Document:

ex10-1.htm

Exhibit 10.1

 

 

 

 

Fourth Amendment

to Loan Agreement

 

Borrower:     Accelerize Inc. 

Date:             June 24, 2015

 

 

THIS FOURTH AMENDMENT TO LOAN AGREEMENT is entered into between SQUARE 1 BANK (“Lender”) and the borrower named above (“Borrower”).

 

The Parties agree to amend the Loan and Security Agreement between them, dated March 17, 2014 (as amended, the “Loan Agreement”), as follows, effective as of the date hereof. Capitalized terms used but not defined in this Amendment shall have the meanings set forth in the Loan Agreement.

 

1.     Credit Limit. Section 1 of the Schedule is hereby amended in its entirety to read as follows:

 

“1. CREDIT LIMIT 

	
               (Section 1.1)
	
An amount not to exceed the lesser of (a) and (b) below (the ‘Credit Limit’):

	
 
	
(a)
	
a total of $6,000,000 at any one time outstanding (the ‘Maximum Credit Limit’); or

	
 
	
(b)
	
Three and One-Quarter (3.25) times (an ‘Advance Rate’) an amount equal to the average trailing three-month Recurring Revenue of Borrower minus the average trailing three-month Recurring Revenue Churn of Borrower, provided however, that such Advance Rate shall automatically decrease from Three and One-Quarter (3.25) to Three (3.00) on September 1, 2015.

	 	Lender may, from time to time, adjust the Advance Rate, in its Good Faith Business Judgment, upon notice to the Borrower, based on issues or factors relating to the Accounts or other Collateral or Borrower. 
	 	
As used herein, ‘Recurring Revenue’ means revenue generated by Borrower from license fees and transactional fees (not including set-up or similar fees). Recurring Revenue shall be determined based on the most recent Borrowing Base Certificate provided to Lender (provided that if a Borrowing Base Certificate is not provided to Lender when due, or if a Borrowing Base Certificate is inaccurate, then the amount in clause (b) above shall be determined by Lender in its Good Faith Business Judgment).

	 	
As used herein, ‘Recurring Revenue Churn’ means, for any month of calculation, the greater of (i) an amount equal to the prior month’s Recurring Revenue minus the current month’s Recurring Revenue from the prior month’s customer base; or (ii) zero.

 

 

 

 

 

	 	Ancillary Services
	 	
Sublimit:
	
$500,000.”

2.     Minimum Liquidity Covenant. That portion of Section 5 of the Schedule which currently reads:

 

	 	
“Minimum Liquidity:
	
Borrower shall maintain total Liquidity of no less than $1,000,000 at all times.” 

 

is hereby amended in its entirety to read:

 

	 	
“Minimum Liquidity:
	
Borrower shall not be required to maintain total Liquidity of any amount, provided however, that beginning September 1, 2015, Borrower shall be required maintain total Liquidity of no less than $1,000,000 at all times.” 

 

3.     Fee. In consideration for Lender entering into this Amendment, Borrower shall concurrently pay Lender a fee in the amount of $2,000, which shall be non-refundable and in addition to all interest and other fees payable to Lender under the Loan Documents. Lender is authorized to charge said fee to Borrower’s loan account or any of Borrower’s deposit accounts with Lender. 

 

4.     Representations True. Borrower represents and warrants to Lender that all representations and warranties set forth in the Loan Agreement, as amended hereby, are true and correct, other than any representations or warranties which Borrower, prior to the date of this Amendment, has advised Lender in writing (including via electronic communication) are no longer true and correct, including but not limited to: (i) with respect to Section 3.2 of the Loan Agreement, the change of Borrower’s name, effective October 10, 2014; and (ii) with respect to Section 3.10 of the Loan Agreement, that certain letter from Lewis Silkin dated February 19, 2015 in regards to Cake Marketing UK Ltd., that certain Complaint by Jeff McCollum against Accelerize Inc., filed on February 23, 2015 in Orange County Superior Court, that certain Complaint by Accelerize Inc. against Jeff McCollum, filed on February 23, 2015 in Orange County Superior Court and that certain Cross-Complaint by Jeff McCollum against Accelerize Inc., filed on May 29, 2015 in Orange County Superior Court. 

 

 

 

 

 

5.     No Waiver. Nothing herein constitutes a waiver of any default or Event of Default under the Loan Agreement or any other Loan Documents, whether or not known to Lender. 

 

6.     General Release. In consideration for Lender entering into this Amendment, Borrower hereby irrevocably releases and forever discharges Lender, and its successors, assigns, agents, shareholders, directors, officers, employees, agents, attorneys, parent corporations, subsidiary corporations, affiliated corporations, affiliates, participants, and each of them (collectively, the “Releasees”), from any and all claims, debts, liabilities, demands, obligations, costs, expenses, actions and causes of action, of every nature and description, known and unknown, which Borrower now has or at any time may hold, by reason of any matter, cause or thing occurred, done, omitted or suffered to be done prior to the date of this Amendment (collectively, the “Released Claims”). Borrower hereby irrevocably waives the benefits of any and all statutes and rules of law to the extent the same provide in substance that a general release does not extend to claims which the creditor does not know or suspect to exist in its favor at the time of executing the release, and, without limiting the foregoing, and without limiting the stipulation to governing law set forth in the Loan Agreement, and ratified and confirmed herein, Borrower irrevocably waives any benefits it may have under California Civil Code Section 1542 which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Borrower represents and warrants that it has not assigned to any other Person any Released Claim, and agrees to indemnify Lender against any and all actions, demands, obligations, causes of action, decrees, awards, claims, liabilities, losses and costs, including but not limited to reasonable attorneys' fees of counsel of Lender’s choice and costs, which Lender may sustain or incur as a result of a breach or purported breach of the foregoing representation and warranty. 

 

7.     General Provisions. Borrower hereby ratifies and confirms the continuing validity, enforceability and effectiveness of the Loan Agreement and all other Loan Documents. This Amendment, the Loan Agreement, the prior written amendments to the Loan Agreement signed by Lender and Borrower, and the other written documents and agreements between Lender and Borrower, set forth in full all of the representations and agreements of the parties with respect to the subject matter hereof and supersede all prior discussions, representations, agreements and understandings between the parties with respect to the subject hereof. Except as herein expressly amended, all of the terms and provisions of the Loan Agreement, and all other documents and agreements between Lender and Borrower shall continue in full force and effect and the same are hereby ratified and confirmed. Without limiting the generality of the foregoing, the provisions of all subsections of Section 9 of the Loan Agreement (titled “General Provisions”), including without limitation all provisions relating to governing law, venue, jurisdiction, dispute resolution, and the waiver of the right to a jury trial, shall apply equally to this Amendment, and the same are incorporated herein by this reference.

 

[Signatures on Next Page]

 

-2

 

 

 

 

	
Borrower:
	
 
	
Lender:
	
 

	
Accelerize Inc.
	
 
	Square 1 Bank	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
 
	
 
	
 
	
 
	
 
	
 

	
By
	
/s/ Michael Lin
	
 
	
By
	
/s/ Lauren Cosentino
	
 

	
Title
	
CFO
	
 
	
Title
	
Account Executive
	
 

 

 

[Signature Page – Fourth Amendment to Loan Agreement]Exhibit 10.22 

   

   

 AMENDMENT
NO. 1 TO ESCROW AGREEMENT 

 Reference
is made to the Escrow Agreement (Public Offering) (the “Agreement”) made the 19th day of June, 2015 among
DelMar Pharmaceuticals, Inc. (the “Issuer”), the Placement Agent whose name and address appears on the Information
Sheet attached thereto and Continental Stock Transfer & Trust Company, 17 Battery Place, 8th Floor, New York, NY
10004 (the “Escrow Agent”). 

 The
parties hereby agree that the Agreement shall be amended to replace the references in paragraphs 3 and 4 of Exhibit A thereto
to “$5,000,000” with “$2,500,000.” All other provisions of the Agreement shall remain unaffected by the
terms hereof. 

 This
Amendment may be signed in any number of counterparts, each of which shall be an original and all of which shall be deemed to
be one and the same instrument, with the same effect as if the signatures thereto and hereto were upon the same instrument. A
facsimile signature shall be deemed to be an original signature for purposes of this Amendment. 

 IN
WITNESS WHEREOF, the parties have executed this Amendment as of June 30, 2015. 

   

	   	 DELMAR
                                         PHARMACEUTICALS, INC. 

         By:
        ____________________________

        Name:

        Title:

        

        MAXIM GROUP LLC 

	   	 By:
    ____________________________ 

    Name: 

    Title: 
	   	 CONTINENTAL
    STOCK TRANSFER & TRUST COMPANY  

    

    

    By: ____________________________

    Name: 

    Title:Exhibit 10.1

EXHIBIT 10.1

 

AGREEMENT
AND PLAN OF MERGER

 

This Agreement and Plan
of Merger (the  "Agreement") is made and  entered into  as
 of June 26, 2015 by Indaba
Group, LLC, a Colorado limited liability company, which has a mailing
address at 2854 Larimer Street, Denver, CO 80205
("Indaba" or "Seller"), Ryan Shields
("Shields"), Blake Gindi ("Gindi"), and Jack Gindi ("Jack Gindi")
(collectively, the "Indaba Members"), and Warp 9, Inc., a Nevada corporation ("Buyer" or "Company"), and Warp 9, Inc., a
Delaware corporation ("Merger Sub"), with respect
to the following facts.  Each of Indaba, Seller, Shields, Gindi, Jack Gindi, the
Indaba Members, Buyer, Company and Merger Sub are sometimes referred to herein
individually as a "Party" and collectively as the "Parties."

 

R E C I T A LS

 

A.        The Indaba
Members own 100% of the membership interests of Indaba.

B.         Indaba is
engaged in the
business of providing digital commerce services the "Business").

 

 C.         The Board of Managers of Indaba and the board of directors of
each of the Merger Sub and the Company have determined that an acquisition of
Indaba by the Buyer is advisable, fair to and in the best interests of their
respective companies, members and stockholders and, accordingly, have each
approved the merger of Indaba with and into Merger Sub (the "Merger"), with the Merger Sub
surviving such Merger as the Surviving Corporation, upon the terms and
subject to the conditions set forth in this Agreement; and

D.        Neither the
Buyer nor the Surviving Corporation shall make, for U.S. federal income tax
purposes, an election pursuant to Section 338 of the Code (or any corresponding
provision of state Law) in connection with the transactions contemplated by
this Agreement.  

 

E.         The Parties
hereto intend that the reorganization contemplated by this Merger Agreement
shall constitute a tax-free reorganization pursuant to Section 368(a)(1) of the
Internal Revenue Code;

NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which are hereby acknowledged by the Parties to this Agreement,
and in light of the above
recitals to this Agreement, the Parties to this Agreement hereby agree as follows:

1.  The Merger.  

Upon Closing as described in Section 4 below, and subject to the terms and
conditions of this Agreement, Indaba shall merge with Merger Sub, and a
Certificate of Merger, in the form attached as Exhibit A, shall be filed with
the Delaware Secretary of State (the time of such filing is referred to
hereafter as the 

1 

"Effective Time").  From and after the Effective Time, the separate
existence of Indaba shall cease and Merger Sub shall continue as the Surviving
Corporation.  The Merger shall have the effects set forth in Section 259 of
the Delaware General Corporation Law.

1.1             
The
Closing. 
The Closing shall take place in accordance with Section 4 below.

1.2          
Merger
Consideration. 
The aggregate consideration to be paid by the Buyer to the Indaba Members in
exchange for and in cancellation of their interests in Indaba as a result of
the Merger (the "Merger
Consideration")
shall be two million dollars ($2,000,000.00) paid in the form of ten thousand
(10,000) shares of the Company's Series A Convertible Preferred Stock (the
"Series A Preferred Stock"), at two hundred dollars ($200.00) per share, which
shall have the rights, preferences and privileges as set forth in a Certificate
of Designation, in the form attached hereto as Exhibit B, to be filed with the
Nevada Secretary of State prior to the Effective Time. Each one (1) share of
Series A Preferred Stock is convertible into ten thousand (10,000) shares of
Common Stock of the Buyer.  With respect to the public resale of the Common
Stock, each Indaba Member shall at all times be subject to the restrictions, conditions and requirements applicable to an affiliate of the Buyer, as described in Rule 144 of the Securities Act of 1933, as amended, even if the Indaba
Members or its assignees and successors are no longer affiliates of the Buyer. 

 

1.3             
Certificate
of Incorporation and By-laws; Officers and Directors.  

(a)               
At
the Effective Time, by virtue of the Merger and without any action on the part
of any Party, the Certificate of Incorporation of the Surviving Corporation
shall be the Certificate of Incorporation of the Merger Sub immediately prior
to the Effective Time, except that the name of the Surviving Corporation set
forth therein shall be changed to Indaba Group, Inc. 

(b)              
At
the Effective Time, by virtue of the Merger and without any action on the part
of any Party, the By-laws of the Surviving Corporation shall be the By-laws of
the Merger Sub immediately prior to the Effective Time, except that the name of
the Surviving Corporation set forth therein shall be changed to Indaba Group,
Inc. 

2.    Covenant to Remain Employees of the Surviving Corporation.

 

As an inducement
to Buyer to enter into and to perform its obligations under this
Agreement, the Indaba Members covenant
to enter into employment
agreements with Buyer in substantially the form attached here as Exhibit C
(each an "Employment Agreement").  In the event that Shields
or Gindi (a "Terminating Seller")
(i) voluntarily resigns as an
employee of the Surviving
Corporation without Good Reason, as defined in his Employment Agreement; (ii)
terminates his employment with the Surviving
Corporation due to death, disability rendering
the Terminating Seller unable to work, or (iii)
is involuntarily terminated as an employee of the Surviving Corporation for cause, as defined in Section 3 below, in each case prior to the two
(2) year anniversary of the Closing, then Buyer will
have the sole right, exercisable at any time within one (1) year
after such termination, to either (i) cause an immediate conversion of all or
any portion of the Terminating Seller's Series A Preferred Stock into shares of
Buyer's Common Stock, or (ii) redeem such shares of Series A Preferred Stock in
cash at a price equal to the liquidation preference then in effect for such
shares; provided, that in the event of any such conversion of the Series A
Preferred Stock, all Common 

2 

Stock issued pursuant to such a conversion will be subject to a two (2) year
lock-up whereby Seller will not be able to transfer, hypothecate, assign or sell
any of those shares for two (2) years after receipt of them.  In any event,
Seller will, with respect to the resale by any of them of any of the shares of
Buyer's common stock issued to them at any time pursuant to any conversion of
any portion of their Series A Preferred Stock, be subject to the restrictions,
conditions and requirements applicable to an affiliate of Buyer under Rule 144
of the Securities Act of 1933, as amended, even if Seller or the Indaba Members
are no longer affiliates of Buyer.

 

3.    Other
Covenants.

 

3.1      Covenant Not to Compete. As a material
inducement for Buyer to enter into this
Agreement, the Indaba Members agree that for
a period of two years following the Closing  (the "Non-Competition Period"), they covenant and agree that each of them shall not, directly or indirectly own, manage, operate, participate in, produce,
represent, distribute and/or otherwise act on behalf of any person, firm, corporation, partnership or other
entity which involves digital commerce services (the "Competitive Business") anywhere within  the
 United  States,  its  possessions  and  territories,  Canada  or
 Mexico (collectively, the "Territory"); or hire any employee or former employee
of Buyer, the Surviving
Corporation or Indaba to
perform services in or involving
the Competitive Business, unless the individual
hired shall have departed Buyer's, the Surviving Corporation's or Indaba's employment at least twelve
(12) months prior
to the hiring.   The Indaba Members further covenant and agree that during the Non-Competition Period, they will not directly or indirectly
solicit or agree to service for their benefit or the benefit
of any third-party, any of Buyer's
or the Surviving Corporation's customers. Notwithstanding the foregoing, nothing in this Section
3.1 shall prohibit them from owning, managing, operating, participating in the operation
of, or advising, consulting or being
employed by any entity that is not involved in the Competitive Business. The Indaba Members acknowledge and agree that Buyer will expend substantial time, talent, effort and money in
marketing, promoting, managing, selling and otherwise
exploiting the businesses Buyer and the
Surviving Corporation operate, in part by virtue of Buyer's acquisition
of the Assets pursuant to this
Agreement, that Indaba Members are all of the members of Indaba,
that they are receiving a substantial
benefit from the transactions contemplated hereunder and that the benefit received
by Buyer and the Indaba Members in agreeing
to be bound by this Section
3.1 are a material part of the consideration for the transactions  contemplated by  this  Agreement.    The  Parties  recognize
that  this  Section  3.1
contains  conditions,  covenants,  and  time  limitations  that  are
 reasonably  required  for  the
protection of the business of the
Surviving Corporation and Buyer.  If any limitation, covenant
or condition shall be
deemed to be unreasonable
and unenforceable by a court or arbitrator of competent
jurisdiction, then this Section 3.1 shall thereupon be deemed to be amended to provide for modification  of  such
 limitation,  covenant  and/or  condition
 to  such
 extent  as  the  court  or
arbitrator shall find to be reasonable
and such modification shall not affect the remainder of this Agreement.   The
Indaba Members acknowledge that, in the event an Indaba Member breaches this Agreement, money  

3 

damages will not be adequate
to compensate Buyer
for the loss occasioned by such breach. The Indaba Members therefore
consent, in the event of such a
breach, to the granting of injunctive or other equitable relief
against the Indaba Members by
any court of competent jurisdiction.          

 

3.2     Indaba and Buyer Boards of Directors.  At or prior to the Closing, to be effective on the Closing, the Parties will execute all documents, resolutions, resignations, appointments
and acceptances in order to cause the Surviving
Corporation Board of Directors to consist of the following
five members at the
Closing: Shields, Gindi, Andrew Van
Noy, Zachary Bartlett and Gregory Boden.  Shields
and Gindi will also be
appointed to the Buyer's
Board of Directors.

 

3.3     Cooperation
on Tax Matters. 
The Parties acknowledge and agree that they intend for the transactions set
forth in this Agreement to be treated as a tax-free reorganization under IRC §
368(a)(1)(A).  From and after the date of this Agreement, each party shall
cooperate fully, as and to the extent reasonably requested by any other party,
in connection with the preparation of tax returns, forms and/or documents
necessary to ensure that the transactions set forth in this Agreement are
treated as a tax-free reorganization under IRC § 368(a)(1)(A).  

 

4.    Closing and Further Acts.

 

4.1       Time and Place of Closing.   Upon satisfaction or waiver of the conditions set forth in this Agreement, the closing of the Transaction (the "Closing") will take place in Santa Barbara,
California at 11:00 a.m. (local time) on the date that
the Parties may mutually agree in writing, but in no event later than September 30, 2015 (the "Closing Date"),
unless extended by mutual written agreement of the
Parties.

 

4.2       Actions at
Closing. At the Closing, the following actions
will take place:

(a)       Buyer will deliver to each of the Indaba Members a
certificate representing their respective shares of Buyer's Series A Preferred
Stock.

 

            (b)      The
Parties shall execute and deliver for filing the Certificate of Merger upon the
Closing.

 

            (c)       Indaba will deliver
to Buyer copies of necessary
resolutions of the
Board of Managers of Indaba authorizing the execution, delivery,
and performance of this Agreement
and the other agreements contemplated by this Agreement, which resolutions have been
certified by an officer
of Indaba as being valid and in full force and effect.

 

            (d)      Buyer will deliver to Indaba copies of corporate
resolutions of the Board of Directors of Buyer authorizing the
execution, delivery  and  performance  of  this Agreement and the other agreements
contemplated by this Agreement, which resolutions
have been certified by an officer
of Buyer as being
valid and in full force and effect.

4 

 

(e)       Indaba  will
 deliver  to  the  Buyer  true
 and  complete  copies  of  Indaba's
Articles of Organization and a Certificate of Good Standing
from the Secretary of State of its state of
domicile, which articles
and certificate of good
standing are dated not more than thirty (30) days prior to the Closing Date.

 

 (f)      Delivery
of any additional documents or instruments as a party may
reasonably request or as may be necessary to evidence
and effect the Merger.

 

4.3       Actions Pre-Closing.  Seller and
the Indaba Members will at all times prior to and after the
Closing cooperate fully with Buyer and Buyer's officers,
directors, representatives,
accountants and lawyers to enable Buyer to conduct thorough due diligence of Indaba and to
enable Indaba to prepare and have audited all financial statements deemed necessary
by Buyer to comply
with all of its reporting
obligations with the Securities and Exchange Commission, including without
limitation the preparation and filing of its Reports on Form 8-K within four (4)
business days after the Closing,
without audited financial
statements, and with audited financial
statements within seventy-one (71) days after the Closing,
subject to the provisions of Section
4.5 of this Agreement.

 

4.4       Actions Post Closing.  The Indaba Members will at all times after the
Closing cooperate fully with Buyer and Buyer's officers,
directors, representatives,
accountants and lawyers to complete the preparation and audit of all financial
statements of Buyer and Indaba deemed necessary
or appropriate by Buyer, and to enable Buyer to
comply with all of its reporting obligations with the Securities and Exchange Commission.

 

4.5       Costs of Financial Audit of Indaba.  Buyer will bear the costs of the 2014 audit of Indaba financial statements, except that Indaba will reimburse Buyer for the total
cost of the audit (not to exceed $25,000), as invoiced by the auditor,
if any of the following events occur: (i) the audit cannot be completed
due to the lack of reasonable cooperation from Seller, the Indaba Members
or Indaba's personnel, or (ii) the audited financials
and records of Indaba are, in the opinion of the certified
auditors, materially and adversely different than those presented
to the Buyer prior to the date of this Agreement,
or (iii) Seller or the Indaba Members refuse to proceed
with the Closing and Buyer is ready, willing and able to proceed
with the Closing, or Seller or the Indaba
Members otherwise materially breach this Agreement. With the
exception of possible audit fee reimbursement, under no
circumstances will either Buyer or Seller or the Indaba Members be
due any termination expenses
in connection with this Agreement. 

 

5.    Representations and Warranties of the
Indaba Members and Seller.

 

Except
as set forth on the Disclosure Schedules, attached hereto as Exhibit D, the
Indaba Members and Seller represent and warrant, jointly and severally, as
of the date hereof, to Buyer as follows:

 

5.1     Power and Authority; Binding
Nature of Agreement.  The Indaba Members and Seller have full power
and authority to enter into this Agreement and to perform their obligations
hereunder. The execution, delivery, and performance of this Agreement by Indaba
have been duly authorized by all necessary action on its part.   Assuming
that this Agreement is a valid and binding obligation of each of the other
Parties hereto, this Agreement is a valid and 

5 

binding obligation of the Indaba Members and Seller, except as may be limited by
bankruptcy, moratorium, insolvency or other similar laws generally affecting the
enforcement of creditors' rights, and the effect or availability of rules of law
governing specific performance, injunctive relief or other equitable remedies
(regardless of whether any such remedy is considered in a proceeding at law or
in equity).

 

5.2    Subsidiaries.   There is no corporation, general
partnership limited partnership, joint venture, association, trust or other
entity or organization that Indaba directly
or indirectly controls or in
which Indaba directly or indirectly owns any equity or other
interest.

 

5.3     Good Standing.  Indaba (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, (ii) has all necessary
power and authority to own its assets and to conduct
its business as it is currently being conducted, and (iii)
is duly qualified or licensed
to do business and is in good standing in every jurisdiction (both domestic and foreign) where such qualification or licensing is required.

 

5.4     Financial Statements.   Indaba has delivered to Buyer the following
unaudited financial statements prior
to the Closing (the "Indaba Financial Statements"):  (i) the unaudited statement of operations and
balance sheet of Indaba for the
calendar year ended December 31, 2013, (ii) the unaudited
statement of operations and balance
sheet of Indaba for the calendar year ended December 31, 2014, and (iii) the unaudited statement of
operations and balance sheet of Indaba for the three (3) months ended March 31,
2015. Except as stated therein or in the notes thereto,
the Indaba Financial Statements: (a) present fairly the financial position
of Indaba as of the respective dates thereof and the results
of operations and changes in financial
position of Indaba for the respective periods covered thereby; and (b) have been prepared
in accordance with Indaba's normal business practices
applied on a consistent basis throughout
the periods covered. Indaba will
cooperate with Buyer to prepare the following audited financial statements
prior to the Closing (the "Indaba Audited Financial Statements"):  (i) the audited statement of operations, statement of cash flows
and balance sheet of Indaba
for the calendar year ended December
31, 2014, and the (ii) audited
statement of operations, statement of cash flows and balance sheet for the calendar year ended December 31, 2013 

 

5.5     Capitalization.  The Indaba Members own 100% of Indaba's
membership interests, and there are no options, warrants or other rights to
acquire any ownership interest in Indaba, except as set forth in this
Agreement.  The existing membership interests were issued to the Indaba Members
in full compliance with all applicable federal, state and local
securities laws and other laws.

 

5.6     Absence of Changes.  Except
as otherwise set forth on Schedule 5.6 hereto or otherwise disclosed to and acknowledged by Buyer in writing prior to the Closing,
since August 31, 2014:

 

(a)       There has not been any material adverse
change in the business, condition, assets,  operations  or  prospects  of
 Indaba  and  no  event  has 

6 

 occurred  that is reasonably likely to have a material adverse effect on
the business, condition, assets, operations or prospects of Indaba.

 

(b)       Indaba has not repurchased, redeemed or otherwise reacquired any of its membership interests or other
securities.

 

(c)       Indaba has not sold or otherwise issued
any of its membership
interests.

 

(d)       Indaba has not amended its articles of organization, operating agreement or other charter or organizational documents, nor has it effected
or been a party to any merger, recapitalization, reorganization or similar transaction.

 

(e)       Indaba
has not formed any subsidiary or contributed any funds or other
assets to any subsidiary.

 

(f)        Indaba has not purchased or otherwise acquired any
material assets, nor has it leased any assets from any other person,
except in the ordinary course
of business consistent with past practice.

 

(g)       Indaba has not made any capital expenditure outside the ordinary course of
business or inconsistent with past practice.

 

(h)       Indaba has not sold or otherwise
transferred any material assets to any other person,
except in the ordinary course of
business consistent with past practice
and at a price equal
to the fair market value
of the assets transferred.

 

(i)        There has not been any material loss, damage or destruction to any of the material properties or Assets of
Indaba (whether or not covered
by insurance).

 

(j)       Indaba has not written off as uncollectible any indebtedness or accounts receivable, except for write offs that were made in the ordinary
course of business consistent with past practice.

 

(k)       Indaba has not leased any assets to any other person except in
the ordinary course of business consistent with past practice
and at a rental rate equal to the fair rental
value of the leased assets.

 

(l)        Indaba has not mortgaged, pledged,
hypothecated or otherwise encumbered any assets, except in the ordinary
course of business consistent with past practice.

 

(m)      Indaba has not entered into any contract, or incurred any debt, liability
or other obligation (whether
absolute, accrued, contingent or otherwise), except for (i) contracts that were
entered into in the ordinary course of business consistent with past practice
and that have terms of less than six (6) 

7 

months and do not contemplate payments by or  to  Indaba  which  will  exceed,
 over  the  term  of  the  contract,  ten  thousand  dollars ($10,000) in
the aggregate, and (ii) current liabilities incurred in the ordinary course of
business consistent with the past practice.

 

(n)       Indaba has not made any loan or advance to any other person, except for
advances that have been made to customers in the ordinary
course of business
consistent with past practice
and that have been properly
reflected as "accounts receivables."

 

(o)       Other than annual raises or bonuses paid or provided consistent with past business practices,
Indaba has not paid any bonus to, or increased
the amount of the salary, fringe benefits or other compensation or remuneration
payable to, any of the managers,
officers or employees of Indaba.

 

(p)       No contract or other instrument to which Indaba
is or was a party or by which
Indaba or any of its assets are or were bound has been amended
or terminated, except in the ordinary
course of business consistent with past practice.

 

(q)       Indaba has not discharged
any lien or discharged or paid any indebtedness, liability or other obligation, except for current liabilities
that (i) are reflected in the Indaba Financial Statements as of March 31, 2015 or have been incurred since March
31, 2015 in the ordinary course of
business consistent with past practice, and (ii) have been discharged or paid
in the ordinary course of business consistent with past practice.

 

(r)        Indaba has not forgiven
any debt or otherwise released
or waived any right
or claim, except in the ordinary
course of business consistent with past practice.

 

(s)     
 Indaba has not changed
its methods of accounting or its accounting practices in any respect.

 

(t)        Indaba has not entered into any transaction outside the ordinary
course of business or inconsistent with past practice.

 

(u)     
 Indaba has not agreed or committed (orally or in writing) to do any of the
things described in clauses (b) through (t) of this Section
5.6.

 

5.7     Absence  of  Undisclosed
 Liabilities.  Indaba  has  no
 debt,  liability  or  other obligation  of  any  nature
 (whether  due  or  to  become 
due  and  whether  absolute,  accrued, contingent or otherwise) that is not reflected or reserved against
in the Indaba Financial Statements as of March 31, 2015,
except for obligations incurred since March
31, 2015 in the ordinary and usual
course of business consistent with past practice.

 

5.8     Indaba Assets.

 

(a)       The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in a breach of the terms and
conditions of, or result in a loss of rights
under, or result
in the creation of any lien,
charge or encumbrance upon, any of its assets (the "Assets").

8 

 

(b)       Indaba has good and marketable
title to the Assets, free and clear of all mortgages, liens, leases, pledges,
charges, encumbrances, equities
or claims, except
as expressly disclosed in writing by Indaba to Buyer prior to the Closing
Date.

 

(c)       Except as reflected in the Indaba
Financial Statements, the Assets  are
 not  subject  to  any  material
 liability,  absolute  or
contingent, which has not been disclosed
by Indaba to and acknowledged by Buyer in writing  prior  to  the  Closing
 Date.

 

(d)     
 Indaba has provided to Buyer in writing an accurate
description of all of the
assets of Indaba or used in the business
of Indaba.

 

(e)       Indaba
has provided to Buyer in writing a list of all contracts, agreements, licenses, leases, arrangements, commitments and other undertakings to which Indaba is a party
or by which it or its property
is bound.   Except as
specified by Indaba to and acknowledged by Buyer in writing
prior to the Closing Date, all of such contracts, agreements, leases,
licenses and commitments are valid, binding
and in full force and effect.  As soon as practicable
after the execution of this Agreement by all Parties,
Indaba will provide Buyer
with copies of all
such documents for Buyer's review.

 

5.9     Compliance with Laws; Licenses
and Permits.  Indaba is not in violation
of, nor has it failed to conduct its business in material compliance with, any applicable federal,
state, local or foreign laws, regulations, rules, treaties, rulings,
orders, directives or decrees.  Indaba has delivered to Buyer a complete and accurate list and provided Buyer with the right to inspect true
and complete copies of all of the licenses, permits,
authorizations and franchises
to which Indaba is subject and all said licenses, permits, authorizations
and franchises are valid and in full force
and effect.   Said licenses, permits,
authorizations and franchises constitute all of the licenses, permits, authorizations  and  franchises  reasonably  necessary  to  permit
 Indaba  to  conduct  its business in the manner
in which it is now being conducted, and Indaba is not in violation or breach
of any of the terms, requirements or conditions of any of said licenses, permits, authorizations or
franchises.

 

5.10     Taxes.
 Except as disclosed herein, Indaba has accurately and completely filed with the
appropriate United States state, local and foreign governmental agencies all tax
returns and reports required to be filed (subject to permitted extensions
applicable to such filings), and has paid or accrued in full all taxes, duties,
charges, withholding obligations and other governmental liabilities as well as
any interest, penalties, assessments or deficiencies, if any, due to, or claimed
to be due by, any governmental authority (including taxes on properties, income,
franchises, licenses, sales and payroll).  (All such items are collectively
referred to herein as "Taxes").  The Indaba Financial Statements fully accrue or
reserve all current and deferred taxes.  Indaba is not a party to any pending
action or proceeding, nor is any such action or proceeding threatened by any
governmental authority for the assessment or collection of Taxes.  No liability
for taxes has been incurred other than in the ordinary course of business.
 There are no liens for Taxes except for liens for property taxes not yet
delinquent.  Indaba is not a 

9 

party to any Tax sharing, Tax allocation, Tax indemnity or statute of
limitations extension or waiver agreement and in the past year has not been
included on any consolidated combined or unitary return with any entity other
than Indaba.  Indaba has duly withheld from each payment made to each person
from whom such withholding is required by law the amount of all Taxes or other
sums (including but not limited to United States federal income taxes, any
applicable state or municipal income tax, disability tax, unemployment insurance
contribution and Federal Insurance Contribution Act taxes) required to be
withheld therefore and has paid the same to the proper tax authorities prior to
the due date thereof. To the extent any Taxes withheld by Indaba have not been
paid as of the Closing Date because such Taxes were not yet due, such Taxes will
be paid to the proper tax authorities in a timely manner.  All Tax returns filed
by Indaba are accurate and comply with and were prepared in accordance with
applicable statutes and regulations.  The Indaba Members and Seller will
cause Indaba to prepare and file all Tax returns and pay all Taxes required
prior to the Closing.  Such Tax returns will be subject to review and approval
by Buyer, which approval will not be unreasonably withheld.

 

5.11     Environmental Compliance Matters.   Indaba has at all relevant times with respect to the Business
or otherwise been in material compliance with all environmental laws, and has received no potentially responsible party notices or similar notices from any governmental
agencies or private parties concerning
releases or threatened releases of any "hazardous substance" as that term is defined under
42 U.S.C. 960(1) (14).

 

5.12     Compensation. Indaba has provided
Buyer with a full and complete list of all officers, directors, employees and consultants of Indaba as of the date hereof,
specifying their names and job designations, their respective current wages,
salaries or other forms of direct compensation, and the basis of such compensation, whether
fixed or commission or a combination thereof.

 

5.13     No Default.

 

(a)       Each of the contracts, agreements or other instruments of Indaba and each
of the  standard  Customer  Agreements  or  contracts  of  Indaba  is  a
 legal,  binding  and
enforceable obligation by or against Indaba, subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium or other similar federal
or state laws affecting the rights of creditors and the effect or availability of rules of law governing specific performance, injunctive relief or other
equitable remedies (regardless of whether any such
remedy is considered in a proceeding at law or in equity).  To
the knowledge of Seller, no party
with whom Indaba has an agreement or contract is in default there under or has breached
any terms or provisions thereof which is material to the conduct
of Indaba's business.

 

(b)       Indaba has performed or is now performing the
obligations of, and Indaba is not in material default (or would by the elapse of
time and/or the giving of notice be in material default) in respect of, any
contract, agreement or commitment binding upon it or its assets or properties
and material to the conduct of its business.   No third party has
raised any claim, dispute or controversy with respect to any of the executed
contracts of Indaba, nor has 

10 

Indaba received notice of warning of alleged nonperformance, delay in delivery
or other noncompliance by Indaba with respect to its obligations under any of
those contracts, nor are there any facts which exist indicating that any of
those contracts may be totally or partially terminated or suspended by the other
Parties thereto.

 

5.14     Product Warranties.   Except as otherwise
disclosed to and acknowledged by Buyer
in the form of a written disclosure
schedule prior to the Closing and for warranties under applicable law, (a) there are no warranties, express
or implied, written or oral, with respect to the
products or projects of  Indaba, (b)  there are no  pending or  threatened claims with respect
to  any such warranty and (c) Indaba has no, and after the Closing Date, will have no, liability
with respect to any such warranty,
whether known or unknown, absolute,
accrued, contingent, or otherwise
and whether due or to become due, other than customary
returns in the ordinary course of business that are fully reserved
against in the Indaba Financial Statements.   In the event that warranty
claims arise after the Closing, the Indaba
Members shall have the right to settle those claims through
Indaba, subject only to a cost of
labor and materials charge without
any mark up.

5.15    Proprietary Rights.

 

(a)       Indaba
has provided Buyer in writing
a complete and accurate list and
provided Buyer with the right to inspect true and complete
copies of all software, patents and applications for patents, trademarks, trade names, service marks, and copyrights, and applications therefore, owned or used by Indaba or in which it has any rights or licenses, except for software used by Indaba and generally available on the commercial market. Indaba has provided Buyer with a complete and accurate description of all agreements or provided Buyer with the right to inspect true and complete
copies of all agreements
of Indaba with each officer, employee
or consultant of Indaba providing Indaba with title and
ownership to patents, patent applications, trade secrets and inventions
developed or used by Indaba
in its business. All of such agreements are valid, enforceable and legally binding,
subject to the effect or availability
of rules of law governing specific
performance, injunctive relief or other equitable
remedies (regardless of
whether any such remedy is considered in a proceeding at law or in equity).

 

(b)       Indaba  owns
 or  possesses
 licenses  or  other  rights  to  use  all  computer
software, software programs, patents, patent applications,
trademarks, trademark applications, trade secrets, service
marks, trade names, copyrights,
inventions, drawings, designs, customer
lists, propriety know-how or information, or other rights with respect thereto (collectively referred to as "Proprietary Rights"), used in the business
of Indaba, and the same are sufficient to conduct
Indaba's business as it has been and is now being
conducted.

 

(c)       The operations of Indaba do not conflict with
or infringe, and no one has asserted to Indaba that such operations conflict
with or infringe on any Proprietary Rights owned, possessed or used by any third
party.  There are no claims, disputes, actions, proceedings, suits or appeal
pending against Indaba with respect to any Proprietary Rights, and none has been
threatened against Indaba.  There are no facts or alleged fact which would
reasonably 

11 

serve as a basis for any claim that Indaba does not have the right to use, free
of any rights or claims of others, all Proprietary Rights in the development,
manufacture, use, sale or other disposition of any or all products or services
presently being used, furnished or sold in the conduct of the business of Indaba
as it has been and is now being conducted.

 

(d)      To the knowledge of Seller, no current employee of Indaba
is in violation of any term of any employment contract, proprietary information and inventions agreement, non-competition agreement,
or any other contract or agreement relating
to the relationship of any such employee with Indaba or any previous employer.

 

5.16     Insurance.  Indaba
has provided Buyer with complete
and accurate copies
of all policies of insurance and provided Buyer with the right
to inspect true and complete
copies of all policies of insurance to which Indaba
is a party or is a beneficiary or named insured
as of the Closing Date.  Indaba has in full force and effect, with all premiums due thereon paid the policies of insurance set forth therein.
 There were no claims in excess of
$10,000 asserted or currently outstanding under any of the insurance
policies of Indaba in respect of
all motor vehicle,
general liability, errors and omissions, workers compensation, and medical
claims during the calendar year ending on December 31, 2013 or December
31, 2014.

 

5.17     Labor Relations.  None of the employees of Indaba are represented by any union or
are parties to any collective bargaining arrangement,
and, to the knowledge of Seller, no attempts
are being made to
organize or unionize any of Indaba's employees.  Except as disclosed
in writing to Buyer prior to
the Closing, to the knowledge of Seller, there is not presently
pending or existing,
and there is not presently
threatened, any material (a) strike,
slowdown, picketing, work stoppage or employee
grievance process, or (b) action, arbitration, audit, hearing, investigation,
litigation, or suit (whether civil, criminal,
administrative, investigative, or informal)
against or affecting
Indaba relating to the alleged violation of any legal requirement pertaining to labor relations
or employment matters.  Indaba is in compliance with all applicable
laws respecting employment and employment practices, terms
and conditions of employment, wages and hours, occupational safety and health and is not engaged in any unfair labor practices.  Indaba is in compliance
with the Immigration Reform and Control Act of 1986.  Except
as disclosed in Schedule 5.17, Indaba has no employment agreements.

 

              5.18    Condition of Premises.  All real property
leased by Indaba
is in good condition and repair,
ordinary wear and tear excepted.

 

5.19   No Distributor Agreements.  Except as
disclosed to and acknowledged by Buyer
in writing prior to the Closing, Indaba is not a party to, nor is the property
of Indaba bound by, any distributors' or manufacturer's representative or agency agreement.

 

5.20   Conflict of Interest Transactions.   No past or present
shareholder, director, officer or employee of Indaba or any of their affiliates (i)
is indebted to, or has any financial, business or contractual relationship or
arrangement with Indaba, or (ii) has any direct or indirect interest in any
property, asset or 

12 

right which is owned or used by Indaba or pertains to the business of Indaba
with the exception of outstanding shareholder loans which will be satisfied and
discharged in full prior to the Closing Date.

 

5.21   Litigation.       There is no
action, suit, proceeding, dispute, litigation, claim, complaint or, to the knowledge of Seller, investigation by or before
any court, tribunal,
governmental body, governmental agency or arbitrator pending or threatened against or with respect
to Indaba which (i) if adversely
determined would have a material adverse effect on the business,
condition, assets, operations or prospects of Indaba,
or (ii) challenges or would challenge any of the actions required to be taken
by Indaba under this Agreement. There exists no basis for any such
action, suit, proceeding, dispute, litigation, claim,
complaint or investigation.

 

5.22   Non-Contravention.  Neither
(a) the execution and delivery
of this Agreement, nor (b) the performance of this Agreement
will: (i) contravene or result in a violation
of any of the provisions of the organizational documents
of Indaba; (ii) contravene or result in a violation of any resolution adopted by the members
or directors of Indaba; (iii) result in a violation
or breach of, or give any person the right to declare (whether
with or without notice or lapse of time)
a default under or to
terminate, any material agreement or other instrument to which  Indaba is a
party or by which Indaba or any of its assets are bound; (iv) give any person the right to accelerate the maturity of any indebtedness or other obligation of Indaba; (v) result in the loss of any license or other
contractual right of Indaba; (vi) result in the loss of, or in a violation
of any of the terms, provisions or conditions of, any
governmental license, permit,
authorization or franchise
of Indaba; (vii) result in
the creation or imposition of any lien, charge, encumbrance or restriction on any of the assets of Indaba; (viii) result in the reassessment or revaluation of any property
of Indaba by any
taxing authority or other governmental authority; (ix) result in the imposition
of, or subject Indaba to any liability for, any conveyance or transfer tax or any similar tax; or (x) result in a violation of any law, rule, regulation, treaty,
ruling, directive, order, arbitration award, judgment or decree
to which Indaba or any of its assets
or any limited liability
interests are subject.

 

5.23     Approvals.   Indaba
has provided Buyer with a complete and accurate list of all jurisdictions in which Indaba is
authorized to do business along with the documentation evidencing such authorization.  No authorization, consent
or approval of, or registration or filing with, any governmental authority
is required to be obtained
or made by Indaba in connection with the
execution, delivery or performance of this Agreement, including the conveyance to Buyer of the Business.

 

5.24     Brokers.  Indaba
has not agreed to pay any brokerage fees, finder's fees or other fees or commissions with respect to the Transaction, and no person is entitled,
or intends to claim that it is entitled, to receive any such
fees or commissions in connection
with such transaction.

 

5.25    Special Government Liabilities.  Indaba
has no existing or pending liabilities, obligations or deferred payments due to
any federal, state or local government agency or entity in connection with its
business or with any program sponsored or funded in whole or in part by any
federal, state or local government 

13 

agency or entity, nor are the Indaba Members or Seller aware of any threatened
action or claim or any condition that could support an action or claim against
Indaba or the Business for any of said liabilities, obligations or deferred
payments.

 

5.26     Sales and EBITDA.  Indaba's
total sales for the year ended December
31, 2014 were in
excess of $1,688,000.00 and EBITDA (defined
below) was approximately $-60,576.26. 
The Indaba Members and the Seller have estimated in good faith that Indaba's
total sales for the six
(6) months ending June 30, 2015 will
be approximately $1,300,000 and EBITDA will be approximately $100,000.  The
foregoing estimates shall in no event be construed as a guaranty or warranty of
future performance.  For purposes of this Agreement, "EBITDA" means, for the
relevant time period, earnings before interest, taxes, depreciation and
amortization, determined in accordance with generally accepted accounting
principles, as consistently applied by Indaba, plus (i) all out of pocket costs
and expenses incurred by Indaba in connection with the Transaction, (ii) all
cash and non-cash compensation expenses and distributions to any of the Indaba
Members, (iii) any extraordinary, unusual or non-recurring or non-cash amounts
paid or payable for capital expenditures, and (iv) any extraordinary, unusual
or non-recurring employee bonuses or similar compensation relating to the
Transaction. 

 

            5.27     Net
Working Capital.  Immediately prior to the Closing, Indaba's Working
Capital, as hereinafter defined, shall be not less than one hundred fifty
thousand dollars ($150,000).  For purposes of this Section 5.27:

                                               
i.           
"Current Assets" means the current assets of Seller as determined
in accordance with U.S. generally accepted accounting principles.

                                              
ii.           
"Current Liabilities" means the current Liabilities of Seller as
determined in accordance with U.S. generally accepted accounting principles.

                                            
iii.           
"Working Capital" means an amount equal to (a) the amount of the
Current Assets, minus (b) the amount of the Current Liabilities.  

5.28     Full Disclosure.  Neither
this Agreement (including the exhibits hereto)
nor any statement, certificate or other document
delivered to Buyer by or on behalf of Indaba contains
any untrue statement of a material
fact or omits to state
a material fact necessary to make the representations and other statements contained herein and therein not misleading.

5.29          Tax Advice. The Indaba Members and
Seller hereby represent and
warrant that they have sought their own independent tax advice regarding the Transaction and neither the Indaba Members nor Seller have relied on any representation
or statement made by Buyer, Merger
Sub, or their representatives regarding the tax implications of such transactions.

 

5.30     Acknowledgement of Risks.  The Indaba
Members hereby represent and warrant that they have
conducted a thorough
review of Buyer's
public reports and financial statements filed by it with the Securities and Exchange Commission, and have had an opportunity to ask questions of and to receive additional information from representatives of Buyer.   The Indaba Members acknowledge that there are substantial risks associated with owning the Series
A Preferred  

14 

Stock and Buyer's common stock into which it is convertible, including
but not limited to (i) those risk factors
specifically disclosed to the
Indaba Members in writing
by Buyer, a copy of which has been delivered
to the Indaba Members, (ii) Buyer may default on the Series A Preferred Stock and the price
of its common stock may decline, (iii) the transferability of Buyer's common stock is
restricted  by  applicable  federal  and  state  securities  laws  as  well  as
 by  the
 terms  of  this Agreement and the Series
A Preferred Stock, and may be impaired
by a lack of trading
volume, and (iv) those
additional risks described in public reports filed by Buyer with the Securities and Exchange
Commission.  The Indaba Members are
acquiring the Series A Preferred Stock for investment for their own respective
accounts only and not with a view to, or for resale in connection with, any
distribution thereof.  The
Indaba Members represent and warrant that they are sophisticated,
knowledgeable and experienced in
making investments of this kind and
are capable of evaluating the risks
and merits of acquiring the Series A Preferred Stock.

 

6.    Representations and Warranties of
Buyer.

Buyer represents and warrants to the
Indaba Members and Seller as follows:

 

6.1       Power and Authority; Binding
Nature of Agreement.  Buyer has full power
and authority to enter into this Agreement and to perform its obligations hereunder.   The execution, delivery and performance of this Agreement
by Buyer have been duly authorized by all necessary action on its part.
 Assuming that this Agreement
is a valid and binding
obligation of the other party hereto, this Agreement is a valid and binding
obligation of Buyer.

 

6.2       Approvals. No authorization, consent or approval of, or registration or filing with, any governmental authority or any other person is required to be
obtained or made by Buyer in connection with the execution, delivery or performance of this Agreement.

 

6.3     Good Standing.  Buyer (i) is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized, (ii) has all necessary
power and authority to own its assets and to conduct
its business as it is currently being conducted, (iii) is
duly qualified or licensed to do business
and is in good standing
in every jurisdiction (both domestic and foreign) where such qualification or licensing is required, (iv) has the full right,
corporate power and authority to enter into this Agreement and to perform its
obligations hereunder; (v)

 

6.4     Authority. 
The
execution of this Agreement by the individual whose signature is set forth at
the end of this Agreement, and the delivery of this Agreement by Buyer, have
been duly authorized by all necessary corporate action on the part of Buyer;

 

6.5     Representations True on Closing Date. The representations and warranties of Buyer set forth in this Agreement
are true and correct on the date hereof, and will be true and correct on the Closing
Date as though such
representations and warranties were made as of the Closing Date.

15 

 

6.6  Non-Contravention.  The execution,
delivery and performance of this Agreement by Buyer will not violate,
conflict with, require consent under or result in any breach or default under
(i) any of Buyer's organizational documents (including its Certificate of
Incorporation and By-laws), (ii) any applicable Law or (iii) with or
without notice or lapse of time or both, the provisions of any material
contract or agreement to which Buyer is a party or to which any of its material
assets are bound (the "Buyer Contracts").

 

6.7     Material
Compliance.            Buyer is in material compliance with all
applicable Laws and Buyer Contracts relating to this Agreement, and the
operation of its business.

 

6.8     Capital
Structure.  

 

(a) Capital Stock. 
The authorized capital stock of the Company consists of: (i) Four Hundred
Ninety Five Million (495,000,000) Shares and (ii) Five Million (5,000,000)
shares of preferred stock, par value $0.001per share, of the Company (the
"Company Preferred Stock"). As of the date of this Agreement, (105,790,195) 
Shares were issued and outstanding, (0) ZERO Shares were issued and held by the
Company in its treasury and (0) ZERO shares of Company Preferred Stock were
issued and outstanding or held by the Company in its treasury. All of the
outstanding shares of capital stock of the Company are, and all shares of
capital stock of the Company which may be issued as contemplated or permitted by
this Agreement will be, when issued, duly authorized and validly issued, fully
paid and non-assessable and not subject to any pre-emptive rights. No
Subsidiary of the Company owns any Shares. Prior to the Closing, Buyer will
deliver to each Seller a schedule describing all stock options (the "Stock
Options") and convertible notes of the Company (the "Convertible Notes"), along
with the aggregate number of shares that could be issued if all Stock Options
were issued and all Convertible Notes were converted into Shares.

 

6.9            Governmental
Consents. No consent, approval, order or authorization of, or
registration, declaration or filing with, or notice to (any of the foregoing
being a "Consent"), any supranational, national, state, municipal,
local or foreign government, any instrumentality, subdivision, court,
administrative agency or commission or other governmental authority, or any
quasi-governmental or private body exercising any regulatory or other
governmental or quasi-governmental authority (a "Governmental
Entity") is required to be obtained or made by the Buyer in connection
with the execution, delivery and performance by the Company of this Agreement
or the consummation by the Buyer of the Merger and other transactions
contemplated hereby, except for: (i) the filing of the Certificate of Merger
with the Secretary of State of the State of Delaware; (ii) if required by
Nevada law, the filing of the Buyer Proxy Statement with the Securities and
Exchange Commission ("SEC") in accordance with the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and such reports under
the Exchange Act as may be required in connection with this Agreement, the
Merger and the other transactions contemplated by this Agreement; (iii) such
Consents as may be required under (A) the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR Act") or (B) any other
Laws that are designed or intended to prohibit, restrict or regulate actions
having the purpose or effect of monopolization or restraint of trade or
significant impediments or lessening of competition or creation or

16 

strengthening of a dominant position through merger or acquisition
("Foreign Antitrust Laws" and, together with the HSR Act, the
"Antitrust Laws"), in any case that are applicable to the
transactions contemplated by this Agreement; (iv) such Consents as may be
required under applicable state securities or "blue sky" Laws and the
securities Laws of any foreign country; (v) the other Consents of Governmental
Entities listed in Schedule 6.7(c); and (vi) such other Consents which if not
obtained or made would not reasonably be expected to have, individually or in
the aggregate, a material adverse effect.

 

6.10 SEC Filings; Financial
Statements; Internal Controls; Sarbanes-Oxley Act Compliance.

 

(a)        SEC Filings. Buyer has timely filed with or furnished to, as
applicable, the SEC all registration statements, prospectuses, reports,
schedules, forms, statements and other documents (including exhibits and all
other information incorporated by reference) required to be filed or furnished
by it with the SEC since January 1, 1998 (the "Buyer
SEC Documents"). Buyer has made available to Seller all such Buyer SEC
Documents that it has so filed or furnished prior to the date hereof. To the
knowledge of Buyer's management and board of directors, as of their respective
filing dates (or, if amended or superseded by a subsequent filing, as of the
date of the last such amendment or superseding filing prior to the date
hereof), each of the Buyer SEC Documents complied as to form in all material
respects with the applicable requirements of the Securities Act of 1933, as
amended (the "Securities
Act"), and the Exchange Act, and the rules and regulations of the SEC
thereunder applicable to such Buyer SEC Documents. To the knowledge of Buyer's
management and board of directors, none of the Buyer SEC Documents, including
any financial statements, schedules or exhibits included or incorporated by
reference therein at the time they were filed (or, if amended or superseded by
a subsequent filing, as of the date of the last such amendment or superseding
filing prior to the date hereof), contained any untrue statement of a material
fact or omitted to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. None of the Buyer 's
Subsidiaries is required to file or furnish any forms, reports or other
documents with the SEC.

 

(b)        Undisclosed Liabilities. The audited balance sheet of Buyer dated as of June 30,
2014 contained in the Buyer SEC Documents filed prior to the date hereof is
hereinafter referred to as the "Buyer Balance Sheet." Neither Buyer nor any of its
Subsidiaries has any Liabilities other than Liabilities that (i) are reflected
or recorded on the Buyer Balance Sheet (including in the notes thereto), (ii)
were incurred since the date of the Buyer Balance Sheet in the ordinary course
of business, (iii) are incurred in connection with the transactions
contemplated by this Agreement, or
(iv) would not reasonably be expected to have, individually or in the
aggregate, a material adverse effect.

 

(c)        Off-balance Sheet Arrangements. Neither
Buyer nor any of its Subsidiaries is a party to, or has any commitment to become
a party to, any joint venture, off balance sheet partnership or any similar
contract (including any contract or arrangement relating to any transaction or
relationship between or among Buyer and any of its Subsidiaries, on the one
hand, and any unconsolidated affiliate, including any structured finance,
special purpose or limited purpose entity or person, on the other hand, or any
"off balance sheet arrangements" (as defined in Item 303(a) of Regulation S-K
under the Exchange Act)), where the result, 

17 

purpose or intended effect of such contract
is to avoid disclosure of any material transaction involving, or material
liabilities of, Buyer or any of its Subsidiaries in Buyer's or such Subsidiary's
published financial statements or other Buyer SEC Documents.

 

6.11     Full Disclosure.  Neither
this Agreement (including the exhibits hereto)
nor any statement, certificate or other document
delivered to Seller by or on behalf of Buyer contains
any untrue statement of a material
fact or omits to state
a material fact necessary to make the representations and other statements contained herein and therein not misleading.

 

7.         Conditions to
Closing.

 

7.1       Conditions Precedent
to Buyer's Obligation to Close.   Buyer's
obligation to close the transaction as contemplated in this Agreement
is conditioned upon the occurrence or waiver by Buyer of the following:

 

(a)        The Indaba
Members have delivered an updated list of assets and liabilities that is
accurate and complete as of not more than five (5) business days prior to the
Closing.

 

(b)      All representations
and warranties of the Indaba Members and Seller made in this
Agreement or in any exhibit
or schedule hereto
delivered by the Indaba Members and Seller shall
be true and correct as of the Closing Date with the same force and effect as if made on and as
of that date.

 

(c)       The Indaba Members and Seller shall have performed
and complied with all agreements, covenants and conditions required
by this Agreement
to be performed or complied
with by them prior to or at the Closing
Date.

 

(d)       Buyer must be satisfied in its sole and absolute discretion with its due
diligence of the Indaba Members and Seller.

 

(e)      Buyer shall
have received a report from the Secretary of State for Colorado showing the
existence or absence of liens, financing statements and other encumbrances
recorded against any of the Assets, dated not more than five (5) days prior to
the Closing, and such report shall be satisfactory to Buyer in its sole and
absolute discretion.

 

7.2       Conditions Precedent
to the Indaba Members' and Seller's Obligation to Close.   The Indaba Members' and Sellers' obligation to
close the transaction as contemplated in this Agreement
is conditioned upon the occurrence or waiver by the Indaba Members of
the following:

18 

 

(a)       All representations and warranties of Buyer made in this Agreement or in
any exhibit hereto delivered by Buyer shall be true and correct on and as of the Closing
Date with the same force and effect
as if made on and as of
that date.

 

(b)       Buyer  shall  have
 performed  and  complied  with  all
 agreements  and conditions required
by this Agreement to be performed or complied with by Buyer prior
to or at the Closing Date.

 

(c)      Buyer shall
have executed and delivered an Employment Agreement to Shields and Gindi.

 

8.         Survival of
Representations and Warranties.

 

All representations and warranties made by each of the Parties hereto will survive
the Closing for eighteen (18) months after
the Closing Date, or longer if expressly and
specifically provided in the Agreement.  Indaba
and the Indaba Members will have joint and several liability under this Agreement, except for the covenant not to compete in Section 3.1 of this Agreement or where otherwise expressly and specifically provided
in this Agreement.

 

9.         Indemnification.

 

9.1       Indemnification by the Indaba Members.  The Indaba Members agree jointly and severally, to indemnify, defend and hold harmless Buyer and its affiliates against any and all
claims, demands, losses, costs, expenses,
obligations, liabilities and damages,
including interest, penalties and reasonable
attorney's fees and costs ("Losses"), incurred
by Buyer or any of its affiliates arising, resulting from, or relating to any and all liabilities of Indaba incurred prior to the Closing
Date or relating to the Assets prior the Closing
Date, any misrepresentation of a material fact or omission to disclose a material fact made by the Indaba Members or Seller in this Agreement,
in any exhibits to this Agreement
or in any other document
furnished or to be furnished by Indaba or Sellers under this Agreement, or any breach of, or failure
by the Indaba Members or Seller to perform,
any of their representations, warranties, covenants
or agreements in this Agreement or in any exhibit or
other document furnished or to be furnished by the Indaba Members or Seller under
this Agreement.

 

9.2       Indemnification
by Buyer.    Buyer agrees to indemnify, defend and hold harmless the Indaba Members and Seller arising,
resulting from, or relating to any misrepresentation of a material fact or omission
to disclose a material fact made by the Buyer in this Agreement, in any
exhibits to this Agreement or in any other document furnished or to be
furnished by the Buyer under this Agreement, or any breach of, or failure
by Buyer to perform, any of its representations, warranties, covenants or agreements in this
Agreement or in any exhibit or other document furnished
or to be furnished by Buyer under
this Agreement.

 

9.3       Procedure for Indemnification Claims.

 

(a)       Whenever any parties become aware that a
claim (an "Underlying Claim") has arisen entitling them to seek indemnification
under Section 9 of 

19 

this Agreement,  such  parties  (the  "Indemnified  Parties")  shall  promptly
 send  a  notice  ("Notice") to the parties liable for such indemnification (the
"Indemnifying Parties") of the right to indemnification (the "Indemnity Claim");
provided, however, that the failure to so notify the Indemnifying Parties will
relieve the Indemnifying Parties from liability under this Agreement with
respect to such Indemnity Claim only if, and only to the extent that, such
failure to notify the Indemnifying Parties results in the forfeiture by the
Indemnifying Parties of rights and defenses otherwise available to the
Indemnifying Parties with respect to the Underlying Claim.  Any Notice pursuant
to this Section 9.3(a) shall set forth in reasonable detail, to the extent then
available, the basis for such Indemnity Claim and an estimate of the amount of
damages arising therefore.

 

(b)       If an Indemnity
Claim does not result from or arise in connection with any Underlying Claim or legal proceedings by a third
party, the Indemnifying Parties will have thirty (30) calendar
days following receipt
of the Notice to issue a written response
to the Indemnified Parties, indicating the Indemnifying
Parties' intention to either (i) contest the Indemnity Claim or (ii) accept the Indemnity Claim as valid.   The Indemnifying Parties' failure to provide
such a written response within such thirty (30)
day period shall be deemed to be an acceptance of the Indemnity Claim as valid.  In the event that an Indemnity Claim is accepted
as valid, the Indemnifying Parties
shall, within fifteen (15) business days thereafter, pay Losses incurred
by the Indemnified Parties in respect of the Underlying
Claim in cash by wire transfer of immediately
available funds to the account or accounts
specified by the Indemnified Parties.  To the extent appropriate, payments for indemnifiable Losses made pursuant
to this Agreement will be treated as adjustments to the Purchase
Price.

 

(c)       In the event an Indemnity
Claim results from or arises in connection
with any Underlying Claim or legal proceedings by a third
party, the Indemnifying Parties shall have fifteen
(15) calendar days following receipt
of the Notice to send a Notice to
the Indemnified Parties
of their election
to, at their sole cost and expense,
assume the defense of any such Underlying Claim or legal proceeding;
provided that such Notice of election shall contain a confirmation by the Indemnifying Parties of their obligation to hold
harmless the Indemnified Parties with respect to Losses arising from such Underlying Claim. The failure
by the Indemnifying Parties to elect
to assume the defense of any such Underlying Claim within such fifteen
(15) day period shall entitle
the Indemnified Parties to undertake control
of the defense of the Underlying Claim on
behalf of and for the account and risk of the Indemnifying Parties in such manner as the Indemnified Parties may deem appropriate,
including, but not limited to, settling the Underlying Claim. The parties
controlling the defense of the
Underlying Claim shall
not, however, settle or compromise such Underlying Claim without the prior written consent
of the other parties, which consent shall not be unreasonably withheld
or delayed.  The non-controlling parties shall be entitled to participate
in (but not control) the defense of any such action,
with their own counsel and at their own
expense.

 

(d)      The Indemnifying Parties and the Indemnified
Parties will cooperate reasonably, fully and in good faith with each other, at
the sole expense of 

20 

the Indemnifying Parties subject to the last sentence of Section 9.3(c) of this
Agreement, in connection with the defense, compromise or settlement of any
Underlying Claim including, without limitation, by making available to the other
parties all pertinent information and witnesses within their reasonable control.

 

(e)       Basket;
Limitations on Indemnification; Calculation of Losses.

           (i)   Basket. 
A Buyer Indemnified Party shall not be entitled to make a claim for
indemnification for any Losses arising out of Section 9.1 until the aggregate
amount of all claims for Losses which arise out of Section 9.1 exceeds ten
thousand dollars ($10,000) (the "Basket").  In the event the aggregate amount
of such Losses exceeds the Basket, then the Seller shall indemnify such Buyer
Indemnified Party with respect to the amount of all Losses exceeding the amount
of the Basket.

           (ii)  Seller's
and Indaba Member Cap.  The maximum aggregate liability of the Seller and
Indaba Members, collectively, under Section 8.2(a) for all Losses shall be an
amount equal to the Purchase Price actually received by such Seller or Indaba
Member (the "Seller's Cap").

           (iii) Exclusions
from the Basket and Seller's Cap.  Notwithstanding the foregoing, the following
Losses shall not be subject to the provisions of the Basket and the Seller's
Cap and a Buyer Indemnified Party shall be entitled to indemnification with
respect to such Losses in accordance with this Article 9 as though the Basket
and the Seller's Cap were not a part of this Agreement:

(1)              
Losses
relating to, caused by or resulting from the breach of any of the Seller's
and/or Indaba Members representations and warranties as a result of fraud or
intentional misrepresentation; and

(2)              
Losses
relating to, caused by or resulting from the breach of any ongoing covenant of
the Seller or Indaba Member.

 

                      9.4       Recovery   Losses for which a
Buyer Indemnified Party may be entitled to recover pursuant to this Article 9
shall be offset by the pro rata cancellation of Series A Preferred Shares held
by the Indaba Members at the rate of $200.00 per share, if any, against any
Seller or Indaba Member in accordance with this Article 9.  Except for specific
performance and injunctive relief, the indemnification obligations and
procedures set forth in this Article 9 shall be the sole and exclusive remedy
for liabilities arising out of this Agreement and the transactions contemplated
hereby.

 

10.       Injunctive Relief.

 

10.1     Damages Inadequate.  Each party acknowledges that it would be impossible to measure in money the damages
to the other party if there is a failure to comply with any covenants and provisions of this Agreement,
and agrees that in the event of any breach of any covenant or provision, the other party to this Agreement will not have an adequate
remedy at law.

21 

 

10.2     Injunctive Relief.  It is therefore
agreed that the other party
to this Agreement who is entitled
to the benefit of the
covenants and provisions of this Agreement which have been breached, in addition to any other rights or remedies which they may have, will be entitled to immediate injunctive relief to enforce
such covenants and provisions, and that in the event that
any such action or proceeding is brought in equity to enforce them, the defaulting or breaching
party will not urge a defense that there is an adequate
remedy at law.

 

11.       Further Assurances.

 

Following the Closing, the Indaba Members and Seller shall furnish to Buyer such instruments
and other documents as Buyer may reasonably request for the purpose of carrying out or evidencing the transactions contemplated hereby.

 

12.       Fees and
Expenses.

 

Each party hereto shall pay all fees, costs and expenses
that it incurs in connection with the negotiation and preparation of this Agreement and in carrying out the transactions contemplated hereby (including, without limitation, all fees and expenses of its counsel and
accountant).

 

13.       Waivers.

 

If any party at any time waives any rights hereunder resulting from any breach by the
other party of any of the provisions
of this Agreement, such waiver is not to be construed
as a continuing waiver
of other breaches of the same or other provisions of this Agreement. Resort to any remedies
referred to herein will not be construed as a waiver
of any other rights and remedies to which such party is entitled under this Agreement or otherwise.

 

14.       Successors and
Assigns.

 

Each covenant
and representation of this Agreement will inure to the benefit of and be
binding upon each of the Parties, their personal representatives, assigns and other successors
in interest.

 

15.       Entire and
Sole Agreement.

 

           This Agreement
constitutes the entire agreement
between the Parties and supersedes all other agreements, representations, warranties, statements, promises
and undertakings, whether oral or written, with respect to the subject
matter of this Agreement.
 This Agreement may be modified or amended only by a written agreement signed by all Parties to this Agreement.   The Parties acknowledge that as of the date of the execution of this Agreement, any and all other agreements, either written or verbal, regarding the substance of this
Agreement will be terminated and be of
no further force or effect.

 

16.       Governing Law.

 

This Agreement will be governed by the laws of California without giving effect
to applicable conflict of law provisions.  With respect to any litigation 

22 

arising out of or relating to this Agreement, each party agrees that it will be
filed in and heard by the state or federal courts with jurisdiction to hear such
suits located in Santa Barbara County, California.

 

17.       Counterparts.

 

This Agreement
may be executed simultaneously in any number of counterparts, each of which counterparts will be deemed to be an original, and such counterparts will constitute but one
and the same instrument.

 

18.       Assignment.

Except in the case of an affiliate of Buyer, this Agreement may not be assignable by any
party without prior written consent
of the other Parties.

 

19.       Remedies.

 

Except as otherwise expressly
provided herein, none of the remedies set forth in this Agreement are intended to be exclusive, and each party will have all other remedies now or
hereafter existing at law, in equity, by statute or otherwise.
 The election of any one or more
remedies will not constitute a waiver of the
right to pursue
other available remedies.

 

20.       Section Headings.

 

The section headings in this Agreement are included for convenience only, are not a part of this Agreement and will not be used in construing it.

 

21.       Severability.

 

In the event that any provision
or any part of this Agreement
is held to be illegal,
invalid or unenforceable, such illegality, invalidity or unenforceability
will not affect the validity or
enforceability of any other provision or part
of this Agreement.

 

22.       Notices.

Each notice or other communication hereunder must be in writing and will be deemed to have been duly given on the earlier
of (i) the date on which such notice or other communication is actually received by the intended
recipient thereof, or (ii) the date five (5) days after the date such
notice or other communication is mailed by registered or certified
mail (postage prepaid) to the intended recipient at the following address
(or at such other address as the intended recipient will have specified in a written
notice given to the other Parties hereto):

23 

 

If to the Indaba Members and Seller:

Indaba Group, LLC

2854
Larimer Street

Denver,
CO 80205

Attn: Ryan Shields, President

Telephone: 720-545-0120

 

Facsimile:  

 

If to Buyer:

Warp 9, Inc.

1933 Cliff Dr. Suite 11

Santa Barbara, CA 93109

Attention: Andrew Van Noy, CEO

Telephone: 805-964-3313

Facsimile: 805-964-6968

 

23.       Publicity.

 

Except as may be required in order for a party to comply with applicable laws, rules, or regulations or to enable a party to comply with this Agreement,
or necessary for Buyer to prepare
and disseminate any private or public placements of its securities or to communicate with its stakeholders, no press release,
notice to any third party or other publicity
concerning the Transaction will be issued,
given or otherwise disseminated without the prior approval
of each of the Parties
hereto.

 

[Signatures on following page.]

24 

IN WITNESS
WHEREOF, this Agreement has been entered
into as of the date first
above written.

 

Indaba:                                               Indaba Group, LLC.

 

By: 
  /s/ Ryan Shields         

      
Ryan Shields, President

 

Indaba Members:                              
  /s/
Ryan Shields               

Ryan Shields, Individually

 

/s/ Blake Gindi               

Blake Gindi,
Individually

     

/s/ Jack Gindi               

Jack Gindi,
Individually     

 

 

Company:                                     WARP
9, INC., a Nevada corporation

 

By:    /s/
Andrew Van Noy                               

     
Andrew Van Noy, Chief Executive Officer

 

 

Merger Sub:                                 WARP
9, INC., a Delaware corporation

 

By:    /s/
Andrew Van Noy                                 

     
Andrew Van Noy, Chief Executive Officer

25 

EXHIBIT
A

 

Certificate
of Merger

 

 

CERTIFICATE OF
MERGER

OF

DOMESTIC
CORPORATION AND FOREIGN LIMITED LIABILITY COMPANY

Pursuant to Title 8, Section
264(c) of the Delaware General Corporation Law, the undersigned corporation
executed the following Certificate of Merger: 

FIRST: The name of the surviving
corporation is Warp 9, Inc., a Delaware Corporation, and the name of the limited
liability company being merged into this surviving corporation is Indaba Group,
LLC, a Colorado limited liability company. 

SECOND: The Agreement of Merger
has been approved, adopted, certified, executed and acknowledged by the
surviving corporation and the merging limited liability company. 

THIRD: The name of the surviving
corporation is Indaba Group, Inc. 

FOURTH: The merger is to become
effective on _______________________________. 

FIFTH: The Agreement of Merger is
on file at ________________________________
_______________________________________________________________________, the
place of business of the surviving corporation. 

SIXTH: A copy of the Agreement of
Merger will be furnished by the corporation on request, without cost, to any
stockholder of any constituent corporation or member of any constituent limited
liability company. 

SEVENTH: The certificate of
incorporation of the surviving corporation shall be amended and restated in its
entirety as set forth on Exhibit A attached hereto, and in accordance
with Article I therein, the surviving corporation's name shall be changed to
"Indaba Group, Inc."

IN WITNESS WHEREOF, said
Corporation has caused this certificate to be signed by an authorized officer,
the______________ day of ________________, A.D., 2015. 

By:____________________________________ 

Name:____________________________________ 

Title:____________________________________

 

 

 

EXHIBIT
B

Certificate
of Designation

 

 

EXHIBIT C

Employment Agreement

 

 

EXHIBIT D

Disclosure Schedules

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