Exhibit 10.1


 





ASSET PURCHASE AGREEMENT


 


THIS ASSET PURCHASE
AGREEMENT dated September 18, 2014 (this “Agreement”) by and between SpendSmart Networks, Inc., a
California corporation (the “Purchaser”), SpendSmart Networks, Inc., a Delaware Corporation (the “Parent”),
TechXpress, Inc., a California corporation (the “Seller”) and Bryan A. Sarlitt (“Sarlitt”
and together with the Purchaser, the Parent and the Seller referred to as the “Parties”).


 


RECITALS


 


Whereas, the Seller
is engaged in the Seller is in the business of designing, developing, and hosting eCommerce websites (the “Business”);


 





Whereas, Sarlitt is
the sole shareholder of Seller;


 


Whereas, the Seller
desires to sell to the Purchaser certain Web Assets (as defined in Section 1.2 of this Agreement) used by the Business,
and the Purchaser desires to acquire the Web Assets upon the terms, in the manner and subject to the conditions hereinafter set
forth;


 


Whereas, contemporaneously
with the Purchaser’s acquisition of the Web Assets, a third party is purchasing certain other assets of the Business, namely
Seller’s IT Assets (as defined in Section 1.3); and


 


Whereas, Seller intends
to close the Web Asset sale to Purchaser and the IT Assets sale to a third party on the same Closing Date in order to ensure that
all proceeds from the sale of assets of the Business collectively pay off the debts, liabilities or obligations of the Company.


 


Based on foregoing
Recitals, and in consideration of the premises and of the mutual covenants, representations and warranties contained in this Agreement,
and intending to be legally bound hereby, the parties hereto agree as follows:


 


ARTICLE I.


PURCHASE AND SALE OF THE WEB ASSETS


 


SECTION 1.1. The
Closing. The sale and transfer of the Assets (as defined herein) and the consummation of all of the other transactions
contemplated by this Agreement (the “Closing” or the “Closing Date”) shall
occur at the offices of Ruskin Moscou Faltischek, P.C., Uniondale, New York, at such time and on such date as the parties may jointly
agree, as the same may be extended by the Purchaser and subject to Section 9.7 hereof, provided the terms and conditions of this
Agreement are satisfied (the applicable date of the Closing being referred to as the “Closing Date”).
At the Closing, the Seller and the Purchaser shall exchange certificates, instruments and other documents required to be delivered
under Article VI hereof.


 


SECTION 1.2. Purchase
and Sale of the Assets. At the Closing, the Seller shall sell, assign and transfer to the Purchaser, free and clear of
all liens, pledges, security interests, mortgages, claims, debts, charges, agreements or other encumbrances or restrictions on
transfer of any kind whatsoever (collectively, the “Encumbrances”), all of its property, rights, privileges
and interests, whether tangible or intangible, real, personal or mixed, that are held or leased or used in connection with the
Assets listed on Schedule 1.2 of the Disclosure Schedules, other than the Excluded Assets as defined in Section 1.3
below (collectively, the “Web Assets”). The Web Assets shall include, but not be limited to, all of Seller's
rights in, but only with regard to the Web Assets: (a) tangible personal property, including, without limitation, work in process,
inventory, furniture and equipment; (b) contracts and personal property leases expressly assumed by the Purchaser; (c) licenses
and permits, which may require consent to assignment; (d) patents, trademarks, copyrights and all other intellectual property,
if any, which may require consent to assignment; (e) know how and trade secrets; (f) accounts receivable; (g) customer lists and
account information; (h) goodwill; and (i) copies of all files, books and records. For purposes of this Agreement, “Disclosure
Schedules” means the Disclosure Schedules delivered by Seller and Purchaser concurrently with the execution
and delivery of this Agreement. 


 






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SECTION 1.3. Excluded
Assets. The following assets of the Seller are expressly excluded from the Assets and shall not be sold, assigned, transferred
or delivered to the Purchaser hereunder (collectively, the “Excluded Assets”): (a) the corporate minute
books and stock record books of the Seller (copies of which, however, will be delivered to Purchaser); (b) all of Seller’s
interest in Seller’s IT Assets (“Seller’s IT Assets”), whether tangible or intangible, associated
with Seller’s IT Assets, including, without limitation, the following: customer lists and related data for both active and
inactive clients and prospective clients relating solely to Seller’s IT Assets; all digital files associated with Seller’s
IT Assets; ConnectWise software, license agreements, and all related intellectual property; Kaseya software, license agreements
and all related intellectual property; “TechXpress” name, logo, trademarks, trade names, service marks, copyrights,
marketing collateral including signage; TechXpress domain names, including techxpress.net and all other aliases or alternatives;
website content, including all social media accounts relating solely to Seller’s IT Assets; telephone system; telephone numbers;
facsimile numbers; email addresses; eight (8) desks with cabinetry and office supplies contained therein; eight (8) complete computer
workstations, including associated peripheral equipment and miscellaneous spare parts as specified in Schedule 1.3, attached
hereto and incorporated herein by reference; six (6) laptop computers, including associated peripheral equipment as specified in
Schedule 1.3; servers and networking equipment specified in Schedule 1.3; and all spare parts, tools, and any equipment
originally purchased for the IT Services department to conduct IT Service on behalf of TechXpress; and (c) any rights the Seller
may have to enforce the obligations of the Purchaser pursuant to this Agreement and any and all agreements, certificates, instruments
and other documents related to this Agreement (collectively, the “Related Documents”).


 


SECTION 1.4. Excluded
Liabilities. Except for post-Closing adjustment for accounts paid by Seller prior to Closing, which payments benefit Purchaser
post-Closing as prepaid expense, which amounts shall be reconciled within 60 days of Closing, the Purchaser shall not assume or
be deemed to have assumed any debts, liabilities or obligations of any kind, character or nature, whether known or unknown, fixed,
contingent, absolute or otherwise, arising or made prior to, on or after the Closing Date, of the Seller and its affiliates, or
relating to or arising from the Web Assets, Seller’s IT Assets or any other assets of the Business (each an “Excluded
Liability” and collectively, the “Excluded Liabilities”). Except as set forth in the Disclosure
Schedules immediately prior to, and in conjunction with, the Closing, the Seller covenants and agree to timely and fully discharge
and satisfy all Excluded Liabilities so that the same are not asserted against the Web Assets, the Purchaser or the Parent.


 


SECTION 1.5. Employees.
Seller shall terminate all employees at Closing, including payment of all outstanding wages, accrued vacation and other benefits
due through the Closing Date. Either Purchaser or Parent shall have the right, but not the obligation, to rehire those Seller employees
related to the Web Assets, who consent to rehire, as named on the Disclosures Schedules at Schedule 3.12(c). Purchaser agrees
to pay to Seller within sixty (60) days after Closing the pro rata share (based the actual Closing date) of all payments made for
health insurance covering those employees hired by Purchaser to ensure continued coverage immediately post-Closing until such employees
are covered or otherwise eligible for Purchaser’s health coverage.


 




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ARTICLE II.


CONSIDERATION FOR TRANSFER


 


SECTION 2.1. Purchase
Price. The purchase price (the “Purchase Price”) shall consist of:


 


(a)The payment by
Purchaser and/or Parent of those certain Seller liabilities as set forth on Schedule 2.1(a) (the “Seller Liabilities”)
in an amount not to exceed $460,400 in the aggregate (the “Seller Liabilities Cap”). If Seller Liabilities
equal less than the Seller Liabilities Cap, the remainder, if any, shall be remitted to Sarlitt. If the Seller Liabilities are
greater than the Seller Liabilities Cap, such Seller Liabilities shall be paid from the sale of the IT Assets to the buyer of the
IT Assets or otherwise expressly assumed by Seller and Sarlitt.


 


(b)Such number of
shares of Parent’s common stock (the “Stock Consideration”), par value $.001 per share (the “SSPC
Common Stock”) in an amount equal to $741,814 in the aggregate at a price per share equal to the Value Weighted Average
Price of the Parent’s common stock listed on the OTCQB market place for the ten (10) Business Days prior to the Closing,
shall be issued to certain Note Holders of the Seller, listed in Schedule 2.1(b) (the “Note Holders”)
attached hereto, subject to such Note Holders executing a Purchase and Release Agreement substantially in the form attached hereto
as Exhibit A and the Lock Up and Leak Out Agreement substantially in the form annexed hereto as Exhibit A-1
(the “Lock Up and Leak Out Agreement”). Purchaser acknowledges that the Note Holders consist of individuals
that loaned funds to the Company for working capital, the amount of which has been subject to amendment and compromise. Such Note
Holders have agreed to accept a portion of the Purchase Price payment to resolve any and all claims related to the amounts owed
under their respective notes issued to the Seller, as amended. The Stock Consideration shall be issued to each Note Holder based
on the amount outstanding principal balance of each note, relative to the total amount of consideration $741,814 to be paid on
behalf of all of them. Stock Consideration shall consist of a number of authorized but unissued shares of SSPC Common Stock to
be issued at the Closing and shall be subject to the Lock Up and Leak Out Agreement. The certificate for the Stock Consideration
shall bear a legend under the Securities Act of 1933, as amended (the “Securities Act”) relating to the
status of the Stock Consideration as restricted securities and will also bear a legend stating:


 


“THE ISSUANCE AND SALE
OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”),
OR APPLICABLE STATE SECURITIES LAWS AND THESE SECURITIES MAY NOT BE SOLD OR TRANSFERRED UNLESS (I) A REGISTRATION STATEMENT COVERING
SUCH SALE OR TRANSFER IS EFFECTIVE UNDER THE ACT OR (II) THE TRANSACTION IS EXEMPT FROM REGISTRATION UNDER THE ACT, AND IF THE
ISSUER REQUESTS, AN OPINION SATISFACTORY TO THE CORPORATION TO SUCH EFFECT HAS BEEN RENDERED BY COUNSEL.”


 


SECTION 2.2. Payment
of the Purchase Price. At the Closing, the Purchaser shall pay the Stock Consideration by delivery to the Seller of one
or more certificates representing the same and shall coordinate the payment of the Seller Liabilities.


 


SECTION 2.3. Allocation
of Purchase Price. The Purchase Price has been allocated among the Assets consistent with the requirements of Section 1060
and the regulations promulgated thereunder as set forth in Schedule 2.3, attached hereto. The parties agree to complete
jointly and to file separately Form 8594 with its federal income tax return consistent with such allocation for the tax year in
which the Closing occurs. Purchase acknowledges that the sale of tangible Web Assets, is subject to sales tax under California
law. Purchase shall be responsible for payment of such taxes as reported by Seller at Closing.


 






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SECTION 2.4. Third
Party Consents. To the extent that Seller's rights under any contract or permit constituting a portion of the Asset, or
any other Asset, may not be assigned to Purchaser without the consent of another person which has not been obtained, this Agreement
shall not constitute an agreement to assign the same if an attempted assignment would constitute a breach thereof or be unlawful,
and Seller, at its expense, shall use its reasonable best efforts to obtain any such required consent(s) as promptly as possible.
If any such consent shall not be obtained or if any attempted assignment would be ineffective or would impair Purchaser’s
rights under the Asset in question so that Purchaser would not in effect acquire the benefit of all such rights, Seller, to the
maximum extent permitted by law and the Asset, shall act after the Closing as Purchaser’s agent in order to obtain for it
the benefits thereunder and shall cooperate, to the maximum extent permitted by law and the Asset, with Purchaser in any other
reasonable arrangement designed to provide such benefits to Purchaser. Notwithstanding any provision in this Section 2.4
to the contrary, Purchaser shall not be deemed to have waived its rights under Section 7.2(f) hereof unless and until Purchaser
either provides written waivers thereof or elects to proceed to consummate the transactions contemplated by this Agreement at Closing.


 


SECTION 2.5. Pre-Paid
Expense Reconciliation. To the extent Seller has prepaid certain expenses and other accounts payable relating to the
Web Assets between September 1, 2014 and the Closing, the Seller and Purchaser shall each be responsible for the payment of their
respective pro rata share of such prepaid expenses and accounts payable for such period. At Closing, Seller and Purchaser shall
determine their respective pro rata portions of the prepaid expenses including, without limitation, wage and payroll/insurance
expenses and all other Accounts Payable paid by Seller between September 1, 2014, and the Closing relating to the Web Assets, and
Purchaser shall thereupon reimburse Seller for its pro rata share of such prepaid expenses and Accounts Payable as a credit to
Seller at Closing.


 


SECTION
2.6. Accounts Receivable. Seller shall retain all accounts receivable relating to the Web Assets, including
prepaid accounts receivable, received by Seller prior to the Closing. Notwithstanding the foregoing, Seller shall retain only
the pro rata portion of all Web Asset related prepaid accounts receivable that Seller receives for work done, in process or billed
as of September 1, 2014, for the period between September 1, 2014 and the Closing, the balance of which shall be credited to Purchaser
at Closing.


 


ARTICLE III.


REPRESENTATIONS AND WARRANTIES OF


THE SELLER AND SARLITT


 


For purposes hereof,
“Seller's knowledge” or “the best of the Seller's knowledge” shall mean the knowledge of the Seller and
any manager, officer and/or employee of the Seller, and shall include information which such individuals actually knew or should
have known through the performance of the duties of such individuals in a manner that is customary in the industry including the
Business. The Seller and Sarlitt hereby jointly and severally represent and warrant to the Purchaser and the Parent, as of the
date hereof (except as to any representation or warranty which specifically relates to an earlier date), and as of the moment immediately
prior to Closing, as follows:


 


SECTION 3.1. Organization
and Qualification. The Seller is a corporation duly organized, validly existing and in good standing under the laws of
the state of California, with all requisite power and authority to own the Assets, lease its properties, and to conduct
the Business as it is presently conducted. The Seller is qualified to do business and is in good standing in the state of California,
which is the only jurisdiction in which it owns assets, leases property or conducts the Business. The Seller has delivered to the
Purchaser true and complete copies of the Seller Articles of Incorporation and bylaws, and all amendments thereto.


 






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SECTION 3.2. Authorization.
The Seller has full power and authority to perform the transactions contemplated by this Agreement. The Seller's execution and
delivery of this Agreement and the Related Documents and its performance of the transactions contemplated herein have been duly
authorized by all requisite action, including, without limitation, by the Seller's officers and directors. This Agreement and the
Related Documents have been duly and validly executed and delivered by the Seller and constitute legal, valid and binding obligations
of the Seller, enforceable in accordance with their terms, except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency or similar laws relating to creditors' rights and remedies generally.


 


SECTION 3.3. No
Violation. Neither the execution nor delivery of this Agreement or the Related Documents by the Seller and the performance
of the Seller's obligations hereunder and thereunder, nor the purchase and sale of the Web Assets, will: (a) violate or result
in any breach of any provision of the Seller's Articles of Incorporation or bylaws; (b) except as set forth on Schedule 3.3
of the Disclosure Schedule violate, conflict with or result in a violation or breach of, or constitute a default (with or without
due notice or lapse of time or both) under, or permit the termination of, or require the consent of any other party to, or result
in the acceleration of, or entitle any party to accelerate (whether as a result of a change in control of any Seller or otherwise)
any obligation under, or result in the loss of any benefit under, any agreement to which the Seller is a party, or give rise to
the creation of any Encumbrance upon any of the Web Assets; or (c) violate any order, writ, judgment, injunction, decree, statute,
law, rule, regulation or ordinance of any court or governmental, quasi-governmental or regulatory department or authority (“Governmental
Authority”) applicable to the Seller, Sarlitt or any of the Web Assets.


 


SECTION 3.4. Ownership.
Bryan Sarlitt, with the address listed in Section 9.4, entitled Notice, below, is the sole shareholder of Seller.
No other person or entity has any equity or other interest except as a creditor in the Company.


 


SECTION 3.5. Consents
and Approvals. No filing or registration with, no notice to, and no permit, authorization, consent or approval of any Governmental
Authority or any other person is necessary for the Seller to execute and deliver this Agreement and the Related Documents, including
all contract and lease assignments or to enable the Purchaser after the Closing to continue to conduct the Business as presently
conducted.


 


SECTION 3.6. Financial
Statements. The Seller has delivered to the Purchaser the unaudited financial statements of the Seller for the fiscal
years ended December 31, 2013 and December 31, 2012 and unaudited and reviewed financial statements for the periods ended March
31, 2014 and June 30, 2014 (the “Financial Statements”). The Financial Statements are accurate in all
material respects and have been prepared from the books and records of the Seller and in accordance with income tax basis of accounting
and fairly present the financial condition of the Seller as of the date thereof and the results of the operations of the Business
for the period indicated. A copy of the Financial Statements is attached hereto as Schedule 3.6 of the Disclosure Schedule.
The Seller shall provide any and all information required in order to assist the Parent in filing a Current Report on Form 8-K
which shall include Seller’s, audited financial statements per Section 6.14, below, to be audited by Purchaser at
its expense after Closing.


 


SECTION 3.7. Absence
of Undisclosed Liabilities. Except as set forth on Schedule 3.7 of the Disclosure Schedule, on December 31, 2013,
the Seller had no liability (whether accrued, absolute, contingent or otherwise, and whether then due or to become due) nor loss
contingency, except as reflected on the Financial Statements, which would be required to be included therein in accordance with
cash based accounting, and the Seller and Sarlitt have no knowledge of any valid basis for the assertion of any such liability
or loss contingency.


 






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SECTION 3.8. Absence
of Certain Changes. Except as disclosed in  Schedule 3.8 of the Disclosure Schedule, since June 30, 2014, the Seller
has conducted the Business and utilized the Web Assets in the usual ordinary course, and, without limiting the generality of the
foregoing, since such date, there has not been: (a) a Material Adverse Effect (as hereinafter defined); (b) any capital expenditure
or commitment thereof in excess of $25,000 individually or $50,000 in the aggregate, or the making or any loans or advances; (c)
any sale, lease, license, Encumbrance or other transfer or disposition of any assets or properties of the Seller, except in the
ordinary course of the Business; (d) any forgiveness or cancellation of any debts or claims; (e) any entry into or commitment to
enter into any material contract by the Seller or any change or amendment to any material contract, or any entry into any or commitment
to enter into any contract with an affiliate of the Seller; (f) any damage, destruction or loss to the properties or assets owned,
leased or used by the Seller, whether or not covered by insurance, which adversely affected the operations of the Business; (g)
any change by the Seller in its financial or tax accounting principles or methods, or any failure to maintain the books, accounts
and records of the Seller in the usual, regular and ordinary manner on a basis consistent with prior practice and in accordance
with income tax basis of accounting.; (h) any acquisition (by merger, consolidation or acquisition of stock or assets) by the Seller
of any business entity or division or significant assets thereof; (i) any change made or authorized in the Seller's certificate
of incorporation or by-laws; or (j) any failure by the Seller to use its customary best efforts to preserve the Seller's goodwill
with suppliers, customers and others with which it has business relationships and to maintain its business, employees, licenses
and operations consistent with past practices. For purposes of this Agreement, a “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 the Business, (b) the value of the Web Assets, or (c) the ability of Seller to consummate the transactions
contemplated hereby on a timely basis.


 


SECTION 3.9. Litigation.
Except as set forth in Schedule 3.9 of the Disclosure Schedule, there is no action, dispute, suit, litigation, hearing,
inquiry, proceeding, arbitration or investigation, as it relates to the Web Assets, pending or threatened against the Seller or
any of its properties, assets or rights, before any court, arbitrator or Governmental Authority, nor is there any judgment, decree,
injunction, rule or order of any court, arbitrator or Governmental Authority outstanding against, and unsatisfied by, the Seller
(any of the foregoing being herein referred to as “Existing Litigation”), nor to the Seller’s knowledge,
does any fact or condition exist which could reasonably be expected to serve as a basis for the assertion of any such action, suit,
inquiry, judicial or administrative proceeding, arbitration or investigation. There is no action, suit, proceeding or investigation
by any Seller pending or that the Seller intends to initiate or is considering initiating.


 


SECTION 3.10. Title
to Web Assets. Except as set forth in Schedule 3.10 of the Disclosure Schedule, the Seller has good
and marketable title to the Web Assets, free and clear of any and all liens and Encumbrances (except for those properties or
assets disposed of in the ordinary course of business).


 


SECTION 3.11. Contracts.
Schedule 3.11 of the Disclosure Schedule sets forth a complete and accurate list of all of the contracts, agreements
and arrangements, whether written or oral, formal or informal, which relate to the Web Assets (the “Material Contracts”).
Other than as set forth in Schedule 3.11 of Disclosure Schedule, the Seller is not in default with respect to any obligation
to be performed under any Material Contract, and to the knowledge of the Seller, each other party to a Material Contract is not
in default with respect to any obligation to be performed. Except as set forth in Schedule 3.11 of the Disclosure Schedule,
no consent by, notice to or approval from any third party is required under any Material Contract as a result of or in connection
with the execution, delivery or performance of this Agreement and/or the Related Agreements or the consummation of the transactions
contemplated herein. The contracts to be assumed by the Purchaser include the contracts marked with an asterisk on Schedule
3.11.


 






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SECTION 3.12. Employee
Benefit Plans; Labor Relations; Employees.


 


(a)Schedule
3.12(a) of the Disclosure Schedule contains a complete and accurate list of each employee benefit plan, program, agreement
or arrangement, whether written or oral, covering employees, former employees or managers of the Seller, or providing benefits
to such persons in respect of services provided to the Seller (collectively, the “Benefit Plans”). Schedule
3.12(a) of the Disclosure Schedule indicates which of the Benefit Plans is an “employee benefit plan” within the
meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
and which of the Benefit Plans is subject to Section 302 or Title IV of ERISA. With respect to each Benefit Plan, the Seller heretofore
delivered to the Purchaser a accurate and complete copy of such Benefit Plan and any amendments thereto (or if the Benefit Plan
is not a written plan, an accurate and detailed written description thereof), and, if applicable, (i) any related trust or other
funding documents, and (ii) any reports or summaries required under ERISA and the most recent determination letter received from
the Internal Revenue Service with respect to each Benefit Plan intended to qualify under section 401 of the Code.


 


(b)Seller is not
a party to any collective bargaining agreement or other labor agreement with any union or labor organization, and to the knowledge
of the Seller or Sarlitt, there is no activity or proceeding of any labor organization or employee group to organize any such employees.


 


(c)Schedule
3.12(c) of the Disclosure Schedules contains a list of all persons who are employees,
independent contractors or consultants of the Business as of the date hereof, including any employee who is on a leave of absence
of any nature, paid or unpaid, authorized or unauthorized, and sets forth for each such individual the following: (i) name; (ii)
title or position (including whether full or part time); (iii) hire date; (iv) current annual base compensation rate; (v) commission,
bonus or other incentive-based compensation; and (vi) a description of the fringe benefits provided to each such individual as
of the date hereof. As of the date hereof, all compensation, including wages, commissions and bonuses payable to all employees,
independent contractors or consultants of the Business for services performed on or prior to the date hereof have been paid in
full and there are no outstanding agreements, understandings or commitments of Seller with respect to any compensation, commissions
or bonuses.


 


SECTION 3.13. Taxes.


 


(a)Except as set
forth in Schedule 3.13 of the Disclosure Schedule or attachment thereto: (i) , the Seller has timely filed or caused to
be filed with appropriate governmental agencies or departments all Federal, state, local and foreign returns (the “Tax
Returns”) for Taxes (as hereinafter defined) required to be filed by it; (ii) , the Seller has made available to
the Purchaser complete and accurate copies of such Tax Returns for the past three (3) years; (iii) , the Seller has paid or caused
to be paid all Taxes (including any additions or penalties if any) if any required to be paid by the Seller in respect of the periods
for which its Tax Returns are due, and will establish an adequate accrual or reserve for the payment of all Taxes payable in respect
of the period, including portions thereof, subsequent to the last of said periods up to and including the Closing Date; (iv) no
extensions or waivers of statutes of limitations have been given or requested with respect to any Taxes (as hereinafter defined)
of Seller; (v) all deficiencies asserted, or assessments made, against Seller as a result of any examinations by any taxing authority
have been fully paid; (vi) Seller is not a party to any action by any taxing authority and there are no pending or threatened actions
by any taxing authority; and (vii) there are no Encumbrances for Taxes upon any of the Web Assets nor is any taxing authority in
the process of imposing any Encumbrances for Taxes on any of the Web Assets.
The Tax Returns are complete and accurate in all respects, and the calculations and deductions set forth therein
have been made, in all respects, in compliance with all applicable Tax statutes, laws, rules and regulations.


 






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(b)The term “Tax”
or “Taxes” shall include all taxes, charges, withholdings, fees, levies, penalties, additions, interest
or other assessments imposed by any United States Federal, state or local and foreign or other taxing department or authority on
any Seller (including, without limitation, as a result of being a member of an affiliated, combined or unitary group or as a result
of any obligation arising out of an agreement to indemnify any other person), and including, but not limited to, those related
to income, gross receipts, gross income, sales, use, excise, occupation, services, leasing, valuation, transfer, license, customs
duties or franchise.


 


SECTION
3.14. Environmental Matters. Except as disclosed in Schedule 3.14 of the Disclosure Schedule, (i) the Seller
is in full compliance with all Environmental Laws, (ii) the Seller does not have knowledge of any notice of any suit, litigation,
arbitration, hearing, investigation, dispute or other action (whether civil, criminal, administrative or investigative) brought
by or before any court, Governmental Authority or arbitration. “Environmental Laws” means all applicable
federal, state, or local laws, regulations, ordinances, decrees, rules, judgments, orders or directives now or hereinafter in effect
relating to the protection of human health, safety or the environment, or otherwise relating to hazardous substances generation,
production, use, storage, treatment, transportation or disposal.


 


SECTION 3.15. Compliance
with Applicable Laws; Permits and Licenses. Schedule 3.15 of the Disclosure Schedule sets forth all of the licenses,
franchises, permits, consents and authorizations necessary for the lawful conduct of the Business. Except as set forth in Schedule
3.15 of the Disclosure Schedule, the Seller properly holds, and at all relevant times has held, all material licenses, franchises,
permits, consents and authorizations necessary for the lawful conduct of the Business, and the Business is not being and, during
the relevant statute of limitations period, has not been conducted in violation of any provision of any federal, state, local or
foreign statute, law, ordinance, rule, regulation, judgment, decree, order, concession, grant, franchise, permit, consent or license
or other governmental authorization or approval (“Law”) applicable to it. Except as set forth in Schedule
3.15 of the Disclosure Schedule, the Seller has not received any notification of any failure by the Seller to comply with any
Law applicable to it.


 


SECTION 3.16. Brokers'
Fees and Commissions. Neither the Seller nor any of its managers, officers, employees or agents has employed any investment
banker, broker, finder or intermediary, and no fee or other commission is owed to any third party, in connection with the
transactions contemplated herein.


 


SECTION 3.17. Proprietary
Rights.


 


(a)Set forth in
Schedule 3.17(a) of the Disclosure Schedule is a complete and accurate list of all patents, registered copyrights, trademarks,
trade names, trade secrets and all other intellectual property in which the Seller has proprietary rights and which relates to
the Web Assets (hereinafter referred to as the “Proprietary Rights”) and all licenses, sublicenses or
other agreements with respect thereto. The Seller owns all of the Proprietary Rights and to the best of Seller’s knowledge,
the use of such Proprietary Rights does not infringe upon the rights of any other person or entity. The Seller has not received
any notice of a claim of such infringement nor was any such claims the subject of any action, suit or proceeding involving the
Seller. The Seller has no knowledge of any infringement or improper use by any third party of the Proprietary Rights, nor has the
Seller instituted any action, suit or proceeding in which an act constituting an infringement of any of the Proprietary Rights
was alleged to have been committed by a third party.


 






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(b)Schedule
3.17(b) of the Disclosure Schedule identifies (i) all of the software and computer databases (collectively, the “DataBases”)
that are used in the conduct of the Web Assets, (ii) states whether such DataBases are owned or licensed by the Seller and, (iii)
if licensed, the name of such licensor. Except as set forth on Schedule 3.17(b) of the Disclosure Schedule, the Seller has
all legal right to use the DataBases as they are currently being used, and the Purchaser will continue to have the legal right
to use the DataBases in this manner following the consummation of the transactions contemplated herein. The use of the DataBases
does not infringe upon the rights of any other person or entity, nor has any Seller received any notice of a claim of such infringement.
Except as listed on Schedule 3.17(b) of the Disclosure Schedule, there are no licenses, sublicenses or other agreements
relating to the use of the DataBases by the Seller.


 


SECTION 3.18.
Accounts Receivable. The Accounts Receivable reflected on the Schedule 3.18 and the Accounts Receivable arising
after the date thereof (a) have arisen from bona fide transactions entered into by Seller involving the sale of goods or the rendering
of services in the ordinary course of business consistent with past practice; and (b) except as noted, constitute only valid, undisputed
claims of Seller not subject to claims of set-off or other defenses or counterclaims other than normal cash discounts accrued in
the ordinary course of business consistent with past practice.


 


SECTION 3.19. Insurance.
Schedule 3.19 of the Disclosure Schedule sets forth a complete and accurate list (including the name of the insurer, name,
address and telephone number of the insurance broker or agent, type of coverage, premium, policy number, limits of liability for
personal injury and property damage and expiration date) of all binders, policies of insurance, self insurance programs or fidelity
bonds, other than bonds for excise taxes and custom duties (collectively the “Insurance Policies”) maintained
by the Seller or for which the Seller is a named insured. All of the Insurance Policies have been issued under valid policies or
binders for the benefit of the Seller, and are in amounts and for risks, casualties and contingencies customarily insured against
by enterprises with operations similar to those of the Seller. Except as provided in Schedule 3.19, all of the Insurance
Policies are currently valid, issued, outstanding and enforceable, and each of the Insurance Policies shall remain in full force
and effect at least through the respective expiration dates as set forth on Schedule 3.19. There are no pending or asserted
claims against any Insurance Policy as to which any insurer has denied liability, and there are no claims under any Insurance Policy
that have been disallowed or improperly filed.


 


SECTION 3.20. Real
Estate. Schedule 3.20 of the Disclosure Schedule sets forth a complete and accurate list of all real property leased
or subleased by or on behalf of each Seller (the “Real Estate Leases”), if any. Other than as set forth
on Schedule 3.20 of the Disclosure Schedule, the Seller has delivered to the Purchaser accurate, correct, and complete copies
of the Real Estate Leases, as amended, which leases are not being transferred with the Web Assets. Seller has paid the Lease payments
through August of 2014, but intends to abandon the Lease at Closing if the lessor thereunder will not agree to terminate same.
Seller has claims against lessor under the lease, which it will retain, and all of lessor’s claims against Seller related
to abandonment or termination of the lease shall be subject to Seller’s indemnity obligations as set forth Article VIII,
below.


 


SECTION 3.21. Regulatory
Reports. The Seller has filed all material reports, registrations and statements, together with any amendments required
to be made with respect thereto, that it was required to file with any Governmental Authority, and has paid all fees or assessments
due and payable in connection therewith.


 






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SECTION 3.22. Customers
of the Seller. Schedule 3.22 of the Disclosure Schedules sets forth with respect to the Web Assets (i) each customer
who has paid aggregate consideration to Seller for goods or services rendered in an amount greater than or equal to $10,000 for
each of the two (2) most recent fiscal years (collectively, the “Material Customers”); and (ii) the amount
of consideration paid by each Material Customer during such periods. Seller has not received any notice, and has no reason to believe,
that any of the Material Customers has ceased, or intends to cease after the Closing, to use the goods or services related to the
Web Assets or to otherwise terminate or materially reduce its relationship related to the Web Assets.


 


SECTION 3.23. Untrue
or Misleading Statements. No representation or warranty contained in this Article III contains any untrue statement
of a material fact or omits to state a material fact required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not misleading.


 


SECTION 3.24.Condition
and Sufficiency of Web Assets. The tangible and intangible property included in the
Web Assets is in good operating condition, repair, and are adequate for their current uses. The Web Assets are sufficient for the
continued conduct of the Business as it related to such Web Assets after the Closing in substantially the same manner as conducted
prior to the Closing and constitute all of the rights, property and assets necessary to conduct the Business as it relates to the
Web Assets as currently conducted. 


 


ARTICLE IV.


REPRESENTATIONS AND WARRANTIES OF THE
PURCHASER


 


The Purchaser hereby
represents and warrants to the Seller, as of the date hereof (except as to any representation or warranty which specifically relates
to an earlier date) and immediately prior to Closing, as follows:


 


SECTION 4.1. Organization
and Qualification. The Purchaser is a corporation duly organized, validly existing and in good standing under the laws
of California, with all requisite power and authority and legal right to own assets, to lease properties, and to
conduct its business as presently conducted.


 


SECTION 4.2. Authorization.
The Purchaser has full corporate power and authority to execute and deliver this Agreement and the Related Agreements and to consummate
the transactions contemplated herein. The execution and delivery of this Agreement and the Related Documents by the Purchaser and
the performance by the Purchaser of its obligations hereunder have been duly authorized by all requisite corporate action. This
Agreement and the Related Documents have been duly and validly executed and delivered by the Purchaser and constitute the legal,
valid and binding obligation of the Purchaser, enforceable against the Purchaser in accordance with their terms, except to the
extent that such enforcement may be subject to applicable bankruptcy, insolvency, or similar laws relating to creditors' rights
and remedies generally.


 


SECTION 4.3. No
Violation. Neither the execution and delivery of this Agreement and the Related Documents by the Purchaser, nor the performance
by the Purchaser of its obligations hereunder, will: (a) violate or result in any breach of any provision of the Purchaser's Articles
of Incorporation or bylaws; or (b) violate any order, writ, judgment, injunction, decree, statute, rule or regulation of any court
or Governmental Authority applicable to the Purchaser.


 


SECTION 4.4. Consents
and Approvals. Except as listed on Schedule 4.4 of the Disclosure Schedule, no filing or registration with, no notice
to and no permit, authorization, consent or approval of any third party or any Governmental Authority not heretofore delivered
to the Seller is necessary for the Purchaser's consummation of the transactions contemplated herein.


 






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SECTION 4.5. Brokers'
Fees and Commissions. Neither the Purchaser nor any of its shareholders, directors, officers, employees or agents has employed
any investment banker, broker, finder or intermediary, and such no fee or other commission is owed to any third party, in connection
with the transactions contemplated herein.


 


SECTION 4.6. Untrue
or Misleading Statements. No representation or warranty contained in this Article IV contains any untrue statement
of a material fact or omits to state a material fact required to be stated herein or necessary in order to make the statements
herein, in light of the circumstances under which they are made, not misleading.


 


ARTICLE V.


REPRESENTATIONS AND WARRANTIES OF THE
PARENT


 


SECTION 5.1. Organization.
The Parent is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and
has all requisite power and authority to lease its properties and to conduct its business as it is presently conducted.
The Parent is qualified to do business and is in good standing in each jurisdiction in which it owns assets, leases property or
conducts its business. The Parent has delivered to the Seller true and complete copies of the Parent's Articles of Incorporation
and bylaws, and all amendments thereto.


 


SECTION 5.2. Authorization.
The Parent has full power and authority to perform the transactions contemplated by this Agreement. The Parent's execution and
delivery of this Agreement and the Related Documents and its performance of the transactions contemplated herein have been duly
authorized by all requisite action, including, without limitation, by the Parent's board of directors. This Agreement and the Related
Documents have been duly and validly executed and delivered by the Parent and constitute legal, valid and binding obligations of
the Parent, enforceable in accordance with their terms, except to the extent that such enforcement may be subject to applicable
bankruptcy, insolvency or similar laws relating to creditors' rights and remedies generally.


 


SECTION 5.3. Valid
Issuance.The Stock Consideration to be issued to the Note Holder at the Closing pursuant to Section 2.1 hereof,
when issued and delivered in accordance with the terms hereof, shall be duly and validly issued, fully paid and nonassessable and
free of all preemptive rights.


 


SECTION 5.4. Consents
and Approvals. No filing or registration with, no notice to, and no permit, authorization, consent or approval of any Governmental
Authority or any other person is necessary for the Parent to execute and deliver this Agreement and the Related Documents.


 


SECTION 5.5. Brokers'
Fees and Commissions. Neither the Parent nor any of its directors, officers, employees or agents has employed any investment
banker, broker, finder or intermediary, and no fee or other commission is owed to any third party, in connection with the
transactions contemplated herein.


 




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ARTICLE VI


COVENANTS


 


SECTION 6.1. Conduct
of the Business Prior to the Closing. During the period from the date of this Agreement and continuing until the Closing
Date, the Seller agrees that, except as expressly contemplated or permitted by this Agreement or to the extent that Purchaser shall
otherwise consent in writing, the Seller shall carry on the Business and use the Web Assets in the usual, regular and ordinary
course in substantially the same manner as heretofore conducted in all material respects. The Seller agrees to promptly notify
the Purchaser within two (2) business days of any event or series of events which has resulted in any of the representations and
warranties as to the Seller being misleading in any material respect (receipt of such notice will not be a waiver with respect
to the same). Without limiting the generality of the foregoing, prior to the Closing, and except as expressly contemplated or permitted
by this Agreement, the Seller will not, without the prior written consent of the Purchaser, take any action that would constitute
a change which violates the terms of Section 3.8 hereof.


 


SECTION 6.2. Access
to Information. During the period from the date of this Agreement and continuing until the Closing, at all reasonable times
without causing unreasonable disruption to the Web Assets or related business, the Seller shall give the Purchaser and its authorized
representatives full access to all personnel, offices and other facilities, and to all books and records of the Seller (including,
without limitation, Tax Returns and accounting work papers) and will permit the Purchaser to make, and will fully cooperate with
regard to, such inspections in order to conduct, among other things, interviews of individuals and visual inspections of facilities
as the Purchaser may reasonably require and will fully cooperate in such interviews and inspections and will cause the Seller's
officers to furnish to the Purchaser such financial and operating data and other information with respect to the Web Assets and
related business as the Purchaser may from time to time reasonably request.


 


SECTION 6.3. Maintenance
of Employee and Customer Relations. During the period from the date of this Agreement and continuing until the Closing,
the Seller shall use its best commercial efforts to retain the services and goodwill of the employees of the Business and the Assets
and to maintain the goodwill of its customers, and shall not take, nor permit any manager, officer, employee, agent or independent
contractor of the Seller to take, any action (i) with respect to any employee, which action is intended to solicit, entice, persuade
or induce such employee to terminate his or her employment with the Seller which action is in contravention of the foregoing requirements,
and (ii) with respect to its customers, which action is intended to cause its customers, to terminate or substantially diminish
their business dealings with the Seller which action is in contravention of the foregoing requirements.


 


SECTION 6.4. All
Reasonable Efforts. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use all reasonable
efforts to take, or cause to be taken, all action, and to do, or cause to be done as promptly as practicable, all things necessary,
proper and advisable under applicable laws and regulations to consummate the transactions contemplated by this Agreement including,
without limitation, fulfillment of the Conditions of Closing set forth in Article VI hereof. If at any time after the Closing
any further action is necessary or desirable to carry out the purposes of this Agreement including, without limitation, the execution
of additional instruments, the proper officers and directors of the Purchaser and the Seller shall take all such necessary action.


 


SECTION 6.5. Consents
and Approvals. The parties hereto each will cooperate with one another and use all reasonable efforts to prepare all necessary
documentation to effect promptly all necessary filings and to obtain all necessary permits, consents, approvals, orders
and authorizations of or any exemptions by, all third parties and Governmental Authorities necessary to consummate the transactions
contemplated herein.


 



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SECTION 6.6. Public
Announcements. The Purchaser and the Seller will consult with each other and will mutually agree upon the content and timing
of any press releases or other public statements with respect to the transactions contemplated by this Agreement and shall not
issue any such press release or make any such public statement prior to such consultation and agreement, except as may be required
by applicable law or based upon the advice of counsel that such disclosure would be prudent under applicable securities laws.


 


SECTION 6.7. Confidentiality.
The Seller shall not use, publish, or disclose to any other person any confidential or proprietary information comprising part
of the Web Assets or relating to the Business or the transactions contemplated by this Agreement; provided, however,
that the foregoing restrictions shall not apply to information: (a) that is necessary to enforce the rights of the Seller under,
or defend against a claim asserted under, this or any other agreement with the Purchaser, (b) that is necessary or appropriate
to disclose to any Governmental or Regulatory Authority having jurisdiction over the Seller, or as otherwise required by law, (c)
that becomes generally known other than through a breach of this Agreement by the Seller, or (d) that is necessary or appropriate
in the ordinary course of the Seller's business. The Seller, acknowledges that the Purchaser does not have an adequate remedy at
law for the breach of this Section 6.7 and that, in addition to any other remedies available, injunctive relief may be granted
for any such breach.


 


SECTION 6.8. Disclosure
Supplements. Prior to the Closing, each party to this Agreement will promptly supplement or amend the Disclosure Schedule
with respect to any matter heretofore existing or hereafter arising which, if existing, occurring or known at the date of this
Agreement, would have been required to be set forth or described in such Disclosure Schedule or which is necessary to correct any
information in such Disclosure Schedule which has been rendered inaccurate thereby. For purposes of determining the accuracy of
the representations and warranties of the Seller and Sarlitt contained in Article III hereof and for purposes of determining satisfaction
of the conditions set forth in Section 7.2 hereof, the Disclosure Schedule delivered by the Seller shall be deemed to include only
that information contained therein on the date of this Agreement and shall be deemed to exclude any information contained in any
subsequent supplement or amendment thereto.


 


SECTION 6.9. Restrictions
on Transfer. The Seller agrees that prior to a termination under this Agreement pursuant to Section 9.7 and Section
9.8 hereof, it will not directly or indirectly sell, assign, transfer, give, pledge, encumber or otherwise dispose of any portion
of the Web Assets and the Seller further agrees not to enter into any agreement relating to these matters or to conduct any discussions
related to any of these matters.


 


SECTION 6.10. No
Solicitation of Transaction. The Seller shall not, and shall use its best efforts to cause its representatives not to,
directly or indirectly, take any of the following actions with any person other than the Purchaser without the prior written consent
of the Purchaser: (A) solicit, initiate, facilitate or encourage, or furnish information with respect to the Seller, in connection
with, any inquiry, proposal or offer with respect to any merger, consolidation or other business combination involving the Seller
or the acquisition of all or a substantial portion of the assets of, or any securities of, the Seller, except as relates to the
Seller’s IT Assets (an “Alternative Transaction”); (B) negotiate, discuss, explore or otherwise
communicate or cooperate in any way with any third party with respect to any Alternative Transaction; or (C) enter into any agreement,
arrangement or understanding with respect to an Alternative Transaction or requiring the Seller to abandon, terminate or refrain
from consummating a transaction with the Purchaser.


 


SECTION 6.11. No
Trading. The Seller and its shareholder, Bryan Sarlitt, directly or indirectly, and no person acting on behalf of or pursuant
to any understanding with them, has engaged in any transactions in the securities of the Parent (including, without limitation,
any short sales involving any of the SSPC’s securities) since the time that the Seller was first contacted by the Parent,
any of Parent’s representatives or any other person regarding Parent’s acquisition of the Assets.


 






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SECTION 6.12. Non-Competition;
Non-solicitation.


 


(a) For a period
of two (2) years commencing on the Closing Date (the “Restricted Period”), neither Seller nor Bryan Sarlitt
(except for work provided to Purchaser post-Closing, if any, or in association with consulting services to buyer of the Seller’s
IT Assets, if any) shall directly or indirectly, (i) engage in or assist others in engaging in a business that competes with the
Web Assets being acquired by the Purchaser (the “Restricted Business”) within the State of California
(the “Territory”); (ii) have an interest in any entity that engages directly or indirectly in the Restricted
Business in the Territory in any capacity, including as a partner, shareholder, member, employee, principal, agent, trustee or
consultant; or (iii) cause, induce or encourage any material actual or prospective client, customer, supplier or licensor of the
Business, as it relates to use of the Web Assets (including any existing or former client or customer of Seller and any person
that becomes a client or customer involved in the Web Assets of the Business after the Closing), or any other person who has a
material business relationship with the Business, to terminate or modify any such actual or prospective relationship. Notwithstanding
the foregoing, Seller may work for Purchaser, its Parent or the purchaser of the Seller’s IT Assets or may own, directly
or indirectly, solely as an investment, securities of any Person traded on any national securities exchange if Seller is not a
controlling Person of, or a member of a group which controls, such person and does not, directly or indirectly, own five percent
(5%) or more of any class of securities of such entity.


 


(b)Seller acknowledges
that a breach or threatened breach of this Section 6.12 would give rise to irreparable harm to Purchaser, for which monetary
damages would not be an adequate remedy, and hereby agrees that in the event of a breach or a threatened breach by Seller of any
such obligations, Purchaser shall, in addition to any and all other rights and remedies that may be available to it in respect
of such breach, be entitled to equitable relief, including a temporary restraining order, an injunction, specific performance and
any other relief that may be available from a court of competent jurisdiction (without any requirement to post bond).


 


(c) Seller acknowledges
that the restrictions contained in this Section 6.12 are reasonable and necessary to protect the legitimate interests of
Purchaser and constitute a material inducement to Purchaser to enter into this Agreement and consummate the transactions contemplated
by this Agreement. In the event that any covenant contained in this Section 6.12 should ever be adjudicated to exceed the
time, geographic, product or service or other limitations permitted by applicable law in any jurisdiction, then any court is expressly
empowered to reform such covenant, and such covenant shall be deemed reformed, in such jurisdiction to the maximum time, geographic,
product or service or other limitations permitted by applicable law. The covenants contained in this Section 6.12 and each
provision hereof are severable and distinct covenants and provisions. The invalidity or unenforceability of any such covenant or
provision as written shall not invalidate or render unenforceable the remaining covenants or provisions hereof, and any such invalidity
or unenforceability in any jurisdiction shall not invalidate or render unenforceable such covenant or provision in any other jurisdiction.


 


SECTION 6.13. Bulk
Sale Laws. The parties hereby waive compliance with the provisions of any bulk sales,
bulk transfer or similar laws of any jurisdiction that may otherwise be applicable with respect to the sale of any or all of the
Web Assets to the Purchaser; it being understood that any liabilities arising out of the failure of Seller to comply with the requirements
and provisions of any bulk sales, bulk transfer or similar laws of any jurisdiction which would not otherwise constitute Assumed
Liabilities shall be treated as Excluded Liabilities.


 






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SECTION 6.14. Financial
Statements. Seller and Sarlitt shall assist Parent in the preparation of audited financial statements by PCAOB
approved auditors relating to the Assets, at Purchaser’s sole expense, with such audited being completed no later than seventy-five
(75) days after the Closing.


 


SECTION 6.16.
Pay Off of Seller Liabilities. Seller and Sarlitt shall use the proceeds from the sale of the Web Assets to pay off
the Seller liabilities as set forth on Schedule 6.16.


 


ARTICLE VII


CLOSING CONDITIONS


 


SECTION 7.1. Conditions
to Each Party's Obligations under this Agreement. Each party's obligations under Article I and Article II of this Agreement
shall be subject to each of the Parties having obtained any and all approvals, consents, licenses, permits and authorizations from
Governmental Authorities, if any, in form and substance satisfactory to the other Party, necessary to permit such Party to perform
its obligations hereunder, to consummate the transactions contemplated herein, and to continue to conduct the Business as presently
conducted and in accordance with applicable Law.


 


SECTION 7.2. Conditions
to the Obligations of the Purchaser. The Purchaser's obligations under this Agreement shall be further subject to the satisfaction
or to the waiver by the Purchaser of the following conditions precedent:


 


(a)Performance
of Obligations of Seller. Each of the Seller's pre-Closing obligations shall have been duly performed in all material respects,
and each of the representations and warranties of the Seller contained in this Agreement shall be true and correct, in all material
respects, as of the date of this Agreement and as of the Closing as if made immediately prior to the Closing (except as to any
representation or warranty which specifically relates to another date), and the Purchaser shall have received a certificate to
that effect signed by an officer of the Seller and/or Sarlitt, in a form reasonably satisfactory to the Purchaser.


 


(b)Secretary's
Certificate. The Purchaser shall have received from the Secretary of the Seller, in a form reasonably satisfactory to the Purchaser,
a certificate enclosing the filed Article of Incorporation Seller, resolution authorizing all of the transactions contemplated
herein, and a good standing certificate of the Seller dated as of a date reasonably close to the Closing Date.


 


(c)Shareholder's
Certificate. The Purchaser shall have received a certificate from Bryan A. Sarlitt, the principal shareholder of the Seller,
in a form reasonably satisfactory to the Purchaser, that the representations and warranties of the Seller set forth in Article
III hereof are true and accurate as of the execution hereof and as of the Closing Date.


 


(d)Financial
Statements. The Seller shall have delivered to the Purchaser the audited financial statements of the Seller as of December
31, 2013 and as of December 31, 2012 and unaudited and reviewed financial statements for the periods ended March 31, 2014 and June
30, 2014.


 


(e)Contract
Consents. Except as set forth in Section 2.4, any and all requisite consents, waivers or authorizations from third parties
required for the assumption by the Purchaser of the assumed contracts shall have been obtained without any adverse effect on the
terms of such contracts.


 






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(f)Bill of Sale.
The Purchaser shall have received a Bill of Sale selling and transferring to Purchaser the Business and all of the Assets, executed
by each Seller and in the form and substance reasonable acceptable to the Parties and all other transfer documents reasonably requested
by it.


 


(g)Legal Opinion.
The Purchaser shall have received an opinion of Duggan Smith & Heath LLP substantially in the form and substance reasonable
acceptable to the Purchaser.


 


(h)Seller Liabilities.
All of the Seller Liabilities and Encumbrances shall have been terminated through payment in cash or other property, or otherwise,
and the Seller shall have no liability for the same including principal, interest, fees and other changes of any description whatsoever.


 


(i)Due Diligence.
Purchaser and Parent shall have completed its due diligence of the operation of the Assets and Business of the Seller, the results
of which shall have been deemed satisfactory in the sole discretion of Purchaser and Parent, their agents, employees and representatives.


 


(j)Note &
Personal Guaranty. The Parent and Snyder Computer Service, Inc. shall have duly executed a secured promissory note in substantially
the form annexed hereto as Exhibit B (the “Promissory Note”), which shall facilitate the
purchase by Snyder Computer Service, Inc. of the Seller’s IT Assets. Tim Snyder shall have executed the Personal Guaranty
in substantially the form annexed hereto as Exhibit C, which shall serve as a guaranty of the payment of the Promissory
Note.


 


(k)IT Asset
Purchase Agreement. The Seller and Tim Snyder shall have duly executed the Asset Purchase Agreement substantially in the form
annexed hereto as Exhibit D (the “IT Asset Purchase Agreement”) simultaneously with the
Closing relating to Tim Snyder’s purchase of Seller’s IT Assets.


 


(l)Purchase
and Waiver Agreement & Lock Up and Leak Out Agreement. The Company and each Note Holder of Seller shall have duly executed
the Purchase and Wavier Agreement/Lock Up and Leak Out Agreement substantially in the form annexed hereto as Exhibit A
and Exhibit A-1 relating to the disposition of the Stock Consideration.


 


(m)Other Documents.
The Purchaser shall have received any such other documents or other materials it may reasonably request to consummate the transactions
contemplated herein.


 


SECTION 7.3. Conditions
to the Obligations of the Seller. The Seller's obligations under Article I and Article II of this Agreement shall be further
subject to the satisfaction or to the waiver by the Seller of the following conditions precedent:


 


(a)Closing Payment.
The Seller shall have received the Stock Consideration and the Purchaser and Parent shall have satisfied the Seller Liabilities.


 


(b)Performance
of Obligations of Purchaser. Each of the pre-Closing obligations of the Purchaser shall have been duly performed, and the representations
and warranties of the Purchaser contained in this Agreement shall be true and correct, in all material respects as of the date
of this Agreement and as of the Closing Date as though made immediately prior to the Closing (except as to any representation or
warranty which specifically relates to another date), and the Seller shall have received a certificate to that effect signed by
an officer of the Purchaser substantially in a form reasonably acceptable to the Seller.


 






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(c)Other Documents.
The Seller shall have received from the Purchaser any such other documents or other materials as the Seller may reasonably request
to consummate the transactions contemplated herein.


 


ARTICLE VIII


SURVIVAL AND INDEMNIFICATION


 


SECTION 8.1. Survival.
All representations, warranties, covenants and agreements contained in this Agreement and the Related Documents shall be deemed
to have been relied upon by the parties hereto, and shall survive the Closing; provided that any such representations, warranties,
covenants and agreements shall be fully effective and enforceable only for a period of three (3) years following the Closing Date,
and shall thereafter be of no further force or effect, except that the representations and warranties set forth in Section 3.12
(Employee Benefit Plans; Labor Relations), Section 3.13 (Taxes) and Section 3.14 (Environmental Matters) and the
indemnification obligations of any party hereto in respect of any misrepresentations or related warranties to which such party
had knowledge prior to the Closing, shall survive indefinitely. Additionally, the parties agree that the indemnification obligations
set forth in this Article VII shall survive with respect to any Existing Litigation and as to any claims made within the applicable
survival period until finally resolved. The representations, warranties, covenants, and agreements contained in this Agreement
or in any certificate, schedule, document, or other writing delivered by or on behalf of any party pursuant hereto shall not be
affected by any investigation, verification, examination or knowledge acquired or capable of being acquired by any other party
hereto or by any person acting on behalf of any such other party.


 


SECTION 8.2. Indemnification
of the Purchaser. From and after the Closing, the Seller and Sarlitt, jointly and severally agree to indemnify, defend
and hold harmless the Purchaser and the Parent and their respective directors, officers, employees, owners, agents and affiliates
and their successors and assigns or heirs and personal representatives, as the case may be (each a “Purchaser Indemnified
Party”) from and against, and to promptly pay to or reimburse a Purchaser Indemnified Party for, any and all losses,
damages and expenses (including, without limitation, reasonable attorneys' and other advisors' fees and expenses), suits, actions,
claims, deficiencies, liabilities or obligations (collectively, the “Losses”) sustained by such Purchaser
Indemnified Party relating to, caused by or resulting from: (a) any misrepresentation, breach of warranty, or failure to fulfill
or satisfy any covenant or agreement made by the Seller; (b) the operations and business of the Seller through the Closing Date,
to the extent such Losses do not constitute Assumed Liabilities; (c) any prepaid expenses or accounts payable as set forth in Section
2.5 hereof; and (d) the Excluded Liabilities.


 


SECTION 8.3. Indemnification
of the Seller. From and after the Closing, the Purchaser agrees to indemnify, defend and hold harmless the Seller and its
directors, officers, employees, owners, agents and affiliates and their successors and assigns or heirs and personal representatives,
as the case may be (each, a “Seller Indemnified Party”) from and against, and to promptly pay to or reimburse
a Seller Indemnified Party for, any and all Losses sustained by such Seller Indemnified Party relating to, caused by or resulting
from: (a) any misrepresentation, breach of warranty, or failure to fulfill or satisfy any covenant or agreement made by the Purchaser
contained herein or in any of the Related Documents; (b) the operation of the Business solely by the Purchaser after the Closing;
and (c) the Assumed Liabilities.


 


SECTION 8.4. Indemnification
Procedure for Third Party Claims Against Indemnified Parties.


 


(a)Notice.
With respect to any matter for which indemnification is claimed pursuant to Section 8.2, the Purchaser Indemnified Party
will notify the Seller in writing promptly after becoming aware of such matter. With respect to any matter for which indemnification
is claimed pursuant to Section 8.3, the Seller Indemnified Party will notify the Purchaser in writing promptly after becoming
aware of such matter. A failure or delay to promptly notify an indemnifying party of a claim will only relieve such indemnifying
part of its obligations pursuant to this Section 8 to the extent, if at all, that such party is prejudiced by reason of
such failure or delay.


 






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(b)Defense of
Claim. Promptly after receipt of any notice pursuant to Section 8.4, the indemnifying party shall defend, contest, settle,
compromise or otherwise protect the indemnified party against any such claim for Losses at its own cost and expense. Each indemnified
party will have the right, but not the obligation, to participate, at its own expense, in the defense by counsel of its own choosing;
provided, however, that the indemnifying party will be entitled to control the defense unless the indemnified party has relieved
the indemnifying party in writing from liability with respect to the particular matter. The indemnified party shall reasonably
cooperate with the indemnifying party’s requests, and at the indemnifying party’s expenses (including, but not limited
to, indemnifying party’s paying or reimbursing the indemnified party’s reasonable attorneys’ fees and investigation
expenses), concerning the defense of the claim for Losses. The indemnifying party shall include the indemnified party in any settlement
discussions.


 


(c)Failure to
Defend. If the indemnifying party does not timely defend, contest or otherwise protect against a claim for Losses after receipt
of the required notice, the indemnified party will have the right, but not the obligation, to defend, contest or otherwise protect
against same, make any compromise or settlement therefore, and record the entire cost therefore from the indemnifying party, including,
without limitation, reasonable attorneys’ fees, disbursements and all amounts paid as a result of such suit, action, investigation
and Losses.


 


ARTICLE IX


GENERAL PROVISION


 


SECTION 9.1. Amendment
and Modification; Waiver of Compliance. Neither the Purchaser, on the one hand, nor the Seller and Sarlitt, on the
other hand, will be deemed as a consequence of any delay, failure, omission, forbearance or other indulgence of such party:
(i) to have waived, or to be estopped from exercising, any of its rights or remedies under this Agreement; or (ii) to have
modified or amended any of the terms of this Agreement, unless such modification or amendment is set forth in writing and
signed by the party to be bound thereby. No single or partial exercise by the Purchaser or the Seller of any right or remedy
will preclude any other right or remedy, and a waiver expressly made in writing on one occasion will be effective only in
that specific instance and only for the precise purpose for which given, and will not be construed as a consent to or a
waiver of any right or remedy on any future occasion or a waiver of any right or remedy against any other party.


 


SECTION 9.2. Validity.
If any provision of this Agreement or the application of any such provision to any party hereto or any circumstances relating hereto
shall be determined by any court of competent jurisdiction to be invalid and unenforceable to any extent, the remainder of this
Agreement or the application of such provision to such party or circumstances, other than those to which it is so determined to
be invalid and unenforceable, shall not be affected thereby, and each provision hereof shall be validated and shall be enforced
to the fullest extent permitted by Law.


 


SECTION 9.3. Parties
in Interest. This Agreement shall not confer upon any other person any rights or remedies of any nature whatsoever.


 






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SECTION 9.4. Notices.
All notices and other communications hereunder shall be in writing and shall be deemed given upon the earlier to occur of delivery
thereof if by hand or upon receipt or on the second next business day after deposit if sent by a recognized overnight delivery
service or upon transmission if sent by facsimile (in each case with receipt verified) as follows:


 


	If to the Purchaser:	With a copy to:
	
        SpendSmart Networks, Inc.

        805 Aerovista Place, Suite 205

        San Luis Obispo,
        CA 93401

         

         
	
        Seth I. Rubin, Esq.

        Ruskin Moscou Faltischek, P.C.

        1425 RXR Plaza

        East Tower, 15th Floor

        Uniondale, NY 11556

         

	If to the Seller or Bryan Sarlitt, to:	With a copy to:
	
        Bryan Sarlitt

        3200 Rockview Pl.

        San Luis Obispo, CA 93401

         
	
        Linda Somers Smith, Esq.

        Duggan Smith & Heath LLP

        560 Higuera Street, Suite B

        San Luis Obispo, CA 93401



 





provided that each of the parties
hereto shall promptly notify the other parties hereto of any change of address, which address shall become such party's address
for the purposes of this Section 9.4.


 


SECTION 9.5. Governing
Law; Consent to Jurisdiction. This Agreement shall be governed by and construed in accordance with the laws of the State
of California, without regard to the choice of law principles thereof. In the event of a dispute hereunder, there shall be exclusive
jurisdiction in the Federal and State courts with jurisdiction over San Luis Obispo County, California. The party prevailing shall
be entitled to recover its reasonable legal fees and expenses from the party not prevailing.


 


SECTION 9.6. Entire
Agreement. This Agreement, including the Disclosure Schedule, and the Related Documents embody the entire agreement and
understanding of the parties hereto and supersede all prior agreements and understandings between the parties hereto, whether written
or oral, express or implied, with respect to such subject matter herein and therein.


 


SECTION 9.7. Termination.
This Agreement may be terminated and the transactions contemplated hereby may be abandoned:


 


(i)by mutual written
consent of the Purchaser and the Seller;


 


(ii)by the Purchaser
if any of the representations or warranties of the Seller or Sarlitt contained herein are not in all material respects true, accurate
and complete, or if the Seller or Sarlitt breaches any covenant or agreement contained herein in any material respect, and the
same is not cured within 10 days after notice thereof;


 


(iii)by the Seller
if any of the representations or warranties of the Purchaser contained herein are not in all material respects true, accurate and
complete or if the Purchaser breaches any covenant or agreement contained herein in any material respect; and the same is not cured
within 10 days after notice thereof; or


 


(iv)By Purchaser
if (A) the Closing has not occurred by October 1, 2014 and (B) such party has performed all of its obligations hereunder and has
satisfied all of the conditions to Closing to be satisfied for the other party to proceed.


 


Section
9.8. Effect of Termination. In the event of the termination of this Agreement in accordance with this Article, this
Agreement shall forthwith become void and there shall be no liability on the part of any party hereto except: (a) as set forth
in this Article IX and Section 6.7 hereof; and (b) that nothing herein shall relieve any party hereto from liability
for any willful breach of any provision hereof.


 






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Section
9.9. Assignment. The Seller may not assign any of its rights under this Agreement without the prior consent of the Purchaser.
The Purchaser may assign this Agreement without the prior consent of the Seller. Notwithstanding the foregoing, this Agreement
will apply to, be binding in all respects upon, and inure to the benefit of and be enforceable by the respective successors and
permitted assigns of the parties.


 


Section
9.10. Enforceability. If any provision of this Agreement is found to be unenforceable, the balance of this Agreement
shall be deemed enforceable without the provision in questions.


 


Section
9.11. Counterparts. This Agreement may be executed in one or more counterparts, each of which will be
deemed to be an original copy of this Agreement and all of which, when taken together, will be deemed to constitute one and the
same agreement. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a “.pdf”
format data file, such signature shall create a valid and binding obligation of the Party executing (or on whose behalf such signature
is executed) with the same force and effect as if such facsimile or “.pdf” signature page were an original thereof.


 


Section
9.12. Expenses. Except as otherwise expressly provided in this Agreement, each party will bear its respective
expenses incurred in connection with the preparation, execution, and performance of this Agreement and the transactions contemplated
by this Agreement, including, without limitations, all fees and expenses of agents, representatives, counsel, and accountants.


 




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





 





	 	PURCHASER:
	 	 	 
	 	THE SPENDSMART PAYMENTS COMPANY, a California Corporation
	 	 	 
	 	 	 
	 	By:  	/s/ Bill Hernandez
	 	 	Name:  Bill Hernandez 
	 	 	Title:    President
	 	 	 
	 	 	 
	 	PARENT:
	 	 	 
	 	SPENDSMART NETWORKS, INC., a Delaware Corporation
	 	 	 
	 	 	 
	 	By:  	/s/ Alex Minicucci 
	 	 	Name:  Alex Minicucci 
	 	 	Title:    Chief Executive Officer 
	 	 	 
	 	 	 
	 	SELLER:
	 	 	 
	 	TECHXPRESS, INC., a California corporation
	 	 	 
	 	 	 
	 	By:  	/s/ Bryan A. Sarlitt
	 	 	Name:  Bryan A. Sarlitt 
	 	 	Title:    Chief Executive Officer
	 	 	 
	 	 	 
	 	Bryan A. Sarlitt, Individually
	 	 	 
	 	 	 
	 	By:  	/s/ Bryan A. Sarlitt
	 	 	Name:  Bryan A. Sarlitt 







 



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