Document:

EXHIBIT 10.1

 

	

	
CONFIDENTIAL

  

Share Transfer Agreement

 

Whereas Skkynet Cloud Systems, Inc. (SKKY:OTCQB), a public reporting company established under the laws of the United States of America (hereinafter referred to as “Transferee”) wants to utilize the technology and know-how of Nic Corporation, established under the laws of Japan (hereinafter referred to as “Target Company”) in manufacturing Transferee’s own products,

 

Whereas Mr. Akira Iwata, Mrs. Takako Nishikawa and Mr. Mitsuharu Sekiguchi (hereinafter collectively referred to as “Transferor”) want to transfer their shares of Target Company to a third party company which has enough management vitality to ensure Target Company’s management stability and growth,

 

Therefore, Transferor and Transferee, in consideration herein, agree as follows:

 

Article 1 (Share Transfer)

 

1. Both parties confirm that Transferor has a total of 200 outstanding shares of Target Company and Mr. Iwata has 90 shares, Mrs. Nishikawa has 90 shares and Mr. Sekiguchi has 20 shares.

 

2. Transferor shall transfer all of its shares (hereinafter referred to as “Shares”) to Transferee for US$110,000.00 and 50,000 common shares of Transferee (SKKY:OTCQB) bearing a restricted legend in compliance with SEC Regulations. For clarity, this equates to US$550.00 and 250 common shares of Transferee (SKKY:OTCQB) per share of Target Company.

 

Article 2 (Representation and Warranty by Transferor)

 

Transferor represents and warrants to Transferee following matters:

 

1. The transfer of Shares shall be authorized by the shareholders’ meeting and a copy of the minutes of the meeting shall be given to Transferee. Also, the shareholders’ meetings of Target Company shall be legally held and the decisions shall be valid.

 

2. The number of the outstanding shares of Target Company is 200 and all of them were legally and validly issued.

 

3. Transferor has the complete ownership of Shares and there is no security right or other liability on Shares. Also, all the certificates of Shares given by Transferor to Transferee shall be legally and validly issued.

 

4. The financial statements of Target Company were made according to generally accepted accounting principles and they reflect correctly the financial situations and operating results. After the record date of the last financial statements, Target Company has been conducting business activities in the same manner as before and there is no material bad influence on the Target Company’s financial situations.

 

5. Target Company has no undisclosed debt. 

 

 

	
Skkynet Cloud Systems

	
2233 Argentia Road

	
Suite 306

	
Mississauga

	
ON

	
 L5N 2X7

	
1.888.628.2028

	
skkynet.com

	 
	
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CONFIDENTIAL

 

6. Target Company has complete ownership of the assets recorded in the balance sheet and there is no security right or other liability on those assets.

 

7. Target Company is not facing a lawsuit, provisional attachment or temporary injunction, or any other claim by a third party. Also, there is no possibility for Target Company to face such procedures.

 

8. The intellectual property right owned by Target Company doesn’t infringe upon third party’s intellectual property.

 

9. Any contracts between Target Company and third parties don’t put the non-competition liability on Target Company or have cancellation clauses due to transfer of shares.

 

10. There is no legal dispute between labor and management in Target Company. Also, there is no trouble between them which may escalate into legal dispute.

 

11. Target company complies with any laws and regulations applied to its business activities. Also, Target Company has no relation with antisocial forces.

 

12. Transferor disclosed to Transferee all material information about transfer of Shares. Also, all the information disclosed by Transferor is true and accurate.

 

Article 3 (Representation and Warranty by Transferee)

 

Transferee represents and warrants to Transferor following matters;

 

1. Transferee was established legally.

 

2. Transferee was legally given the right necessary to enter into this agreement.

 

Article 4 (Covenants)

 

Transferor shall make the covenants to Transferee on following matters:

 

1. Transferor shall conduct business activities in the same manner as before after the execution of this agreement until the closing date described in Article 5 and cause no material bad influence on the Target Company’s financial situations.

 

2. Transferor shall fulfill the conditions for closing described in Article 6 by the closing date.

 

3. Transferor shall not, for 2 years after the closing date in Osaka city, conduct businesses similar to those of Target Company or become employee or officer of companies conducting businesses similar to Target Company.

 

4. Transferor shall not, without prior consent by Transferee, disclose confidential information of Target Company to a third party.

 

	 
	
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CONFIDENTIAL

 

Article 5 (Closing)

 

1. Transferee shall pay to Transferor the amount of money described in Article 1 on November 1, 2014 (hereinafter referred to as “Closing Date”) as transfer fee in exchange of delivering the certificates of Shares. Common shares of SKKY (OTCQB) bearing a restricted legend in compliance with SEC Regulations shall be approved by resolution of Transferee’s Board of Directors, and electronically issued and registered with the Transfer Agent of record (Island Stock Transfer, Roosevelt Office Center, 15500 Roosevelt Boulevard, Suite 301, Clearwater, FL 33706), and proof of said registration effective November 1, 2014 shall be provided to Transferor within 15 business days.

 

2. Transferor shall deliver the certificates of Shares to Transferee in exchange of receiving the transfer fee described in the previous section.

 

Article 6 (Conditions for Closing)

 

The closing described in the previous Article shall occur on the following conditions:

 

1. The representations and warranties described in Article 2 are accurate on both the execution date of this agreement and Closing Date.

 

2. The covenants described in Article 4 are fulfilled.

 

Article 7 (Replacement of Directors)

 

All the directors of Target Company shall resign at the shareholders’ meeting of Target Company held for the first time after Closing Date, and Transferee shall appoint new directors.

 

Article 8 (Indemnification)

 

1. If Transferor violates the representation and warranty described in Article 2, Transferor shall be responsible for compensating the damages, including reasonable attorney’s fee, incurred by Transferee due to the violation.

 

2. If Transferee faces the claim by a third party due to the violation of the representation and warranty described in Article 2 on the part of Transferor, Transferor shall indemnify Transferee against such claim and give no burden on Transferee for it. In this case, if Transferee suffers any damages or costs, including reasonable attorney’s fee, Transferor shall be responsible for compensating such damages or costs.

 

Article 9 (Miscellaneous)

 

1. This agreement consists of entire agreement by both parties on the matters covered herein, and prevails against any type of agreement, understanding or undertaking on those matters written or oral.

 

2. This agreement can be amended only by a written document signed by authorized persons of both parties.

 

3. The applicable law of this agreement is the law of Japan.

 

4. Any dispute arising out of this agreement shall be resolved through the arbitration by Japan Commercial Arbitration Association.

 

	 
	
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CONFIDENTIAL

 

IN WITNESS WHEREOF, the parties hereto have executed this agreement in duplicate by placing their signatures and seals hereon, and each party shall keep one of the originals.

 

November 1, 2014

 

	 	Transferor (Representative of above 3 and self)	 
		
Takeda Bldg, 2-1-2 Minamikubodera-cho, chuo-ku, Osaka

	
			 	
	
 

	By:	/s/ Akira Iwata	 
	 	 	Akira Iwata	 
	 	 	 	 
		
Transferee:

	
		
2233 Argentia Road, Suite 306, Mississauga, ON L5N 2X7

	
		
Skkynet Cloud Systems, Inc.

	
			 	
		By:	/s/ Paul E. Thomas	
			
Paul E. Thomas, President

	

 

 

4Exhibit-10.2-2014.9.30 - LeaseAddendum

Exhibit  10.2

LEASE ADDENDUM NO. 7
THIS LEASE ADDENDUM NO. 7 (“Addendum No. 7”) is made and executed as of this 20th day of October, 2014, by and between COTTONWOOD NEWPARK ONE, L.C., a Utah limited liability company (“Landlord”), and SKULLCANDY, INC., a Delaware corporation (“Tenant”), as an addendum to that certain Lease Agreement between Landlord and Tenant dated the 27th day of August, 2007, as amended by that certain Lease Addendum No. 1 dated the 18th day of June, 2008, that certain Lease Addendum No. 2 dated the 21st day of July, 2010, that certain Lease Addendum No. 3 dated the 2nd day of September, 2010, that certain Lease Addendum No. 4 dated the 4th day of October, 2011, that certain Lease Addendum No. 5 dated the 16th day of November, 2012 and that certain Lease Addendum No. 6 dated the 3rd day of June, 2014 (collectively, the “Lease”).  Landlord and Tenant are sometimes collectively referred to below as the “parties.”

RECITALS:
A.    Pursuant to the Lease, Tenant leased from Landlord that certain commercial office space consisting of approximately twenty-eight thousand two hundred four (28,204) rentable square feet (24,476  usf) (the “Premises”) in a building (the “Building”) constructed on real property owned by Landlord located at 1441 West Ute Boulevard, Park City, Utah, as more particularly described in the Lease.
B.    The parties desire to modify and amend the Lease, subject to the terms and conditions of this Addendum No. 7.
NOW, THEREFORE, for and in consideration of the parties’ covenants and agreements contained herein and in the Lease, Landlord and Tenant covenant and agree as follows:

AGREEMENT:

1.Recitals.  The recitals to this Addendum No. 7 are an integral part of the agreement and understanding of the parties, and are incorporated by reference in this Addendum No. 7.

2.Definitions.  The definitions of certain of the capitalized terms used in this Addendum No. 7 not expressly defined in this Addendum No. 7 will have the respective meanings set forth in the Glossary of Defined Terms attached as Exhibit A to the Lease or elsewhere in the Lease.  

3.Expanded Premises.  Effective as of November 15, 2014 (the “Effective Date”), the Premises (as described in Section A of Part I of the Lease) shall be increased by approximately 3,777 square feet of Rentable Area (3,284 usable square feet) on the first (1st) floor of the Building known as Suite 100 (the “Expansion Space”), so that the increased Premises totals approximately 31,981 square feet of Rentable Area (27,560 usable square feet).   The location of the Expansion Space is shown on the Floor Plan attached as Exhibit “A” to this Addendum No. 7 (the Premises and the Expansion Space shall be collectively referred to herein as the “Expanded Premises”). Tenant hereby accepts the Expanded Premises in its current “AS-IS” condition, without any additional modification, improvement or refurbishing by Landlord.  The description of the Premises contained in Section A of Part I of the Lease, as previously amended, is amended accordingly.  The Landlord shall not be subject to any liability, including, without limitation, lost profits or incidental or consequential damages for any delay or inability to deliver possession of the Expansion Space to the Tenant, 

provided, however, that the Effective Date shall be postponed until the date that Landlord is able to deliver possession of the Expansion Space to the Tenant.  

4.Base Rent for Expansion Space.  From and after the Effective Date, Section C of Part I of the Lease is hereby amended to include the Base Rent for the Expansion Space as follows:

C.    Base Rent (Lease Provisions, Paragraph 5):

	
			
	Lease Year
	Monthly Base Rent
	Annual Base Rent

	Effective Date through 2/28/2015
	$5,835.47
	$70,025.58

	3/1/2015 - 2/29/2016
	$5,980.25
	$71,763.00

The above Base Rent for the Expansion Space shall be in addition to the Base Rent for the Premises as currently set forth in Section C of Part I of the Lease, as previously amended.  

5.Tenant’s Share.  From and after the Effective Date, Section D of Part I of the Lease is deleted and the following language substituted therefor:  

D.    ADDITIONAL RENT (Lease Provisions, Paragraph 5.3):
Tenant’s Share (Lease Provisions, Paragraph 5.3.1):  Tenant’s Share for Tenant’s payment of Operating Expenses for the Premises means Fifty-one and 66/100 percent (51.66%).   

6.Parking Charge.  From and after the Effective Date, Section F of Part I of the Lease is deleted in its entirety and the following language substituted therefor:

F.    PARKING CHARGE (Lease Provisions, Paragraph 5.5):

Tenant shall throughout the Lease Term, lease from Landlord up to a total of one hundred ten (110) unassigned automobile parking spaces at a cost of Zero Dollars ($0.00) per month per space for the Term of the Lease, including any extensions.  

7.Renewal Options.  Given the addition of the Expansion Space to the Premises, the Base Rent for the Expanded Premises during the Extension Renewal Terms granted pursuant to Section 4 of Addendum No. 6 shall be modified as follows:  
Lease Months            Monthly Base Rent    Annual Base Rent

3/1/2016 - 8/31/2016        $ 52,155.68        $ 625,868.17
9/1/2016 - 2/28/2017        $ 52,155.68        $ 625,868.17

8.Broker.  Landlord and Tenant each represent to the other that it has had no dealings with any real estate broker, agent or finder in connection with the negotiation of this Addendum No. 7, except for Janet G. Vise of Sage Realty Services, L.C. (“Broker”), and that they know of no other real estate broker, agent or finder who is entitled to a commission or finder’s fee in connection with this Addendum No. 7.  Each party shall indemnify, protect, defend and hold harmless the other party against all claims, demands, losses, liabilities, lawsuits, judgments, and costs and expenses (including reasonable attorney fees) for any leasing commission, finder’s fee, equivalent compensation alleged to be owing on account of the indemnifying parties’ dealings with any real estate broker, agent or 

finder other than the Broker.  The terms of this Section 8 will survive the expiration or earlier termination of the Lease Term.

9.Other Provisions.  

Tenant represents, warrants and agrees with Landlord as follows:
(a)    The Lease and this Addendum No. 7 embody the entire agreement now existing with Landlord related to the Premises; and
(b)    The Lease, as modified hereby, is in full force and effect; and
(c)    The Lease, or any interest therein, has not been previously transferred, subleased, assigned or pledged by Tenant; and
(d)    Tenant is not aware of any default by Tenant or Landlord under either the Lease or this Addendum No. 7. 
Landlord represents, warrants and agrees with Tenant as follows:
(a)    The Lease and this Addendum No. 7 embody the entire agreement now existing with Tenant related to the Premises; and

(b)    The Lease, as modified hereby, is in full force and effect; and

(c)    Landlord is not aware of any default by Tenant or Landlord under either the Lease or this Addendum No. 7.  

11.    General.  Without limiting any provision respecting assignment or transfer as contained in the Lease, this Addendum No. 7 shall be binding upon and inure to the benefit of the respective legal representatives, and any authorized successors and assigns of the parties.  This Addendum No. 7 shall be governed by, and construed in accordance with, the laws of the State of Utah.  All notices and other communications given pursuant to the Lease, as modified hereby, shall be made as provided in the Lease.  Except as modified in this Addendum No. 7, the Lease is, and shall remain, in full force and effect. The Lease, as amended by this Addendum No. 7, shall not be further amended or modified except by a written instrument signed by the parties.  In the event of any conflict between the terms of the Lease and this Addendum No. 7, this Addendum No. 7 shall control.  The person executing this Addendum No. 7 on behalf of Tenant warrants and represents that Tenant has full right and authority to execute, deliver and perform this Addendum No. 7 and no approval or consent of any third party (other than the parties to this Addendum No. 7) is necessary to make such Addendum No. 7 effectual or otherwise valid and binding. The person executing this Addendum No. 7 on behalf of Landlord warrants and represents that: (a) Landlord is a duly organized and existing legal entity, in good standing in the State of Utah; (b) Landlord has full right and authority to execute, deliver and perform this Addendum No. 7 and no approval or consent of any third party (other than the parties to this Addendum No. 7) is necessary to make this Addendum No. 7 effectual or otherwise valid and binding; and (c) the person executing this Addendum No. 7 on behalf of Landlord was authorized to do so.  This Addendum No. 7 shall not be effective or binding unless and until it is fully executed and delivered by Landlord and Tenant.  This Addendum No. 7 may be executed in multiple counterparts, each of which shall constitute an original and all of which taken together shall constitute one and the same instrument.

[Signature Page to Follow]DATED and effective as of the date first written above.

		
	TENANT:
	SKULLCANDY INC., a Delaware corporation

By:    /s/ Patrick Grosso
Name:    Patrick Grosso
Title:    Vice President, Strategic Initiatives and Corporate Affairs
Date:    October 20, 2014

		
	LANDLORD:
	COTTONWOOD NEWPARK ONE, L.C., a Utah limited liability company, by its manager

CPM NEWPARK, L.C., a Utah limited liability company, by its manager

COTTONWOOD PARTNERS MANAGEMENT, LTD., a Utah limited liability company, by its following general partner, COTNET MANAGEMENT, INC., a Utah corporation

By: /s/ John L. West
JOHN L. WEST, President

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