Document:

INUV-EX10.9_2013.03.31

SUBLEASE

FIRST ORION CORP.    Sublessor

TO

INUVO, INC.    Sublessee

KNOW ALL MEN BY THESE PRESENTS:

First Orion Corp. (the “Sublessor”) does hereby sublease, let and rent unto Inuvo, Inc., a Nevada corporation (the “Sublessee”) for the consideration and upon the terms and conditions hereinafter set forth, the following described lands situated in Faulkner County, Arkansas:

Approximately 5,834 sq. ft. of office space (consisting of Spaces 201-202 (approximately 3,000 sq. ft.), Spaces 207- 208 (approximately 2,690 sq. ft.) and a conference room adjacent to the elevator (approximately 144 sq. ft.)) plus the pro rata share of the common space (bathrooms, break area and corridors) in the Conway Federal Plaza building located at 1111 Main Street in Conway, AR as reflected in the attached Exhibit B (the “Premises”).  For purposes of this Sublease, the sublessee’s pro rata share shall be 47.32% (5,834 of 12,330 rentable square feet on the second floor the Conway Federal Plaza building).

1.    TERM

A.    This sublease shall have a term of twenty four (24) months beginning on the 1st day of March, 2013, and expiring on the 28th day of February, 2015.

B.    This sublease shall not be renewable except by written agreement between Sublessor and Sublessee. Should Sublessee be allowed to remain in possession after termination of this sublease, either in due course or by reason of the breach of any of its provisions by the Sublessee, or should Sublessor accept any rent after such termination, then neither the remaining in possession nor the acceptance of the rent shall be deemed a renewal of this Sublease or a tenancy from year to year, but, on the contrary, the status of the Sublessee shall be deemed that of a tenant-at-will, and the Sublessee will immediately vacate the Premises upon being notified to do so by the Sublessor.

2.    SUBLEASE RATES

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A.    Sublessee shall pay to Sublessor a monthly rental of $8,400 as rentals for the use of said property.  Notwithstanding, Sublessee shall prepay in full the aggregate rent due of the initial term as set forth in Section 1A above, by making a single lump sum payment of $193,200 (the “Lump Sum Payment”).  Sublessee shall make such payment in full not later than March 1, 2013.   This payment is exclusive of all other charges to be paid by Sublessee, including, without limitation, operating expenses set forth in Section.  Any such additional charges will be billed monthly and payable by Sublessee to Sublessor within 30 days of receipt of invoices from Sublessor.  

B.    Time is of the essence and all monthly sublease rentals are to be delivered to Sublessor at 1111 Main Street, Suite 203, Conway, AR 72032or via electronic draft on or before the 1st day of each month beginning March, 2013.

C.    Rent for the Premises for the term herein above specified is payable monthly in advance throughout said term of this Sublease.  Rental payments will be considered to be made on time if received by Sublessor on or before the fifth day of each month.  If rent has not been paid by the fifth of the month in which it is due, a 5% late charge will be assessed.

3.    SECURITY DEPOSIT

A.    No deposit is required as collateral security by Sublessee.

4.    CONDITION AND/OR IMPROVEMENTS TO BUILDING

A.    Sublessee accepts the building as proposed (See Attached Exhibit C), providing Sublessor shall cause all necessary work to be done to provide for the structural integrity of the roof and exterior walls.

B.    Sublessor will provide tenant improvements as per Exhibit D.  Sublessee shall promptly reimburse Sublessor for the cost of such improvements in excess of $22,000.  In the event this Sublease terminates prior to expiration other than due to the breach of this Sublease by Sublessor, in addition to any other amounts due by Sublessee, Sublessee shall pay Sublessor an amount equal to $916.67 times the number of months (whole or partial) remaining between termination date and the end of the initial term of this Sublease, provided, however, the foregoing shall not apply in the event Sublessee has made the Lump Sum Payment.

C.    Sublessor, at its option, will permit Sublessee to provide and pay for its own tenant improvements that are in addition to the tenant improvements set forth in Exhibit D.  Plans and specifications for such improvements must be submitted to Sublessor for approval.

D.    Any outside signage by Sublessee must conform to sign specification guidelines for the building and/or must have written approval from Sublessor prior to any installation. (See Attached Sign Specifications)

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E.    Upon the termination of this Sublease by either expiration of the sublease term or breach by Sublessee, Sublessor shall have the right to retain the Premises as altered, changed or improved by either Sublessee or Sublessor.

5.    OPERATING EXPENSES

A.    Sublessee shall reimburse Sublessor on a monthly basis for its pro rata share utilities and fiber broad band service, without markup. 

B.    Sublessor shall pay for real property taxes and property insurance.

C.    Sublessee shall reimburse Sublessor for maintenance and repair costs of the Premises as outlined in this Sublease. 

D.    Sublessee shall pay its pro rata share of the second floor common area charges allocated to Sublessor under the Prime Lease.  These charges include charges for 2nd floor common area janitorial and maintenance & repair, and elevator maintenance & repair.  Sublessee shall be responsible for cleaning costs associated with its leased space which is not included in any pro rata share of common area charges.  For purposes of this Sublease, Prime Lease means the Lease, dated June 1, 2012, as amended, entered into between Sublessor and Nabholz Properties, Inc. (“Prime Lessor”) whereby Sublessor leases the Premises from Prime Lessor.

E.    Sublessee shall pay its pro rata share of the first floor lobby and overall building & grounds charges allocated to Sublessor under the Prime Lease.  The charges include 1st floor lobby janitorial and maintenance & repair, landscape & parking lot maintenance & repair, and alarm & security charges.

6.    USE OF BUILDING

A.    Said subleased Premises shall, during the life of this Sublease, be used for office space and any legal activities related directly thereto.

B.    Said Premises shall not be put to any use by Sublessee which would produce an increased hazard to said Premises or cause an increase in insurance premiums for insurance coverage on said Premises, without the consent of Sublessor.

C.    Sublessee shall have the quiet and peaceful possession and enjoyment of said lands and improvements during the term of this sublease.

D.    Parking for the building will be provided in the lots adjacent to the building on the east and south side of the building. In addition, public parking is available on the north and west sides of the building. Sublessor reserves the right to assign parking and/or locate parking for tenants in the building within a one block radius. (See Exhibit B)

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7.    RESERVED

8.    PERMITTED SUBLEASE AND THE PRIME LEASE

A.    Sublessor covenants that it is the right and authority to execute this Sublease.

B.    In the event Sublessor enters into an addendum with the Prime Lessor after February 28, 2013 and such addendum provides Sublessor  an abatement of rent, fees, or expenses with respect to all or any portion of the Premises from the Prime Lessor, then Sublessor shall grant a parallel abatement (pertaining to such portion of the Premises) to Sublessee.  

C.    Except as provided herein, Sublessor shall not (A) (1) do anything which would constitute a violation or breach of any of the terms, conditions or provisions of the Prime Lease or  which would cause the Prime Lease to be terminated or forfeited or (2) permit any such violation or breach, or (B) voluntarily cancel or surrender the Prime Lease.

D.    Sublessor shall promptly furnish Sublessee with copies of all notices relating to the Premises which Sublessor receives from Prime Lessor.

E.    Sublessor agrees to pay all rent and other fees and expenses with respect to that portion of the Premises not subleased hereunder according to the terms and conditions set forth in the Prime Lease.

F.    Sublessor hereby represents and warrants to Sublessee that (i) the Prime Lease is in full force and effect as of the date hereof; (ii) Sublessor has received no notice or claim that the Premises do not comply with applicable legal requirements for general office use, (iii) Sublessor has fully performed its obligations under the Prime Lease in all material respects through the date of this Sublease, (iv) to the knowledge of Sublessor, there are no pending claims against Sublessor nor, to the knowledge of sublessor, any facts that would reasonably be expected to give rise to a claim against Sublessor, under the Prime Lease by the counterparties thereto,  (v) there exists no defaults by Sublessor (or any event that, with the giving of notice or the passage of time or both, would constitute a default on the part of Sublessor) under the Prime Lease and (vi) to Sublessor’s  knowledge, there exists no defaults by Prime Landlord (or any event that, with the giving of notice or the passage of time or both, would constitute a default by Prime Landlord) under the Prime Lease. 

9.    HOLD HARMLESS AGREEMENT & INSURANCE REQUIREMENTS

A.    Sublessee assumes all risk of and liability for damages to persons or property arising during the terms of the sublease, in connection with the Premises, or use thereof, and shall indemnify and hold harmless Sublessor and the property of Sublessor, including the subleased Premises, the Prime Lessor and the property of the Prime Lessor (the “Sublessor Indemnitees”) from any and all claims, liability, loss, damage, or expenses resulting from any use or any other 

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occupation and use of the Premises by Sublessee, including, but not limited to, any of such arising by reason of the injury to or death of any person or persons or by reason of damage to any property caused by the condition of the subleased Premises, the condition of any improvements or personal property in, on or about the subleased Premises, or the acts or omissions of the Sublessee of any person in, on or about the areas with the express or implied consent of the Sublessee. Such obligation of the Sublessee to indemnify and hold harmless the Sublessor Indemnitees shall include, but not be limited to, any claim, liability, loss, damage or expense arising by reason of the injury to or death of any agent, officer or employee of the Sublessee, any independent contractor hired by the Sublessee to perform work or render services in, on, or about the Premises, or any agent, officer or employee of any such independent contractor, and any other person from any cause whatsoever, while in, on or about the Premises, streets, alleys, sidewalks or public ways adjacent thereto during the term. Insurance to be provided by the respective indemnitor as hereinafter provided must contain a clause or endorsement specifically affording covering against liability contractually assumed by the Sublessee. The indemnity herein contained is intended to be a complete indemnity against any and all expenses, damages or loss of any kind to the Sublessor, including without limitation, attorney’s fees, court costs and similar expenses incurred in defending against any claim even if groundless.

B.    Sublessee covenants that it will, in the conduct of any business upon said Premises, fully comply with all federal, state, county and local statutes, laws and ordinances pertaining to the conduct of such business; holding Sublessor and the subleased Premises harmless from any and all liability whatever arising from such business activities conducted thereon by Sublessee.

C.    The Sublessee shall carry commercial general liability in the amount of $500,000 each occurrence and $1,000,000 annual aggregate, bodily injury and property damage.

D.    Sublessee shall show Sublessor and the Prime Lessor, as an additional named insured with respect to general liability provision and provide Sublessor with a certificate of insurance stating same.

E.    The Sublessee shall obtain fire legal liability in the amount of $50,000 on Sublessee’s policy.

F.    The Sublessee shall provide hazard insurance for protection of any and all personal property. The Sublessor is not responsible for damage of any kind to Sublessee’s personal property or bodily injury.

G.    Sublessee’s Environmental Representation.  Sublessee represents and warrants to Sublessor that the Premises (including surface water, ground water and any existing improvements) shall not be contaminated with any asbestos, substantial amounts of waste or debris, or contamination, including without limitation:

(a)    Any “hazardous waste” as defined by the Resource Conservation and Recovery Act of 1976, as amended from time to time, and regulations promulgated thereunder;

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(b)    any “hazardous substance” as defined by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended from time to time, and regulations promulgated thereunder; and

(c)    any substance the presence of which on the Premises is prohibited or regulated by any federal, state or local law, ruling, rule or regulation similar or dissimilar to those set forth in this paragraph (collectively referred to as “Hazardous Material”). Sublessee hereby indemnities Sublessor, and its successors and assigns and agrees to hold Sublessor and its successors and assigns harmless from and against any and all losses, liabilities, damages, injuries, penalties, fines, costs, expenses and claims of any and every kind whatsoever (including attorney’s fees and costs) paid, incurred or suffered by, or asserted against, Sublessor, and its successors and assigns, as a result of any claim, demand or judicial or administrative action by any person or entity (including governmental or private entities) for, with respect to, or as a direct or indirect result of the presence on or under of the escape, seepage, leakage, spillage, discharge, emission or resublease from the Premises after the Commencement Date, of any Hazardous Material (including costs, expenses or claims asserted or arising under the Comprehensive environmental Response, Compensation and Liability Act, as amended, and any so-called state or local “Superfund” or “Superlien” law, or any other federal, state or local statue, law, ordinance, code, rule, regulation, order or decree regulating, relating to or imposing liability or standards on conduct concerning any Hazardous Material), regardless of whether or not cause by, or within the control of, the Sublessee.  The representations, warranties and indemnity contained in this section shall survive the execution and recordation this sublease, and shall continue in favor of Sublessor after termination and delivery of possession by Sublessee.

10.    DAMAGE TO BUILDING

A.    Sublessor warrants that the building shall be covered by fire, windstorm and extended coverage insurance and if any improvements upon the subleased Premises shall, at any time during either the primary or any extended term of this Sublease, be so badly damaged by fire, windstorm, or other casualty, without fault therefore on the part of Sublessee which would void the insurance on the Premises, then the rentals coming due hereunder shall abate until such time as said building has been restored to its approximate condition immediately prior to the happening of such casualty.

B.    In the event of a substantial total destruction of said improvements from fire, wind storm, or other casualty, (substantial destruction as herein used means destruction which will cost 20% or more of the value of the improvements prior to destruction to restore such improvements) the Sublessor may, at its sole option, elect to rebuild said improvements, and shall give Sublessee notice of its decision within sixty (60) days after such occurrence.

C.    In the event of such casualty and a decision by the Prime Lessor not to rebuild said Premises, this sublease shall terminate.

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D.    If at the discretion of Sublessor the Sublessee threatens the integrity or value of the building and/or the safety of the property either because of failure to properly maintain the Premises or because of its use of the property, Sublessor will have the right to demand that the situation be remedied and if not remedied within 15 days, Sublessor shall have the right to terminate the sublease.

E.    Sublessee agrees to obtain written approval from Sublessor prior to the removal of any fixture or improvement from the subleased Premises. Furthermore, Sublessee agrees to repair any damage caused by the removal of any fixture or improvement from the subleased Premises.

11.    DEFAULT AND LATE PAYMENT

A.    In the event any rental payments coming due hereunder be not paid timely paid when due, or if, at any time during the primary or any extended term of this sublease the Sublessee should be declared bankrupt or insolvent, either voluntarily or involuntarily the Sublessor shall have the right to declare this sublease terminated and Sublessee shall immediately surrender possession of said subleased Premises.

B.    If the Sublessor is required to incur any expenses including legal fees in the enforcement of this agreement, the Sublessee will be responsible for and will reimburse the Sublessor for such expenses.

C.    The failure of the Sublessor or Sublessee to insist upon the strict and literal performance of any agreement or condition herein or to exercise any option retained or granted by reason of a default by the Sublessee shall not constitute a waiver of the Sublessor’s right thereafter to insist upon and enforce full performance of such conditions and agreements.

D.    Time is of the essence of each of the agreements and conditions herein to be performed by the Sublessee. The failure of Sublessor to insist upon performance of any of the agreements and conditions herein in any one or more instances shall not be a waiver of the right thereafter to insist upon full and complete performance of such agreements and conditions. Receipt by the Sublessor of rent with knowledge of the breach of any of the agreements and conditions hereto shall not be deemed a waiver of such breach.

E.    On termination of this sublease in due course, Sublessee agrees to surrender possession of the subleased Premises without demand.  Failing to do so, Sublessee will, in addition to the damages generally recoverable, be liable to Sublessor for all damages Sublessor may sustain, including claims made by any succeeding tenant against subleased Premises to the succeeding tenant.

F.    In the event of a breach of any of the terms or conditions hereof by Sublessee, Sublessor may:

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(a)    Take possession of the subleased Premises and sublease the same for the account of the Sublessee upon such terms as may be acceptable to Sublessor, and apply the proceeds received from such leasing, after paying the expenses thereof, toward the payment of the rent which the Sublessee herein is obligated to pay and collect the balance thereof from Sublessee; or

(b)    Take possession of the subleased Premises and collect from the Sublessee all damages sustained by reasons of such breach; or

(c)    Pursue any remedy or remedies which may be available at law or in equity.

G.    In the event of a breach of any of the terms or conditions hereof by Sublessor, Sublessed may pursue any remedy or remedies which may be available at law or in equity,

12.    RIGHT OF WAY

A.    Sublessor shall have the right to enter upon the subleased Premises at reasonable times and under reasonable conditions for the purpose of inspecting the same.

13.    ASSIGNMENTS OF SUBLEASE

A.    This Sublease shall not be assigned, nor shall the subleased Premises or any portion thereof be sublet without the written consent of Sublessor.

14.    REQUIRED ALTERATIONS

A.    In the event any changes, alterations or additions are required by any law, ordinance or regulation of the fire department or board of health, or other regulatory agency of any government, then the costs of such change, alterations or additions shall be paid by the Sublessee.

15.    INTERPRETATION OF SUBLEASE

A.    “Eminent Domain.  If the subleased Premises be subject to any eminent domain proceedings, the sublease shall terminate if all of the subleased Premises are taken or if the portion taken is so extensive that the residue is wholly inadequate for Sublessee's purposes.  If the taking be partial, then Sublessee’s rental shall be reduced in the proportion which the space bears to the space originally subleased. In such condemnation proceedings, Sublessee may claim compensation for the taking of any removable installations which by the terms of this sublease Sublessee would be permitted to remove at the expiration of this sublease, but Sublessee shall be entitled to no additional award, it being agreed that all damages allocable to full fee simple ownership of the entire subleased Premises shall in any event be payable to Sublessor.

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B.    The Sublessee shall be held to the most strict interpretation of all terms and conditions contained in this sublease agreement.

C.    This agreement shall become effective upon the date of execution of the last of the parties hereto to execute the same.

EXECUTED THIS ___31___ DAY OF JANUARY, 2013.

Sublessor: FIRST ORION CORP.

By:     /s/ Jeff Stalnaker            
Jeff Stalnaker, CEO

Sublessee: INUVO, INC.

By:     /s/ Trey Barrett                             
Trey Barrett, COO

9ex101.htm

Exhibit 10.1

ASSET SALE, PURCHASE AND TRANSFER AGREEMENT

This Asset Sale, Purchase and Transfer Agreement (this “Agreement”) is made between Great China Mania Holdings, Inc., a Florida corporation (“Seller”), and Yau Wai Hung, an individual residing in Hong Kong (the “Buyer”) on this 6th day of May 2013.

RECITALS:

Seller is a publicly traded corporation with certain specific operations, including the subsidiary Great China Media Limited (the “Business”).

It is therefore agreed as follows:

Definitions.  As used herein, the following terms shall have the following meanings:

	
i.  

	
Assets.  The term “Assets” shall mean all of the rights, properties, and assets used in the conduct of the Business (including, without limitation, the real and personal property, Facility, Contracts, and other items and leases described in Sections 1.1, 1.2, 1.3, and 1.4).

	
ii.  

	
Contracts.  The term “Contracts” shall mean the contracts and leases (except for the long term leases described in Section 1.3), which are described in Sections 1.1 and 1.2 and 1.4.

	
iii.  

	
Closing.  The term “Closing” or “Closing Date” shall have the meaning ascribed to it in Section 3.1.

	
iv.  

	
Material Adverse Effect.  The term “Material Adverse Effect” shall mean events which have an adverse effect in the aggregate which, measured in dollars, exceeds the sum of $15,000.

	
v.  

	
Material Contract.  The term “Material Contract” shall have the meaning ascribed to it in Section 5.3.

	
vi.  

	
Affiliate of Seller.  The term “Affiliate of Seller” shall mean (i) any individual, partnership, corporation, or other entity or person which is owned or controlled directly or indirectly by Seller; (ii) any other individual, partnership, corporation, or other entity or person which controls or is controlled by or under common control with Seller; and (iii) any officer, director, partner, or owner of ten (10) percent or greater equity or voting interest in any such other corporation, partnership, or other entity or person.

	
vii.  

	
Code.  The term “Code” shall mean the Internal Revenue Code of 1986, as amended.

	
viii.  

	
Agreement.  The term “Agreement” shall mean this instrument and all Schedules and Exhibits attached hereto.

1.           SALE, PURCHASE AND TRANSFER OF ASSETS; CONSIDERATION.

Subject to the terms and conditions of this Agreement, and in exchange for good and valuable consideration (the receipt of which is hereby acknowledged) consisting of the Buyer’s assumption of the liabilities of the Business, Seller agrees to sell, transfer and assign and Buyer agrees to purchase and accept on the terms stated herein, all of Seller's right, title and interest in and to the Business and the Business’ Assets, including, without limitation, the following:

 

 

  

  

  

1.1           REAL PROPERTY.  

(a)           Any and all real property of the Business.

(b)           Buildings, Improvements and Easements.   All buildings and improvements, all roads, bridges, permits, servitudes, and easements, owned or leased by the Business or which the Business has a right to use and on or appurtenant to the Properties.

(c)           Other Rights.   All other contracts and rights specifically relating to the Business and operations related thereto including, but not limited to, contracts, contract rights, leases, servitudes, permits, licenses, notifications, approvals and authorizations of governmental bodies, to the extent assignable.

1.2           PERSONAL PROPERTY.   All of the personal property of the Business shall be transferred, sold and assigned to Buyer, including, without limitation, the following (if applicable and in the possession of Seller):

(a)           Records.   Seller's management and other records relating to the Business and other Assets which, in the reasonable judgment and discretion of Seller, are segregated or segregatable by Seller from the overall records of Seller, including but not limited to inventory systems, hardware, software, records, customer lists, computers, office equipment and furniture.

(b)           Mobile Equipment, Machinery and Equipment.   The mobile equipment, machinery, equipment, tools, fixtures and furniture used by Seller exclusively or primarily in connection with the Business as such items listed thereon may have been sold, replaced, deleted or added in the ordinary course of business, together with certificates of title for motor vehicles which are licensed and owned by Seller.

(c)           Office Supplies.  The office supplies and forms, packaging materials and similar miscellaneous tangible personal property used by Seller exclusively or primarily in connection with the Business.

(d)           Contracts.   All rights and obligations under those instruments not related to real property, including the contracts, leases, permits and licenses to the extent the same are assignable, including sales orders and commitments, purchase orders and commitments, agreements and contracts of Seller which relate to work or services to be performed for the Business or Assets.

(e)           All of bank accounts related to the Business, including depository accounts, lockbox and other accounts and deposit books and all cash therein, and all other cash, cash equivalents, and securities, including securities of Affiliates of Seller;

(f)           Pension, retirement savings or other funded employee benefit plan assets of Seller the Business;

 

 

  

  

  

(g)           Minute books, stock ledger records and related corporate records and partnership records related to the Business;

(h)           Any insurance policies, premiums, refunds and proceeds relating to the Business;

(i)           All of Seller's personal property, rights and interests which are related primarily to the headquarters or partnership or corporate management of the Business, including but not limited to the all office equipment, and machinery, fixtures, furniture, office supplies, all computer hardware, software peripherals, computer programs and supplies, and computer licenses relating to the foregoing items, and all other similar personal property, rights and interests located at the Business.

   

1.3           ASSIGNMENT OF CONTRACTS

(a)           Contracts Assignable Without Consent.  Seller agrees to assign or cause to be assigned to Buyer, as of the Closing, all of the rights of Seller under the Contracts that are related to the Business and assignable without consent of any third party and Buyer shall assume, as of the Closing, all obligations of Seller thereunder which arise before, at or after Closing.

(b)           Seller to Use Reasonable Efforts.  Anything in this Agreement to the contrary notwithstanding, Seller shall not be obligated to sell, assign, transfer or convey or cause to be sold, assigned, transferred or conveyed to Buyer, if applicable, any of its rights in and to any of the Contracts without first obtaining all necessary approvals, consents or waivers.  Seller shall use all reasonable efforts, and Buyer shall reasonably cooperate with Seller, to obtain all necessary approvals, consents or waivers, or to resolve any impracticalities of transfer necessary to assign or convey to Buyer, if applicable, each such Contract as soon as practicable; provided, however, that neither Seller nor Buyer shall be obligated to pay any consideration therefor except for filing fees and other ordinary administrative charges which shall be paid by Buyer to the third party from whom such approval, consent or waiver is requested.  Such approvals, consents, and waivers shall be in favor of Buyer.  In the event Seller obtains consent to assignment of a Contract prior to the Closing, Buyer shall assume, as of Closing, all obligations of Seller thereunder which arise before, at or after the Closing, as though no consent was required.

(c)           If Waivers or Consents Cannot be Obtained.  To the extent that any of the approvals, consents or waivers referred to in have not been obtained by Seller as of the Closing, or until the impracticalities of transfer are resolved, Seller shall, during the remaining term of such Contracts, use all reasonable efforts to (i) obtain the consent of any such third party with the filing fees and ordinary administrative charges payable to such third party to be split equally by the parties; (ii) cooperate with Buyer in any reasonable and lawful arrangements designed to provide the benefits of such Contracts to Buyer, so long as Buyer fully cooperates with Seller in such arrangements; and (iii) enforce, at the request of Buyer and at the expense and for the account of Buyer, any rights of Seller arising from such Contracts against such issuer thereof or the other party or parties thereto (including the right to elect to terminate any such Contracts in accordance with the terms thereof upon the request of, and indemnification from, Buyer).

(d)           Non-assignability.   The rights and obligations of either party is not capable of being sold, assigned, transferred or conveyed without the approval, consent or waiver of the issuer thereof or the other party thereto, or any third person (including a government or governmental unit), or if such sale, assignment, transfer or conveyance or attempted assignment, transfer or conveyance would constitute a breach thereof or a violation of any law, decree, order, regulation or other governmental edict, this Agreement shall not constitute a sale, assignment, transfer or conveyance thereof, or an attempted assignment, transfer or conveyance thereof.

 

 

  

  

  

1.4           TRANSFERRING PERMITS AND LICENSES.   Seller will assign, transfer or convey, or cause to be assigned, transferred or conveyed to Buyer at the Closing those permits and licenses, to the extent that any Contract or any claim, right or benefit arising thereunder are held or used by the Seller in connection with the Assets and which can be assigned without having to obtain the consent of any third party with respect thereto.  Seller will cooperate with Buyer in obtaining any third party consents necessary to the assignment or transfer of any other permits or licenses used or held by Seller in connection with the Assets which are so assignable or transferable; however, neither Seller nor Buyer shall be obligated to pay any consideration therefor except for filing fees and other ordinary administrative charges which shall be paid by Buyer to the third party from whom such approval, consent or waiver is requested.  Buyer shall assume, as of Closing, all obligations of Seller arising prior to, at or after Closing under those permits and licenses which can be transferred without having to obtain the consent of any third party and those permits and licenses for which consent to transfer is obtained prior to Closing.  Subsequent to the Closing, to the extent permitted by law, upon ninety (90) days prior written notice, Seller shall have the right to cancel any permits or licenses or any bonds, guarantees or undertakings by Seller applicable to the Assets or the Business to the extent such are not so assigned or transferred to Buyer pursuant to this Section.

1.5.           LIABILITIES ASSUMED BY BUYER; LIABILITY NOT ASSUMED BY BUYER.

(a)           Assumed Liabilities.  Buyer shall, effective as of the Closing and without any further responsibility or liability of or recourse to Seller, or its directors, shareholders, officers, partners, employees, agents, consultants, representatives, successors, transferees or assignees, absolutely and irrevocably assume and shall be liable and responsible for the claims, liabilities, and obligations of Seller with respect to the Business, whether or not occurring or arising prior to, at or after Closing.

          

Without limiting the foregoing, Buyer shall assume the following:

(i)           If applicable, Buyer shall assume the Long Term Leases of the Business and all other Contracts assigned to Buyer pursuant to permits and licenses assigned to Buyer;

(ii)           If applicable, Buyer shall assume the employee matters that include but are not limited to contracts, benefits, stock option plan and other benefits, insurance, health care, dental and other plans related to the Business;

(iii)           If applicable, Buyer shall assume all undertakings of, and liabilities and obligations of Seller included all notes, loans payable, accounts payable and accrued liabilities related to the Business;

(iv)           Trade accounts payable for items purchased and delivered as of the Closing Date, and all accrued expenses of the type set forth or under generally accepted accounting principles should be, accrued at Closing, related to the Business;

(v)           All liabilities and obligations for taxes related to the Business.

 

 

  

  

  

2.           CLOSING

         

2.1           DATE OF CLOSING.    The Closing shall take place at such place and time as the parties may agree in writing, on May 6, 2013, unless an earlier or later date are mutually designated by Seller and Buyer.  The foregoing date is the date on which the Sellers deeds to Buyer are to be recorded immediately prior to the delivery of the Purchase Price to Seller and is referred to in this Agreement as the “Closing” or “Closing Date.”  Seller shall deliver possession of the Assets to Buyer on the Closing Date.

2.2           DOCUMENTS TO BE DELIVERED SELLER.   At or prior to the Closing, Seller shall deliver, or cause to be delivered, the following:

(a)            Documents of transfer, bills of sale, certificates of title and other instruments of transfer, dated the Closing Date, transferring to Buyer title to the Assets.

(b)           Documents evidencing the assignment and assumption of the Contracts to Buyer (together with any third-party consents required for such transfers) and the assignment and assumption of any permits and licenses (together with any third-party consents required for such transfers) not transferred pursuant to Section 3.4(a), and the Assignment, Acceptance, and Assumption Agreement described in Section 1.8;

2.3           DOCUMENTS TO BE DELIVERED BY BUYER.   At or prior to the Closing Date, Buyer shall deliver the following:

(a)           Documents evidencing the assignment and assumption of all Contracts and the assignment and assumption of all permits and licenses transferred by Seller to Buyer pursuant to Section 2.

(b)           A copy of the resolutions of the board of directors of Buyer authorizing the execution, delivery and performance of this Agreement by Buyer.

2.4           TRANSFER TAXES; PRORATION’S.    Buyer shall pay any recording fees, transfer taxes, or sales taxes payable as a result of the sale of the Assets.

3.           CONDUCT OF THE SELLER PENDING CLOSING.

(a)           Between the date hereof and the Closing Date, Seller shall continue to operate the Business in the ordinary course and in a manner reasonably consistent with its present operating plan.  

(b)           Seller will not take any action, (i) the result of which will be to create a Material Adverse Effect on the value of the Assets, or (ii) which is both not reasonably consistent with its normal operating plan and not in the ordinary course of business, except as otherwise set forth in this Section 4.  

(c)

4.           REPRESENTATIONS OF SELLER.    Seller represents to Buyer that:

 

 

  

  

  

4.1           ORGANIZATION, STANDING AND AUTHORITY.    Seller is a corporation organized, existing, and in good standing under the laws of Florida.    

4.2           AUTHORIZATION OF AGREEMENT; AUTHORITY.    The execution, delivery and performance of this Agreement by Seller has been duly authorized by all necessary corporate action of Seller, and this Agreement constitutes the valid and binding obligation of Seller, enforceable in accordance with its terms, except to the extent enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors' rights in general and subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding inequity or at law).  The execution, delivery and performance of this Agreement by Seller will not (a) violate or conflict with the Seller's power and authority; (b) constitute a violation of any law, regulation, order, writ, judgment, injunction or decree applicable to Seller; or (c) subject to the receipt of appropriate consents as specified in this Agreement as of the Closing Date and subject to the provisions of Section 1.6(d), conflict with, or result in the breach of the provisions of, or constitute a default under, any agreement, license, permit or other instrument to which Seller is a party or is bound or by which the Assets are bound.  

4.3           MATERIAL CONTRACTS.     All of the Material Contracts which are to be transferred to Buyer at Closing have not been further modified, or amended.  A Material Contract shall mean a Contract which involves payments, performance of services or delivery of goods by or to Seller after the Closing Date in an amount or value of five thousand dollars ($5,000.00) or more.

4.4           LITIGATION; COMPLIANCE WITH LAWS.     There are no judicial or administrative actions, proceedings or investigations pending or, to the best of Seller's knowledge, threatened, that question the validity of this Agreement or any action taken or to be taken by Seller in connection with this Agreement. There is no claim, litigation, proceeding or governmental investigation pending or, to the best of Seller's knowledge, threatened, or any order, injunction or decree outstanding which, if decided unfavorably, would cause Buyer to incur loss or damage in excess of five thousand dollars ($5,000.00) which has not or will not have been resolved by Seller prior to Closing.

4.5           PERSONAL PROPERTY.     Seller has, or will have on the Closing Date, good and marketable title (which includes leasehold title if applicable) to the personal property to be transferred to Buyer on the Closing Date pursuant to subject to equipment leases, purchase money contracts, and similar security interests to be assumed by Buyer.

4.6           DISCLAIMER OF WARRANTIES AND REPRESENTATIONS FROM SELLER; AS IS; INDEMNITY.

(a)           Personal Property.  Except as otherwise expressly set forth in this Agreement, this Agreement is executed, and the personal property will be transferred, without any warranty of title, either express or implied, and without any express or implied warranty or representation as to the merchantability or fitness for any purpose of any of the equipment or other personal property included in the Assets, and without any other express or implied warranty or representation whatsoever.

(b)           Real Property.   Except as otherwise expressly set forth in this Agreement, this Agreement is executed, and the real property including will be transferred, without any warranty of title, either express or implied, except warranties (if any) contained in the deed(s) conveying the real property included in the Assets, and without any express or implied warranty or representation as to the merchantability of any of the real property included in the Assets, acreage, legal access, operations or encroachments or any other condition affecting the Assets.

 

 

  

  

  

(c)           Disclaimer.  Except as otherwise expressly set forth in this Agreement, the transaction contemplated hereby shall be without any express, implied, statutory or other warranty or representation as to the condition, quantity, quality, fitness for particular purpose, freedom from vices or defects, conformity to models or samples of materials or merchantability of any of the Assets, their fitness for any purpose, and without any other express, implied, statutory or other warranty or representation whatsoever.  In addition, except as otherwise expressly set forth in this Agreement, Seller makes no warranty or representation, express, implied, statutory or otherwise, as to the accuracy or completeness of any data, reports, records, projections information or materials now, heretofore or hereafter furnished or made available to the Buyer in connection with this Agreement including, without limitation, any description of the Assets, pricing assumptions, or the environmental condition of the Assets or the portions affected by the Endangered Species Act or any other materials furnished or made available to Buyer by Seller or its agents or representatives; any and all such data, records, reports, projections, information and other materials furnished by Seller or otherwise made available to Buyer are provided to Buyer as a convenience, and shall not create or give rise to any liability of or against Seller; and any reliance on or use of the same shall be at Buyer's sole risk.

5.           REPRESENTATIONS OF BUYER.     Buyer represents to Seller as follows:

5.1           CONSENTS OF THIRD PARTIES.   The execution, delivery and performance of this Agreement by Buyer will not (a) violate or conflict with the articles of organization or by-laws of Buyer; or (b) constitute a violation of any law, regulation, order, writ, judgment, injunction or decree applicable to Buyer.  

5.2           LITIGATION.    There are no judicial or administrative actions, proceedings or investigations pending or, to the best of Buyer's knowledge, threatened, that question the validity of this Agreement or any action taken or to be taken by Buyer in connection with this Agreement. There is no litigation, proceeding or governmental investigation pending or, to the best of Buyer's knowledge, threatened, or any order, injunction or decree outstanding, against the Buyer that, if adversely determined, would have a material effect upon Buyer's ability to perform its obligations under this Agreement.

6.           FURTHER AGREEMENT OF THE PARTIES.

6.1           ACCESS TO INFORMATION.   Buyer shall have access to information and other Assets for due diligence investigation purposes and to facilitate an orderly transition in the management of those Assets in anticipation of Closing.  In addition, Seller will make available to Buyer its financial statements and shall cooperate and instruct Seller's independent auditors to cooperate, at Buyer's expense, in preparing the financial statements which Buyer will, or such Designee may, be required to file with the Securities Exchange Commission.

6.2           NOTICE OF CHANGES AND EVENTS.     Each party shall promptly notify the other party in writing, and furnish to such party any information that such party may reasonably request, with respect to the occurrence of any event or the existence of any state of facts that would (i) result in the party's representations and warranties not being true if they were made at any time prior to or as of the Closing Date, or (ii) impair the party's ability to perform its obligations under this Agreement.

6.3           EXPENSES.  Except as otherwise specifically provided in this Agreement, Buyer and Seller shall bear their own respective expenses incurred in connection with this Agreement and in connection with all obligations required to be performed by each of them under this Agreement.

 

 

  

  

  

6.4           PUBLICITY.   Buyer and Seller shall consult with each other before issuing any public announcement or press release concerning the transactions contemplated by this Agreement and, except as may be required by applicable law or regulation or rule of any stock exchange or organized securities market on which the securities of Buyer or Seller's securities listed or traded, will not make a public announcement or issue a press release prior to such consultation.  If Buyer or Seller is so required to make a public announcement or issue a press release such party shall use its best efforts to inform the other party hereto prior to making or issuing it.

6.5           PRESERVATION OF RECORDS.

(a)           Buyer agrees that, without expense to Seller, Buyer (i) shall preserve and keep the records and (b) shall give Seller reasonable access to such records and to personnel during regular business hours if needed for any bona fide purpose.

(b)           Buyer agrees that Buyer shall not destroy the records described in Subsection (a).

         

6.6           CONFIDENTIALITY.   Seller and Buyer hereto covenant and agree that the terms and provisions of this Agreement and all information and data obtained in connection with this Agreement shall be treated as Confidential.  If this Agreement is terminated for any reason, the foregoing covenant shall survive the termination; if this Agreement is not so terminated, then the foregoing covenant shall be deemed terminated at Closing.

              

6.7           TERMINATION.     This Agreement shall be terminated at any time prior to the Closing:

(a)           by mutual written agreement executed by Seller and Buyer; or

                  

(b)           by either party if applicable law prohibits the consummation of the sale and purchase of the Assets pursuant to this Agreement or if, at the Closing Date, any action, proceeding or investigation shall have been instituted or threatened in writing by any governmental agency seeking to enjoin, restrain, prohibit, impose material conditions upon or obtain substantial damages in respect of, the transactions contemplated by this Agreement.

7.           DEFAULT; REMEDIES; ARBITRATION.

            

7.1           DEFAULT; REMEDIES.     Time is of the essence of this Agreement. If either party fails or refuses to carry out this Agreement according to its terms, the other party shall be entitled to the remedies set forth below.

7.2           ARBITRATION.     This Agreement shall not be subject to termination except as specifically provided in this Agreement.  Any question, controversy or claim arising under or relating to this Agreement, including without limitation any such matter pertaining to an alleged event having a Material Adverse Effect or any adjustment of the Purchase Price, or for any breach hereof, shall be settled by arbitration in accordance with the rules of the American Arbitration Association and the provisions of the laws of Florida relating to arbitration, as said rules and laws are in effect on the date of this Agreement.  The arbitration shall be conducted in Florida, by and before a single arbitrator, who is experienced in the problem or problems in dispute, to be agreed upon by the Seller and Buyer, or if they are unable to agree upon an arbitrator within ten (10) days after written demand by either party for arbitration, then, at the written request of either party, the arbitrator shall be appointed by the American Arbitration Association, Proceedings to obtain a judgment with respect to any award rendered hereunder shall be undertaken in accordance with the law of the State of Florida including the conflicts of laws provisions thereof.

 

 

  

  

  

            Each party shall pay one-half of the arbitrator's fees and expenses.  Upon application to the arbitrator, the parties shall be entitled to limited discovery, including only exchange of documents and only depositions on such terms as the arbitrator may allow for purposes of fairness and to reduce the overall time and expense of the arbitration.

8.           INDEMNIFICATION AND RELATED MATTERS.

8.1           INDEMNIFICATION.

(a)           Buyer agrees to save, defend, indemnify and hold Seller and its officers and directors, parents, subsidiaries, affiliates, predecessors, successors and assigns (and their respective officers, directors, employees and agents) harmless from and against any loss, claims, liabilities, damages, costs and expenses, including attorneys’ fees incurred with respect to third parties (“Damages”) resulting from, based upon, or arising out of:

(i)  any breaches, occurring before, at or after Closing, of Contracts, Long Term Leases, permits, licenses, and all other agreements and obligations transferred or assigned to Buyer;

(ii)  the operation, management or condition  of the Assets or Business or, whether arising before, at or after the Closing, excluding only those matters covered by Section 8 above; and

(iii)  all matters assumed by the Buyer pursuant to any and all provisions of this Agreement or any related agreement.

(iv)  all actions, claims, suits, proceedings, demands, assessments, judgments, costs and expenses, including attorneys' fees (incurred with respect to third parties), with respect to the foregoing.

8.2           DETERMINATION OF DAMAGES; CLAIMS.     In calculating any amounts payable to Seller pursuant to Section 9 (a), Buyer shall receive credit for (i) any reduction in tax liability as a result of the facts giving rise to the claim for indemnification, and (ii) any insurance recoveries.

           

9.           MISCELLANEOUS.

              

9.1           FINDERS.  Buyer and Seller respectively represent and warrant that they have not employed or utilized the services of any broker or finder in connection with this Agreement or the transactions contemplated by it.  Buyer shall indemnify and hold Seller harmless from and against any and all claims for brokers' commissions made by any third party as a result of this Agreement and transactions contemplated hereunder to the extent that any such commission was incurred, or alleged to have been incurred, by, through or under Buyer.

 

 

  

  

  

9.2           ENTIRE AGREEMENT. This Agreement (contains, and is intended as, a complete statement of all of the terms of the arrangements between the parties with respect to the matters provided for, supersedes any previous agreements and understandings between the parties with respect to those matters, and cannot be changed or terminated orally.

9.3           GOVERNING LAW.  Seller and Buyer each hereby consent to personal jurisdiction in any action brought with respect to this Agreement and the transactions contemplated hereunder in Florida and to the arbitration described in Section 8 of this Agreement shall be governed by and construed in accordance with the law of the State of Florida.

9.4           NOTICES.   All notices and other communications under this Agreement shall be in writing and shall be deemed given when delivered personally or mailed by registered mail, return receipt requested, to the parties at the following addresses (or to such address as a party may have specified by notice given to the other party pursuant to this provision):

            If to Buyer to:

Yau Wai Hung

203 HANKOW CENTER

 5-15 HANKOW ROAD

TSIMSHATSUI

KOWLOON K3 00000

       

            If to Seller, to:

Great China Mania Holdings, Inc.

SUITE 1902, 19TH FLOOR

KODAK HOUSE II

QUARRY BAY

9.5           SEVERABILITY.   The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement which shall remain in full force and effect.

 

9.6           FURTHER ASSURANCES AND ASSISTANCE.     Buyer and Seller agree that each will execute and deliver to the other any and all documents, in addition to those expressly provided for herein, that may be necessary or appropriate to effectuate the provisions of this Agreement, whether before, at or after the Closing.  Seller agrees that, at any time and from time to time after the Closing, it will execute and deliver to Buyer such further assignments or other written assurances as Buyer may reasonably request to perfect and protect Buyer's title to the Assets.

9.7           SURVIVAL.   The terms, covenants, agreements, representations and warranties contained in or made pursuant to this Agreement together with all indemnities and undertakings contained herein shall survive the Closing, subject to the time limits specified herein, if any, delivery of the Purchase Price and delivery and/or recordation of the instruments of conveyances and assignment, bills of sale, assignments of contract rights and other closing documents, and shall not be deemed to have been merged in any of the documents delivered at the Closing, irrespective of any investigation made by or on behalf of any party.

 

 

  

  

  

9.8           WAIVER.     Any party may waive compliance by another with any of the provisions of this Agreement.  No waiver of any provision shall be construed as a waiver of any other provision.  Any waiver must be in writing and signed by the party waiving such provision.

 

9.9           BINDING EFFECT; ASSIGNMENT.   This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and permitted assigns.  Except as expressly set forth herein, nothing in this Agreement shall create or be deemed to create any third party beneficiary rights in any person or entity not a party to this Agreement, including any such person or entity asserting rights as a third party beneficiary with respect to environmental matters.  No assignment of this Agreement or of any rights or obligation hereunder may be made by either party (by operation of law or otherwise) without the prior written consent of the other and any attempted assignment without the required consent shall be void; provided, however, that no such consent shall be required of Buyer to assign its rights under this Agreement to one or more Designees, but no such assignment by Buyer of its rights or obligations hereunder shall relieve Buyer of any of its obligations to Seller under this Agreement.  Further, no such consent shall be required of Seller to assign its rights or obligations under this Agreement to one or more Affiliates of Seller, but no such assignment by seller of its rights or obligations hereunder shall relieve Seller of any of its obligations to Buyer hereunder.

9.10           COUNTERPARTS.   This Agreement may be executed in counterparts, each of which shall be an original, but which together shall constitute one and the same Agreement.

9.11           NO RECORDATION.   Neither this Agreement nor a memorandum hereof shall be recorded in any jurisdiction or public record.  

9.12           TRANSITIONAL SERVICES.    At the request of Seller, Buyer will continue to provide accounting, payroll, and general administration services to Seller for a reasonable period of time after the Closing on a basis consistent with past practice.  

       

9.13           NO PRESUMPTIONS.   This Agreement is a result of negotiations between Seller and Buyer, both of whom are represented by counsel of their choosing.  No presumption shall exist in favor of either party concerning the interpretation of the documents constituting this Agreement by reason of which party drafted the documents.

 

 

  

  

  

 

 

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

	
SELLER

	  	
BUYER

	
 

 

GREAT CHINA MANIA HOLDINGS, INC.

 

 

 

/s/  Kwan Yin Roy Kwong

	  	
 

 

 

 

 

 

/s/  Yau Wai Hung

	
Name:

	
Kwan Yin Roy Kwong

	  	
Name:

	
Yau Wai Hung

	
Title:

	
Chief Executive Officer

	  	  	  
	  	  	  	  	  

 

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