict with or in
derogation of the rights granted to Sub under this Agreement.

 

6.2 Recruiter represents and warrants to Parent and Sub that, to the best of its
knowledge as of the Effective Date:

 

(a) no brokerage, finder’s fees, commissions or due diligence fees are or will
be payable by Recruiter to any broker, financial advisor or consultant, finder,
placement agent, investment banker, bank or other Person with respect to the
transactions contemplated by this Agreement. Parent and Sub shall have no
obligation with respect to any fees or with respect to any claims made by or on
behalf of other Persons for fees of a type contemplated in this Section 6.1(a)
that may be due in connection with the transactions contemplated by this
Agreement.

 

(b) Litigation. There are no Actions pending or threatened by or against
Recruiter or any of its Subsidiaries involving more than, individually or in the
aggregate, $25,000. There is no Action pending or threatened against or
affecting Recruiter before or by any Governmental Authority, (collectively, an
“Action”) which (i) adversely affects or challenges the legality, validity or
enforceability of any of this Agreement or (ii) could, if there were an
unfavorable decision, have or reasonably be expected to result in a Material
Adverse Effect. Neither Recruiter nor officer or director thereof, is or has
been the subject of any Action involving a claim of violation of or liability
under federal or state securities Laws or a claim of breach of fiduciary duty.
There has not been and there is not pending or contemplated, any investigation
by the SEC or any other Governmental Authority involving Recruiter or any
current or former officer or director of Recruiter.

 

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(c) Bad Actors. No “covered person” of Recruiter (as such term is defined in
Regulation D) is subject to any disqualification under Rule 506(d) of Regulation
D under the Securities Act.

 

(d) Compliance with Laws.

 

(1) Recruiter has complied and is currently in compliance with, in all material
respects, all applicable federal, state, local, foreign or other laws, rules,
regulations, guidelines, orders, injunctions, building and other codes,
ordinances, permits, licenses, authorizations, judgments, decrees of federal,
state, local, foreign or other authorities, and all orders, writs, decrees and
consents of any Governmental Authority (collectively, the “Laws”), having
jurisdiction over or which affect its business and properties, except for any
instance of non-compliance that has not had, and would not reasonably be
expected to have, a Material Adverse Effect. Recruiter has all permits, licenses
and franchises from governmental agencies required to conduct its businesses as
now being conducted, except for those the absence of which has not had, or could
not reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on Recruiter.

 

(2) Neither Recruiter nor any of its officers, directors, employees or agents
has taken any action, directly or indirectly, that would result in a violation
by such Persons of the U.S. Foreign Corrupt Practices Act of 1977, as amended
(the “FCPA”), including, without limitation, offered, paid, promised to pay or
authorized the payment of any money or offer, gift, promise to give, or
authorized the giving of anything of value to any “foreign official” (as such
term is defined in the FCPA) or any foreign political party or official thereof
or any candidate for foreign political office, in contravention of the FCPA, and
Recruiter has conducted its business in compliance with the FCPA.

 

(3) Neither Recruiter nor any of its officers, directors, employees or agents
has taken any action, directly or indirectly, that would result in a violation
by such persons of other United States Laws, including, without limitation,
offered, paid, promised to pay or authorized the payment of any money or offer,
gift, promise to give, or authorized the giving of anything of value to (A) any
official or any government of the United States or any state or local
instrumentality or (B) any corporation, limited liability company or other
entity.

 

 12 

 

 

(e) Licensed Technology.

 

(1) Schedule 6.2(e)(1) lists all Recruiter IP Registrations and Licensed
Technology that is not registered but that is material to Recruiter’s Licensed
Technology. All required filings and fees related to Recruiter IP Registrations
have been timely filed with and paid to the relevant Governmental Authorities
and authorized registrars, and all such Recruiter IP Registrations are otherwise
in good standing. Recruiter has made available to Parent and Sub true and
complete copies of file histories, documents, certificates, office actions,
correspondence and other materials related to all Recruiter IP Registrations.
There are no actions that must be taken by Recruiter (or any third party on
Recruiter’s behalf) within 120 days of the Closing Date, including the payment
of any registration, maintenance or renewal fees or the filing of any responses
to office actions, documents, applications or certificates for the purposes of
obtaining, maintaining, perfecting, preserving or renewing any Recruiter IP
Registrations. To the Knowledge of Recruiter, there are no facts or
circumstances that would render any Recruiter IP Registrations invalid or
unenforceable. There has been no misrepresentation or failure to disclose, any
fact or circumstances in any application for any Recruiter IP Registrations that
would constitute fraud or a misrepresentation with respect to such application
or that would otherwise affect the validity or enforceability of any such
Recruiter IP Registrations. Recruiter has not claimed a particular status,
including “small entity status,” in the application for any Recruiter IP
Registrations, which claim of status was not at the time made, or which has
since become, inaccurate or false or that will no longer be true and accurate as
a result of the Closing.

 

(2) Schedule 6.2(e)(2) lists all Recruiter IP Agreements that are material to
Recruiter’s business as it presently is being conducted. Recruiter has made
available to Parent and Sub true and complete copies of all such Recruiter IP
Agreements, including all modifications, amendments and supplements thereto and
waivers thereunder. Each such Recruiter IP Agreement is valid and binding on
Recruiter in accordance with its terms and is in full force and effect. Neither
Recruiter, nor, to its Knowledge, any other party thereto is in breach of or
default under (or is alleged to be in breach of or default under), or has
provided or received any notice of breach or default of or any intention to
terminate, any such Recruiter IP Agreement.

 

(3) Recruiter is the sole and exclusive legal and beneficial, and with respect
to Recruiter’s IP Registrations, record, owner of all right, title and interest
in and to the Licensed Technology, or has the valid right to use all other such
Licensed Technology used in or necessary for the conduct of Recruiter’s current
business or operations and which relate to or otherwise includes the Licensed
Technology being licensed, in each case, free and clear of Encumbrances.

 

(4) Since its inception, Recruiter has entered into binding, written agreements
with every current and former employee and with every current and former
independent contractor, whereby such employees and independent contractors (i)
assign to Recruiter any ownership interest and right they may have in
Recruiter’s Licensed Technology; and (ii) acknowledge Recruiter’s exclusive
ownership of Recruiter’s Licensed Technology. Recruiter provided Parent with
true and complete copies of all such agreements.

 

(5) The consummation of the transactions contemplated hereunder will not result
in the loss or impairment of or payment of any additional amounts with respect
to, nor require the consent of any other Person in respect of, Recruiter’s right
to own, use or hold for use any of the Licensed Technology as owned, used or
held for use in the conduct of Recruiter’s business or operations as currently
conducted.

 

 13 

 

 

(6) Recruiter’s rights in the Licensed Technology are, and, since its inception,
have been, valid, subsisting and enforceable. Recruiter has taken all reasonable
steps to maintain the Licensed Technology and to protect and preserve the
confidentiality of all confidential information and trade secrets included in
the Licensed Technology, including requiring all Persons having access thereto
to execute written non-disclosure agreements.

 

(7) The conduct of Recruiter’s business as currently and formerly conducted, the
Licensed Technology, and the products, processes and services of Recruiter, have
not infringed, misappropriated, diluted or otherwise violated, and do not and
will not infringe, dilute, misappropriate or otherwise violate the intellectual
property or other rights of any Person. No Person has infringed,
misappropriated, diluted or otherwise violated, or is currently infringing,
misappropriating, diluting or otherwise violating, any Licensed Technology.

 

(8) There are no Actions (including any oppositions, interferences or
re-examinations) settled, pending or threatened (including in the form of offers
to obtain a license or inquiries regarding the need to obtain a license): (i)
alleging any infringement, misappropriation, dilution or violation of the
intellectual property of any Person by Recruiter or the Licensed Technology;
(ii) challenging the validity, enforceability, registrability or ownership of
any intellectual property of Recruiter or Recruiter’s rights with respect to any
intellectual property including the Licensed Technology; or (iii) by Recruiter
or any other Person alleging any infringement, misappropriation, dilution or
violation by any Person of intellectual property including the Licensed
Technology. Recruiter is not subject to any outstanding or prospective
governmental order (including any motion or petition therefor) that does or
would restrict or impair the use of any intellectual property of Recruiter
including the Licensed Technology.

 

(9) Recruiter shall assign or cause to be assigned to Sub the VocaWorks
trademark, and any applications or registrations therefor, once the trademark is
in use in commerce in the United States.

 

(10) Recruiter Products; Proprietary Software.

 

(A) Schedule 6.2(e)(9) identifies all owned Licensed Technology and all Licensed
Technology licensed to Recruiter under an agreement and that are (i) used in the
development, maintenance, use or support of the Licensed Technology being
licensed (“Recruiter Product”), (ii) incorporated in or distributed or licensed
with such Recruiter Product in any manner for use in connection with such
Recruiter Product, or (iii) used to deliver, host or otherwise provide services
with respect to such Recruiter Product, (except for non-customized,
off-the-shelf Software that is commercially available pursuant to shrink-wrap,
click-through or other standard form agreements or with an annual license fee or
replacement value of less than $10,000).

 

 14 

 

 

(B) All Recruiter Products are fully transferable, alienable or licensable by
Recruiter without restriction and without payment of any kind to any third
party. Recruiter has not transferred ownership of, or granted any exclusive
license of (or exclusive right to use), or authorized the retention of any
exclusive rights to use or joint ownership of, any Recruiter Product or any
related Licensed Technology to any other Person. Recruiter is not subject to any
Recruiter IP Agreement (other than with respect to current customers pursuant to
Recruiter’s standard form of customer agreement entered into in the ordinary
course of business) that includes any unperformed obligations that require
Recruiter to develop any Software or other Intellectual Property, including any
enhancements or customizations that are part of or used in connection with
Recruiter Products (collectively, “Customizations”), and Recruiter owns and will
continue to own all right, title and interest in and to all such Customizations
developed by Recruiter.

 

(11) Source Code.

 

(A) Except as disclosed on Schedule 6.2(e)(10)(A), Recruiter is in actual
possession of and has exclusive control over a complete and correct copy of the
source code for all Software included in the Licensed Technology.

 

(B) Except for application programming interfaces and other interface code that
is generally available to customers, Recruiter has not disclosed, delivered,
licensed or otherwise made available, and does not have a duty or obligation
(whether present, contingent or otherwise) to disclose, deliver, license or
otherwise make available, any source code for any Licensed Technology to any
escrow agent or any other Person, other than an independent contractor or
consultant of Recruiter pursuant to a valid and enforceable written agreement
prohibiting use or disclosure except in the performance of services for
Recruiter. Without limiting the foregoing, neither the execution of this
Agreement nor the consummation of any of the transactions contemplated by this
Agreement will, or would reasonably be expected to, result in the release from
escrow or other delivery to any Person of any source code for any of the
Licensed Technology including all Intellectual Property.

 

(C) To the Knowledge of Recruiter, as of the date hereof, there has been no
unauthorized theft, reverse engineering, decompiling, disassembling or other
unauthorized disclosure of or access to any source code for any of the Licensed
Technology.

 

(12) Open Source Software.

 

(A) Schedule 6.2(e)(11)(A) sets forth a true and complete list of each item of
open source software that is or has been used by or on behalf Recruiter, in the
development of or that is incorporated into, combined with, linked with,
distributed with, provided to any Person as a service, provided via a network as
a service or application, or otherwise made available with, any of the Licensed
Technology (collectively, the “Open Source Software”), and for each such item of
Open Source Software, (i) the applicable Recruiter Product, and (ii) the name
and version number of the applicable license agreement.

 

 15 

 

 

(B) Recruiter has complied in all material respects with all notice, attribution
and other requirements of each license applicable to the Open Source Software
required to be disclosed in Schedule 6.2(e)(11)(A).

 

(C) Recruiter has not used any Open Source Software in a manner that does, will
or would reasonably be expected to, require Recruiter or any other Person to (i)
disclose or distribute the source code of the Software of any Recruiter Product,
(ii) license or otherwise offer or distribute any Recruiter Product on a
royalty-free basis, or (iii) grant any patent license, non-assertion covenant
or, rights to modify, make derivative works based on, decompile, disassemble or
reverse engineer or any other rights to any Recruiter Product including, for the
avoidance of doubt, any Licensed Technology.

 

(13) Conformance with Specifications; Defects; Malicious Code.

 

(A) All Recruiter Products conform in all material respects to all applicable
warranties in all Contracts with customers or any other third parties that are
party to such Contracts.

 

(B) To the Knowledge of Recruiter, none of the Licensed Technology contains any
bug, defect or error that materially adversely affects the functionality or
performance of such Licensed Technology against its applicable specifications.

 

(C) To the Knowledge of Recruiter, none of the Licensed Technology including
Software used in the provision of any Recruiter Product or otherwise in the
operation of its business and related to the Licensed Technology, contains any
“time bomb,” “Trojan horse,” “back door,” “worm,” virus, malware, spyware, or
other device or code (“Malicious Code”) designed or intended to, or that could
reasonably be expected to, (i) disrupt, disable, harm or otherwise impair the
normal and authorized operation of, or provide unauthorized access to, any
computer system, hardware, firmware, network or device on which any Recruiter
Product or such other Licensed Technology including Software is installed,
stored or used, or (ii) damage, destroy or prevent the access to or use of any
data or file without the user’s consent. Recruiter has taken reasonable steps
designed to prevent the introduction of Malicious Code into the Licensed
Technology.

 

(f) Tax Matters. Recruiter has filed all Tax Returns that it was required to
file, and has paid all Taxes shown thereon as owing, except where the failure to
file Tax Returns or to pay Taxes would not have a Material Adverse Effect on
Recruiter. No claim has ever been made by an authority in a jurisdiction where
Recruiter does not file Tax Returns that either is or may be subject to taxation
by that jurisdiction. There are no security interests on any of the assets of
Recruiter including, for the avoidance of doubt, the Licensed Technology that
arose in connection with any failure (or alleged failure) to pay any Tax.

 

 16 

 

 

(g) Contracts. Schedule 6.2(g) lists the following contracts and other
agreements to which Recruiter is a party and which relate to the Licensed
Technology:

 

(1) any agreement (or group of related agreements) for the lease of personal
property to or from any Person providing for lease payments in excess of $25,000
per annum;

 

(2) any agreement (or group of related agreements) for the purchase or sale of
raw materials, commodities, supplies, products, or other personal property, or
for the furnishing or receipt of services, the performance of which will extend
over a period of more than one year, result in a material loss to Recruiter, or
involve consideration in excess of $25,000;

 

(3) any agreement concerning a partnership or joint venture;

 

(4) any material agreement (or group of related agreements) under which it has
created, incurred, assumed, or guaranteed any indebtedness for borrowed money,
or any capitalized lease obligation, in excess of $25,000 or under which it has
imposed a security interest on any of its assets, tangible or intangible;

 

(5) any agreement concerning confidentiality or noncompetition other than with
clients and vendors in the Ordinary Course of Business;

 

(6) any agreement under which the consequences of a default or termination may
have a Material Adverse Effect on Recruiter; or

 

(7) any other agreement (or group of related agreements) the performance of
which involves consideration in excess of $25,000.

 

(8) Recruiter has delivered to Parent and Sub a correct and complete copy of
each written agreement listed in Schedule 6.2(g). With respect to each such
agreement: (i) the agreement is legal, valid, binding, enforceable, and in full
force and effect; (ii) Recruiter has not received written notice from the
counterparty that it is in breach or default; and (iii) no party has repudiated
any provision of the agreement.

 

(h) Financial Statements. Recruiter has delivered to Parent and Sub a pro forma
balance sheet as of the Closing Date as provided in Schedule 6.2(h). The pro
forma balance sheet accurately presents the assets and liabilities of the
Licensed Technology which is the subject of the License as if Recruiter has
never conducted any business and has no capital stock.

 

(i) Events Subsequent to Most Recent Fiscal Year End. Except as set forth on
Schedule 6.2(i), since the end of its last fiscal year:

 

(1) Recruiter has not entered into any material agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
involving more than $25,000 and outside the Ordinary Course of Business;

 

 17 

 

 

(2) No party (including Recruiter) has accelerated, terminated, modified, or
cancelled any agreement, contract, lease, or license (or series of related
agreements, contracts, leases, and licenses) involving more than $25,000 to
which Recruiter is a party or by which any of them is bound;

 

(3) Recruiter has not imposed or allowed to occur any Encumbrance upon any of
its material assets, tangible or intangible other than in the Ordinary Course of
Business;

 

(4) Recruiter has not issued any note, bond, or other debt security or created,
incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $25,000 singly or in the
aggregate;

 

(5) Recruiter has not transferred, assigned, or granted any license or
sublicense of any rights under or with respect to any intellectual property
including the Licensed Technology other than in the Ordinary Course of Business;

 

(6) there has not been any other occurrence, event, incident, action, failure to
act, or transaction outside the Ordinary Course of Business involving Recruiter;

 

(7) Recruiter has not disclosed any confidential information without a
non-disclosure agreement;

 

(8) Recruiter has not committed to any of the foregoing.

 

(j) Undisclosed Liabilities. Except as set forth in Recruiter’s pro forma
balance sheet, or Schedule 6.2(j), Recruiter has no Liabilities related to the
Licensed Technology (absolute, accrued, contingent or otherwise) other than (i)
Liabilities included in such balance sheet, (ii) Liabilities of a nature not
required to be disclosed on a balance sheet or in the notes to financial
statements prepared in accordance with GAAP, and (iii) Liabilities under this
Agreement.

 

(k) Related Party Transactions. With respect to the Licensed Technology, no
officer or director of Recruiter or any person owning 5% or more of the
Recruiter equity (or any of such person’s immediate family members or
Affiliates) is a party to any contract with or binding upon Recruiter or any of
its assets, rights or properties or has any interest in any property owned by
Recruiter or has engaged in any transaction with any of the foregoing within the
last 12 months. No officer, director or Affiliate of Recruiter owns or has owned
(of record or as a beneficial owner) an equity interest or any other financial
or profit interest in a Person that has (a) had business dealings or a financial
interest in any transaction with Recruiter or (b) engaged in competition with
Recruiter with respect to any line of ownership of the products or services of
Recruiter including without limitation the Licensed Technology in any market
presently served by Recruiter, except for less than 1% of the outstanding
capital stock of any competing business that is publicly-traded on any national
securities exchange or in the over-the-counter market.

 

 18 

 

 

(l) Governmental Authorizations. Recruiter has all material authorizations,
consents, approvals, franchises, licenses and permits required under applicable
Laws for the ownership of Recruiter’s properties and operation of its business
as presently operated. No suspension, nonrenewal or cancellation of any of such
permits is pending or threatened, and there is no reasonable basis therefor.
Recruiter is not in conflict with, or in material default or violation of any
such permits.

 

(m) Investment Intent. Recruiter is acquiring the common stock and the Series B
for investment for its own account and not with a view to, or for resale in
connection with any distribution thereof. Recruiter understands that these
securities have not been registered under the Securities Act or the securities
laws of any state by reason of specific exemptions from the registration
provisions of the Securities Act and applicable state securities laws, which
exemptions are dependent upon, among other things, the bona fide nature of the
investment of Recruiter as expressed herein.

 

(n) Accredited Investor. Recruiter is an “accredited investor” as that term is
defined by Rule 501(a) promulgated under the Securities Act.

 

(o) Rule 144. Recruiter understands that the common stock and Series B must be
held indefinitely by it unless subsequently registered under the Securities Act
and applicable securities laws or an exemption from such registration is
available. Recruiter is aware of the provisions of Rule 144 promulgated under
the Securities Act which permit limited resale of securities purchased in a
private placement subject to the satisfaction of certain conditions.

 

(p) Disclosure. No statement, representation or warranty by Recruiter in this
Agreement, including the Schedules hereto, contains any untrue statement of
material fact, or omits to state a material fact, necessary to make such
statements, representations and warranties not misleading. There is no fact
known to the Knowledge of Recruiter which has specific application to Recruiter
or, so far as it can reasonably foresee, materially threatens in the future, the
value of the assets, business, prospects, financial condition or results of
operations of the Licensed Technology which has not been set forth in this
Agreement or the Schedules hereto.

 

6.3 Parent represents and warrants to Recruiter that as of the Effective Date:

 

(a) Issuance of the Shares. The shares of Parent common stock including the
shares issuable upon conversion of the Series B to be issued to Recruiter are
duly authorized and, when issued in accordance with this Agreement, will be duly
and validly issued, fully paid and nonassessable, free and clear of all
Encumbrances imposed by Parent.

 

(b) Certain Fees. No brokerage, finder’s fees, commissions or due diligence fees
are or will be payable by Parent or Sub to any broker, financial advisor or
consultant, finder, placement agent, investment banker, bank or other Person
with respect to the transactions contemplated by this Agreement. Recruiter shall
have no obligation with respect to any fees or with respect to any claims made
by or on behalf of other Persons for fees of a type contemplated in this Section
6.3(b) that may be due in connection with the transactions contemplated by this
Agreement.

 

 19 

 

 

(c) Capitalization.

 

(1) The authorized capital stock of Parent, as of the date hereof is set forth
on Schedule 6.3(c)(1).

 

(2) Except as disclosed on Schedule 6.3(c)(2), there are no outstanding options,
warrants, rights (including conversion or preemptive rights and rights of first
refusal), proxy or equity holders agreements, or arrangements or agreements of
any kind for the purchase or acquisition from Parent or any subsidiary or any of
its equity interest. Except as disclosed on Schedule 6.3(c), neither the
issuance of the Parent’s common stock or the Series B (or the Series A being
offered to third parties), nor the consummation of any transaction contemplated
hereby will result in a change in the price or number of any equity interests of
Parent under anti-dilution or other similar provisions contained in or affecting
any such securities.

 

(3) Except as disclosed on Schedule 6.3(c)(3), all issued and outstanding shares
of Parent’s common stock: (i) have been duly authorized and validly issued and
are fully paid and non-assessable; and (ii) were issued in compliance with all
applicable state and federal laws concerning the issuance of equity interests.

 

(4) The rights, preferences, privileges and restriction of the shares of
Parent’s securities are as stated in its certificate of incorporation in
addition to changes contemplated by Exhibit C and Exhibit D. The securities
issued as the License Fee shall be issued in compliance with the provisions of
this Agreement and Parent’s certificate of incorporation, will be validly
issued, fully paid and non-assessable, and will be free of any Encumbrances;
provided, however, that such securities may be subject to restrictions on
transfer under state and/or federal securities laws as set forth herein or as
otherwise required by such laws at the time a transfer is proposed.

 

(d) SEC Reports; Financial Statements.

 

(1) Since March 31, 2015, Parent has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC pursuant
to the reporting requirements of the Securities Exchange Act of 1934, as
amended, (the “Exchange Act”) (all of the foregoing filed prior to the date this
representation is made including all exhibits included therein and financial
statements and schedules thereto and documents incorporated by reference therein
are referred to as the “SEC Reports”). Parent has made available to Recruiter or
its respective representatives, or filed and made publicly available on EDGAR no
less than five days prior to the date this representation is made, true and
complete copies of the SEC Reports.

 

 20 

 

 

(2) As of their respective dates, the consolidated financial statements of
Parent included in the SEC Reports complied as to form in all material respects
with applicable accounting requirements and the published rules and regulations
of the SEC with respect thereto. Such financial statements have been prepared in
accordance with GAAP, consistently applied, during the periods involved (except
(i) as may be otherwise indicated in such financial statements or the notes
thereto, or (ii) in the case of unaudited interim statements, to the extent they
may be subject to normal year-end adjustments, may exclude footnotes or may be
condensed or summary statements) and fairly present in all material respects the
financial position of Parent as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). The accounting firm
that expressed its opinion with respect to the consolidated financial statements
included in Parent’s most recently filed annual report on Form 10-K, and
reviewed the consolidated financial statements included in Parent’s most
recently filed quarterly report on Form 10-Q is independent pursuant to the
standards set forth in Rule 2-01 of Regulation S-X promulgated by the SEC and as
required by the applicable rules and guidance from the Public Company Accounting
Oversight Board (United States), and such firm was (or is, as applicable)
otherwise qualified to render such opinion under applicable law and the rules
and regulations of the SEC. There is no transaction, arrangement or other
relationship between Parent and an unconsolidated or other off-balance-sheet
entity that is required to be disclosed by Parent in its reports pursuant to the
Exchange Act that has not been so disclosed in the SEC Documents prior to the
date of this Agreement.

 

(e) Events Subsequent to Most Recent Fiscal Year End. Except as set forth in the
Parent Financial Statements or on Schedule 6.3(e), since March 31, 2017: Parent
has no Liabilities outside the Ordinary Course of Business other than
Liabilities (i) included in the most recent Financial Statements, (ii)
Liabilities of a nature not required to be disclosed on a balance sheet or in
the notes to Financial Statements prepared in accordance with GAAP, (iii) normal
or recurring Liabilities in the ordinary course of business consistent with past
practice which, individually or in the aggregate, would not be reasonably likely
to have a Material Adverse Effect on Recruiter, and (iv) Liabilities under this
Agreement.

 

(f) Sub. Sub has recently been organized and has conducted no business. Its only
material assets are the securities constituting the License Fee. It has not
incurred any Liabilities. Sub is a wholly-owned subsidiary of Parent and has all
corporate authority to enter into this Agreement and carry out the transactions
contemplated by it.

 

(g) Disclosure. No statement, representation or warranty by Parent in this
Agreement, including the Schedules hereto, contains any untrue statement of
material fact, or omits to state a material fact, necessary to make such
statements, representations and warranties not misleading. There is no fact
known to the Knowledge of Parent which has specific application to Parent or, so
far as Parent can reasonably foresee, materially threatens in the future, the
value of the assets, business, prospects, financial condition or results of
operations of the business which has not been set forth in this Agreement or the
Schedules hereto.

 

6.4 Survival. The foregoing representations and warranties of each Party shall
survive the Closing Date through the General Expiration Date.

 

 21 

 

 

Article 7.

Covenants

 

7.1 Indemnification.

 

(a) Indemnification of Directors and Officers.

 

(1) The Charter Documents of Parent following the Closing will contain
provisions with respect to exculpation and indemnification and shall not be
amended, repealed or otherwise modified for a period of six years after the
Closing in any manner that would adversely affect the rights thereunder of
individuals who following the Closing are directors, officers, employees or
agents of Parent unless such modification is required by Law. In addition, from
and after the Closing, Parent shall, and shall cause its Subsidiaries to,
advance expenses (including reasonable legal fees and expenses) incurred in the
defense of any Action with respect to any matters subject to indemnification
pursuant to this Article 7 pursuant to the procedures set forth, and to the
fullest extent provided in the certificate or articles of incorporation and
bylaws in effect immediately prior to the Closing or existing indemnification
agreements; provided, however, that, prior to any such advance, any Indemnified
Party to whom expenses are advanced shall sign a written undertaking to repay
such advanced expenses as soon as reasonably practicable if it is ultimately
determined that such Indemnified Party is not entitled to indemnification or
advancement. Further, from and after the Closing, Parent shall not, and shall
cause its Subsidiaries not to, settle, compromise or consent to the entry of any
judgment in any Action or threatened Action, with respect to any matter arising
out of, relating to, or in connection with any acts or omissions occurring or
alleged to have occurred prior to the Closing (with respect to which
indemnification could be sought by such Indemnified Party under the Delaware
General Corporation Law, the indemnification provisions in Parent’s certificate
of incorporation and bylaws in effect immediately prior to the Closing or any
indemnification agreement), brought against any Indemnified Party, unless such
settlement, compromise or consent includes an unconditional release of such
Indemnified Party from all liability arising out of such Action or such
Indemnified Party otherwise consents in writing and Parent shall, and shall
cause its Subsidiaries to, cooperate in the defense of any such matter.

 

(2) Parent shall enter into indemnification agreements with each officer and
director of Recruiter in the form annexed as Exhibit E.

 

(b) Indemnification for Breach of Agreement.

 

(1) Breach by Recruiter. Subject to Section 7.1(c), in the event that Recruiter
breaches any of its representations, warranties, and covenants contained in the
Agreement or in any certificate or affidavit delivered pursuant to this
Agreement, and, provided that Parent and Sub make a written claim for
indemnification against Recruiter prior to the one-year anniversary of the
Closing Date (such date, the “General Expiration Date”), then Recruiter agrees
as a condition of receiving the payment for the License to indemnify Parent and
Sub from and against the entirety of any Adverse Consequences Parent and Sub may
suffer through and after the date of the claim for indemnification resulting
from, arising out of, relating to, or caused by such breach by Recruiter in
accordance with the procedure described in Section 7.1(c).

 

 22 

 

 

(2) Infringement Indemnification by Recruiter. Subject to Section 7.1(c),
Recruiter shall indemnify, defend and hold Sub and its Affiliates, and their
respective officers, directors, members, shareholders, managers, employees,
representatives, successors and assigns harmless from and against, and shall
reimburse Sub and its Affiliates on demand on account of, any and all Adverse
Consequences which may be asserted against, imposed on or incurred by any of
them as a result of or arising out of or in any manner relating or attributable
to any Action brought by a third party against Parent, Sub or any of their
Affiliates, sublicensees, vendors, contractors or customers alleging that the
Licensed Technology infringes or otherwise misappropriates a patent, copyright,
trademark, trade secret, trade name, trade dress, mask work or any other
intellectual property right. The indemnification obligations of Recruiter
pursuant to this Section 7.1(b)(2) shall not be subject to the limitations on
indemnification as set forth in Section 7.1(d)(2).

 

(3) Breach by Parent. Subject to Section 7.1(c), in the event Parent breaches
any of its representations, warranties, and covenants contained in the Agreement
or in any certificate or affidavit delivered by Parent at or prior to the
Closing pursuant to this Agreement, and, provided that Recruiter makes a written
claim for indemnification against Parent prior to the General Expiration Date,
then Parent agrees to indemnify Recruiter, and its respective officers,
directors, members, shareholders, managers, employees, representatives,
successors and assign harmless from and against the entirety of any Adverse
Consequences Recruiter may suffer through and after the date of the claim for
indemnification resulting from, arising out of, relating to or caused by the
breach by Parent in accordance with the procedure described in Section7.1(c). In
the event Parent consolidates with or merges into any other Person and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger or (ii) transfers all or substantially all of its properties and assets
to any Person, then, and in each such case, proper provision shall be made so
that the successors and assigns of Parent shall assume the obligations set forth
in this Section 7.1(b)(3). Section 7.1(b)(3) is intended for the irrevocable
benefit of, and to grant third party rights to, Indemnified Parties and shall be
binding on all successors and assigns of Parent. Parent shall pay all reasonable
expenses, including reasonable attorneys’ fees, that may be incurred by any
Indemnified Person in enforcing the indemnity and other obligations provided in
this Section 7.1(b)(3). The provisions of this Section 7.1(b) shall survive the
Closing.

 

(4) This Section 7.1(b) shall not be amended in a manner that is adverse to the
Indemnified Parties (including their successors and heirs) or terminated without
the consent of each of the Indemnified Parties (including their successors and
heirs) affected thereby. Each of the Indemnified Parties shall be entitled to
enforce the covenants contained in this Section 7.1(b).

 

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(c) Third Party Actions; Procedure.

 

(1) Promptly (and in any event within five days after the service of any summons
or other document) after acquiring knowledge of any third party Action for which
one or more of the Parties (the “Indemnified Party”) may seek indemnification
against other Parties (the “Indemnifying Party”) pursuant to this Article 7, the
Indemnified Party shall give written notice thereof to the Indemnifying Party.
Failure to provide notice shall not relieve the Indemnifying Party of its
obligations under this Section 7.1(c), except to the extent that the
Indemnifying Party has sustained actual damage by that failure. The Indemnifying
Party shall have the right to assume the defense of any Action with counsel
reasonably acceptable to the Indemnified Party upon delivery of notice to that
effect to the Indemnified Party. If the Indemnifying Party, after written notice
from the Indemnified Party, fails to take timely action to defend the Action or
otherwise respond to the Action, the Indemnified Party shall have the right to
defend the Action by counsel of its own choosing, but at the cost and expense of
the Indemnifying Party. The Indemnified Party shall have the right to settle or
compromise any Action against it, and recover from the Indemnifying Party any
amount paid in settlement or compromise thereof, if it has given written notice
thereof to the Indemnifying Party and the Indemnifying Party has failed to take
timely action to defend the Action; otherwise, the Indemnified Party shall have
no right to settle or compromise any such Action. The Indemnifying Party shall
have the right to settle or compromise any Action against the Indemnified Party
without the consent of the Indemnified Party provided that the terms of the
settlement or compromise provide for the unconditional release of the
Indemnified Party and require the payment of monetary damages only.

 

(2) Upon its receipt of any amount paid by the Indemnifying Party pursuant to
this Article 7, the Indemnified Party shall deliver to the Indemnifying Party
such documents as it may reasonably request assigning to the Indemnifying Party
any and all rights, to the extent indemnified, that the Indemnified Party may
have against third parties with respect to the Action for which indemnification
is being received.

 

(3) In the event that the Action is asserted by one of the Parties to this
Agreement either based on a direct Action by a Party or a third party Action,
the procedure set forth in this Section 7.1(c) shall control.

 

(d) Limitations on Indemnification.

 

(1) Notwithstanding anything to the contrary contained herein, except as
provided in this Section 7.1(d), no Indemnified Party shall be entitled to
receive an indemnification payment with respect to any Action or Actions
specified in this Article 7 unless the Action, or the aggregate amount of all
Actions made by the Indemnified Party hereunder, equals or exceeds $50,000 (in
which case all of such Action or Actions back to the first dollar will be
recoverable).

 

(2) Subject to this Section 7.1(d), the Parties agree that the right of each
Indemnified Party to make claims pursuant to Sections 7.1(a) and 7.1(b) (other
than with respect to an Action pursuant to Section 7.1(b)(2) which shall survive
indefinitely) shall survive the Closing until 11:59 p.m. on the General
Expiration Date; provided, however, that if, at any time prior to the General
Expiration Date, any Indemnified Party delivers to the Indemnifying Party a
written notice asserting in good faith a claim for recovery under Section 7.1(a)
or 7.1(b), then the Action asserted in such notice shall survive the General
Expiration Date until such time as such Action is fully and finally resolved.

 

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(3) The Parties agree that the indemnification right set forth in this Agreement
shall be the Parties’ sole and exclusive remedy with respect to the transactions
contemplated by this Agreement, except for specific performance or other
equitable remedy or for fraud as long as the Party or Person alleged to have
acted fraudulently had an actual intent to defraud or acted with reckless
disregard to whether any statement was true.

 

(4) In the event of any reclassification, recapitalization, stock split, stock
dividend (including any dividend or distribution of securities convertible into
Parent common stock) or subdivision with respect to Parent common stock, any
change or conversion of Parent common stock into other securities, any other
dividend or distribution with respect to the Parent common stock (or if a record
date with respect to any of the foregoing should occur), after the date of this
Agreement, appropriate and proportionate equitable adjustments shall be made to
the number of shares of Parent common stock issuable for indemnification
purposes pursuant to this Agreement.

 

7.2 Equity Incentive Plan. At or prior to the Closing, Parent shall establish an
Equity Incentive Plan covering 38 million shares of Common Stock and reserve
500,000 shares for Parent’s new Chief Executive Officer and 300,000 shares for
Parent’s new Chief Financial Officer. No options or stock based stock
appreciation rights shall be granted at less than $0.02 per share, subject to
equitable adjustment.

 

7.3 Officers and Directors. At the Closing, the current Chief Executive Officer,
Elliot Maza, of Parent and Sub shall resign, and Miles Jennings shall be
appointed Chief Executive Officer of Parent and Sub, and Elliot Maza shall
continue in his capacity as Chief Financial Officer of Parent and Sub. At the
Closing, Irving Pompadur shall resign from the Board of Directors and Michael
Solomon shall tender his resignation from the Board of Directors, and the
Company shall accept such resignation subject to and in compliance with Rule
14f-1 under the Exchange Act. Subject to compliance with Rule 14f-1 under the
Exchange Act, the Board of Directors of Parent shall consist of five persons,
consisting of Miles Jennings, Elliot Maza, one person to be appointed by the
Series A investors and two persons to be appointed by Recruiter.

 

7.4 Securities Offering. In connection with the Closing, Parent shall sell
Series A to purchasers under that certain Securities Purchase Agreement, dated
as of the date of this Agreement, between Parent and the purchasers, and shall
have received $600,000 in gross proceeds thereunder. The Series A shall be
convertible into 120 million shares of Parent’s common stock. Parent shall offer
the Series A in units with a number of five-year warrants equal to 50% of the
number of shares of common stock issuable under conversion of the Series A. The
warrants shall contain standard cashless exercise provisions, be exercisable for
five-years and automatically be exercised immediately prior to expiration if
in-the-money.

 

7.5 Parent Debt.

 

(a) Prior to, or simultaneously with the Closing, holders of convertible notes
of Parent with an aggregate principal amount of $1,995,933.91 plus accrued
interest (the “4% Notes”) shall have converted the 4% Notes including accrued
interest into 102,099,752 shares of common stock at an approximate conversion
price of $0.02 per share.

 

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(b) Prior to, or simultaneously with the Closing, holders of convertible notes
of Parent with an aggregate principal amount of $90,000 plus accrued interest
(the “10% Notes”) shall have converted the 10% Notes including accrued interest
into 18,839,000 shares of common stock at an approximate conversion price of
$0.005 per share.

 

(c) At the option of each holder of 4% and 10% Notes, Parent shall issue such
holder Series C Convertible Preferred Stock (“Series C”) and Series C-1
Convertible Preferred Stock (“Series C-1”) with the standard 4.99% beneficial
ownership limitation. The phrase “beneficial owner” shall be as defined under
Rule 13d-3 of the Exchange Act. A copy of the Series C and Series C-1
Certificate of Designations are annexed as Exhibit F and Exhibit G.

 

7.6 Shareholder Action. On or about 90 days following the Closing, Parent shall
file an Information Statement pursuant to Schedule 14C under the Exchange Act
and Rules thereunder (the “Information Statement”) (i) changing its name to
VocaWorks Group, Inc. (ii) effecting a reverse stock split of 1-for-80 (without
reducing its authorized common stock), and (iii) approving the Equity Incentive
Plan. Recruiter shall execute a consent of shareholders to permit Parent to take
such steps. Following the amendment of Parent’s certificate of incorporation,
Recruiter shall convert its Series B into common stock.

 

Article 8.

Closing Conditions

 

8.1 Conditions to Recruiter’s Obligations to Close. The obligations of Recruiter
under this Agreement are subject to the satisfaction of the following conditions
on or before the Closing:

 

(a) At or prior to Closing, Parent shall deliver the following to Recruiter:

 

(1) This Agreement, duly executed by Parent and Sub;

 

(2) Certificates representing the License Fee;

 

(3) Evidence that the 4% Notes and 10% Notes have been converted;

 

(4) Evidence that the Series A, Series B and Series C, and Series C-1
Certificates of Designation have been executed and either filed with the
Delaware Secretary of State or delivered to a service company for filing;

 

(5) Evidence that the Board of Directors of Parent has approved the Equity
Incentive Plan for 38 million shares and reserved a grant of 500,000 shares for
the new Chief Executive Officer and 300,000 shares for the new Chief Financial
Officer;

 

(6) An officer’s certificate containing such customary provisions as Recruiter
shall request;

 

(7) Evidence that Miles Jennings has been appointed Chief Executive Officer
Elliot Maza has been appointed Chief Financial Officer, and Irving Pompadur has
resigned as an outside member of the Board of Directors and Michael Solomon has
tendered his resignation subject to compliance with Rule14f-1 under the Exchange
Act.

 

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(8) The financing referred to in Section 7.4 shall have closed or shall close as
soon as the Series C and Series C-1 Certificates of Designation have been filed;

 

(9) Parent shall be current in all filings required under the Exchange Act; and

 

(10) Parent’s common stock shall continue to be quoted on the OTCQB by at least
one market maker.

 

8.2 Conditions to Sub’s and Parent’s Obligations to Close. The obligations of
Parent and Sub under this Agreement are, at the option of Parent and Sub,
subject to the satisfaction of the following conditions on or before the
Closing:

 

(a) At or prior to Closing, Recruiter shall deliver the following to Parent and
Sub:

 

(1) This Agreement, duly executed by Recruiter.

 

(2) An officer’s certificate containing such customary provisions as Parent and
Sub shall request;

 

(b) The financing referred to in Section 7.4 shall have closed or shall close as
soon as the Series C and Series C-1 Certificate of Designations have been filed.

 

Article 9.

Miscellaneous

 

9.1 Amendment and Modification. Subject to applicable Law, this Agreement may be
amended, modified or supplemented only by written agreement of each Party at any
time.

 

9.2 Waiver of Compliance; Consents. Any failure of any Party to comply with any
obligation, covenant, agreement or condition herein may be waived 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. Whenever this Agreement requires or
permits consent by or on behalf of any Party hereto, such consent shall be given
in writing in a manner consistent with the requirements for a waiver of
compliance as set forth in this Section 9.2.

 

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9.3 Notices and Addresses. All notices, offers, acceptance and any other acts
under this Agreement (except payment) shall be in writing, and shall be
sufficiently given if delivered to the addressees in person, by FedEx or similar
receipted next business day delivery, or by email followed by overnight next
business day delivery as follows:

 

  to Parent and Sub: Truli Media Group, Inc.

550 Sylvan Avenue, Suite 101

Englewood Cliffs, NJ 07632

Attention: Elliot Maza, Chief Executive Officer

Email: emaza@outlook.com

 

  with a copy to: Nason, Yeager, Gerson, White & Lioce, P.A.

3001 PGA Boulevard, Suite 305

Palm Beach Gardens, Florida 33410

Attention: Michael D. Harris, Esq.

Email: mharris@nasonyeager.com

 

  to Recruiter: Recruiter.com, Inc.

1533 New Britain Avenue

Farmington, CT 06032

Attention: Miles Jennings

Email: miles@recruiter.com

 

  with a copy to: Attention: Matthew Monteith

Shipman and Goodwin

One Constitution Plaza, Hartford, CT 06103

Email: MMonteith@goodwin.com

 

or to such other address as any of them, by notice to the other may designate
from time to time. Time shall be counted to, or from, as the case may be, the
date of delivery.

 

9.4 Assignment; Third Party Beneficiaries. Neither this Agreement nor any right,
interest or obligation hereunder shall be assigned by any of the Parties hereto
without the prior written consent of the other Parties. This Agreement shall be
binding upon and inure to the benefit of the Parties hereto and their respective
successors and permitted assigns. This Agreement is not intended to confer any
rights or remedies upon any Person other than the Parties hereto.

 

9.5 Governing Law. This Agreement and all Actions arising out of or in
connection with this Agreement and the transactions contemplated thereunder,
shall be governed by and construed in accordance with the Laws of the State of
Delaware without regard to the conflicts of law provisions of the State of
Delaware or of any other state.

 

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9.6 Exclusive Jurisdiction; Attorney Fees. Each Party agrees that all legal
Actions concerning the interpretations, enforcement and defense of the
transactions contemplated by this Agreement and any other Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, partners, members, employees or agents) shall be
commenced exclusively in the state and federal courts in New York County, New
York. Each Party hereby irrevocably submits to the exclusive jurisdiction of the
state and federal courts in New York County, New York for the adjudication of
any dispute hereunder or in connection herewith or with any transaction
contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives,
and agrees not to assert in any Action or Proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such Action or
Proceeding is improper or is an inconvenient venue for such Proceeding. Each
Party hereby irrevocably waives personal service of process and consents to
process being served in any such Action or Proceeding by mailing a copy thereof
via registered or certified mail or overnight delivery (with evidence of
delivery) to such Party at the address in effect for notices to it under this
Agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any other manner permitted by
law. If any Party shall commence an Action or Proceeding to enforce any
provisions of the Transaction Documents, then, in addition to the obligations of
the Company elsewhere in this Agreement, the prevailing Party in such Action or
Proceeding shall be reimbursed by the non-prevailing Party for its reasonable
attorneys’ fees and other costs and expenses incurred with the investigation,
preparation and prosecution of such Action or Proceeding.

 

9.7 Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.

 

9.8 Severability. In case any one or more of the provisions contained in this
Agreement should be finally determined to be invalid, illegal or unenforceable
in any respect against a Party hereto, it shall be adjusted if possible to
effect the intent of the Parties. In any event, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby, and such invalidity, illegality or
unenforceability shall only apply as to such Party in the specific jurisdiction
where such final determination shall have been made.

 

9.9 Interpretation. The Article and Section headings contained in this Agreement
are solely for the purpose of reference and shall not in any way affect the
meaning or interpretation of this Agreement. The word “including” shall be
deemed to mean “including without limitation.”

 

9.10 Entire Agreement. This Agreement including the Disclosure Schedules and the
other Transaction Documents embody the entire agreement and understanding of the
Parties hereto in respect of the subject matter contained herein. There are no
representations, promises, warranties, covenants, or undertakings, other than
those expressly set forth or referred to herein and therein.

 

9.11 Rules of Construction. Each Party to this Agreement has been represented by
counsel during the preparation and execution of this Agreement, and therefore
waives any rule of construction that would construe ambiguities against the
Party drafting the Agreement.

 

9.12 Effect of Recruiter Bankruptcy. All rights and licenses granted by
Recruiter under this Agreement are and will be deemed to be rights and licenses
to "intellectual property," and the subject matter of this agreement, including
all Licensed Technology, is and will be deemed to be "embodiment[s]" of
"intellectual property", for purposes of and as such terms are used in and
interpreted under Section 365(n) of the United States Bankruptcy Code (the
"Code") (11 U.S.C. § 365(n)). Sub may exercise all rights and elections under
the Code and all other applicable bankruptcy, insolvency and similar laws with
respect to this Agreement and its subject matter.

 

9.13 Equitable Relief. Each Party acknowledges and agrees that a breach or
threatened breach by such Party of any of its obligations under Sections2, 3, 4
or 7 would cause the other Party irreparable harm for which monetary damages
would not be an adequate remedy and agrees that, in the event of such breach or
threatened breach, the other Party will be entitled to equitable relief,
including a restraining order, an injunction, specific performance, and any
other relief that may be available from any court, without any requirement to
post a bond or other security, or to prove actual damages or that monetary
damages are not an adequate remedy. Such remedies are not exclusive and are in
addition to all other remedies that may be available at law, in equity, or
otherwise.

 

(Signature Pages Follow)

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
Effective Date.

 

  RECRUITER.COM, INC.         By:                   Name:     Title:          
TRULI MEDIA GROUP, INC.         BY:       Elliot Maza, Chief Executive Officer  
      VOCAWORKS, INC.         By:       Elliot Maza, President

  

 

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