Document:

ex_143547.htm

Exhibit 10.1

Certain confidential information contained in this document,

marked by brackets, has been omitted because it is both 

(i) not material and (ii) would be competitively harmful if publicly disclosed.

 

 

 

 

 

DEVELOPMENT AGREEMENT

 

 

by and between

 

 

 

SOPHIRIS BIO CORP.

 

and

 

VETTER PHARMA INTERNATIONAL GMBH 

 

 

 

 

 

— ii —

 

TABLE OF CONTENTS

 

	
			1:

				
			DEFINITIONS

				
			  1

			
	 	 	 
	
			2:

				
			SERVICES

				
			  4

			
	 	 	 
	
			3:

				
			REPRESENTATIONS AND WARRANTIES BY CUSTOMER

				
			  5

			
	 	 	 
	
			4:

				
			CONFIDENTIALITY

				
			5

			
	 	 	 
	
			5:

				
			MATERIALS

				
			  6

			
	 	 	 
	
			6:

				
			CUSTOMER INSPECTIONS

				
			7

			
	 	 	 
	
			7:

				
			DEFECTS AND RECALLS

				
			  7

			
	 	 	 
	
			8:

				
			PURCHASE ORDERS AND DELIVERY

				
			  8

			
	 	 	 
	
			9:

				
			PRICES AND PAYMENTS

				
			  9

			
	 	 	 
	
			10:

				
			APPROVALS, AUDITS AND CHANGES

				
			  9

			
	 	 	 
	
			11:

				
			INTELLECTUAL PROPERTY

				
			10

			
	 	 	 
	
			12:

				
			INDEMNIFICATION, INSURANCE AND LIABILITY

				
			11

			
	 	 	 
	
			13:

				
			WARRANTIES

				
			13

			
	 	 	 
	
			14:

				
			TERM AND TERMINATION

				
			13

			
	 	 	 
	
			15:

				
			MISCELLANEOUS

				
			14

			
	 	 	 
	 	
			SIGNATURE PAGE

				
			19

			

 

 

 

 

ANNEXES

 

	ANNEX 1:	STATEMENT(S) OF WORK
	 	 
	ANNEX 2:  	DEVELOPMENT QUALITY AGREEMENT
	 	 
	ANNEX 3:	CONFIDENTIALITY AGREEMENT

          

 

 

 

THIS DEVELOPMENT AGREEMENT (the “Agreement”) is made and entered into as of the 23rd day of January, 2018 (“Effective Date”), by and between Sophiris Bio Corp., a company duly organized and existing under the laws of Delaware and having its principal place of business at 1258 Prospect Street, La Jolla, California 92037 (“Customer”), and Vetter Pharma International GmbH, a company duly organized and existing under the laws of Germany, having its principal place of business at Eywiesenstraße 5, 88212 Ravensburg, Germany (“Vetter International”), Customer and Vetter International also being referred to herein individually as a “Party” and collectively as the “Parties”.

 

W I T N E S S E T H:

 

WHEREAS, Vetter International is a specialist in providing services for aseptic filling and the packaging of compounds into syringes, vials, and cartridges; and

 

WHEREAS, Customer desires Vetter International to perform certain services for the development of its compounds for use in its clinical trials and other non-commercial uses within the applicable Territory;

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements hereinafter set forth, and subject to the provisions of this Agreement, Customer and Vetter International agree as follows:

 

	
			1.

				
			Definitions. For all purposes of this Agreement, and all amendments thereto, the following capitalized terms, whether used in singular or plural, will have the definitions set forth below, unless otherwise stated:

			

 

	 	
			1.1.

				
			“Affiliate” shall mean, with respect to Customer, any person, firm, company, or entity which is directly or indirectly controlled by Customer, and with respect to Vetter International, any person, firm, company, or entity which is under common control of the trustees/executors of the estate of Helmut Vetter. For all purposes hereof, “control” shall mean owning more than fifty percent (50%) of the voting stock or interests.

			

 

	 	
			1.2.

				
			“Agreement” shall have the meaning in the preamble.

			

 

	 	
			1.3.

				
			“API” shall mean the active pharmaceutical ingredient that is identified in the applicable Statement of Work.

			

 

	 	
			1.4.

				
			“API Invention” shall have the meaning set forth in Section 11.2.

			

 

	 	
			1.5.

				
			“Applicable Law” shall mean any law, statute, ordinance, rule, regulation, order or determination of any governmental agency or authority in the applicable jurisdiction.

			

 

	 	
			1.6.

				
			“Business Day” shall mean any calendar day other than a Saturday, a Sunday or a calendar day on which commercial banks located in either Baden-Wuttemberg, Germany or Skokie, Illinois, USA, are closed.

			

 

	 	
			1.7.

				
			“Change” shall have the meaning set forth in Section 10.4.

			

      

 

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			1.8.

				
			“Confidential Information” shall have the meaning set forth in that certain Confidentiality Agreement.

			

 

	 	
			1.9.

				
			“Confidentiality Agreement” shall mean that certain confidentiality agreement between Customer and Vetter International, or any of its Affiliates, dated 15 February 2017 and incorporated and attached hereto as Annex 3.

			

 

	 	
			1.10.

				
			“Customer Indemnitees” shall have the meaning set forth in Section 12.1.

			

 

	 	
			1.11.

				
			“Customer Material” shall mean any materials (including API) listed as customer materials in any Specifications or Statement of Work, and any other materials or items supplied under this Agreement by or on behalf of Customer, including information and documentation pertaining to manufacturing and handling specifications and requirements, testing procedures, GMP requirements and other technical information concerning the Manufacture of Product, as provided by, on behalf of, or directed by, Customer.

			

 

	 	
			1.12.

				
			“Deliverables” shall have the meaning set forth in Section 11.4.

			

 

	 	
			1.13.

				
			“Development Quality Agreement” shall mean the mutually agreed Development Quality Agreement, including all of its appendices, separately executed by the Parties and effective as of January 23, 2019.

			

 

	 	
			1.14.

				
			“Development Schedule” shall mean the mutually agreed upon plan for the Manufacture of the Product, attached as an annex to the applicable Statement of Work and incorporated herein by reference.

			

 

	 	
			1.15.

				
			“Effective Date” shall have the meaning in the preamble.

			

 

	 	
			1.16.

				
			“EMA” shall mean the European Medicines Agency, or any successor agency.

			

 

	 	
			1.17.

				
			“Equipment” shall mean the dedicated equipment listed and attached as an annex to the applicable Statement of Work or Budgetary Quotation, and incorporated herein by reference, for the Manufacture of the Product.

			

 

	 	
			1.18.

				
			“Facility” shall mean any of the facilities and non-dedicated equipment therein utilized by Vetter International for the Manufacture of the Product, either located in or near Ravensburg, Germany, Langenargen, Germany, or Skokie, Illinois, USA .

			

 

	 	
			1.19.

				
			“FDA” shall mean the United States Food and Drug Administration, or any successor agency.

			

 

	 	
			1.20.

				
			“Force Majeure” shall have the meaning set forth in Section 15.2.

			

 

	 	
			1.21.

				
			“GMP” means good manufacturing practices as applicable for the Services in each jurisdiction in the Territory.

			

 

	 	
			1.22.

				
			“Information” shall have the meaning set forth in the Confidentiality Agreement.

			

 

 

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			1.23.

				
			“Information of Customer” means all information provided by or on behalf of Customer, including information pertaining to the manufacturing, handling, testing procedures and other technical information regarding the Manufacture of the Product.

			

 

	 	
			1.24.

				
			“Losses” shall have the meaning set forth in Section 12.1.

			

 

	 	
			1.25.

				
			“Manufacture” means the manufacturing activities performed by Vetter International and its Affiliates and in accordance with the Specifications.

			

 

	 	
			1.26.

				
			“Manufacture Invention” shall have the meaning set forth in Section 11.3.

			

 

	 	
			1.27.

				
			“Parties” shall mean Customer and Vetter International, and “Party” shall mean either thereof.  

			

 

	 	
			1.28.

				
			“Product” means the various application systems, pre-filled with the API and the result of the Manufacture Services.

			

 

	 	
			1.29

				
			“Regulatory Approvals” means any and all approvals, consents, permissions, and the like, required by law or under the terms of this Agreement to be obtained and maintained by Customer in order to Manufacture, use (including use in clinical trials), import, export, distribute, market, promote or sell the Product within the Territory.

			

 

	 	
			1.30

				
			“Representatives” shall mean any Affiliate and/or any employee, officer, director and trustee/executor of a Party and/or an Affiliate.

			

 

	 	1.31 	“Rules” shall have the meaning set forth in Section 15.11.

 

	 	1.32 	“Services” shall have the meaning in Section 2.1, including Manufacturing of Product.

 

	 	
			1.33

				
			“SOPs” shall mean Vetter International’s or its Affiliates’ standard operating procedures as applicable to the Manufacture of the Product.

			

 

	 	
			1.34

				
			“Specifications” shall mean the process development specifications, as agreed upon between the Parties and set forth in the DQA, for the Manufacture of the Product by Vetter International.

			

 

	 	
			1.35

				
			“Statement of Work” shall have the meaning set forth in Section 2.1

			

 

	 	
			1.36

				
			“Territory” shall mean worldwide except Japan.

			

 

	 	
			1.37

				
			“Vetter International” shall have the meaning set forth first above.

			

 

	 	
			1.38

				
			“Vetter International Indemnitees” shall have the meaning set forth in Section 12.2.

			

 

	 	1.39 	“Vetter International Property” shall have the meaning set forth in Section 11.4.

 

	 	
			1.40

				
			“Vetter Materials” shall mean the materials, equipment and other resources utilized by Vetter International for the performance of the Services.

			

 

 

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			1.41

				
			“Vetter Pharma” shall mean Vetter Pharma-Fertigung GmbH & Co. KG, a company duly organized and existing under the laws of Germany, having its principal place of business at Schützenstraße 87, 88212 Ravensburg, Germany, an Affiliate of Vetter International.

			

 

	 	
			1.42

				
			“Warehouse” shall mean the warehousing facilities of Vetter Pharma located at Helmut-Vetter-Straße 10, 88213 Ravensburg, Germany, as directed by Vetter International in writing.

			

 

	
			2.

				
			Services.

			

 

	 	
			2.1.

				
			From time to time, Customer may engage Vetter International to provide certain development and manufacturing related services (“Services”). This Agreement contains general terms and conditions under which Customer will engage Vetter International. Vetter International and Customer will complete and execute a statement of work (each, a “Statement of Work”) before any Services are rendered. Each Statement of Work will, at a minimum, detail the API, a description of the Services provided, and the payment schedule. If applicable, the Parties will execute a Development Quality Agreement in connection to the API and the Services provided prior to the commencement of any Services. Once a Statement of Work is executed, a Statement of Work becomes part of, and subject to, this Agreement. A Statement of Work may not change any term in this Agreement. Statements of Work will be attached to this Agreement as Annex 1.

			

 

	 	
			2.2.

				
			Performance. Vetter International agrees to use best commercial efforts to provide all Services identified in any Statement of Work: (a) within the time period specified in the applicable Statement of Work, (b) in accordance with all Applicable Laws, rules and regulations and (c) in accordance with the highest prevailing industry standards and practices for the performance of similar services at the Facility. However, it is understood and agreed that Vetter International makes no guaranty and no warranty (i) that the dates and timelines referenced in any document or agreed upon by the Parties will be met and (ii) as to the outcome of the Services or success in achieving Customer's objectives, any anticipated results and/or any target, whether set forth in this Agreement, any Statement of Work, the Specifications or any other document.

			

 

	 	
			2.3.

				
			Subcontracting. Vetter International will supply the Product to Customer in accordance with the terms of this Agreement. Customer acknowledges that Vetter International may subcontract any and all portions of the Services to Vetter Pharma. Further, Vetter International may subcontract internal logistic and warehousing operations to [...***...]. Vetter International will remain liable for any performance of or failure to perform by Vetter Pharma, and [...***...]. Other than these named sub-contractors, Vetter shall not sub-contract with any other entities without a prior written agreement from Customer consenting to such sub-contractor.

			

 

	 	
			2.4.

				
			Equipment. Vetter International will procure, either directly or by its Affiliates, Equipment for the performance of the Services as provided in the applicable Statement of Work. The Equipment will be dedicated to and paid for by Customer and Vetter agrees that the Equipment will only be used for the manufacture of Customer’s Product. The title of the Equipment will belong to and be insured by Vetter Pharma and Vetter Pharma will maintain and operate the Equipment in accordance with its SOPs at Vetter International’s expense, provided, however, that any costs related to the repair or replacement of any Equipment will be borne by Customer. Any costs for the procurement, repair or replacement of any Equipment will be invoiced by Vetter Pharma.

			

 

 

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			2.5.

				
			Statement of Work Amendments. If the scope of work under a Statement of Work materially changes, then the applicable Statement of Work may be amended as provided in this Section 2.5. If Vetter International or Customer identifies that a modification to the Statement of Work is necessary, the identifying Party will notify the other Party as soon as reasonably possible. The Parties will agree on an amendment to the Statement of Work, which will not be effective unless and until it has been signed by an authorized representative of each Party. If practical, Vetter International will continue to provide Services under the existing Statement of Work while an amendment to the Statement of Work is finalized and executed.

			

 

	
			3.

				
			Representations and Warranties.

			

 

3.1      Customer makes the following representations and warranties, and agrees to notify Vetter International in writing immediately upon learning of any future breach of these representations and warranties:

 

3.1.1 Organization of Customer.  Customer is and will remain a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.

 

3.1.2     Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action. This Agreement is and will remain a valid and binding obligation of Customer, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors.

 

3.1.3     Absence of Other Contractual Restrictions. Customer is under no contractual or other obligation or restriction that is inconsistent with Customer’s execution or performance of this Agreement. Customer will not enter into any agreement, either written or oral, that would conflict with Customer’s responsibilities under this Agreement.

 

3.1.4     Conflicts with Rights of Third Parties. To the best of Customer’s knowledge, the use of Customer Materials under this Agreement will not violate any patent, trade secret, or other proprietary or intellectual property of any third party.

 

	 	
			3.2 

				
			Vetter makes the following representations and warranties, and agrees to notify Customer in writing immediately upon learning of any future breach of these representations and warranties:

			

 

3.2.1     Organization of Vetter International. Vetter International is and will remain a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization.

 

3.2.2     Enforceability of this Agreement. The execution and delivery of this Agreement has been authorized by all requisite corporate action. This Agreement is and will remain a valid and binding obligation of Vetter Internationnal, enforceable in accordance with its terms, subject to laws of general application relating to bankruptcy, insolvency and the relief of debtors.

 

 

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3.2.3     Absence of other Contractual Restrictions. Vetter International is under no contractual obligation or restriction that is inconsistent with Vetter’s execution or performance of this Agreement. Vetter will not enter into any agreement, either written or oral, that would conflict with Vetter’s responsibilities under this Agreement.

 

3.2.4     Conflicts with Rights of Third Parties. To the best of Vetter International’s knowledge, the use of Vetter Materials under this Agreement will not violate any patent, trade secret, or other proprietary or intellectual property of any third party.

 

3.2.5     Warranty of Vetter Supplied Materials. Vetter International warrants, on behalf of itself and its Affiliates, that all Vetter Materials utilized hereunder for human use are in compliance with GMP, Agreed Specifications and the agreed manufacturing process.

 

	
			4.

				
			Confidentiality. The provisions of that certain Confidentiality Agreement will govern this Agreement in every respect (and the term Purpose (as therein defined) will be deemed to include the matters set forth or contemplated in this Agreement), except that the confidentiality obligations in the Confidentiality Agreement contained shall survive the expiration or early termination of this Agreement and shall remain in full force and effect for a period of ten (10) years from the effective date of termination or expiration of the Agreement.

			

 

	
			5.

				
			Materials.

			

 

	 	
			5.1.

				
			Materials. Customer will timely deliver, or have delivered, to the Facility as directed by Vetter International, free of any charge to Vetter International and at the sole risk to Customer, Customer Materials in sufficient quantities to enable Vetter International to perform the Services. If applicable, Customer Materials will be accompanied with certificates as reasonably requested by Vetter International or any of its Affiliates. All associated intellectual property rights of the Customer Materials will remain the exclusive property of Customer. Customer will provide information with respect to the Customer Materials, specifically the API, as Vetter International or its Affiliates may request. Customer will be responsible for obtaining any adequate insurance for the Customer Materials.

			

 

	 	
			5.2.

				
			Delay. In the event the Customer Materials are not timely delivered as directed by Vetter International for any reason, Vetter International may reasonably determine, in its sole discretion and after consulting with Customer, a new delivery date for the Product.

			

 

	 	
			5.3.

				
			Testing. All Vetter Materials and all Customer Materials will be tested in accordance with the Development Quality Agreement or Vetter International’s SOPs.

			

 

	 	
			5.4.

				
			Use. Vetter International and its Affiliates will use the Customer Materials solely for the Services and for no other purpose. Vetter International will notify Customer in writing of any surplus Customer Materials at the completion of the Services and, at Customer’s option and expense, will be either (i) disposed of, (ii) returned to the Customer, or (iii) handled in accordance with Customer’s written directions. At Customer’s written request, Vetter International will provide Customer copies of an inventory of Customer Materials stored at the Facility.

			

 

 

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			5.5.

				
			Liability for Materials. Neither Vetter International nor any of its Affiliates will be liable for any Customer Materials supplied to the Facility by or on behalf of Customer, including any testing or other services performed by any third party; provided however, that Vetter International will transfer, or cause to transfer, to Customer any warranties received in respect of any of the foregoing.

			

 

	
			6.

				
			Customer Inspections.

			

 

	 	
			6.1.

				
			Inspection. Customer will inspect the Product and review the accompanying batch documentation without delay, but in no event later than [...***...] calendar days upon Customer’s receipt of either the Product or the batch documentation, whichever is received by Customer first. If either the Product or the batch documentation does not pass inspection by Customer, Customer will promptly notify Vetter International in writing. Customer will, as instructed by Vetter International, either return the rejected Product to the assigned Facility or dispose of the Product.

			

 

	 	
			6.2.

				
			Acceptance. Any Product or batch documentation not rejected as set forth in Section 6.1 above will be deemed accepted by Customer, to the extent that either the Product or batch documentation may contain any non-latent defect. Any Product or batch documentation that contains any latent defect will be deemed to be accepted by Customer unless Customer gives prompt written notice to Vetter International within a period no later than [...***...] months after delivery of the batch documentation and Product.

			

 

	 	
			6.3

				
			Standard. With the exception of any deviations, of which Customer will be notified in writing as set forth in the Development Quality Agreement, all Product made available to Customer under this Agreement will have been Manufactured in accordance with the Specifications, Vetter’s SOP’s, under GMP conditions (if applicable), the Development Quality Agreement and the approved master batch records. Customer acknowledges that Vetter International and its Affiliates will not be found to be negligent so long as it can be shown by written documentation that the Product was Manufactured in accordance with the Specifications, Vetter’s SOP’s, GMP (if applicable), the Development Quality Agreement and the approved master batch records.

			

 

	
			7.

				
			Defects and Recalls.

			

 

	 	
			7.1.

				
			Defects. If Product has been rejected pursuant to Section 6.1, Vetter International will supply Customer with replacement Product and provide the corresponding batch documentation. If required, Customer will supply, or have supplied, sufficient quantities of Customer Materials for the replacement Product. Vetter International will not be responsible for the disposal of defective Product or to supply replacement Product, unless the defect is due to Vetter International’s (a) gross negligence to supply the Product or provide the batch documentation as required in this Agreement, (b) material breach of this Agreement, or (c) willful misconduct or violation of Applicable Laws, in which case, following Customer’s provision of additional API, Vetter International agrees to replace the Product without additional cost to Customer for the replacement Product. The obligations of this Section shall survive expiration or termination of this Agreement. Apart from supplying replacement Product as above, there will be no further payment or reimbursement by Vetter International or any of its Affiliates in connection to the defective Product and the replacement Product.

			

 

 

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			7.2.

				
			Recall. If a recall or return of the Product results from the Products’ non-conformity with the Specifications, the Development Quality Agreement, this Agreement, GMP, or Applicable Laws, or is initiated by a regulatory authority, and such non-conformity arose due to Vetter International’s or its Affiliates’gross negligence, Vetter International will, upon Customer’s written request, use commercially reasonable efforts to replace the recalled or returned Product with new Product, contingent upon receipt of API and other necessary Customer Materials required for the Manufacture of the replacement Products; provided, however, that Vetter International’s liability under this Section 7.2 will not exceed the limitations set forth in Section 12.

			

 

	
			8.

				
			Purchase Orders and Delivery.

			

 

	 	
			8.1.

				
			Purchase Orders. Customer will issue purchase orders to Vetter International pursuant to the applicable Statement of Work. The Product will be released on the Business Day specified by Customer and approved by Vetter International; however, if a Business Day is not specified or approved, then Vetter International will, in good faith, determine the month for release of the Product. The date of release requested by Customer will be no earlier than [...***...] calendar days after receipt of the purchase order by Vetter International. Vetter International will confirm receipt of the purchase order within [...***...] Business days of its receipt of the purchase order; provided, however, that Vetter International may reject the purchase order if the Services have not progressed to ensure timely Manufacture of the Product. This Agreement will supersede any terms and conditions contained in the purchase order.

			

 

	 	
			8.2.

				
			Cancellation or Rescheduling. In the event Customer cancels a purchase order, or reschedules any Services set forth in the applicable Statement of Work, the following fees will apply:

			

 

	
			Cancellation or delay within [...***...] calendar days of a scheduled batch run

				
			Customer pays [...***...] percent ([...***...] %) of the quoted batch price.

			
	
			Cancellation or delay between [...***...]  and [...***...] calendar days of a scheduled batch run

				
			Customer pays [...***...] percent ([...***...] %) of the quoted batch price.

			
	
			Cancellation or delay between [...***...] and [...***...] calendar days of a scheduled batch run

				
			Customer pays [...***...] percent ([...***...] %) of the quoted batch price.

			

 

 

	 	
			8.3.  

				
			Delivery. All Product released by Vetter International will be delivered Ex Works Warehouse (EXW Incoterms® 2010). Product will be deemed to be delivered and ready for collection by Customer upon written notification to Customer. Customer will collect the Product released by Vetter International or its Affiliates no later than [...***...] calendar days upon receipt of written notification (“Collection Period”), until which time Vetter International will maintain the Product in storage at no cost to Customer but at Customer’s risk.

			

 

 

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			8.4.

				
			Warehousing. Unless otherwise agreed between the Parties, if the Product is not collected by Customer within the Collection Period, Vetter International will store the Product at the Facility at Customer’s risk and in accordance with Vetter International’s SOPs until a revised collection date is agreed upon by the Parties. Following the Collection Period and until Product is collected by Customer, Customer will pay storage fees at a rate of [...***...] Euros (€[...***...] ) per pallet per month of 2-8°C refrigerated storage, or [...***...] Euros (€[...***...] ) per pallet per month of controlled ambient storage.

			

 

	 	
			8.5.

				
			Delivery Assistance. In addition to Section 8.3 above, Vetter International and its Affiliates may, at its option and at Customer’s request with Customer bearing the cost and risk, provide assistance with (i) addressing special shipping requirements; (ii) obtaining licenses, official authorizations, clearances, customs, any other documents or information, including security related information that Customer may require for export, import, or transport of the Product to its final destination; (iii) making a contract for transport or insurance; or (iv) loading the packed Product in any container, collecting vehicle or other means of transport. At Vetter International’s request, Customer will provide information for taxation or reporting purposes with respect to the export of Product.

			

 

	 	
			8.6.

				
			Quarantine Shipments. Product may be shipped under quarantine upon prior written request by Customer and such written request will serve as conclusive notice by Customer that (i) Product is delivered and ready for collection by Customer, notwithstanding Section 8.3; and (ii) Customer assumes all risks and liabilities associated with the quarantine shipment.

			

 

	
			9.

				
			Prices and Payments.

			

 

	 	
			9.1.

				
			Price. Customer will pay Vetter International in the amounts set forth in the applicable Statement of Work, plus any applicable taxes, VAT, customs, fees and other duties. In the event of any change to the Services contained in a Statement of Work, both Parties will enter into good faith negotiations for any price adjustments. Vetter International reserves the right to reasonably change its prices due to any change in circumstances, such as, for instance, due to a revision of regulatory requirements or a change to the prices for Vetter Materials; provided, however, that in the event of a price increase in excess of [...***...] percent, Customer shall have the right to terminate this Agreement and/or any Statement of Work according to the terms of Section 14.2, below, and without a termination penalty payment, so long as such increase does not result from a change in project scope made by Customer.

			

 

	 	
			9.2.

				
			Payment. Vetter International will issue an invoice upon delivery of Product as set forth in Section 8. Payments will be made in the currency set forth in the invoice and due [...***...] calendar days from the date of receipt of the invoice. If Customer does not pay the invoice within [...***...] calendar days from the date of receipt of the invoice, Vetter International will have the right to add interest to the invoiced amount at a rate of [...***...] percent ([...***...]%) per annum, unless Customer has given notice of a dispute of the invoiced amount in good faith.

			

 

	
			10.

				
			Approvals, Audits and Changes.

			

 

	 	
			10.1.

				
			          Regulatory Contact. Customer will be responsible for obtaining and maintaining, at its cost and risk, all Regulatory Approvals for the Services. Customer will not distribute or otherwise use the Product, either for clinical or commercial purposes, without first obtaining Regulatory Approval, as legally required. Vetter International and its Affiliates will reasonably cooperate, at Customer’s expense, to provide information and other documentation with respect to Regulatory Approvals.

			

 

 

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			10.2.

				
			          Facility. Vetter International will ensure that all Affiliates or subcontractors pre-approved by Customer in writing, including but not limited to Vetter Pharma, shall obtain and maintain the necessary manufacturing authorization with respect to the Facility or the authorized facility, by the applicable German health authority in accordance with the German Medical Act (Arzneimittelgesetz) and, upon written request by Customer, Vetter International will make available a copy of such authorization. Customer acknowledges that certain regulatory authorities may have to approve the Manufacture of the Product, at Customer’s expense.

			

 

	 	
			10.3.

				
			          Audits. Vetter International will promptly, as legally permitted, notify Customer of any audit by a regulatory authority that relate directly to the Product and, if legally permitted, arrange for a representative of Customer onsite for all Product specific or pre-approval inspections. For audits performed by a regulatory agency, such as the FDA, EMA, or Germany health authorities, and the audit relates directly to the Product, the audit will be performed at Customer’s expense; provided, however, that in the event an audit takes place by a regulatory authority and the audit is not directly related to the Product, Customer will not be responsible for the associated costs.

			

 

	 	
			10.4.

				
			          Change Control. All changes to the Development Quality Agreement (each a “Change”) will be processed in accordance with the change control procedures set forth in the applicable Development Quality Agreement, subject to this Section 10.4 and Section 10.5. The Parties agree that the cost of any Change which does not result from Vetter International’s discretionary decision will be the responsibility of the Customer unless such Change is not specific to Customer’s Product, in which case the cost of such Change will be borne by the Customer only in proportion to the Product’s utilization of total Facility capacity.

			

 

	 	
			10.5.

				
			          Change Dispute. In the event of a good faith dispute regarding a Change, Customer and Vetter International will discuss in good faith a resolution for the dispute; provided, however, that Vetter International and its Affiliates will not be required to commence with the Services affected by the Change, without breaching this Agreement, until the dispute is resolved.

			

 

	
			11.

				
			Intellectual Property.

			

 

	 	
			11.1.

				
			          Existing Intellectual Property. Each Party shall continue to own all of its intellectual property (including patents, trademarks, trade secrets, know-how, industrial design, and other intellectual property) existing on or before the Effective Date (“Pre-Existing IP”), and neither Party nor any third party will acquire any right, title or interest in or to any Pre-Existing IP of the other Party, except that Customer hereby grants to Vetter International and its Affiliates a non-exclusive license to Customer Materials and to Customer Pre-Existing IP solely for purposes of Vetter International and its Affiliates‘ performance of the Services.

			

 

	 	
			11.2.

				
			          API Inventions. Any inventions, improvements, discoveries or enhancements, whether or not patentable, and all associated intellectual property, that (a) are generated, developed, conceived, discovered, or reduced to practice by or on behalf of Vetter International or its Affiliates and arise from or are made in the course of performance of the Services, (b) are in connection to the API or to Customer drug substance-specific processes, programs or materials provided by Customer and/or are specific to the Product, and (c) do not incorporate any of Vetter International Confidential Information (“API Inventions”) will be owned by Customer, and Vetter International agrees to assign and hereby assigns to Customer all rights in Germany, the United States, and throughout the world.

			

 

 

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			11.3.

				
			          Manufacturing Inventions. Any inventions, improvements, discoveries or enhancements, whether or not patentable, and all associated intellectual property, that (a) are generated, developed, conceived, or discovered, or reduced to practice by or on behalf of Customer and arise from or are made in the course of performance of the Services, (b) do not contain any API Inventions, and (c) do not incorporate any of Customer Confidential Information (“Manufacturing Inventions”) will be owned by Vetter International, and Customer agrees to assign and hereby assigns to Vetter International all rights in Germany, the United States, and throughout the world, provided, however, that Vetter International shall (i) grant to Customer a royalty-free, sublicenseable, worldwide license for the use of such Manufacturing Invention in the manufacture of the Product by any manufacturer and (ii) provide commercially reasonable assistance to Customer, at Customer’s expense, in the transfer of such licensed Manufacturing Invention to Customer’s designated manufacturer. For the avoidance of doubt, the foregoing obligations of license grant and assistance by Vetter International do not require the transfer to Customer of, or to grant to Customer a license either express or implied for the use or practice of, any Vetter International Pre-existing IP.

			

 

	 	
			11.4.

				
			          Deliverables. Vetter International and its Affiliates agree to assign, and hereby assign, to Customer all of its right, title and interest in and to the Product and batch documentation (collectively, “Deliverables”). Vetter International and its Affiliates appoints Customer its attorney-in-fact to execute and deliver any documents on behalf of Vetter International and its Affiliates for Customer to perfect and enforce its rights to the Deliverables. Notwithstanding the foregoing, Vetter International and its Affiliates will retain full ownership rights in and to all templates, programs, processes, and other materials developed or obtained or licensed from third parties by Vetter International and its Affiliates (which for the avoidance of doubt do not include processes, programs and materials provided by Customer to enable Vetter International to provide the Services) prior to or independent of the performance of its obligations under this Agreement (“Vetter International Property”), regardless of whether such Vetter International Property is used in connection with Vetter International’s performance of the Services.

			

 

	
			12.

				
			Indemnification, Insurance and Liability.

			

 

	 	
			12.1.

				
			          Indemnification by Vetter International. Vetter International agrees to indemnify Customer and its directors, officers, and employees (collectively, “Customer Indemnitees”) from and against any and all liability, loss, damage, cost, and expense, including reasonable attorneys’ fees and costs (collectively, “Losses”) they may suffer in connection with any claim or lawsuit brought by a third party arising from a Vetter International Indemnitee’s (defined below) (a) gross negligence or willful misconduct; or (b) breach of this Agreement or Applicable Laws, rules and regulations..

			

 

12.2          Indemnification by Customer. Customer agrees to indemnify Vetter International and its directors, officers and employees, and Vetter International’s Affiliates’ directors, officers and employees (collectively, the “Vetter International Indemnitees”) from and against any and all Losses they may suffer in connection with any claim or lawsuit brought by a third party arising from (a) Customer’s transport, storage, promotion, labeling, marketing, distribution, sale, or use of the Product; (b) Customer’s gross negligence or willful misconduct; (c) Customer’s breach of this Agreement; (d) any claim that the use, sale, Manufacturing, marketing or distribution of Product or Customer Materials by Vetter International or its Affiliates, excluding the use of Vetter International’s intellectual property, violates the patent, trademark, copyright or other intellectual property rights of any third party;

 

 

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12.3          Indemnification Procedures. Each Party agrees to notify the other party within [...***...] days of receipt of any claims made for which the other Party might be liable under Section 12.1 or 12.2, as the case may be. The indemnified Party will be entitled to participate in the defense of such matter and to employ counsel at its expense to assist therein; provided, however, that the indemnifying Party will have final decision-making authority regarding all aspects of the defense of any claim. The Party seeking indemnification will provide the indemnifying Party with such information and assistance as the indemnifying Party may reasonably request, at the expense of the indemnifying Party. Neither Party will be responsible or bound by any settlement of any claim or suit made without its prior written consent; provided, however, that the indemnified Party will not unreasonably withhold or delay such consent. If a settlement contains an absolute waiver of liability for the indemnified Party, and each Party has acted in compliance with the requirements of this Section 12.3, then the indemnified Party’s consent will be deemed given.

 

12.4          Insurance. Customer shall self-insure or maintain product liability insurance coverage with a reputable international insurance company, of at least [...***...] US Dollars per each calendar year during the term of this Agreement and for [...***...] thereafter. Vetter International and its Affiliates shall maintain product liability insurance coverage (to the extent commercially reasonable), with a reputable insurance company, in the aggregate of [...***...] Euros per each calendar year during the term of this Agreement, with [...***...] Euros per personal injury and [...***...] Euros per property damage, which coverage shall include attorneys’ fees and court fees. Upon request of the other Party, each Party shall provide a Certificate of Insurance evidencing such coverages and providing [...***...] calendar days advance written notice for any material change or cancellation in coverage of limits. 

 

12.5               Liability.

 

12.5.1     Limitation. NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY, IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL, PUNITIVE OR INDIRECT DAMAGES INCLUDING WITHOUT LIMITATION, LOST PROFITS, ARISING OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY. THIS LIMITATION WILL APPLY EVEN IF THE OTHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE; PROVIDED, HOWEVER, THAT THIS LIMITATION WILL NOT APPLY TO DAMAGES RESULTING FROM ANY BREACH OF THE CONFIDENTIALITY AGREEMENT OR THE INDEMNIFICATION OBLIGATIONS HEREIN.

 

12.5.2     Active Materials. Under no circumstances will Vetter International or its Affiliates be responsible for any loss or damage to the Customer Materials, unless the loss of any Customer Materials occurred through the gross negligence or willful misconduct of Vetter International or its Affiliates; provided, however, that in such case Vetter International and its Affiliates’ liability will not exceed the lesser of: (i) [...***...] percent ([...***...] %) of the [...***...] of the respective Product affected by the loss of the Customer Materials or (ii) [...***...] Euros (€[...***...] ).

 

 

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12.5.3     Recalls. If the Product is recalled or returned as set forth in Section 7.2 and the recall or return results from the Products’ non-conformity with the Specifications, the Development Quality Agreement, this Agreement, GMP, Applicable Laws, or is initiated by a regulatory authority, and such non-conformity arose due to Vetter International’s or its Affiliates’ gross negligence, Vetter International’s liability for the recall or returned Product will not exceed [...***...] Euros (€[...***...] ).

 

12.5.4     Maximum Liability. Vetter International and its Affiliates’ liability to Customer under this Agreement for any reason whatsoever will not exceed: (i) in the case of any claims of negligence and/or breach of contract, [...***...] percent ([...***...] %) of the contractual amount paid by [...***...]; (ii) in the case of gross negligence and/or breach of contract, [...***...] percent ([...***...] %) of the contractual amount paid by [...***...]; or (iii) in the case of indemnification, [...***...] ([...***...] %) of the contractual amount paid by Customer.

 

12.5.5     No direct Liability of Representatives. Notwithstanding anything to the contrary contained in this Agreement, it is expressly agreed by and between the Parties that no Affiliate of Vetter International shall personally assume any responsibility or liability , but Vetter International shall be responsible and liable for the performance of any of its Affilites to the same extent as if Vetter International had performed or failed to perform, all as contemplated or required hereunder, and any claim made under this Agreement (for clarity, specifically including the Quality Agreement) shall exclusively be made against Vetter International.

 

	
			13.

				
			Warranties.

			

	 	
			13.1.

				
			          NEITHER PARTY MAKES ANY WARRANTY OR CONDITION OF ANY KIND, EITHER EXPRESSED OR IMPLIED, BY FACT OR LAW, THAT THAN THOSE EXPRESSLY SET FORTH IN THIS AGREEMENT. VETTER INTERNATIONAL AND ITS AFFILIATES AND CUSTOMER GIVE NO WARRANTY OR CONDITION OF FITNESS FOR A PARTICULAR PURPOSE NOR ANY WARRANTY OR CONDITION OF MERCHANTABILITY FOR THE PRODUCTS.

			

 

	
			14.

				
			Term and Termination.

			

 

	 	
			14.1.

				
			          Term. This Agreement shall be in full force and effect as of the Effective Date. This Agreement will expire on the later of (a) ten (10) years from the Effective Date or (b) the completion of all Services under the last Statement of Work executed by the Parties prior to the tenth anniversary of the Effective Date. This Agreement may be extended by mutual agreement of the Parties or earlier terminated as set forth in this Section 14.

			

 

	 	
			14.2.

				
			          Termination by Either Party. Either Party may terminate this Agreement upon prior written notice if the other Party is in major default in the fulfillment of any obligation under this Agreement and such major default is not cured within the relevant notice period. The term “major default” shall include, but not be limited to (i) insolvency, bankruptcy, liquidation, or appointment of a receiver of any significant part of the property, of a Party or Vetter Pharma; (ii) in the case of any other default which can be cured, the failure to commence remedying the default during a period of [...***...] calendar days after the giving of written notice specifying such default; and (iii) with respect to Customer, the failure to provide for or maintain product liability insurance as required under this Agreement; or (iv) failure to establish mutual agreement in accordance with Section 10.5 within [...***...] calendar days.

			

 

 

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			14.3.

				
			          Termination by Customer. Customer may immediately terminate this Agreement at any time with prior written notice to Vetter International if Customer determines, in its sole discretion and consultation with Vetter International, that the Product cannot be commercialized for medical, scientific, regulatory or technical reasons.

			

 

	 	
			14.4.

				
			          Effect of Termination or Expiration. Upon termination or expiration of this Agreement, except as stated within this Agreement, neither Party will have any further obligations under this Agreement, or in the case of termination or expiration of a Statement of Work, under that Statement of Work, except that:

			

 

14.4.1.     Customer will purchase, subject to any right of Customer for late/short delivery and inspection and acceptance, at the agreed prices, any Product for which purchase orders have been or are required to be placed in accordance with the applicable Statement of Work prior to the effective date of termination or expiration.

 

14.4.2.     Customer will be liable to Vetter International for all agreed upon milestone payments achieved or pro-rated for partial achievement, and the Parties cooperate to terminate all Services in an orderly manner; provided, however, that Vetter International will mitigate any non-committed costs as reasonably possible.

 

14.4.3.     Vetter International will arrange for, at Customer’s option and expense, to either return any remaining Customer Materials to Customer, to destroy the Customer Materials, or to deliver the Customer Materials to a third party, as instructed by Customer.

 

14.4.4.     Vetter International will return to Customer all copies of Customer Confidential Information and Customer will return to Vetter International all copies of Vetter International Confidential Information, with the exception of one copy of such Confidential Information that each Party may retain in a limited access, secure location to satisfy all regulatory requirements and compliance with the terms herein.

 

14.5.             Survival. The terms, conditions and obligations under Sections 1, 3, 4, 5, 6, 7, 11, 12, 13, 14.5 and 15 will survive any termination or expiration.

 

	
			15.

				
			Miscellaneous.

			

 

	 	
			15.1.

				
			          Independent Contractor.  All Services will be rendered by Vetter International as an independent contractor and this Agreement does not create an employment relationship, partnership or joint venture between Customer and Vetter International. Vetter International will not in any way represent itself to be a partner or joint venturer of or with Customer.

			

 

 

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			15.2.

				
			          Force Majeure. No Party shall be responsible other Party, and no default shall be deemed to have occurred, for failure or delay in performing any obligations or for other non-performance if such failure, delay or other non-performance is caused by or arises from any strike, stoppage of labor, lockout or any other labor trouble, shortage of energy or raw material or any inability to obtain any materials or shipping space, breakdown or delays of carriers or shippers, default or delay by any supplier or sub-contractor or other events due to internalization of operations and services typically and customarily provided by a third party, fire, flood, lightning, fog, storm, unusual weather conditions, explosion, accident, earthquake, volcanic ash, epidemics, act of God, any public enemy, sabotage, invasion, war (declared or undeclared), riot, embargo, governmental or administrative act or restraint, prohibition on import or export of the Product or materials incorporated therein or parts thereof, (unless arising from a failure to comply with Applicable Laws), or any matter or cause that is unavoidable by or beyond the reasonable control of the affected Party (each, an event of “Force Majeure”). A Party shall be under no obligation to settle a strike, labor stoppage, lockout, or any other labor trouble by entering into any agreement to settle any thereof and until any such matter is settled to the satisfaction of the affected Party, such matter shall continue to be deemed Force Majeure. Any and all of the foregoing shall also apply to a Party to the extent that an Affiliate of such Party is performing or providing any service or work in connection with the obligations of a Party. A Party claiming Force Majeure shall promptly notify the other Party specifying the cause and probable duration of the failure, delay or other non-performance. Neither Vetter International nor any of its Affiliates will be under any obligation to fulfill any purchase order which has been, or should have been scheduled to be performed during a time period of Force Majeure; provided, however, a Party so affected shall undertake every reasonable effort to fulfill its contractual obligations to the extent reasonably possible under the circumstances. Each Party shall have the right to terminate this Agreement and/or any SOW under this Agreement if the Force Majeure continues for more than [...***...] days without further liability for the termination.

			

 

	 	
			15.3.

				
			          United Nations. The United Nations Convention on Contracts for the International Sale of Goods shall not apply with respect to the matters set forth in this Agreement.

			

 

	 	
			15.4.

				
			          Use of Names. Neither party has the right to use the other party’s name or the names of the other party’s employees in any advertising, sales promotional material or press release without prior written permission of the other party, except to the extent such disclosure is reasonably necessary for (a) regulatory filings, including filings with the U.S. Securities Exchange Commission, FDA, or EMA, (b) prosecuting or defending litigation, and (c) complying with (i) applicable governmental regulations and legal requirements and (ii) the requirements of any stock exchange or stock listing entity.

			

 

	 	
			15.5.

				
			          Notices. All notices required or permitted under this Agreement must be in writing and must be given by addressing the notice to the address for the recipient set forth in this Agreement or at such other address as the recipient may specify in writing under this procedure.

			

 

If to Customer:                                    Sophiris Bio Corp.

Attn: Allison Hulme, COO and Head of R&D

1258 Prospect Street

La Jolla, California 92037 USA

Fax: [...***...]______

 

	Confidential	- Page 15 -	Execution Copy

 

 

 

If to Vetter International:      Vetter Pharma International GmbH

Attn. Managing Director

Eywiesenstraße 5, 88212 Ravensburg, Germany

Fax: [...***...]

 

With copy to:

Vetter Pharma-Fertigung GmbH & Co. KG

Attn. Head of Legal Department

Schützenstraße 87, 88212 Ravensburg, Germany

Fax: [...***...]

 

Notices will be deemed to have been given (a) three (3) Business Days after deposit in the mail with proper postage for first-class registered or certified mail prepaid, or (b) one (1) Business Day after sending by nationally recognized overnight delivery service

 

15.6             Assignment. This Agreement may not be assigned or transferred, in whole or in part, by either party without the prior written consent of the other party. However, Vetter International may transfer or assign this Agreement, in whole or in part without the prior written consent of Customer, to an Affiliate, provided that all obligations of Vetter International are assumed by the assignee. Notwithstanding the above, Customer may, without prior notice or consent, assign this Agreement and its rights and obligations hereunder to a third party in connection with the transfer or sale of all or substantially all of its business related to the subject matter of this Agreement, or in the event of a change in control of Customer or its merger, acquisition, consolidation or a similar transaction, in which event Vetter International has the right to immediately terminate the Agreement or any Statement of Work based on Vetter’s commercially reasonable concerns regarding assignee’s ability to meet Customer’s obligations under this Agreement within a period of ninety days after receipt of written notification of such sale, merger, consolidation or similar transaction.

 

15.7             Entire Agreement. This Agreement, including the Confidentiality Agreement attached hereto as Annex 3 and incorporated herein, constitutes the entire agreement of the parties with regard to its subject matter, and supersedes all previous written or oral representations, agreements and understandings between Vetter International and Customer with regard to such subject matter. In the event of any conflict, discrepancy, or inconsistency between the terms set forth in the body of this Agreement, any Statement of Work or any purchase order issued under this Agreement, the terms of the body of this Agreement will control. Further, the terms of a Statement of Work will control over the terms of any purchase order issued by Customer for the Services under that Statement of Work.

 

15.8             Conflict. In the event of any conflict between any provision of the Development Quality Agreement and the other provisions of this Agreement, the provisions of the Development Quality Agreement shall control all technical, pharmaceutical and quality related provisions of the Services, all other provisions will be controlled by this Agreement. In the event of any conflict between the Statement of Work and the Agreement, the provisions of the Agreement shall control.

 

15.9             No Modification. This Agreement may be changed only by a writing signed by an authorized representative of each Party.

 

 

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			15.10

				
			          Severability; Reformation. Any of the provisions of this Agreement which are determined to be invalid or unenforceable in any jurisdiction will be ineffective to the extent of such invalidity or unenforceability in such jurisdiction, without rendering invalid or unenforceable the remaining provisions hereof and without affecting the validity or enforceability of any of the other terms of this Agreement in such jurisdiction, or the terms of this Agreement in any other jurisdiction.  The Parties will substitute for the invalid or unenforceable provision a valid and enforceable provision that conforms as nearly as possible with the original intent of the Parties.

			

 

	 	
			15.11

				
			          Governing Law and Dispute Resolution. The Parties shall attempt to amicably settle and in good faith resolve any dispute in connection with this Agreement, by negotiations between designated representatives prior to the commencement of any litigation. If no amicable settlement and good faith resolution thereof has been achieved within [...***...] Business Days from the initiation of negotiations, such dispute may be brought by written notice to the executive management representatives who shall use reasonable endeavors to amicably settle and in good faith resolve such dispute within [...***...] Business Days of receipt of said notice. If no settlement or resolution is achieved within the time period, such dispute shall be brought by written notice to the highest management representatives who shall use reasonable endeavors to amicably settle and in good faith resolve such dispute within further [...***...] Business Days of receipt of said further notice. If such settlement fails, either Party may, at its sole discretion, refer any dispute, controversy or claim arising out of or in connection with this Agreement to Arbitration under the Rules of Arbitration of the German institution for arbitration (Deutsche Institution für Schiedsgerichtsbarkeit e.V. (DIS); “Rules”). All disputes, controversies or claims arising out of or in connection with the present Agreement shall be finally settled in accordance with the Rules by three arbitrators appointed in accordance with the Rules. The seat of arbitration shall be Frankfurt am Main, Germany. The language to be used in the arbitral proceedings shall be English. Annexes to any procedural document may also be provided in the German language. This Agreement shall be governed by, construed and interpreted and all disputes, controversies or claims arising under or in connection with this Agreement shall be resolved in accordance with the substantive laws of Germany without recourse to any conflict of laws rules. Notwithstanding the foregoing, each Party shall be entitled to obtain injunctive relief against any threatened breach of this Agreement or the continuation of any such breach by the receiving Party by way of ordinary civil proceedings. Any decision or arbitral award delivered in the arbitration shall be reasoned and in writing, and shall be final and binding on the Parties and enforceable in any competent court of law. The Parties undertake to comply promptly with any award without delay and shall be deemed to have waived their right to any form of recourse insofar as such waiver can validly be made.

			

 

	 	
			15.12

				
			          Waiver. No waiver of any term, provision or condition of this Agreement in any one or more instances will be deemed to be or construed as a further or continuing waiver of any other term, provision or condition of this Agreement. Any such waiver must be evidenced by an instrument in writing executed by an officer authorized to execute waivers.

			

 

	 	
			15.13

				
			          Counterparts. This Agreement may be executed in any number of counterparts, each of which will be deemed an original and all of which together will constitute one and the same instrument. A facsimile or scanned copy of this Agreement that includes a party’s signature will be deemed an original.

			

 

 

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			15.14

				
			          Headings. This Agreement contains headings only for convenience and such headings should not be used in the construction of this Agreement.

			

 

 

 

 

(Page remainder left blank intentionally.)

 

 

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IN WITNESS WHEREOF, duly authorized representatives of each Party have executed this Agreement on the dates and at the places below written.

 

 

	
			SOPHIRIS BIO CORP.

			 

			 

			Signature: /s/ Allison Huhme                      

			 

			Name: Allison Hulme                                  

			 

			Title: COO & Head of Research & Development

			 

			Place: 1258 Prospect Street, La Jolla           

			 

			Date:6th March 2019                                     

				
			 

			 

			 

			Signature: _______________________________

			 

			Name:__________________________________

			 

			Title:___________________________________

			 

			Place: __________________________________

			 

			Date:___________________________________

			
	
			 

			 

			 

			 

			VETTER PHARMA INTERNATIONAL GMBH

			
	
			 

			 

			Signature: /s/ Hermann Piana                        

			 

			Name: Dr. Hermann Piana                             

			 

			Title: Director Key Account Management Europe

			 

			Place: Ravensburg                                           

			 

			Date: 19th March 2019                                   

				
			 

			 

			Signature: /s/ Harmann Kleinle                      

			 

			Name:Hermann Klienle                                  

			 

			Title: Key Account Manager                          

			 

			Place: Ravensburg                                          

			 

			Date: 19th March 2019                                    

			

 

 

	Confidential	- Page 19 -	Execution Copy

 

 

 

ANNEX 1:  STATEMENT OF WORK (SAMPLE)

 

Statement of Work No. ___

 

 

This Statement of Work No. ___ (“SOW”), is entered into by and between Vetter Pharma International GmbH (“VPI”) and Sophiris Bio Corp. (“Sophiris”) and shall be effective as of _____________ (the “SOW Effective Date”). Upon execution, this SOW shall be subject to and incorporated into that certain Master Services Agreement dated ______________________ (the “Agreement”).

NOW, THEREFORE, in reliance upon and in consideration of the following undertakings and for other good and valuable consideration, the Parties hereby agree to the following:

 

	 	
			1.

				
			Services. VPI agrees to provide, by VPI itself or via any VPI Affiliate, certain pharmaceutical development and/or Manufacturing services for Phase I or Phase II clinical trial projects (“Services”), which Services shall be:

			

 

	 	
			a.

				
			performed in accordance with the quotation set forth in Annex 1, attached hereto and incorporated herein by reference;

			

 

	 	
			b.

				
			subject to the terms and provisions set forth in the Agreement; and

			

 

	 	
			c.

				
			if expressly agreed that cGMP standards shall apply to such services, subject to the Development Quality Agreement dated ____________________ (“Quality Agreement”).

			

 

	 	
			2.

				
			Pricing. For VPI’s performance of the Services, Sophiris shall pay to VPI the amounts (“Prices”) set forth in detail in Annex 1, which shall be invoiced and payable in accordance with the applicable payment schedule set forth therein. The terms of the Agreement shall apply to the Prices due hereunder.

			

 

	 	
			3.

				
			Term and Termination. The term of this SOW shall commence as of the SOW Effective Date and shall continue until completion of the Services described herein, provided, however, that this SOW may be terminated in accordance with the Agreement.

			

 

The terms of the Agreement shall take precedence and control over the terms of this SOW and those of any purchase order issued by Sophiris in connection with these Services; further, the terms of this SOW shall take precedence and control over those of any purchase order issue by Sophiris in connection with these Services. Any capitalized term used in this SOW but not defined herein shall have the meaning set forth in the Agreement. A facsimile or scanned copy of this SOW that includes a Party’s signature shall be deemed an original. This SOW may be executed in counterparts, each of which is deemed an original, but all of which together constitute one and the same agreement. Delivery of an executed counterpart of this SOW electronically or by facsimile shall be effective as delivery of an original executed counterpart of this SOW.

 

 

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	Confidential	- Annex 1-1 -	Execution Copy

 

 

 

IN WITNESS WHEREOF, the parties by their authorized representatives have executed this SOW with effect as of the SOW Effective Date:

 

 

 

	
			Sophiris Bio Corp.

			 

			 

			By: ____________________________________

			 

			Name: __________________________________

			 

			Title: ___________________________________

			 

			Date: ___________________________________

			 

			 

			 

			 

			vetter pharma interNational gmbh

			 

			 

			By: ____________________________________

			 

			Name: __________________________________

			 

			Title: ___________________________________

			 

			Date: ___________________________________

			 

			 

			 

			By: ____________________________________

			 

			Name: __________________________________

			 

			Title: ___________________________________

			 

			Date: ___________________________________

				 

 

 

	Confidential	- Annex 1-2 -	Execution Copy

 

 

 

Annex 1 to the Statement of Work No. [#]

 

 

Quotation titled:

“ _____________________ ”

 

Quotation No: ________

 

Dated: ____________________

 

 

 

[see following pages]

 

 

	Confidential	- Annex 1-3 -	Execution Copy

 

 

 

ANNEX 2:  DEVELOPMENT QUALITY AGREEMENT

 

 

 

[...***...]

 

 

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ANNEX 3: CONFIDENTIALITY AGREEMENT

 

 

 

[...***...]

 

 

	Confidential	- Annex 3-1 -	Execution Copytrtc_ex101.htm

EXHIBIT 10.1
  
 ASSET PURCHASE AGREEMENT
  
 This Asset Purchase Agreement (this “Agreement”) is entered into as of May 8, 2019 (the “Effective Date”), by and between Picksy LLC, a Nevada limited liability company (“Purchaser”), and MEDIFARM LLC, a Nevada limited liability company (“Seller”). 
  
 RECITALS
  
 A. Seller is engaged in the business of selling Medical and Recreational Marijuana and all associated derivatives and products, under multiple State of Nevada Department of Taxation (“NV DOT”) licenses, through a retail dispensary operating at the Premises, being referred to herein as the “Business”; 
  
 B. Purchaser is interested in purchasing, and Seller is interested in selling, certain assets related to the Business, as more fully described herein. Obtaining approval from state and local governmental authorities for the sale and transfer of Seller’s existing State licenses to Purchaser, as well as all associated State or County business licenses and permits, is a contingent factor and a condition precedent to Closing.; 
  
 C. The parties hereto desire that Seller sell, assign, transfer and convey to Purchaser, and that Purchaser purchase from Seller, the Assets (as defined below) in exchange for the consideration set forth herein, all according to the terms and subject to the conditions set forth in this Agreement (the “Transaction”). 
  
 NOW, THEREFORE, in consideration of the representations, warranties and covenants herein contained and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows. 
  
 ARTICLE I
  
 PURCHASE AND SALE OF ASSETS
  
 1.1 Purchase and Sale of Assets and Assumption of Assumed Liabilities. 
  
 (a) Upon the terms and subject to the conditions set forth in this Agreement, effective as of the Closing Date (as defined below), Seller agrees to sell, assign, transfer, convey and deliver to Purchaser, and Purchaser agrees to purchase from Seller, all of Seller’s right, title and interest in and to the Assets, free and clear of all Encumbrances (other than Permitted Encumbrances). 
  
 (b) In connection with the Transaction, on the Closing Date, Seller shall take any and all actions that may be required, or reasonably requested by Purchaser, to transfer good, valid and marketable title to all of the Assets, free and clear of all Encumbrances (other than Permitted Encumbrances), to Purchaser, and Seller shall deliver possession of all of the Assets to Purchaser on the Closing Date. Seller shall further deliver to Purchaser proper assignments, bills of sale, conveyances and other instruments of sale and/or transfer in forms reasonably satisfactory to Purchaser to convey to Purchaser good title to all Assets, free and clear of all Encumbrances (other than Permitted Encumbrances), as well as such other instruments of sale and/or transfer as Purchaser may reasonably request (whether on or after the Closing Date) to evidence and effect the Transaction contemplated herein. 
  
  	 
	1
	 
 
	 

  
 1.2 Assets. 
  
 (a) As used in this Agreement, the term “Assets” means, collectively, all of Seller’s right, title and interest in and to all the assets, properties and rights that are owned, including licenses and leases, used or held for use exclusively in the conduct of the Business together with the goodwill of the Business associated therewith (including the Assumed Contracts (if any), the Business Records, the Tangible Personal Property and any other asset identified herein), customer databases and lists, financial records, all product inventory, appropriate equipment and real property leases, all procedural and operational manuals, all equipment, computers and electronics owned by Seller, in each case only those specifically related to or located at the Premises, excluding the Excluded Assets (as defined below). 
  
 (b) Purchaser and Seller have mutually drafted and agreed to the asset list attached hereto as Schedule 1.2(b) which defines all Assets included in the Transaction.
  
 1.3 Excluded Assets. Notwithstanding anything herein to the contrary, it is hereby expressly acknowledged and agreed that the Assets shall not include, and Seller is not selling, conveying, assigning, transferring or delivering to Purchaser, and Purchaser is not purchasing, acquiring or accepting from Seller, any of the rights, properties or assets set forth or described in paragraphs (a) through (f) below (the rights, properties and assets expressly excluded by this Section 1.3 from the Assets being referred to herein as the “Excluded Assets”): 
  
 (a) all rights, claims or causes of action of Seller arising under this Agreement; 
  
 (b) all Seller bank accounts; 
  
 (c) all Accounts Receivable of the Business as of the date of Closing;
  
 (d) all Seller credit cards, lines of credit, or similar agreements for the extension of credit to Seller in the operation of the Business;
  
 (e) the corporate charter, qualifications to conduct business as a foreign corporation, arrangements with registered agents relating to foreign qualifications, taxpayer and other identification numbers, seals, minute books, stock transfer books, blank stock certificates, and other documents relating to the organization, maintenance, and existence of Seller as a corporation or other form of business entity; 
  
 (f) all Employee Benefit Plans and any assets associated with such Employee Benefit Plans; and 
  
 (g) any contracts of Seller which are not Assumed Contracts and any other assets identified on Schedule 1.3(g) herein. 
  
  	 
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 1.4 Assumption of Liabilities. 
  
 (a) Subject to and upon the terms and conditions of this Agreement, effective as of the Closing Date, Purchaser agrees to assume from Seller and to pay, perform and discharge according to their terms ONLY the following specified Liabilities (collectively, the “Assumed Liabilities”), but no others: (i) all Liabilities, if any, of Seller specifically set forth in Schedule 1.4(a) herein, (ii) all Liabilities incurred by the Business with respect to the Assets, including the Assumed Contracts, from and after the Closing Date, and (iii) any Transfer Taxes, Fees and Property Taxes, in each case, to the extent specifically allocated to Purchaser pursuant to Section 5.2. Purchaser shall not assume any Liabilities of Seller, and Seller shall remain liable for and shall discharge any and all Liabilities incurred with respect to the Assets, including the Assumed Contracts, prior to the Closing. 
  
 (b) Nothing herein shall be deemed to deprive Purchaser or any Affiliate of Purchaser, as applicable, of any defenses, set-offs or counterclaims that Seller has or may have had or that Purchaser, or any Affiliate of Purchaser, as applicable, shall have (to the extent relating to the Assumed Liabilities) to any of the Assumed Liabilities (the “Defenses and Claims”). Effective as of the Closing, Seller agrees to assign, transfer and convey to Purchaser all Defenses and Claims and agrees to cooperate with Purchaser to maintain, secure, perfect and enforce such Defenses and Claims. 
  
 1.5 Liabilities Not Assumed. Purchaser shall not assume any Liabilities of Seller other than the Assumed Liabilities, nor shall it assume any of the following obligations or Liabilities (all obligations or Liabilities not assumed by Purchaser herein are collectively referred to herein as “Excluded Liabilities”), which in each case shall remain obligations and Liabilities of Seller:
  
 (a) Any Liability arising out of or as a result of any legal or equitable Action or judicial or administrative proceeding initiated at any time to the extent arising out of facts occurring prior to the Closing; 
  
 (b) Any Liability of Seller or otherwise imposed on the Assets or with respect to the Business, in respect of any Tax, including (i) any Liability of Seller for the Taxes of any other Person under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or foreign Law), as a transferee or successor, by contract or otherwise, (ii) any Transfer Taxes or Property Taxes except, in each case, to the extent specifically allocated to Purchaser pursuant to Section 5.2, and (iii) any liability of Seller for Taxes arising in connection with the consummation of the Transaction or because Seller is transferring the Assets, excluding any Transfer Taxes allocated to Purchaser pursuant to Section 5.2; 
  
 (c) Any Liabilities required to have been performed or paid prior to the Closing, or related to or arising from any breach or default by Seller, whether on or before the Closing, of any Assumed Contracts, or related to or arising from any tort, infringement or violation of Laws by Seller, to the extent occurring or arising from facts occurring on or prior to the Closing; 
  
  	 
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 (d) Any Liability of Seller incurred in connection with or under this Agreement (including with respect to any of Seller’s representations, warranties, agreements, or covenants hereunder) relating to the execution or performance of this Agreement and the transactions contemplated herein; 
  
 (e) Except as set forth in Sections 8.14 and 8.15, any fees or expenses incurred by Seller or its shareholders with respect to Seller’s or such Persons’ engagement of counsel, or any investment banker, appraiser or accounting firm engaged to perform services in connection with the Transaction; 
  
 (f) Any obligations of Seller for borrowed money; 
  
 (g) Any Liability of Seller not related to the Assets; 
  
 (h) Any Liability relating to the Excluded Assets; 
  
 (i) Any Liability or obligation of Seller or any of its Affiliates relating to any current or former employee or other service provider of Seller or any of its Affiliates, or any dependent or beneficiary thereof, including without limitation (i) any Liability arising under any Employee Benefit Plan, including any Multiemployer Plan or other Pension Plan, (ii) any Liability that constitutes a Withdrawal Liability or COBRA Liability, (iii) any Liability arising in connection with the actual or prospective employment or engagement, the retention and/or discharge by Seller or any of its Affiliates of any current or former employee or other service provider , (iv) any Liability for wages, remuneration, compensation (including any bonuses due any employee arising as a result of the transactions contemplated hereby), benefits, severance, vacation or other paid-time-off or other accrued obligations (A) associated with any employee or other service provider of Seller or any of its Affiliates (including any Business Employee) who does not become a Transitioned Employee (or any dependent or beneficiary thereof), and (B) with respect to any Transitioned Employee, arising on or prior to the Closing Date, and (v) any claim of an unfair labor practice, or any claim under any state unemployment compensation or worker’s compensation Law or under any federal or state employment discrimination Law; 
  
 (j) Any Liability of Seller related to the Assets under any Environmental Law which first arose prior to or is related to actions occurring on or prior to the Closing Date; 
  
 (k) Any Liability of Seller listed as an Account Payable or debt amount owed. At the Closing Date, in conjunction with this Transaction, Seller shall warrant to purchaser that all Accounts Payable and debt amounts, as of that date, are current and with a zero balance, unless excluded and agreed to in writing by Purchaser; and 
  
 (l) Any other Liabilities not identified as Assumed Liabilities in Section 1.4(a) or Schedule 1.4(a) herein. 
  
  	 
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 1.6 Purchase Consideration. 
  
 (a) The aggregate consideration for the purchase of the Assets shall be TEN MILLION DOLLARS ($10,000,000) plus or minus the Inventory Adjustment as set forth in Section 1.6(b) below (the “Purchase Price”) and the assumption of the Assumed Liabilities (the “Liability Assumption”) (together with the Purchase Price, the “Transaction Consideration”). 
  
 (b) Product inventory at Closing must be equivalent in quality, diversity and value to the average quality, diversity and value of inventory during the sixty (60) days prior to the date of this Agreement (“Average Inventory”). Such Average Inventory is considered part of the Assets being acquired by Purchaser. The Seller and the Purchaser shall agree in writing as to the value of the Inventory located at the Premises (the “Inventory Amount”) immediately prior to Closing. Should the Inventory Amount at the time of Closing exceed the Average Inventory, the Purchase Price shall be adjusted upward accordingly and shall be payable at Closing. Should the Inventory Amount at the time of Closing be less than the Average Inventory, the Purchase Price shall be adjusted downward accordingly and shall be payable at Closing. Any adjustment either upwards or downwards based upon the actual amount of inventory transferred to Purchaser at Closing pursuant to this Section shall be deemed the “Inventory Adjustment.”
  
 1.6.1 Escrow Deposit. 
  
 (a) On the date of execution of this Agreement, Purchaser shall deposit into an escrow account (“Initial Escrow Deposit”) the amount of One Million Dollars ($1,000,000) pursuant to the terms of the Escrow Agreement.
  
 (b) The Escrow Agent shall be Gentile Cristalli Miller Armeni & Savarese (“Escrow Agent”). All costs associated with the Escrow Agent in regards to this Transaction, shall be paid equally by the Seller and the Purchaser. 
  
 (c) The Escrow Deposit shall be refundable at the written request of the Purchaser only in the event (i) the Seller terminates this Agreement other than based upon an unremedied default of the Purchaser; (ii) the Purchaser terminates this Agreement based upon an unremedied default of the Seller; or (iii) the NV DOT, Clark County or City of Las Vegas do not approve the transfer of the applicable Permits by the Outside Date. In the event the NV DOT does not approve Purchaser as an owner of the licenses set forth herein and/or an operator of a medical and recreational marijuana dispensary due to an un-remedied fault of Purchaser, the transaction set forth in this Agreement shall be cancelled and all funds deposited into escrow shall be released to Seller. 
  
 1.7 Consent of Third Parties. Notwithstanding anything to the contrary in this Agreement, this Agreement shall not constitute an agreement to assign or transfer any Asset, instrument, contract, lease, permit or other agreement or arrangement or any claim, right or benefit arising thereunder or resulting therefrom if an assignment or transfer or an attempt to make such an assignment or transfer without the consent of a third party would constitute a material breach or violation thereof or affect adversely the rights of Purchaser or Seller thereunder; and any assignment or transfer to Purchaser by Seller of any interest under any such Asset, instrument, contract, lease, permit or other agreement or arrangement that requires the consent of a third party shall be made subject to such consent or approval being obtained. Nothing in this Section 1.7 shall be deemed to constitute an agreement to exclude from the Assets any assets described under Section 1.2. 
  
  	 
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 1.8 Allocation. Following the Closing, Seller and Purchaser shall use commercially reasonable efforts to prepare a joint schedule allocating the aggregate consideration (including the Assumed Liabilities) payable for the Assets in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended (the “Code”) and the Treasury regulations promulgated thereunder (and any similar provision of state, local or foreign Law, as appropriate) (the “Allocation Schedule”). If Seller and Purchaser are able to agree upon the Allocation Schedule within thirty (30) days following the Closing Date, Seller and Purchaser shall each file IRS Form 8594, and all federal, state, local and foreign tax returns, in accordance with the Allocation Schedule. If Purchaser and Seller are unable to agree upon the Allocation Schedule within 30 days after the Closing Date, any dispute or disagreement between Purchaser and Seller regarding any matter set forth in the Allocation Schedule shall be resolved promptly by the Independent Auditor, the costs of which shall be borne equally by Purchaser, on the one hand, and Seller, on the other hand. Purchaser and Seller shall prepare and file all Tax Returns and other statements in a manner consistent with the Allocation Schedule and shall not make any inconsistent statement or adjustment on any Tax Returns or otherwise during the course of an audit, investigation or other dispute with a Taxing authority, provided, however, that nothing contained herein shall prevent Purchaser or Seller from settling any proposed deficiency or adjustment by any Taxing authority based upon or arising out of the Allocation Schedule, and neither Purchaser nor Seller shall be required to litigate before any court any proposed deficiency or adjustment by any Taxing authority challenging such Allocation Schedule. 
  
 1.9 Withholding. Purchaser shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement to Seller such amounts as Purchaser is required to deduct and withhold under the Code, or any Tax Law, with respect to the making of such payment. To the extent that amounts are so withheld, such withheld amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of whom such deduction and withholding was made. 
  
 ARTICLE II
  
 THE CLOSING
  
 2.1 Closing. The consummation of the Transaction will take place at a closing to be held at the offices of Gentile Cristalli Miller Armeni & Savarese in Las Vegas, Nevada, or such other place as the parties agree upon in writing, (the “Closing”) on the third business day after the satisfaction or waiver of all of the closing conditions to the obligations of the parties contemplated hereby (the “Closing Date”). 
  
  	 
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 2.2 Deliveries by Purchaser at the Closing. At the Closing, Purchaser shall deliver, or cause to be delivered to Seller, the following: 
  
  	  
	(a)	the Purchase Price, less (i) the Escrow Deposit and (ii) the amount of the Note (as defined below), by wire transfer of immediately available funds to the account designated by Seller. The parties agree that the Seller shall pay any commission owed to the Seller’s broker at the Closing; and
	  
	  
	  

	  
	(b)	a 12 month Promissory Note payable to Seller in the principal amount of Two Million Eight Hundred Thousand Dollars ($2,800,000) bearing 5% interest and secured by the Assets (the “Note”) in the form attached hereto as Exhibit A.

  
 2.3 Deliveries by Seller and Purchaser at the Closing. At the Closing, as conditions precedent to Closing, Seller shall deliver, or cause to be delivered, to Purchaser, and Purchaser shall deliver, or cause to be delivered, to Seller, as applicable, the following: 
  
 (a) evidence satisfactory to Purchaser of (i) the third party consents set forth in Section 1.7 and (ii) any other required consents from third parties, including landlord(s), current lender(s), the NV DOT, Clark County and City of Las Vegas, for the transactions contemplated herein; 
  
 (b) a bill of sale, assignments and assumptions of contracts and licenses as agreed to by Purchaser, and such other good and sufficient instruments of conveyance, assignment and transfer, duly executed by Seller and which are in form and substance reasonably satisfactory to counsel to Purchaser and are legally sufficient to vest in Purchaser, good title to the Assets; 
  
 (c) the Business Records and all assets listed in Section 1.2 and Schedule 1.2(b) herein; 
  
 (d) certificates, signed by the Secretary of Seller and the Secretary of Purchaser, certifying as to the truth and accuracy of, and attaching copies of, Seller’s and Purchaser’s charter documents and board of director and stockholder resolutions adopted in authorizing and approving this Agreement, and the Transaction; 
  
 (e) an Estoppel Certificate in the form required by the NV DOT duly executed by Purchaser; 
  
 (f) the Assumed Contracts, including properly assigned leases, if applicable, both equipment and real property, if any, and all Medical Marijuana or Recreational Marijuana licenses pertinent to the Seller, approved by the NV DOT and transferred to Purchaser, as agreed to by Purchaser; 
  
 (g) evidence of advance deposits, if any, duly executed by Seller; 
  
 (h) Purchaser’s standard form of employment, work file and confidentiality agreement, in the form attached as an Exhibit, duly executed by each of the Key Employees; and
  
 (i) a properly executed affidavit prepared in accordance with Treasury Regulations section 1.1445-2(b) certifying Seller’s non-foreign status.
  
  	 
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 2.4 Simultaneous Delivery. All deliveries at the Closing as provided for in Section 2.2 shall be deemed to be made and effected simultaneously with each other and with all deliveries provided for in Section 2.3, and all such deliveries shall be deemed to be in escrow until all such deliveries provided for in Section 2.2 and in Section 2.3 have been made and effected. 
  
 2.5. Lease. In the event Purchaser assumes the lease on the Premises as an Asset as of the date of Closing and then terminates the Lease following the Closing, Purchaser shall be responsible for any payments owed to the landlord in connection with such termination. 
  
 2.6 Termination. The parties may terminate this Agreement prior to the Closing as provided below:
  
 (a) by mutual written consent;
  
 (b) the Purchaser may terminate this Agreement by giving written notice to the Seller in the event the Seller is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in Section 2.3 not to be satisfied and (ii) is not cured within twenty (20) days following delivery by the Purchaser to the Seller of written notice of such breach;
  
 (c) the Seller may terminate this Agreement by giving written notice to the Purchaser in the event the Purchaser is in breach of any representation, warranty or covenant contained in this Agreement, and such breach (i) individually or in combination with any other such breach, would cause the conditions set forth in Section 2.3 not to be satisfied and (ii) is not cured within twenty (20) days following delivery by the Seller to the Purchaser of written notice of such breach;
  
 (d) the Purchaser may terminate this Agreement by giving written notice to the Seller if the Closing shall not have occurred on or before the one year anniversary of the date of this Agreement (the “Outside Date”) by reason of the failure of any condition precedent under Section 2.3 (unless the failure results primarily from a breach by the Purchaser of any representation, warranty or covenant contained in this Agreement); or
  
 (e) the Seller may terminate this Agreement by giving written notice to the Purchaser if the Closing shall not have occurred on or before the Outside Date by reason of the failure of any condition precedent under Section 2.3 (unless the failure results primarily from a breach by the Seller of any representation, warranty or covenant contained in this Agreement).
  
 ARTICLE III
  
 REPRESENTATIONS AND WARRANTIES OF SELLER
  
 Except as is otherwise set forth in Seller’s disclosure schedule (the “Seller Disclosure Schedule”) delivered by Seller to Purchaser and dated as of the date of this Agreement, Seller represents and warrants that the statements contained in this Article III are true and correct as of the date hereof. Matters disclosed by Seller in the Seller Disclosure Schedule in reference to any section of this Agreement shall be deemed to be disclosed for all purposes under this Agreement to the extent it is reasonably apparent on its face that such disclosure is applicable for such other purposes. 
  
  	 
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 3.1 Organization; No Subsidiaries. 
  
 (a) Seller is a company duly organized and validly existing under the Laws of the State of Nevada and has full power and authority to carry on its business as now conducted. 
  
 (b) Seller does not have any subsidiaries, and the Business is conducted solely by Seller. 
  
 3.2 Authorization. This Agreement will constitute, a valid and binding agreement of Seller enforceable against Seller, in accordance with their respective terms, subject to (a) Laws of general application relating to bankruptcy, insolvency, and the relief of debtors and (b) rules of law governing specific performance, injunctive relief and other equitable remedies (collectively, the “Enforceability Exceptions”). Seller has all requisite power and authority to execute and deliver this Agreement, to carry out and perform its obligations hereunder and thereunder and to carry out and perform the transactions contemplated herein and therein. All requisite action on the part of Seller has been taken to authorize the execution and delivery of this Agreement. 
  
 3.3 No Conflicts; Consents. Except as set forth in Section 3.3 of the Seller Disclosure Schedule, the execution and the delivery by Seller of this Agreement does not, and the consummation of the transactions contemplated herein and therein and compliance with the provisions hereof and thereof will not (a) conflict with or violate the articles of organization or operating agreement of Seller, (b) conflict with or violate, result in a material breach of, constitute a material default (with or without notice or lapse of time, or both) under or violation of, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of any Encumbrance pursuant to, any note, bond, mortgage, indenture, lease, sublease, contract or other agreement or instrument, permit, concession, franchise, license, sublicense or Law applicable to Seller or any of the Assets, (c) conflict with or violate, on the part of Seller any filing with, or any permit, authorization, consent or approval of, any Governmental Authority, (d) require any notice, consent or waiver under any Assumed Contract or any other agreement or contract of Seller, except for the required consents listed in Section 1.7, (e) result in the imposition of any Encumbrance upon any of the Assets (other than a Permitted Encumbrance), (f) conflict with or violate any judgment, order, writ, injunction, or decree applicable to Seller or any of the Assets, or (g) conflict with or violate any material Law applicable to Seller or any of the Assets. 
  
 3.4 Financial Statements. 
  
 (a) Seller shall provide to Purchaser (i) the unaudited balance sheet and the related unaudited income statement and statement of cash flows of the Business for the calendar year 2018, and for the first quarter of 2019 (the “Historical Financial Statements”). The Historical Financial Statements fairly present, in all material respects, the consolidated financial condition, results of operations and cash flows of the Business as of the dates and during the periods indicated therein, consistent with the books and records of Seller (which, in turn, are correct and complete in all material respects), except that the unaudited Historical Financial Statements are subject to normal year end adjustments, which are not material individually or in the aggregate. 
  
  	 
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 (b) Except for Permitted Encumbrances and as set forth herein, the Business does not have any material Liability, except for Liabilities (i) reflected on the face of the Historical Financial Statements and to be paid off in conjunction with this Transaction, (ii) incurred in connection with the execution of this Agreement, and (iii) of the type reflected on the face of the Historical Financial Statements which have arisen since December 31, 2018 in the ordinary course of business (none of which relate to breach of contract, breach of warranty, tort, infringement, violation of or Liability under any Law or any Action and none of which are material individually or in the aggregate). 
  
 3.5 Assets. 
  
 (a) Title to Assets. Seller has, and, following the Closing, Purchaser will have, good, valid and marketable title to all Tangible Personal Property, including equipment, inventory and licenses, free and clear of all Encumbrances (other than Permitted Encumbrances). Seller has, and following the Closing Purchaser will have, a valid and binding leasehold interest in any leased equipment, and real property included among the Assets, free and clear of all Encumbrances (other than Permitted Encumbrances). At the Closing, Seller will sell, convey, assign, transfer and deliver to Purchaser good, valid, and marketable title in, and all of Seller’s right, title and interest in and to all of the Assets, free and clear of any Encumbrances (other than Permitted Encumbrances). 
  
 (b) Condition of Assets. As set forth herein, a copy of the fixed asset ledger of Seller, is attached, as of March 31, 2019. Each item of Tangible Personal Property included in the Assets has been maintained in accordance with normal industry practice, is in good operating condition (normal wear and tear excepted) and is suitable for the purposes for which it presently is used. 
  
 (c) Sufficiency of Assets. 
  
 (i) Except for (A) the Excluded Assets, (B) any employees or contractors (current or former) of Seller and (C) any general corporate or administrative services provided to the Business by Seller, the Assets include all tangible and intangible assets and rights that are used or held for use by Seller in the operation or conduct of the Business as it is conducted immediately prior to the Effective Date consistent with past practice, including all State Medical Marijuana licenses, and are sufficient for the conduct of the Business by Purchaser immediately following the Closing in substantially the same manner as conducted by Seller immediately prior to the Effective Date. This Transaction is contingent upon the above noted licenses being transferred to Purchaser. Seller is only warrantying that those licenses are part of the asset package being transferred, and does not warrant the approval from the State to transfer those licenses to Purchaser.
  
  	 
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 (ii) Seller (A) does not own, use or hold any websites or Domain Names that are owned, used or held for use in the Business other than the Seller Websites and the Domain Names included in the Transferred Intellectual Property, if any, (B) is not engaged in any business, activities or operations other than the Business and the businesses related to the Excluded Assets, and (C) does not own, use or hold any assets that are currently proposed to be used in the Business other than the Assets. 
  
 (iii) The Seller has all Permits, which will be transferred in this Transaction, necessary for the conduct of the Business as it is conducted immediately prior to the Effective Date consistent with past practice, the lack of which would reasonably be expected to result in a Material Adverse Effect. 
  
 3.6 Litigation. Other than that disclosed by the Seller Disclosure Schedule, there is no litigation, claim, action, suit, arbitration, charge, demand, proceeding or investigation (each, an “Action”) pending or, to Seller’s Knowledge, threatened or reasonably expected against Seller relating to the Business, the Assets or the Assumed Liabilities, other than what shall be specifically noted by Seller in writing. None of the Business or the Assets is subject to (i) any continuing order, consent decree, settlement agreement or other similar written agreement with any Governmental Authority, including, for the avoidance of doubt, any arbitrator, mediator or similar person, (ii) any order, writ, judgment, injunction, decree, determination or award of any Governmental Authority or (iii) to Seller’s Knowledge, any continuing investigation or inquiry by any Governmental Authority and, to Seller’s Knowledge, there is no valid basis for any such investigation or inquiry. 
  
 3.7 [Intentionally Omitted]. 
  
 3.8 Privacy. The Business has been operated at all times, and all personal information has been collected, processed, used, disclosed, shared, transferred, transmitted, stored and disposed of in compliance with the Privacy Statements and all applicable privacy Laws. 
  
 3.9 Assumed Contracts. 
  
 (a) Other than the Assumed Contracts, no existing contracts with Seller shall be assumed by Purchaser, without specific, individual, written consent by Purchaser.
  
 (b) Seller shall provide Purchaser a list of all existing contracts on Schedule 3.9(b). Except for the Assumed Contracts, Seller is not a party to or otherwise bound by the terms of any material contract, agreement or obligation, written or oral, affecting the Business or the Assets. Seller shall separately identify each Assumed Contract (i) pursuant to which any other party is granted “most favored party” rights of any type or scope, or containing any non-solicitation or non-competition covenants or other restrictions relating to the Business or that limits the freedom of Seller to engage or participate, or compete with any other Person, in any line of business, market or geographic area, or to make use of any Transferred Intellectual Property, (ii) that is an IP Agreement, (iii) that imposes on Seller payment obligations (contingent or otherwise) in excess of $5,000 per annum, (iv) that provides for payments to Seller in excess of $5,000 per annum, (v) that constitutes a partnership or joint venture agreement, (vi) that evidences outstanding Indebtedness which constitutes an Asset and (vii) that is a Lease.
  
  	 
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 (c) Assumed Contracts (if any) are valid, binding and in full force and effect and enforceable by Seller prior to Closing and by Purchaser upon and after Closing.. Neither Seller, nor, to Seller’s Knowledge, any other party, is in material breach, violation of, or default under, and to the Knowledge of Seller, no event has occurred which, with the lapse of time or the giving of notice, or both, is reasonably likely to result in a breach or violation by Seller or such other party of, or default under, any Assumed Contract, and there are no existing disputes or claims of default relating thereto, or any facts or conditions Known to Seller which, if continued, will result in a material default or claim of default thereunder. Seller has not received any written or, to the Knowledge of Seller, oral notice of the intention of any party to terminate, cancel, amend or not renew any Assumed Contract. Except as set forth in Section 1.7, no consents are necessary for the effective assignment to and assumption by Purchaser of any of the Assumed Contracts including but not limited to the lease on the Premises. Seller has furnished or made available to Purchaser true and complete copies of all Assumed Contracts and descriptions of all material terms of Assumed Contracts that are not in writing, including any amendments, waivers or other changes thereto. 
  
 3.10 No Adverse Changes. Other than that noted in the Seller Disclosure Schedule, since January 1, 2019, except as expressly contemplated by this Agreement, (i) Seller has conducted the Business only in the ordinary course of business and in a manner consistent with past practice and (ii) there has not been: 
  
 (a) Any Material Adverse Effect or any change, development or event that, individually or in the aggregate, has resulted in or would reasonably be expected to result in a Material Adverse Effect; 
  
 (b) Any material damage, destruction or loss, whether or not covered by insurance; 
  
 (c) Any sale, transfer or other disposition of Assets, except as contemplated by this Agreement; 
  
 (d) Any sale, transfer or other disposition of any other assets of the Business, except in the ordinary course of business and consistent with past practice or as contemplated by this Agreement; 
  
 (e) Any actual or threatened change in Seller’s relationships with the Key Employees; 
  
 (f) Any action taken or any change made, other than reasonable and usual actions in the ordinary course of business and consistent with past practice, with respect to accounting policies, practices, principles, methods or procedures, other than as required by GAAP or by a Governmental Authority; 
  
 (g) Any writing up, writing down or writing off of the book value of any Assets, individually or in the aggregate, in excess of $5,000, except for depreciation and amortization in accordance with GAAP consistently applied; 
  
  	 
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 (h) Any commencement of any Action relating to the Assets, the Assumed Liabilities or the Business; 
  
 (i) Any waiver, release, assignment, settlement or compromise of any material rights or claims, or any material Action by or against Seller and relating to the Business or any of the Assets; 
  
 (j) Except in the ordinary course of business and in a manner consistent with past practice, any entrance into, amendment, modification, acceleration or consent to the termination of any Assumed Contract (or any contract that would be required to be disclosed if in existence on the date hereof), or amendment, waiver, modification or consent to the termination of Seller’s rights thereunder; 
  
 (k) Any action taken for the winding up, liquidation, dissolution or reorganization of Seller or for the appointment of a receiver, administrator or administrative receiver, trustee or similar officer of its assets or revenues; 
  
 (l) Any grant of a license, exclusive or non-exclusive, or other agreement with respect to the Transferred Intellectual Property, other than grants of rights under the Terms and Conditions; 
  
 (m) Any disclosure of any trade secrets or other proprietary and confidential information that is included in an Asset to any Person that is not subject to any confidentiality or non- disclosure agreement; 
  
 (n) Any new, change in or revocation of any material Tax election; settlement or compromise of any claim, notice, audit report or assessment in respect of Taxes; change in any annual Tax accounting period, adoption or change in any method of Tax accounting; filing of any amended material Tax Return; entrance into any tax allocation agreement, tax sharing agreement, tax indemnity agreement or closing agreement relating to any material Tax; surrender of any right to claim a material Tax refund; or consent to any extension or waiver of the statute of limitations period applicable to any material Tax claim or assessment, in each case, to the extent related to the Assets or the Business; or 
  
 (o) Any agreement, whether oral or written, to effect any of the foregoing (excluding this Agreement). 
  
 3.11 Employees. 
  
 (a) Neither Seller nor any of its Affiliates is or has been a party to any collective bargaining or similar agreement and there are no labor unions or other organizations representing, purporting to represent or, to Seller’s Knowledge, attempting to represent, any employee of Seller or any of its Affiliates. There are no unfair labor practice complaints pending against Seller or any of its Affiliates before the National Labor Relations Board or any other Governmental Authority nor, to Seller’s Knowledge, are any such complaints threatened. Neither Seller nor any of its Affiliates have experienced any strike, slowdown or work stoppage nor, to Seller’s Knowledge, are any such strikes, slowdowns, work stoppages or lockouts threatened. 
  
  	 
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 (b) To Seller’s Knowledge, no Key Employee has any present intention to terminate employment with Seller. Except as noted herein, no employee of Seller is subject to any noncompetition, nondisclosure, confidentiality, employment, consulting or similar contract relating to, affecting or in conflict with the present or proposed business activities of Seller. 
  
 3.12 Employee Benefits.
  
 (a) Seller shall provide Purchaser, a true and complete list of each Employee Benefit Plan.
  
 (b) With respect to each Employee Benefit Plan, Seller has made available to Purchaser true and complete copies of (i) each Employee Benefit Plan (or, if not written, a written summary of its material terms), including without limitation all plan documents, trust agreements, insurance contracts or other funding vehicles and all amendments thereto, (ii) all summaries and summary plan descriptions, including any summary of material modifications, (iii) the most recent annual reports (Form 5500 series) filed with the Internal Revenue Service, and (iv) the most recent determination or opinion letter, if any, issued by the Internal Revenue Service and any pending request for such a letter. 
  
 (c) Each Employee Benefit Plan which is intended to be a “qualified plan” within the meaning of Section 401(a) of the Code has either (i) received a favorable determination letter from the Internal Revenue Service as to its qualified status, or (ii) may rely upon a favorable prototype opinion letter from the Internal Revenue Service, and each trust established in connection with any Employee Benefit Plan which is intended to be exempt from federal income taxation under Section 501(a) of the Code is so exempt, and to Seller’s Knowledge, no fact or event has occurred that could adversely affect the qualified status of any such Employee Benefit Plan or the exempt status of any such trust. 
  
 (d) Neither the execution and delivery of this Agreement nor the consummation of the transactions contemplated hereby (either alone or in conjunction with any other event, whether contingent or otherwise), including, without limitation, any termination of employment, will (i) entitle any current or former employee, officer, consultant or director of Seller or its Affiliates to any payment; (ii) result in or cause the accelerated vesting, funding, or time of payment, or delivery of any compensation, equity award or other benefit; (iii) increase the amount or value of, any payment, compensation or benefit to any such employee, officer, consultant or director of Seller or its Affiliates; or (iv) limit Seller’s right to amend, modify or terminate any Employee Benefit Plan. 
  
 (e) Neither Seller nor any ERISA Affiliate sponsors, maintains, contributes to or is required to contribute to, or has ever sponsored, maintained, contributed to or been required to contribute to, or has any Liability or obligation, whether actual or contingent, with respect to any, and no Employee Benefit Plan is a, Multiemployer Plan or a Pension Plan.
  
 (f) With respect to the Employee Benefit Plans, there does not now exist, nor do any circumstances exist that would reasonably be expected to result in, any current or contingent Liabilities of Purchaser or its Affiliates following the Closing under ERISA, the Code or any other applicable Laws. 
  
  	 
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 3.13 Absence of Insolvency. No insolvency proceedings of any character, including bankruptcy, receivership, reorganization, composition or arrangement with creditors, voluntary or involuntary, (a) is pending against Seller or any of the Assets, (b) to the Knowledge of Seller is affecting Seller or any of the Assets, or (c) to the Knowledge of Seller is threatened, and Seller has not made any assignment for the benefit of creditors, nor taken any action with a view to, or which would constitute the basis of the institution of any such insolvency proceedings. 
  
 3.14 No Brokers or Finders. Except as set forth in Section 3.14 of the Seller Disclosure Schedule, no Person has, or as a result of the transactions contemplated herein will have, any right or valid claim against Seller, the Business or any of the Assets for any commission, fee or other compensation as a finder or broker, or in any similar capacity. 
  
 3.15 Complete Copies of Materials. Seller has delivered or made available true and complete copies of each material document that has been requested by Purchaser in connection with Purchaser’s legal and accounting review of Seller, the Business and the Assets. 
  
 3.16 Compliance with Laws. Seller (i) is not in conflict with, or in default, breach or violation in any material respect of any applicable Law, (ii) has conducted the operations of the Business in compliance with applicable Law in all material respects and has not received notice of any material violation or alleged material violation of any applicable Law, and (iii) no event has occurred, and no condition exists, that would reasonably be likely to (with or without notice of lapse of time) constitute or result directly or indirectly in a material violation by Seller of, or a material failure on the part of Seller to comply with, any applicable Law. 
  
 3.17 Real Property. Seller has good and valid leasehold interest in the Premises free and clear of all Encumbrances, other than Permitted Encumbrances. With respect to the lease or other occupancy agreements affecting the Premises (each, a “Lease”), true and complete copies of which have been furnished by Seller to Purchaser, there exists no default by Seller or any event or circumstance which upon notice or the passage of time, or both, would give rise to any default by Seller, nor, to the Knowledge of Seller, is there any such default or events or circumstances of default by any lessor or subtenant under such Lease, other than that noted in the Seller Disclosure Schedule. No party other than Seller has the right to occupy any of the Premises. The Premises and all improvements located thereon are free from material defect, are in good operating condition and repair (normal wear and tear excepted), and are suitable for the purposes for which the Premises and improvements thereon are presently used. The Premises are supplied with all utilities and other services necessary for the operation of such Premises as currently operated. 
  
 3.18 Insurance. 
  
 (a) Seller shall provide a list of all insurance policies that are currently held by Seller with respect to the Business or the Assets (“Insurance Policies”), true and complete copies of which have been made available to Purchaser. 
  
  	 
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 (b) All premiums due with respect to such policies are currently paid and Seller is not in material breach or material default with respect to its obligations under the Insurance Policies and, to the Knowledge of Seller, no event has occurred which, with notice or the lapse of time, or both, would constitute such a breach or default, or permit termination or modification, under any of the Insurance Policies. Seller has not received notice of cancellation or termination of any Insurance Policy, nor has it been denied or had revoked or rescinded any policy of insurance, nor has it borrowed against any such policies. There are and have been no claims against any Insurance Policies and no insurance carrier has denied or, to the Knowledge of Seller, threatened to deny coverage. 
  
 3.19 Taxes. 
  
 (a) Seller has timely filed (taking into account any extensions of time for such filings that have been properly and timely requested by Seller) all material Tax Returns that were required to be filed. All such Tax Returns are complete and accurate in all material respects. All material Taxes owed by Seller (whether or not shown on any Tax Return) have been paid. Seller is not currently the beneficiary of any extension of time within which to file any Tax Return. No written claim has ever been made by a Governmental Authority in a jurisdiction in which Seller does not file Tax Returns that Seller is or may be subject to taxation by that jurisdiction. There are no Encumbrances on any of the Assets or the Business for Taxes (other than Permitted Encumbrances). 
  
 (b) Seller has not waived any statute of limitations in respect of Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency. 
  
 (c) The unpaid Taxes of Seller did not, as of each of the dates of the Historical Financial Statements, exceed the reserve for Tax Liability (excluding any reserve for deferred Taxes established to reflect timing differences between book and Tax income) set forth on the face of the balance sheets contained in the Historical Financial Statements (rather than in any notes thereto). Since the date of such financial statements, Seller has not incurred any liability for Taxes outside the ordinary course of business consistent with past practice. 
  
 (d) No audit, investigation, dispute, claims or other Actions for or relating to any Liability for Taxes of Seller is presently in progress, nor has Seller been notified in writing of any request for such an audit, potential claim, dispute or other examination. 
  
 (e) No Tax deficiency is outstanding, assessed or, to the knowledge of Seller, threatened or proposed against Seller that would adversely impact Purchaser, the Assets or Purchaser’s use of the Assets. 
  
 (f) Seller has not been and will not as of the Closing Date be a “United States real property holding corporation” within the meaning of Section 897 of the Code. 
  
 (g) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, either alone or in combination with another event (whether contingent or otherwise) will result in any “parachute payment” under Section 280G of the Code (or any corresponding provision of state, local, or foreign Tax Law). 
  
  	 
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 (h) There are no proceedings pursuant to which Seller is disputing any amounts payable for Taxes arising out of Seller’s ownership or operation of the Assets or Business. 
  
 (i) No Asset (i) is property required to be treated as owned by another Person pursuant to the provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended and in effect immediately prior to the enactment of the Tax Reform Act of 1986, (ii) constitutes “tax-exempt use property” within the meaning of Section 168(h) of the Code, (iii) is “tax-exempt bond financed property” within the meaning of Section 168(g) of the Code, (iv) secures any debt the interest of which is tax- exempt under Section 103(a) of the Code or (v) is subject to a 467 rental agreement as defined in Section 467 of the Code. 
  
 ARTICLE IV
  
 REPRESENTATIONS AND WARRANTIES OF PURCHASER
  
 Purchaser represents and warrants that the statements contained in this Article IV are true and correct as of the date hereof. Matters disclosed by Purchaser in the Purchaser Disclosure Schedule in reference to any section of this Agreement shall be deemed to be disclosed for all purposes under this Agreement to the extent it is reasonably apparent on its face that such disclosure is applicable for such other purposes. 
  
 4.1 Organization and Valid Existence. Purchaser is a Nevada corporation duly formed, validly existing and in good standing under the Laws of the State of Nevada and has full power and authority to carry on its business as now conducted. 
  
 4.2 Authorization. This Agreement is duly and validly executed and delivered by Purchaser and constitute, or will constitute, valid and binding agreements of Purchaser, enforceable against Purchaser in accordance with their respective terms, subject to the Enforceability Exceptions. Purchaser has all requisite power and authority to execute and deliver this Agreement, to carry out and perform its obligations hereunder and thereunder and to carry out and perform the transactions contemplated herein and therein. All requisite action on the part of Purchaser has been taken to authorize the execution and delivery of this Agreement. 
  
 4.3 No Conflicts; Consents. The execution and the delivery by Purchaser of this Agreement does not, and the consummation of the transactions contemplated herein and therein and compliance with the provisions hereof and thereof will not, (a) conflict with or violate the articles of organization or operating agreement of Purchaser, (b) conflict with or violate, result in a material breach of, constitute a material default (with or without notice or lapse of time, or both) under or violation of, or give to others any right of termination, amendment, acceleration or cancellation of, or result in the creation of any lien pursuant to any note, bond, mortgage, indenture, lease, sublease, contract or other agreement or instrument, permit, concession, franchise, license, sublicense or Law applicable to Purchaser or any of its properties or assets. 
  
  	 
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 ARTICLE V
  
 COVENANTS
  
 5.1 Further Assurances.
  
 (a) Seller shall, from time to time, at the request of Purchaser, and without further consideration, execute and deliver such instruments of transfer, conveyance and assignment in addition to those delivered, and take such other actions, as may be reasonably necessary to assign, transfer, convey and vest in Purchaser, and to put Purchaser in possession of, the Assets, including but not limited to obtaining any and all required consents of third parties which Seller has not obtained as of the Closing Date. Seller will use its commercially reasonable efforts to obtain for Purchaser any and all consents of third parties which Seller has not obtained as of the Closing Date. Seller further agrees to provide information pertaining to the Assets as may be reasonably requested by Purchaser. 
  
 (b) Each Party shall cooperate with the other to transfer all Assets, including State licenses, inventory, equipment, software, data and other information maintained by Seller, to Purchaser. 
  
 5.2 Tax Liability. 
  
 (a) Purchaser and Seller agree to furnish or cause to be furnished to the other, upon request, as promptly as practicable, such information and assistance relating to the Business and Assets, including access to books and records, as is reasonably necessary for the filing of all Tax Returns by Purchaser or Seller, the making of any election relating to Taxes, the preparation for any audit by any Taxing authority and the prosecution or defense of any claim, suit or proceeding relating to any Tax. Each of Purchaser and Seller shall retain all books and records with respect to Taxes pertaining to the Assets for a period of at least seven (7) years following the Closing Date (the “Seven Year Period”). At the end of the Seven Year Period, each party hereto shall provide the other with at least ten (10) days prior written notice before transferring, destroying or discarding any such books and records, during which period the party receiving such notice can elect to take possession, at its own expense, of such books and records. If Seller elects to undergo a voluntary dissolution as a corporation prior to the end of the Seven Year Period, prior to such dissolution, Seller shall notify Purchaser or one of its Affiliates or designees before such dissolution and before transferring, destroying or discarding any such books and records, during which period Purchaser or one of its Affiliates or designees receiving such notice can elect to take possession, at its own expense, of such books and records. Purchaser and Seller shall cooperate fully with each other in the conduct of any audit, litigation or other proceeding relating to Taxes involving the Assets or the Allocation Schedule. 
  
  	 
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 (b) To the extent not otherwise provided in this Agreement, Seller shall be responsible for and shall promptly pay when due all Property Taxes levied with respect to the Assets attributable to the Pre-Closing Tax Period. All Property Taxes levied with respect to the Assets for the Straddle Period shall be apportioned between Purchaser and Seller based on the number of days of such Straddle Period included in the Pre-Closing Tax Period and the number of days of such Straddle Period included in the Post-Closing Tax Period. Seller shall be liable for the proportionate amount of such Property Taxes that is attributable to the Pre-Closing Tax Period, and Purchaser shall be liable for the proportionate amount of such Property Taxes that is attributable to the Post-Closing Tax Period. Upon receipt of any bill for such Property Taxes, Purchaser or Seller, as applicable, shall present a statement to the other setting forth the amount of reimbursement to which each is entitled under this Section 5.2(b) together with such supporting evidence as is reasonably necessary to calculate the proration amount. The proration amount shall be paid by the party owing it to the other within ten (10) days after delivery of such statement. In the event that Purchaser or Seller makes any payment for which it is entitled to reimbursement under this Section 5.2(b), the applicable party shall make such reimbursement promptly but in no event later than ten (10) days after the presentation of a statement setting forth the amount of reimbursement to which the presenting party is entitled along with such supporting evidence as is reasonably necessary to calculate the amount of reimbursement. 
  
 (c) All Transfer Taxes will be borne equally by Purchaser and Seller. Purchaser and Seller further agree, upon request, to use commercially reasonable efforts to obtain any certificate or other document from any Governmental Authority or any other Person as may be necessary and will otherwise cooperate so as to mitigate, reduce or eliminate any Tax that could be imposed in connection with the transactions contemplated hereby. 
  
 (d) Seller shall promptly notify Purchaser in writing upon receipt by Seller of notice of any pending or threatened Tax audits or assessments relating to the income, properties or operations of Seller that reasonably may be expected to relate to or give rise to an Encumbrance on the Assets or the Business. Each of Purchaser and Seller shall promptly notify the other in writing upon receipt of notice of any pending or threatened Tax audit or assessment challenging the Allocation Schedule. 
  
 5.3 Dissolution. Seller hereby covenants not to voluntarily dissolve and windup as a company for a period of not less than the later of (X) the expiration of the Survival Period and (Y) the period of time the Seller may voluntarily dissolve in accordance with applicable Law.
  
 5.4 Transitioned Employees. As set forth herein, Seller shall provide a list of all employees of Seller employed in the operation of the Business as of the Closing Date, stating such employee’s name, job title, location of employment, base salary or hourly rate of compensation, target incentive compensation, years of service credit, accrued vacation and other paid time-off, exempt/non-exempt status, and hire date. All such employees are referred to herein as the “Business Employees.” 
  
 (a) On or prior to the Closing Date, Purchaser shall, or shall cause one of its Affiliates to, extend offers of employment to those Business Employees whom it desires to hire (if any), which offers shall be on such terms and conditions as Purchaser shall determine, in each case, in Purchaser’s sole discretion, provided, however, that Purchaser shall extend offers of employment to the Key Employees prior to the Closing Date. Seller shall cooperate with and use its best efforts to make reasonably accessible to Purchaser any Business Employees to whom Purchaser wishes to makes offers of employment (including without limitation the Key Employees and otherwise as communicated by Purchaser to Seller on the Closing Date) and to assist Purchaser in its efforts to secure satisfactory employment terms with those Business Employees. Any Business Employees, including any Key Employees, who accept an offer of employment in accordance herewith and commence employment with Purchaser or its Affiliate as of the Closing Date shall be referred to as the “Transitioned Employees.” Seller and its Affiliates shall terminate for all purposes (including under all Employee Benefit Plans) the employment of all Business Employees, including any Key Employees, who agree to become Transitioned Employees, effective immediately prior to the Closing. 
  
  	 
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 (b) Seller shall be and remain solely responsible for filing all Tax Returns with respect to its employment of any of its employees through the Closing Date. 
  
 (c) Seller shall be and remain solely liable for any and all COBRA Liabilities. 
  
 (d) Notwithstanding anything herein to the contrary, Seller shall be solely responsible for, and Seller shall indemnify and hold Purchaser and its Affiliates harmless from and against, any and all Liabilities or obligations, whether actual or contingent: (i) associated with any employee or other service provider of Seller or any of its Affiliates (or any dependent thereof), including without limitation any Business Employee, in any case who does not become a Transitioned Employee, including in connection with any termination of any such service relationship; (ii) that arise in connection with any Transitioned Employee (or any dependent thereof) on or prior to the Closing Date; and (iii) that arise under or in connection with any Employee Benefit Plan at any time. Without limiting the generality of the foregoing, Purchaser shall not, at any time, have or assume any obligation or liability with regard to any severance, retention, employment, change-of-control, pension, retirement, equity or other plan, program, policy or agreement of or with Seller or any of its Affiliates. 
  
 (e) Nothing contained in this Agreement shall confer upon any Transitioned Employee any right with respect to continuance of employment by Purchaser or its Affiliates, nor shall anything herein interfere with the right of Purchaser or its Affiliates to terminate the employment of any of the Transitioned Employees at any time, with or without cause, or restrict Purchaser or its Affiliates in the exercise of its independent business judgment in modifying any of the terms and conditions of the employment of the Transitioned Employees. 
  
 (f) No provision of this Agreement shall (i) create any third-party beneficiary rights in any current or former service provider of Seller or any of its Affiliates, any beneficiary or dependents thereof, or any collective bargaining representative thereof; (ii) be deemed or construed to be an amendment or other modification of any Employee Benefit Plan, or Purchaser employee benefit plan; (iii) obligate Purchaser or its Affiliates to adopt, enter into or maintain any employee benefit plan or other compensatory plan, program or arrangement at any time; or (iv) be deemed to prevent or restrict in any way the right of Purchaser or its Affiliates to terminate, reassign, promote or demote any Transitioned Employee at any time, or to change the title, powers, duties, responsibilities, functions, locations, salaries, other compensation or terms or conditions of employment of such Transitioned Employee. 
  
 5.5 Collection of Accounts Receivable. Seller shall be entitled to collect all Accounts Receivable pending as of the date of Closing.
  
  	 
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 5.6 Use of Company Name. Purchaser shall not use, and shall not permit any Affiliate to use, the name Blüm, or any name reasonably similar thereto after the Closing Date.
  
 5.7 Interim Operations Prior to Closing. Seller hereby covenants and agrees that, between the Effective Date of this Agreement and Closing, Seller shall cause the Business to be operated and conducted in the ordinary course in accordance with prior practices and cause the Business to be carried on diligently and substantially in the manner as heretofore conducted in the ordinary course of business commensurate with the scale of operations during the sixty (60) days prior to the date of this Agreement. Seller shall not take actions or operate the Business in such a way as to cause or precipitate any diminution in the Business’ prospective, post-closing sales or any material shift in the Business’ post-closing revenue streams. Without limitation, Seller shall use all reasonable efforts to preserve intact its present business organization, keep available the services of its Key Employees and Business Employees and maintain satisfactory relationships with customers, suppliers, landlord and others having business relationships with the Business.
  
 ARTICLE VI
  
 INDEMNIFICATION
  
 6.1 Survival Period; Certain Limitations. 
  
 (a) The representations and warranties of Seller contained in this Agreement shall survive the Closing Date for a period of twelve (12) months (the “Survival Period”), provided, that with respect to the representations and warranties set forth in Section 3.2 (Authorization), Subsection 3.4(a) (Title to Assets), Section 3.12 (No Brokers or Finders) and Section 3.17 (Taxes), the Survival Period shall be the 30th day after the expiration of the applicable statute of limitations (including any extensions thereto to the extent that such statute of limitations may be tolled). The representations and warranties of Purchaser contained in this Agreement shall survive the Closing Date for the Survival Period. All covenants and agreements of the parties will survive the Closing Date in accordance with their respective terms. If written notice of a claim has been given prior to the expiration of the Survival Period by a party, then the relevant representations and warranties shall survive as to such claim until such claim has been finally resolved. 
  
 (b) It is the express intent of the parties hereto that, if the applicable Survival Period for an item as contemplated by this Article VI is shorter than the statute of limitations that would otherwise have been applicable to such item, then, by contract, the applicable statute of limitations with respect to such item shall be reduced to the shortened survival period contemplated hereby. The parties hereto further acknowledge that the time periods set forth in this Article VI for the assertion of claims under this Agreement are the result of arms-length negotiation among the each of the parties hereto and that they intend for the time periods to be enforced as agreed by each of the parties hereto. 
  
  	 
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 6.2 Indemnification. 
  
 (a) Indemnification by Seller. Subject to the limitations set forth in this Article VI, after the Closing Date, Purchaser and its Affiliates (including, after the Closing Date, the Business and Assets), and their respective officers, directors, employees, agents, successors and assigns (collectively, the “Purchaser Indemnified Parties”) shall be indemnified and held harmless by Seller for any and all liabilities, losses, Taxes, damages of any kind, claims, costs, expenses, fines, fees, deficiencies, interest, awards, judgments, amounts paid in settlement and penalties (including reasonable attorneys’, consultants’ and experts’ fees and expenses and other costs of defending, investigating or settling claims) suffered, incurred, or paid by them (including in connection with any Action brought or otherwise initiated by any of them) (collectively, “Losses”), arising out of or resulting from: 
  
 (i) any inaccuracy or breach of any representation or warranty made by Seller in this Agreement; 
  
 (ii) the breach of any covenant or agreement made by Seller in this Agreement; 
  
 (iii) any failure of Seller to pay any of its debts, obligations or Liabilities (other than any Assumed Liabilities pursuant to Section 1.4) as and when due; 
  
 (iv) any Excluded Liabilities; or 
  
 (v) any fraud that is committed by Seller in connection with the negotiation and execution of this Agreement. 
  
 (b) Indemnification by Purchaser. Subject to the limitations set forth in this Article VI, after the Closing Date, Seller and its Affiliates, and their respective officers, directors, employees, agents, successors and assigns (collectively, the “Seller Indemnified Parties”) shall be indemnified and held harmless by Purchaser for any and all Losses arising out of or resulting from: 
  
 (i) any inaccuracy or breach of any representation or warranty made by Purchaser in this Agreement; 
  
 (ii) the breach of any covenant or agreement made by Purchaser in this Agreement; 
  
 (iii) any Assumed Liabilities; or 
  
 (iv) any fraud that is committed by Purchaser in connection with the negotiation and execution of this Agreement. 
  
 (c) Materiality. As used herein, Losses are not limited to matters asserted by third parties, but include Losses incurred or sustained by the Purchaser Indemnified Parties or Seller Indemnified Parties in the absence of claims by third parties. 
  
  	 
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 6.3 Limitations. 
  
 (a) Limitation on Seller Liability. Seller shall have no liability for indemnification under Section 6.2(a)(i) with respect to any Losses that would otherwise be payable under Section 6.2(a)(i) until the aggregate of all such Losses exceeds $100,000 (the “Liability Threshold”), and then after the Liability Threshold has been exceeded Seller shall be responsible for all such Losses based thereon for all amounts in excess of the Liability Threshold. The maximum aggregate liability of Seller for indemnification under this Article VI for any of the matters set forth in Section 6.2(a)(i) shall not exceed $5,000,000 (the “Indemnification Limit”); provided, however, that neither the Liability Threshold nor the Indemnification Limit shall apply with respect to any claim described in Sections 6.2(a)(ii) – 6.2(a)(v); provided, further, that in no event shall the maximum aggregate liability of Seller for any matters under this Article VI exceed that portion of the Purchase Price actually received by Seller, including the Escrow Amount. 
  
 (b) Limitation on Purchaser Liability. Purchaser shall have no liability for indemnification under Section 6.2(b)(i) with respect to any Losses that would otherwise be payable under Section 6.2(b)(i) until the aggregate of all such Losses exceeds the Liability Threshold, and after the Liability Threshold has been exceeded, Purchaser shall be responsible for all such Losses in excess of the Liability Threshold. The maximum aggregate liability of Purchaser for indemnification under this Article VI for any of the matters set forth in Section 6.2(b)(i) shall not exceed the Indemnification Limit; provided, however, that that neither the Liability Threshold nor the Indemnification Limit shall apply with respect to any claim described in Sections 6.2(b)(ii) – 6.2(b)(iv). 
  
 (c) Notwithstanding the foregoing, the Liability Threshold and the Indemnification Limit shall not apply to any Losses in connection with any breach of any of the representations or warranties set forth in Sections 3.2 (Authorization), 3.4(a) (Title to Assets), 3.4(c)(i) (Sufficiency of Assets), 3.4(c)(ii) (Sufficiency of Assets), 3.12 (No Brokers or Finders) 3.17 (Taxes) and 4.2 (Authorization); provided, however, that in no event shall the maximum aggregate liability of Seller for any matters under this Article VI exceed that portion of the Purchase Price actually received by Seller, including the Escrow Amount. 
  
 (d) Losses shall exclude lost profits or any punitive or exemplary damages, unless specifically awarded by an arbitrator or Governmental Authority to a third party and paid to such third party by an Indemnified Party (as defined below). 
  
 (e) The parties hereto agree that the rights to indemnification under this Article VI shall be the sole and exclusive rights and remedies of the parties hereto against any other party for any Losses relating to or arising under this Agreement; provided, that notwithstanding the foregoing, nothing set forth in this Article VI shall be deemed to prohibit or limit any party’s right at any time to seek injunctive or other equitable relief for the failure of any other party to perform any covenant or agreement contained herein or for any party’s right to seek any remedy based upon fraud. 
  
 6.4 Indemnification Procedures. 
  
 (a) For purposes of this Section 6.4, a party against which indemnification may be sought is referred to as the “Indemnifying Party” and the party which may be entitled to indemnification is referred to as the “Indemnified Party.” 
  
  	 
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 (b) Claims. 
  
 (i) As soon as practicable, and not later than the last day of the Survival Period, an Indemnified Party may deliver to an Indemnifying Party a certificate signed by any authorized officer of such Indemnified Party (a “Claim Certificate”): 
  
 (A) stating that such Indemnified Party has incurred Losses; 
  
 (B) stating the amount of the Losses if known; and 
  
 (C) specifying in reasonable detail the nature of the claim to which such Losses are related. Any Third Party Claims (as defined below) shall also be subject to the requirements in Section 6.4(d). 
  
 (c) Resolution of Objections to Claims. 
  
 (i) If the Indemnifying Party does not contest, by written notice to the Indemnified Party, any claim or claims by the Indemnified Party made in any Claim Certificate within the thirty (30) day period following receipt of the Claim Certificate, then the Indemnifying Party will be conclusively deemed to have consented to the recovery by the Indemnified Party of the full amount of the damages specified in the Claim Certificate. The Indemnifying Party shall pay to the Indemnified Party cash in an amount equal to the amount of the Losses set forth in such Claim Certificate. 
  
 (ii) If the Indemnifying Party objects in writing to any claim or claims by the Indemnified Party made in any Claim Certificate within such thirty (30) day period, the Indemnifying Party and Indemnified Party shall attempt in good faith for 15 days after the Indemnified Party’s receipt of such written objection to resolve such objection. If the Indemnifying Party and the Indemnified Party shall so agree, a memorandum setting forth such agreement shall be prepared and signed by the Indemnifying Party and the Indemnified Party. 
  
 (iii) If no such agreement can be reached during the 15-day period for good faith negotiation, but in any event upon the expiration of such 15-day period, either the Indemnifying Party or the Indemnified Party may bring an Action in accordance with the terms of Section 8.1 to resolve the matter. 
  
 (iv) Seller and Purchaser agree to treat (and cause their Affiliates to treat) any payment received pursuant to this Article VI as adjustments to the Transaction Consideration for all Tax purposes, to the maximum extent permitted by Law. 
  
  	 
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 (d) Third Party Claims. 
  
 (i) The obligations and liabilities of Indemnifying Parties under this Article VI with respect to Losses arising from actual or threatened claims or demands by any Person not party to this Agreement (other than an Affiliate of Purchaser) which are subject to the indemnification provided for in this Article VI (“Third Party Claims”) shall be governed by and contingent upon the following additional terms and conditions. If an Indemnified Party shall receive notice of any Third Party Claim prior to the expiration of the Survival Period, the Indemnified Party shall give the Indemnifying Party notice of such Third Party Claim by delivering a Claim Certificate to the Indemnifying Party within ten (10) days of the receipt by the Indemnified Party of such notice; provided, however, that the failure to provide such notice shall not release an Indemnifying Party from any of its obligations under this Article VI except to the extent that such Indemnifying Party is materially prejudiced by such failure. The Claim Certificate shall be deemed to have complied with Section 6.4(b) if it describes in reasonable detail the facts known to the Indemnified Party giving rise to such indemnification claim, and the amount or good faith estimate of the amount arising therefrom (if known). 
  
 (ii) If the Indemnifying Party acknowledges in writing its obligation to indemnify the Indemnified Party hereunder against any Losses that may result from such Third Party Claim (without any reservation of rights), then the Indemnifying Party shall be entitled to assume and control the defense of such Third Party Claim through counsel of its choice (such counsel to be reasonably acceptable to the Indemnified Party) if it (x) gives notice of its intention to do so to the Indemnified Party within ten (10) days of the receipt of such notice from the Indemnified Party and (y) it furnishes the Indemnified Party with reasonable evidence that the Indemnifying Party is and will be able to satisfy such Losses; provided, however, that the Indemnifying Party shall not have the right to assume the defense of the Third Party Claim if (i) any such claim seeks, in addition to or in lieu of monetary Losses, any injunctive or other equitable relief or involves criminal allegations; (ii) there is reasonably likely to exist a conflict of interest that would make it inappropriate (in the judgment of the Indemnified Party in its reasonable discretion) for the same counsel to represent both the Indemnified Party and the Indemnifying Party; or (iii) settlement of, or an adverse judgment with respect to, the Third Party Claim would establish (in the good faith judgment of the Indemnified Party) a precedential custom or practice that would be materially adverse to the business interests of the Indemnified Party or would impact the Taxes or Tax position of the Indemnified Party. If the Indemnifying Party assumes the defense of a Third Party Claim, it will conduct the defense actively, diligently and at its own expense, and it will hold all Indemnified Parties harmless from and against all Losses caused by or arising out of any settlement thereof. The Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, at the Indemnifying Party’s expense, all witnesses, pertinent records, materials and information in the Indemnified Party’s possession or under the Indemnified Party’s control relating thereto as is reasonably requested by the Indemnifying Party and shall have the right to participate at its own cost in the defense of such Third Party Claim. Except with the written consent of the Indemnified Party (not to be unreasonably withheld, conditioned or delayed), the Indemnifying Party will not, in the defense of a Third Party Claim, consent to the entry of any judgment or enter into any settlement (i) which does not include as an unconditional term thereof the giving to the Indemnified Party by the third party of a release from all liability with respect to such Action; or (ii) unless there is no finding or admission of (A) any violation of Law by the Indemnified Party (or any affiliate thereof), (B) any liability on the part of the Indemnified Party (or any affiliate thereof) or (C) any violation of the rights of any Person and no effect on any other claims of a similar nature that may be made by the same third party against the Indemnified Party (or any affiliate thereof), provided, that the Indemnified Party shall have no obligation of any kind to consent to the entry of any judgment of settlement unless such judgment or settlement is only for money damages, the full amount of which will be paid by the Indemnifying Party. 
  
  	 
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 (iii) In the event that the Indemnifying Party fails or elects not to assume the defense of an Indemnified Party against such Third Party Claim which the Indemnifying Party had the right to assume, the Indemnified Party shall have the right, at the expense of the Indemnifying Party, to defend or prosecute such claim in any manner as it may reasonably deem appropriate and may settle such claim after giving written notice thereof to the Indemnifying Party, on such terms as such Indemnified Party may deem appropriate, and the Indemnified Party may seek prompt reimbursement for any Losses incurred in connection with such settlement. If no settlement of such Third Party Claim is made, the Indemnified Party may seek prompt reimbursement for any Losses arising out of any judgment rendered with respect to such claim. Any Losses for which an Indemnified Party is entitled to indemnification hereunder shall be promptly paid as suffered or incurred. If the Indemnifying Party does not elect to assume the defense of a Third Party Claim which it has the right to assume hereunder, the Indemnified Party shall have no obligation to do so. 
  
 (iv) In the event that the Indemnifying Party is not entitled to assume the defense of the Indemnified Party against such Third Party Claim, the Indemnified Party shall have the right, at the expense of the Indemnifying Party, to defend or prosecute such claim and consent to the entry of any judgment or enter into any settlement with respect to the Third Party Claim in any manner it may reasonably deem appropriate after giving written notice thereof to the Indemnifying Party, and the Indemnified Party may seek prompt reimbursement for any Losses incurred in connection with such judgment or settlement. In such case, the Indemnified Party shall conduct the defense of the Third Party Claim actively and diligently, and the Indemnifying Party shall cooperate with the Indemnified Party in such defense and make available to the Indemnified Party, at the Indemnifying Party’s expense, all such witnesses, records, materials and information in the Indemnifying Party’s possession or under the Indemnifying Party’s control relating thereto as is reasonably requested by the Indemnified Party. If no settlement of such Third Party Claim is made, the Indemnified Party may seek prompt reimbursement for any Losses arising out of any judgment rendered with respect to such claim. Any Losses for which an Indemnified Party is entitled to indemnification hereunder shall be promptly paid as suffered or incurred. 
  
 6.5 Manner of Payment. At the Closing, funds deposited into escrow and the Note shall be released to Seller as directed by the Seller.
  
  	 
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 ARTICLE VII
  
 DEFINITIONS
  
 As used in this Agreement, the following terms shall have the meanings set forth or referenced below: 
  
 7.1 “Accounts Payable” shall mean all accounts and notes payable by Seller to third parties solely to the extent generated by the Business as conducted by Seller prior to the Closing Date. “Accounts Receivable” shall mean all accounts and notes receivable payable to Seller solely to the extent generated by the Business as conducted by Seller prior to the Closing Date, and other rights to payment and the full benefit of any security therefor, whether billed or unbilled. 
  
 7.2 “Affiliate” shall mean a Person that directly or indirectly through one or more intermediaries is controlled by, or is under common control with, another Person. 
  
 7.3 “Assumed Contracts” shall mean the agreements and contracts assumed by Purchaser as identified by Section 1.2 and Schedule 1.2(b) herein. . 
  
 7.4 “Business Records” shall mean copies of Seller’s books and records, original files, drawings, documentation, data or information that have been or now are used in or with respect to, in connection with or otherwise relating to the Business, the Assets and the Assumed Liabilities; provided that Business Records exclude any items specifically included among the Excluded Assets. 
  
 7.5 “COBRA” shall mean Part 6 of Subtitle B of Title I of ERISA, Section 4980B of the Code, and any similar state Law. 
  
 7.6 “COBRA Liability” shall mean all Liabilities arising under COBRA (i) in respect of any Business Employee (or any beneficiary or dependent thereof) who does not become a Transitioned Employee, and (ii) arising on or prior to the Closing Date, with respect to any Transitioned Employee (or any beneficiary or dependent thereof). 
  
 7.7 “Confidential Information” means all information (whether or not specifically identified as confidential), in any form or medium, that is disclosed to or by, or developed or learned by, Seller that relates to the Business, Assets or Assumed Liabilities, including: (a) information relating to strategic plans and practices, business, accounting, financial or marketing plans, practices or programs, training practices and programs, salaries, bonuses, incentive plans and other compensation and benefits information and accounting and business methods, in each case, of the Business, Assets or Assumed Liabilities; (b) identities of, individual requirements of, specific contractual arrangements with, and information about, the Business, its customers and their respective confidential information; (c) any confidential or proprietary information of any third party that Seller or subsidiary of Seller has a duty to maintain confidentiality of, or use only for certain limited purposes, in each case, related to the Business, Assets or Assumed Liabilities; (d) industry research related to the Business, Assets or Assumed Liabilities compiled by, or on behalf of Seller, including identities of potential target companies, management teams, and transaction sources identified by, or on behalf of, Seller; (e) compilations of data and analyses, processes, methods, track and performance records, data and data bases, in each case, related to the Business, Assets or Assumed Liabilities; and (f) information related to the Intellectual Property of the Business and updates of any of the foregoing, provided that “Confidential Information” shall not include any information that Seller can demonstrate has become generally known to and widely available for use within the industry other than as a result of the acts or omissions of Seller or a Person that Seller has direct control over to the extent such acts or omissions are not authorized by Seller in the performance of such Person’s assigned duties for Seller. 
  
  	 
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 7.8 “Employee Benefit Plan” shall mean any “employee benefit plan” as defined in Section 3(3) of ERISA (whether or not subject to ERISA) and each other plan, policy, program practice, agreement, understanding or arrangement (whether written or oral) providing compensation or other benefits to any current or former director, officer, employee or consultant (or to any spouse, dependent or beneficiary thereof) of Seller or any Affiliate of Seller, maintained, sponsored or contributed to by Seller or any Affiliate of Seller, or under which Seller or any Affiliate of Seller has or may have any obligation or liability, whether actual or contingent, including, without limitation, all personnel policy, collective bargaining, bonus (including transaction bonus), incentive compensation, stock option, restricted stock, phantom stock, stock unit, stock appreciation right, deferred stock, performance share, performance share unit, employee stock ownership, stock purchase, equity or equity-based, phantom equity, deferred compensation, change in control, employment, consulting, retention, noncompetition, nondisclosure, vacation, holiday, sick leave, severance, retirement, supplemental retirement, defined benefit, defined contribution, pension, money purchase, target benefit, cash balance, pension equity, 401(k), savings, profit sharing, supplemental or executive retirement, excess benefit, medical, dental, vision, life insurance, cafeteria (Code Section 125), adoption assistance, dependent care assistance, health savings, health reimbursement, flexible spending, voluntary employees beneficiary, multiple employer welfare, accident, disability, long-term care, employee assistance, scholarship, fringe benefit, expense reimbursement, welfare benefit, paid time off, employee loan, salary continuation and other benefit or similar plan, policy, program, practice, agreement, understanding or arrangement, including any trust, escrow, funding, insurance or other agreement related thereto. 
  
 7.9 “Encumbrances” shall mean any and all restrictions on or conditions to transfer or assignment, claims, liabilities, licenses, liens, pledges, mortgages, options, restrictions, rights of first refusal, security interests and encumbrances of any kind, whether accrued, absolute, contingent or otherwise and whether voluntarily or involuntarily incurred or arising by operation of Law. 
  
 7.10 “Environmental Laws” means any and all Laws which (i) regulate or relate to the protection or clean up of the environment; the use, treatment, storage, transportation, handling, disposal or release of Hazardous Substances, the preservation or protection of waterways, groundwater, drinking water, air, wildlife, plants or other natural resources; or the health and safety of persons or property, including without limitation protection of the health and safety of employees; or (ii) impose liability or responsibility with respect to any of the foregoing, including without limitation the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. § 9601 et seq.), or any other Law of similar effect. 
  
  	 
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 7.11 “ERISA” shall mean the Employee Retirement Income Security Act of 1974, as amended and the regulations promulgated thereunder. 
  
 7.12 “ERISA Affiliate” shall mean any entity (whether or not incorporated) other than Seller that, together with Seller, is required to be treated as a single employer under Section 414(b), (c), (m) or (o) of the Code. 
  
 7.13 “Escrow Agreement” shall mean that certain Escrow Agreement, by and among Purchaser and Seller, in the form attached hereto as Exhibit B 
  
 7.14 “GAAP” shall mean generally accepted accounting principles in the United States. 
  
 7.15 “Governmental Authority” shall mean any court, or any federal, state, municipal, provincial or other governmental authority, department, commission, board, service, agency, political subdivision or other instrumentality. 
  
 7.16 “Hazardous Substances” means: (i) any pollutant, chemical, substance and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical, or chemical compound, or hazardous substance, material or waste, whether solid, liquid or gas, that is subject to regulation, control or remediation under any Environmental Laws; (ii) petroleum and petroleum products, including crude oil and any fractions thereof; (iii) natural gas, synthetic gas, and any mixtures thereof; (iv) polychlorinated biphenyls, toxic mold, asbestos and radon; (v) any other contaminant; and (vi) any substance, material or waste regulated by any Governmental Authority pursuant to any Environmental Law. 
  
 7.17 “Indebtedness” shall mean, with respect to any Person at any date, without duplication: (i) all short-term and long-term indebtedness outstanding at any one time as determined in accordance with GAAP consistently applied, (ii) all obligations of such Person for borrowed money; (iii) all obligations of such Person evidenced by bonds, debentures, notes or other similar instruments (including any seller notes, deferred purchase price obligations or earn-out obligations issued or entered into in connection with any acquisition undertaken by such Person) including outstanding checks; (iv) all obligations in respect of letters of credit, to the extent drawn, and bankers’ acceptances issued for the account of such Person; (v) all liabilities of such Person under conditional sale or other title retention agreements, including capital leases; (vi) all obligations of such Person with respect to vendor advances or any other advances made to such Person; (vii) all liabilities of such Person arising out of interest rate and currency swap arrangements and any other arrangements designed to provide protection against fluctuations in interest or currency rates; (viii) all obligations of such Person to pay the deferred purchase price of any properties, goods or services (other than those trade payables in the ordinary course of business); (ix) any liability or obligation of others guaranteed by, or secured by any Encumbrance on the assets of, such Person; (x) all liabilities or obligations to pay any bonuses or other compensation in connection with or relating to the Transaction; and (xi) any and all principal, accrued interest, prepayment premiums or penalties, related expenses, commitment and other fees, sale or liquidity participation amounts, reimbursements, indemnities and other amounts related to any of the foregoing. 
  
  	 
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 7.18 “Intellectual Property” means intellectual property, regardless of form, together with all rights in, arising out of, or associated with intellectual property in any jurisdiction (including the right to sue for infringement or misappropriation and collect damages, and to apply for and obtain any registrations or other forms of legal protection), including: (a) published and unpublished works of authorship, including audiovisual works, collective works, Software, web sites, web site content, compilations, databases, derivative works, literary works, and sound recordings, rights in databases and rights granted under the Copyright Act or similar Laws of foreign jurisdictions (“Works of Authorship”); (b) inventions and discoveries, whether or not patentable, including articles of manufacture, business methods, compositions of matter, improvements, machines, methods, and processes and new uses for any of the preceding items, including rights granted under the Patent Act or similar Laws of foreign jurisdictions (“Inventions”); (c) words, names, symbols, devices, designs, and other designations, and combinations of the preceding items, used to identify or distinguish a business, good, group, product, or service or to indicate a form of certification, including logos, product designs and product features together with the goodwill of the business associated therewith, including common law rights, applications, or registrations for the Trademarks, as well as any other proprietary rights in the Trademarks together with the goodwill of the business associated therewith anywhere in the world, including but not limited to, rights in the “look and feel” of objects and rights granted under the Lanham Act or similar Laws of foreign jurisdictions (“Trademarks”); (d) Confidential Information, including information that is not generally known or readily ascertainable through proper means, whether tangible or intangible, or patentable or unpatentable, including algorithms, customer lists, ideas, designs, formulas, know-how, show-how, methods, processes, programs, prototypes, systems, and techniques, including trade secrets and rights granted under the Uniform Trade Secrets Act or similar Laws of foreign jurisdictions; (e) Internet domain names, including but not limited to those set forth in the Seller Disclosure Schedule together with the goodwill of the business associated therewith (“Domain Names”); (f) rights in, arising out of, or associated with a person’s name, voice, signature, photograph, or likeness, including rights of personality, privacy, and publicity; and (g) rights of attribution and integrity and other moral rights of an author. 
  
 7.19 “Key Employees” shall mean those identified and listed separately, as mutually agreed by both Purchaser and Seller. 
  
 7.20 “Knowledge” or “Know” or “Known” shall mean, with respect to Seller, the current actual knowledge, after reasonable inquiry, of the following officers of Seller: Derek Peterson and Michael Nahass; provided, however, that any such reasonable inquiry shall not include any inquiry, investigation or review of any third party docket search, including patent or trademark records or any other similar third party source of information. 
  
 7.21 “Law” shall mean all applicable federal, state, provincial and local laws, ordinances, rules, statutes, regulations, and all orders, writs, injunctions, awards, judgments or decrees. 
  
 7.22 “Liability” or “Liabilities” shall mean any direct or indirect liability, Indebtedness, obligation, guarantee or endorsement, whether known or unknown, whether accrued or unaccrued, whether absolute or contingent, whether due or to become due, or whether liquidated or unliquidated. 
  
  	 
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 7.23 “Material Adverse Effect” shall mean any effect that would be materially adverse to the Business, the Assets or the Assumed Liabilities, taken as a whole, whether or not occurring in the ordinary course of business. 
  
 7.24 “Multiemployer Plan” shall mean any “multiemployer plan” within the meaning of Sections 3(37) or 4001(a)(3) of ERISA. 
  
 7.25 “Pension Plan” shall mean any Employee Benefit Plan that is subject to Section 412 of the Code or Section 302 or Title IV of ERISA. 
  
 7.26 “Permits” shall mean any and all licenses, permits, authorizations, certificates, franchises, variances, waivers, consents, and other approvals from any Governmental Authority relating to the Assets or the Assumed Liabilities or the Business. 
  
 7.27 “Permitted Encumbrances” means statutory liens for Taxes that are not yet due and payable or liens for Taxes being contested in good faith by any appropriate proceedings for which adequate reserves have been established, non-exclusive licenses of Software or licenses granted by Seller in the ordinary course of its business consistent with past practice under its Terms and Conditions (copies of which have been made available to Purchaser’s counsel). 
  
 7.28 “Person” shall mean an individual, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization or a Governmental Authority. 
  
 7.29 “Post-Closing Tax Period” means any Tax period beginning after the Closing Date and that portion of a Straddle Period beginning after the Closing Date. 
  
 7.30 “Pre-Closing Tax Period” means any Tax period ending on or before the Closing Date and that portion of any Straddle Period ending on the Closing Date. 
  
 7.31 “Premises” means the facilities located at 1130 East Desert Inn Road, Las Vegas, Nevada 89109.
  
 7.32 “Privacy Statements” means, collectively, any and all of Seller’s privacy policies published on the Seller Websites or otherwise made available by Seller to third parties regarding the collection, retention, use and distribution of the personal information of individuals, including from visitors of any of the Seller Websites. 
  
 7.33 “Property Taxes” means all real property Taxes, personal property Taxes and similar ad valorem Taxes. 
  
 7.34 “Registered Intellectual Property Rights” means all Intellectual Property that is the subject of an application, certificate, filing, registration, or other document issued by, filed with, or recorded by, any Governmental Authority at any time in any jurisdiction, including all issued patents and applications, reissues, divisions, re-examinations, renewals, extensions, provisionals, continuations, and continuations-in-part. 
  
  	 
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 7.35 [Intentionally omitted].
  
 7.36 [Intentionally omitted]. 
  
 7.37 “Software” means computer programs of any type or form (including source code and object code), including code, scripts, applets, engines, generators, and macros, and related programmers’ comments, data files and structures, header and include files, macros, object libraries, programming tools not commercially available, technical specifications, flowcharts, and logic diagrams, schematics, annotations, and documentation. 
  
 7.38 “Straddle Period” means any Tax period beginning before or on and ending after the Closing Date. 
  
 7.39 “Tangible Personal Property” means the tangible personal property identified on Schedule 7.44. 
  
 7.40 “Tax” or “Taxes” shall mean any federal, state, provincial, territorial, local, or foreign income, profits, gross receipts, capital gains taxes, license, payroll, employment, excise, severance, stamp, occupation, premium, windfall profits, environmental, customs duties, capital stock, franchise, profits, withholding, social security (or similar), unemployment, disability, real property, personal property, sales, use, transfer, registration, business license, occupation, value added, goods and service, alternative or add- on minimum, estimated, or other tax or governmental charge of any kind whatsoever, including any interest, penalty, or addition thereto, whether disputed or not. 
  
 7.41 “Tax Return” shall mean a declaration, statement, report, return or other document or information with respect to Taxes. 
  
 7.42 “Terms and Conditions” means any and all of the visitor terms and conditions published on Seller Websites governing visitors’ use of and access to any of the Seller Websites. 
  
 7.43 “Transfer Taxes” means any transfer, stamp, documentary, sales, use, registration, value-added and other similar taxes imposed by any state or political subdivision thereof on the sale of the Assets under this Agreement, or the use of the Assets immediately following the sale under this Agreement, regardless of whether the legal obligation to pay, collect or remit such taxes falls on Seller or Purchaser. 
  
 7.44 [Intentionally omitted]. 
  
 7.45 “WARN Act” shall mean the Worker Adjustment and Retraining Notification Act of 1988 and analogous state and local Law. 
  
 7.46 “Withdrawal Liability” shall mean Liability to a Multiemployer Plan under Part I of Subtitle E of Title IV of ERISA. 
  
  	 
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 ARTICLE VIII
  
 GENERAL
  
 8.1 Law Governing. This Agreement shall be governed by, and construed in accordance with, the Laws of the State of Nevada without regard to choice or conflict of law principles that would result in the application of any Laws other than the Laws of the State of Nevada. All Actions arising out of or relating to this Agreement shall be heard and determined exclusively in the Courts of the State of Nevada and any state appellate court therefrom within the State of Nevada. The parties hereto hereby (a) submit to the exclusive jurisdiction of the Courts of the State of Nevada and any state appellate court therefrom within the State of Nevada for the purpose of any Action arising out of or relating to this Agreement brought by any party hereto, and (b) irrevocably waive, and agree not to assert by way of motion, defense, or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the above-named courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the Transaction may not be enforced in or by any of the above-named courts. 
  
 8.2 Assignment; Binding upon Successors and Assigns. None of the parties hereto may assign any of its rights or obligations hereunder without the prior written consent of the other party, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, Purchaser may assign its rights and obligations under this Agreement to any Affiliate without obtaining Seller’s consent. Except as otherwise provided herein, this Agreement will be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and assigns. 
  
 8.3 Severability. If any provision of this Agreement, or the application thereof, shall for any reason and to any extent be held to be invalid or unenforceable, the remainder of this Agreement and the application of such provision to other Persons or circumstances shall be interpreted so as best to reasonably effect the intent of the parties hereto. The parties further agree to replace such invalid or unenforceable provision of this Agreement with a valid and enforceable provision which will achieve, to the extent possible, the economic, business and other purposes of the invalid or unenforceable provision. 
  
 8.4 Entire Agreement. This Agreement, the exhibits and schedules hereto, the certificates referenced herein, the exhibits thereto, constitute the entire understanding and agreement of the parties hereto with respect to the subject matter hereof and thereof and supersede all prior and contemporaneous agreements or understandings, inducements or conditions, express or implied, written or oral, between the parties with respect hereto and thereto. This Agreement (including the documents and the instruments referred to herein and therein) is not intended to confer upon any Person other than the parties hereto and thereto any rights or remedies hereunder or thereunder. 
  
  	 
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 8.5 Counterparts; Facsimile. This Agreement may be executed in any number of counterparts, each of which shall constitute an original and all of which together shall constitute one and the same instrument. Execution and delivery of this Agreement by .pdf or facsimile transmission shall be deemed for all purposes to be due execution and delivery by the signing Persons. 
  
 8.6 Other Remedies. Except as otherwise provided herein, any and all remedies herein expressly conferred upon a party hereto shall be deemed cumulative with and not exclusive of any other remedy conferred hereby or by Law on such party, and the exercise of any one remedy shall not preclude the exercise of any other. 
  
 8.7 Amendment and Waivers. Any term or provision of this Agreement may be amended, and the observance of any term of this Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a writing signed by the party to be bound thereby. The waiver by a party of any breach hereof for default in payment of any amount due hereunder or default in the performance hereof shall not be deemed to constitute a waiver of any other default or any succeeding breach or default. 
  
 8.8 Waiver. Each party hereto may, by written notice to the others: (a) waive any of the conditions to its obligations hereunder or extend the time for the performance of any of the obligations or actions of the others, (b) waive any inaccuracies in the representations of the others contained in this Agreement or in any documents delivered pursuant to this Agreement, (c) waive compliance with any of the covenants of the others contained in this Agreement or (d) waive or modify performance of any of the obligations of the others. No action taken pursuant to this Agreement, including any investigation by or on behalf of any party, shall be deemed to constitute a waiver by the party taking such action of compliance with any representation, warranty, condition or agreement contained herein. Waiver of the breach of any one or more provisions of this Agreement shall not be deemed or construed to be a waiver of other breaches or subsequent breaches of the same provisions. 
  
 8.9 Notices. All notices and other communications hereunder will be in writing and will be deemed given (a) upon receipt if delivered personally (or if mailed by registered or certified mail), (b) the day after dispatch if sent by overnight courier, (c) upon dispatch if transmitted by telecopier, email or other means of facsimile transmission (and confirmed by a copy delivered in accordance with clause (a) or (b)), properly addressed to the parties at the following addresses: 
  
 If to Purchaser: 
  
 Picksy LLC
 ATTN: Stacie Jackson
 1901 Camino Carlos Rey
 North Las Vegas, NV 89031
  
  	 
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 If to Seller: 
  
 MEDIFARM LLC
 ATTN: CEO
 2040 Main Street, Suite 225
 Irvine, CA 92614
  
 Any party may change its address for such communications by giving notice thereof to the other party in conformity with this Section. 
  
 8.10 Construction and Interpretation of Agreement. 
  
 (a) The parties hereto and their respective attorneys have negotiated this Agreement, and the language hereof shall not be construed for or against any party by reason of its having drafted such language. 
  
 (b) The titles and headings herein are for reference purposes only and shall not in any manner limit the construction of this Agreement, which shall be considered as a whole. 
  
 (c) As used in this Agreement, any reference to any state of facts, event, change or effect being “material” with respect to any entity means a state of facts that is material to the current condition (financial or otherwise), properties, assets, liabilities, business or operations of such entity. 
  
 (d) Unless the context clearly indicates otherwise, (a) each definition in this Agreement includes the singular and the plural; (b) each reference in this Agreement to any gender includes the masculine, feminine and neuter where appropriate; (c) the words “include” and “including” and variations thereof shall not be deemed terms of limitation, but rather shall be deemed to be followed by the words “without limitation”; (d) the words “hereof,” “herein,” “hereto,” “hereby,” “hereunder” and derivative or similar words refer to this Agreement as an entirety and not solely to any particular provision of this Agreement; and (e) each reference in this Agreement to a particular Article, Section, Exhibit or Schedule means an Article or Section of, or an Exhibit or Schedule to, this Agreement, unless another agreement is specified. 
  
 (e) Capitalized terms shall have the meanings ascribed to them in this Agreement. 
  
 8.11 No Joint Venture. Nothing contained in this Agreement shall be deemed or construed as creating a joint venture or partnership between any of the parties hereto. No party hereto is by virtue of this Agreement authorized as an agent, employee or legal representative of any other party hereto. No party hereto shall have the power to control the activities and operations of any other and their status is, and at all times, will continue to be, that of independent contractors with respect to each other. No party hereto shall have any power or authority to bind or commit any other. No party hereto shall hold itself out as having any authority or relationship in contravention of this Section. 
  
 8.12 Absence of Third Party Beneficiary Rights. No provisions of this Agreement are intended, nor shall be interpreted, to provide or create any third party beneficiary rights or any other rights of any kind in any client, customer, affiliate, shareholder, partner, or employee of any party hereto or any other Person or entity unless specifically provided otherwise herein, and, except as so provided, all provisions hereof shall be personal solely between the parties to this Agreement. 
  
  	 
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 8.13 Waiver of Jury Trial. Each of the parties hereto hereby waives to the fullest extent permitted by applicable Law any right it may have to a trial by jury with respect to any litigation directly or indirectly arising out of, under or in connection with this Agreement or the Transaction. Each of the parties hereto (a) certifies that no representative, agent or attorney of any other party has represented, expressly or otherwise, that such other party would not, in the event of litigation, seek to enforce that foregoing waiver and (b) acknowledges that it and the other hereto have been induced to enter into this Agreement and the Transaction, as applicable, by, among other things, the mutual waivers and certifications in this Section 8.13. 
  
 8.14 Attorneys’ Fees. Except as otherwise specifically provided herein, in any suit, action or appeal (including arbitration) to enforce this Agreement or any term or provision of this Agreement, or to interpret this Agreement, the prevailing party shall be entitled to recover its costs incurred, including reasonable attorneys’ fees at trial or on appeal. 
  
 8.15 Fees and Expenses. Except as set forth in Section 8.14, all fees and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement shall be paid by the party incurring such expenses, whether or not the transaction is consummated. 
  
 8.16 Confidentiality and Publicity. Unless otherwise permitted by this Agreement or as required by applicable law, rule or regulation, Seller and Purchaser shall consult with each other before issuing any press release or otherwise making any public statement or making any other public (non-confidential) disclosure (whether or not in response to an inquiry) regarding the terms of this Agreement and the transactions contemplated hereby, and neither shall issue any such press release or make any such statement or disclosure without the prior approval of the other (which approval shall not be unreasonably withheld); provided, however, that Purchaser and Seller have the right to disclose the Transaction to third parties as may be necessary in order to obtain any necessary third party consents or permissions to take any other actions necessary to consummate the Transaction. 
  
 8.17 Bulk Transfer Laws. Notwithstanding anything to the contrary herein, Purchaser acknowledges that Seller will not comply with any bulk transfer Laws of any jurisdiction in connection with the transactions contemplated hereunder. 
  
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	36
	 
 
	 

  
 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of May 8, 2019. 
  
  	 MEDIFARM LLC
	
	 	 	 
	By:	/s/ Derek Peterson	
	 Name:
	Derek Peterson 	 
	Its:	Manager	 
	 	 	 
	 PICKSY LLC
	  

	  
	  
	  

	 By:
	 /s/ Stacie Jackson
	  

	 Name:
	 Stacie Jackson
	  

	 Its:
	 Manager
	  

  
   
  	 37

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