Document:

coyoteex101.htm

Exhibit 10.1

 

 

EMPLOYMENT AGREEMENT

 

 

               THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of February 17, 2011 (the “Effective Date”), and is by and between Coyote Resources, Inc., a Nevada corporation (the “Corporation”), and Earl Abbott (the “Executive”).

 

WHEREAS, the Corporation desires to employ the Executive, and the Executive desires to be employed by the Corporation and to render services to it, on the terms and subject to the conditions in this Agreement.

 

NOW, THEREFORE, in consideration of the premises and the respective undertakings of the Corporation and the Executive set forth below, the Corporation and the Executive agree as follows:

 

1.      Employment. The Corporation hereby employs the Executive in the position of President, and the Executive accepts such employment and agrees to perform services for the Corporation, for the period and upon the other terms and conditions set forth in this Agreement. As President, the Executive shall be responsible for:

	  	  
	
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the day-to-day operations of the Corporation;

	
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the development of a strategic course of direction for the Corporation;

	
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developing a strong financial and administrative team for the Corporation reporting to the President;

	
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developing an annual operating plan for the Corporation to be submitted to the Corporation's Board of Directors (the "Board") against which (as modified and/or approval by the Board) the Executive and Executive's management team will be measured and, if appropriate, compensated with bonus; and

	
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such other duties, consistent with the Executive's position, as the Board may delegate to the Executive from time to time.

 

       The Executive shall report to the Board.

 

        The Executive will devote at least seventy percent (70%) of his business time and efforts to the performance of the Executive’s duties and responsibilities under this Agreement and to the business and affairs of Corporation, its subsidiaries and affiliates. The Executive may engage in personal, charitable, professional and investment activities to the extent such activities do not materially conflict or interfere with the Executive’s duties and obligations under this Agreement or the Executive’s ability to perform his duties and responsibilities under this Agreement. During the Term (as such term is defined below), the Executive shall not serve on the board of directors (or similar governing body) of any other business entity which has competing interests with the Corporation without the prior approval of the Board. The Executive shall resign from any such board of directors (or similar governing body) on which he may serve (even if such service has been approved by the Board) if the Executive’s activities on such board (or other body) conflict or interfere with the performance of the Executive’s duties for the Corporation.

 

2.     Term. The “Term” shall, unless sooner terminated as provided herein, be a period of two (2) years commencing on the Effective Date and ending at the close of business on the day before the second anniversary of the Effective Date (day before the second anniversary of the Effective Date is referred to as the “Initial Extension Date”). Notwithstanding the preceding sentence, on Initial Extension Date and on each annual anniversary of the Initial Extension Date (the Initial Extension Date and each annual anniversary thereof is referred to as an “Extension Date”), the Term shall be automatically extended through and shall end with the close of business on the first (1st) anniversary of that Extension Date (for example, on the Initial Extension Date the Period of Employment shall be automatically extended through the close of business on the day before the third anniversary of the Effective Date), unless at least ninety (90) days prior to such Extension Date, the Corporation or the Executive has provided the other with written notice that the Term shall not be extended or further extended, as the case may be. The term “Term” shall include any extension thereof pursuant to the preceding sentence. Provision of notice that the Term shall not be extended or further extended, as the case may be, shall not constitute a breach of this Agreement, and shall not entitle the Executive to severance benefits pursuant to Section 7.

 

3.     Compensation.

 

3.1 Base Salary. As compensation in full for the services to be rendered by the Executive under this Agreement during the Term, the Corporation shall pay to the Executive a base salary at a monthly rate of Eight Thousand Five Hundred Dollars ($8,500) per month (the “Base Salary”), which Base Salary shall be paid in accordance with the Corporation’s normal payroll procedures and policies; provided, however, the Base Salary shall be paid entirely in cash, notwithstanding any payroll procedures and policies to the contrary.  The Base Salary shall be subject to annual review and increase (but not decrease) by the Board.

 

  

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3.2 Bonus Opportunity. For each fiscal year of the Corporation during the Term, the Corporation shall grant to the Executive the opportunity to earn a bonus.  Each such bonus opportunity will be based on objectives established with respect to that year, each as determined by the Compensation Committee of the Board. The specific bonus opportunity with respect to a particular fiscal year will be established by the Compensation Committee prior to or within the first three months of that fiscal year.

 

 3.3 Signing Bonus. The Executive shall receive a special one-time signing bonus on the Start

Date in the amount of Eighty Thousand Dollars ($80,000), payable on the execution of this Agreement.

 

3.4 Participation in Benefit Plans. During the Term, the Executive shall also be entitled to participate in all employee benefit plans or programs of the Corporation to the extent that his position, title, tenure, salary, age, health and other qualifications make him eligible to participate in accordance with the terms of the applicable plans or programs. The Corporation does not guarantee the adoption or continuance of any particular employee benefit plan or program during the Term, and the Executive’s participation in any such plan or program shall be subject to the provisions, rules and regulations applicable thereto and as amended from time to time.

 

3.5 Withholding Taxes. The Corporation may withhold from any compensation or other benefits payable under this Agreement, all federal, state, city or other taxes as shall be required to be withheld pursuant to any law or governmental regulation or ruling.

 

3.6  Indemnification.   As a material inducement for the Executive to enter into this Agreement and to serve as a director of the Corporation, the Corporation shall indemnify, defend and hold harmless the Executive to the fullest extent permitted by Nevada law in effect on the date hereof or as Nevada law may from time to time be amended (but, in the case of any such amendment, only to the extent such amendment permits broader indemnification than the prior law), if the Executive becomes a party to, or witness or other participant in, or is threatened to be made a party to or witness or other participant in, any threatened, pending or completed action, suit proceeding or other alternative dispute resolution mechanism, or any hearing, inquiry or investigation that the  Executive reasonably believes might lead to the institution of any such action, suit proceeding or alternative dispute resolution mechanism, whether civil, criminal, administrative, investigative or other (a “Claim”); provided however, that (i) such action, suit proceeding or alternative dispute resolution mechanism or any hearing, inquiry or investigation  results from or arises out of the fact that the Executive is or was a director or officer of the Corporation;  and (ii) the Corporation shall not indemnify the Executive for any pending or threatened action or legal proceedings related to Executive’s actions made prior to the Effective Date.  The Executive shall have the right to employ the Executive’s counsel at the Executive’s expense.  The indemnification provided in this Agreement shall be in addition to any rights which the Executive may be entitled under the Corporation’s Articles of Incorporation or Bylaws, any agreement, any vote of stockholders or disinterested directors, the laws of the State of Nevada or otherwise.   The Corporation shall maintain liability insurance applicable to directors and officers and the Executive shall be covered by such policies in such a manner to provide the Executive the same rights and benefits as are provided to the Corporation’s most favorably insured directors and/or officers.

 

4.     Confidential Information. Except as provided below, the Executive shall not, during the Term or at any time thereafter, divulge, furnish or make accessible to anyone or use in any way (other than in the ordinary course of the business of the Corporation or any of its respective affiliates) any confidential or secret knowledge or information of the Corporation which the Executive has acquired or become acquainted with or will acquire or become acquainted with prior to the termination of the period of his employment by the Corporation (including employment by the Corporation or any affiliated or predecessor companies prior to the date of this Agreement), whether developed by himself or by others, concerning any trade secrets, confidential or secret designs, processes, formulae, plans, devices or material (whether or not patented or patentable) directly or indirectly useful in any aspect of the business of the Corporation, any customer or supplier lists of the Corporation, any confidential or secret development or research work of the Corporation, or any other confidential information or secret aspects of the business of the Corporation. The Executive acknowledges that the above-described knowledge or information constitutes a unique and valuable asset of the Corporation and represents a substantial investment of time and expense by the Corporation, and that any disclosure or other use of such knowledge or information other than for the sole benefit of the Corporation and its affiliates would be wrongful and would cause irreparable harm to the Corporation. Both during and after the Term, the Executive shall refrain from any acts or omissions that would reduce the value of such knowledge or information to the Corporation. The foregoing obligations of confidentiality, however, shall not apply to (i) any knowledge or information which is now published or which subsequently becomes generally publicly known, other than as a direct or indirect result of the breach of this Agreement by the Executive or (ii) any knowledge or information the Executive acquired or became acquainted with prior to the Effective Date.  The foregoing obligations of confidentiality shall not, however, limit the Executive’s disclosure of information (1) to the extent necessary to comply with government disclosure requirements or other applicable laws, (2) pursuant to subpoena or order of any judicial, legislative, executive, regulatory or administrative body, or for the Executive to enforce the Executive’s rights under this Agreement, (3) to employees, advisors, counsel, financial advisors and other third parties as may be necessary and appropriate in connection with the proper performance and enforcement of this Agreement; and (4) pursuant to the Executive’s normal reporting procedures as an executive of a publicly traded company (e.g., pursuant to Sarbanes-Oxley requirements or otherwise).

 

5.     Ventures. If, during the Term, the Executive is engaged in or associated with the planning or implementing of any project, program or venture involving the Corporation and a third party or parties, all rights with respect to such project, program or venture shall belong to the Corporation. Except as approved by the Board, the Executive shall not be entitled to any interest in such project, program or venture or to any commission, finder’s fee or other compensation in connection therewith other than the salary to be paid to the Executive as provided in this Agreement.

 

6.     Noncompetition Covenant.

 

6.1 Agreement not to Compete. The Executive agrees that during the Term of this Agreement the Executive shall not, without the written consent of the Board, directly or indirectly, engage in competition with the Corporation in any manner or capacity (e.g., as an advisor, principal, agent, partner, officer, director, stockholder, employee, member of any association, or otherwise) in any phase of the business which the Corporation is conducting during the Term; provided, however, that nothing herein shall prevent the Executive from investing as less than five percent (5%) stockholder in the securities of any company.

 

6.2 Scope of Covenant. The obligations of the Executive under Section 6.1 shall apply to any geographic area in which the Corporation has engaged in business during the Term.

 

  

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6.3 Non-Solicitation.  The Executive agrees that during the Term and for a period of twelve (12) months thereafter, he will not, without the prior written approval of the Board, hire, solicit or endeavor to entice away from the Corporation or, following termination of the Executive’s employment, otherwise interfere with the relationship of the Corporation with any employee of the Corporation or one of its subsidiaries as an employee of the Corporation or one of its subsidiaries during the last twelve months of the Executive’s own employment by the Corporation, or any person or entity who was, within the then most recent prior 12-month period, a customer, supplier or contractor of the Corporation or any of its affiliates.

 

7.     Termination.

 

7.1 Termination of Employment. The Executive’s employment by the Corporation, and the Term, may be terminated at any time during the Term by the Corporation: (1) with Cause (as such term is defined below), or (2) in the event of the Executive’s death, or (3) in the event of the Executive’s Disability (as such term is defined below) (in the case of Disability, the termination shall be effective ten (10) days after notice thereof is given to the Executive). The Executive’s employment by the Corporation, and the Term, may be terminated at any time during the Term by the Executive, on no less than sixty (60) days prior written notice to the Corporation.

 

7.2 Benefits Upon Termination. If the Executive’s employment by the Corporation is terminated during the Term for any reason by the Corporation or by the Executive, or upon or following the expiration of the Term, the Corporation shall have no further obligation to make or provide to the Executive, and the Executive shall have no further right to receive or obtain from the Corporation, any payments or benefits except:

 

	
(a)

	  	
the Corporation shall pay the Executive (or, in the event of his death, the Executive’s estate) any Accrued Obligations (as such term is defined below); and

	
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if, during the Term (but not upon or following the expiration of the Term), the Executive’s employment is terminated either by the Corporation or the Executive due to the death or Disability of the Executive, by the Corporation other than for Cause (as such term is defined below), the Corporation shall, subject to the conditions set forth in the following paragraph, also pay the Executive (or, in the event of the Executive’s death, the Executive’s estate) a severance benefit equal to three months of Base Salary.  Subject to the conditions set forth in the following paragraph, the aggregate amount of such severance benefit shall be paid in a series of twelve (12) substantially equal monthly installments (without interest, with each installment equal to approximately 1/12th of the aggregate amount of the severance benefit) commencing with the month following the month in which the Executive’s employment by the Corporation terminates and continuing for the following eleven months until paid in full (subject to the Executive’s compliance with the following paragraph and the provisions of Section 6); and

 

As a condition precedent to any Corporation obligation to the Executive pursuant to Section 7.2(b) above, the Executive (or, in the event of his death, the Executive’s estate on behalf of the Executive) shall, upon or promptly following his last day of employment with the Corporation, provide the Corporation with a valid, executed, written Release (as such term is defined below) (in a form provided by the Corporation) and such release shall have not been revoked by the Executive pursuant to any revocation rights afforded by applicable law. The Corporation shall have no obligation to make any payment to the Executive pursuant to Section 7.2(b) above unless and until the Release contemplated by this paragraph becomes irrevocable by the Executive in accordance with all applicable laws, rules and regulations.

 

The Executive agrees that the payments contemplated by Section 7.2 shall constitute the exclusive and sole remedy for any termination of his employment and the Executive covenants not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment. The Corporation and Executive acknowledge and agree that there is no duty of the Executive to mitigate damages under this Agreement. All amounts paid to the Executive pursuant to Section 7.2 shall be paid without regard to whether the Executive has taken or takes actions to mitigate damages.

 

The foregoing provisions of this Section 7.2 shall not affect any rights that the Executive may have under and with respect to a stock option or restricted stock award, to the extent that such award was granted before the date that the Executive’s employment by the Corporation terminates and to the extent expressly provided in the written agreement evidencing such award.

 

7.3 Certain Defined Terms.

 

As used herein, “Accrued Obligations” means:

	  	  
	
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any Base Salary that had accrued but had not been paid prior to the date of termination; and

	
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any reimbursement of reasonable business expenses incurred by the Executive prior to the

	  	
termination of the Executive's employment and in accordance with the Corporation's expense

	  	
reimbursement policies and which had not previously been paid.

 

As used herein, “Cause” means:

 

	  	  
	
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The Executive’s willful and material failure to perform his duties hereunder (other than any

	  	
such failure due to the Executive's physical or mental illness), or the Executive's willful

	  	
and material breach of his obligations hereunder;

	
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The Executive’s engaging in willful and serious misconduct that has caused or is reasonably

	  	
expected to result in material injury to the Corporation;

	
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The Executive’s being convicted of, or entering a plea of guilty or nolo contendre to, a crime

	  	
that constitutes a felony; or

	
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The Executive’s failure or inability to obtain or retain any license required to be obtained or

	  	
retained by him in any jurisdiction in which the Corporation does or proposes to do business.

 

  

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As used herein, “Disability” means a physical or mental impairment which substantially limits a major life activity of the Executive and which renders the Executive unable to perform the essential functions of the Executive’s position, even with reasonable accommodation which does not impose an undue hardship on the Corporation, for ninety (90) days in any consecutive one-hundred eighty (180) day period. The Board reserves the right, in good faith, to make the determination of whether or not a Disability exists for purposes of this Agreement based upon information supplied by the Executive and/or his medical personnel, as well as information from medical personnel (or others) selected by the Corporation or its insurers.

 

As used herein, “Release” shall mean a written release, discharge and covenant not to sue entered into by the Executive on behalf of himself, his descendants, dependents, heirs, executors, administrators, assigns, and successors, and each of them, of and in favor of the Corporation, its parent (if any), the Corporation’s subsidiaries and affiliates, past and present, and each of them, as well as its and their trustees, directors, officers, agents, attorneys, insurers, employees, stockholders, members, representatives, assigns, and successors, past and present, and each of them (the “releasees”), with respect to and from any and all claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and liabilities of whatever kind or nature in law, equity or otherwise, whether now known or unknown, suspected or unsuspected, and whether or not concealed or hidden, which he may then own or hold or he at any time theretofore owned or held or may in the future hold as against any or all of said releasees, arising out of or in any way connected with the Executive’s employment relationship with the Corporation and each of its subsidiaries with which the Executive has had such a relationship, or the termination of his employment or any other transactions, occurrences, acts or omissions or any loss, damage or injury whatever, known or unknown, suspected or unsuspected, resulting from any act or omission by or on the part of said releasees, or any of them, committed or omitted prior to the date of such release including, without limiting the generality of the foregoing, any claim under Section 1981 of the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the California Fair Employment and Housing Act, the California Family Rights Act, any other claim under any other federal, state or local law or regulation, and any other claim for severance pay, bonus or incentive pay, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, medical expenses, or disability (except that such release shall not constitute a release of any Corporation obligation to the Executive that may be due to the Executive pursuant to Section 7.2(b) or (c), as applicable, upon the Corporation’s receipt of such release or any obligations referred to in the last paragraph of Section 7.2). The Release shall also contain the Executive’s warrant that he has not theretofore assigned or transferred to any person or entity, other than the Corporation, any released matter or any part or portion thereof and that he will defend, indemnify and hold harmless the Corporation and the aforementioned releasees from and against any claim (including the payment of attorneys’ fees and costs actually incurred whether or not litigation is commenced) that is directly or indirectly based on or in connection with or arising out of any such assignment or transfer made, purported or claimed.

 

7.4 Resignation From Board. Upon or promptly following any termination of Executive’s employment with the Corporation, the Executive agrees to resign from (1) each and every board of directors (or similar body, as the case may be) of the Corporation and each of its affiliates on which the Executive may then serve (if any), and (2) each and every office of the Corporation and each of its affiliates that the Executive may then hold, and all positions that he may have previously held with the Corporation and any of its affiliates.

 

7.5 Means and Effect of Termination. Any termination of the Executive’s employment under this Agreement shall be communicated by written notice of termination from the terminating party to the other party. The notice of termination shall indicate the specific provision(s) of this Agreement relied upon in effecting the termination.

 

8.     Miscellaneous.

 

8.1 Governing Law. This Agreement and all rights and obligations hereunder, including, without limitation, matters of construction, validity and performance, is made under and shall be governed by and construed in accordance with the internal laws of the State of Nevada, without regard to principles of conflict of laws.

 

8.2 Amendments. No amendment or modification of this Agreement shall be deemed effective unless made in writing and signed by all of the parties hereto.

 

8.3 No Waiver. No term or condition of this Agreement shall be deemed to have been waived, nor shall there be any estoppel to enforce any provisions of this Agreement, except by a statement in writing signed by the party against whom enforcement of the waiver or estoppel is sought. Any written waiver shall not be deemed a continuing waiver unless specifically stated, shall operate only as to the specific term or condition waived and shall not constitute a waiver of such term or condition for the future or as to any act other than that specifically waived.

 

8.4 Severability. To the extent any provision of this Agreement shall be invalid or unenforceable, it shall be considered deleted herefrom and the remainder of such provision and of this Agreement shall be unaffected and shall continue in full force and effect. In furtherance and not in limitation of the foregoing, should the duration or geographical extent of, or business activities covered by, any provision of this Agreement be in excess of that which is valid and enforceable under applicable law, then such provision shall be construed to cover only that duration, extent or activities which may validly and enforceably be covered. The Executive acknowledges the uncertainty of the law in this respect and expressly stipulates that this Agreement be given the construction which renders its provisions valid and enforceable to the maximum extent (not exceeding its express terms) possible under applicable law.

 

8.5 Assignment. This Agreement shall not be assignable, in whole or in part, by either party without the written consent of the other party.

 

8.6 Injunctive Relief. Each party agrees that it would be difficult to compensate the non-breaching party fully for damages for any violation of any provision set forth in Section 4 or Section 6 hereof. Accordingly, each party specifically agrees that the other party shall be entitled to temporary and permanent injunctive relief to enforce the provisions of Sections 4 and 6 of this Agreement and that such relief may be granted without the necessity of proving actual damages. This provision with respect to injunctive relief shall not, however, diminish the right of the non-breaching party to claim and recover damages in addition to injunctive relief.

 

  

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8.7 Arbitration. Any controversy or claim arising out of or relating to this Agreement or the Executive’s employment by the Corporation shall, except for claims for injunctive relief set out in paragraph 8.6 above, be settled by binding arbitration, with a single neutral arbitrator, in accordance with the rules of the American Arbitration Association relating to employment. In any action to enforce this Agreement, the Executive and the Corporation each agree to accept service of process by mail at its address, as applicable, as set forth in Section 8.8 below (or at any different address of which the Executive has notified the Corporation, or the Corporation has notified the Executive, as applicable, in writing). In any action in which service is made pursuant to this paragraph, the Executive and the Corporation each waive any challenge to the personal jurisdiction of the American Arbitration Association. Any judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction thereof. In reaching his or her decision, the arbitrator shall have no authority to change or modify any provision of this Agreement.

 

8.8 Notices. All notices, requests, demands and other communications required or permitted under this Agreement shall be in writing and shall be deemed to have been duly given and made if (1) delivered by hand, (2) otherwise delivered against receipt therefor, or (3) sent by registered or certified mail, postage prepaid, return receipt requested. Any notice shall be duly addressed to the parties as follows:

 

	  	  
	
If to the Corporation:

	  
	  	
Coyote Resources, Inc.

	  	
5490 Longley Lane

Reno, Nevada 89511

	  	  
	  	  
	
If to the Executive:

	  
	  	
Earl Abbott

	  	
5490 Longley Lane

	  	
Reno, Nevada 89511

 

Any party may alter the address to which communications or copies are to be sent by giving notice of such change of address in conformity with the foregoing provisions. Any communication shall be effective when delivered by hand, when otherwise delivered against receipt therefor, or five (5) business days after being mailed in accordance with the foregoing.

 

8.9 Section Headings. The section headings of, and titles of paragraphs and subparagraphs contained in, this Agreement are for the purpose of convenience only, and they neither form a part of this Agreement nor are they to be used in the construction or interpretation thereof.

 

8.10 Provisions that Survive Termination. The provisions of Sections 3.6, 4, 5, 6, 7 and 8 shall survive any termination of the Term.

 

8.11 Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original as against any party whose signature appears thereon, and all of which together shall constitute one and the same instrument. This Agreement shall become binding when one or more counterparts hereof, individually or taken together, shall bear the signatures of all of the parties reflected hereon as the signatories. Photographic copies of such signed counterparts may be used in lieu of the originals for any purpose.

 

8.12 Entire Agreement. This Agreement embodies the entire agreement of the parties hereto respecting the matters within its scope. This Agreement supersedes all prior and contemporaneous agreements of the parties hereto that directly or indirectly bears upon the subject matter hereof. Any prior negotiations, correspondence, agreements, proposals or understandings relating to the subject matter hereof shall be deemed to have been merged into this Agreement, and to the extent inconsistent herewith, such negotiations, correspondence, agreements, proposals, or understandings shall be deemed to be of no force or effect. There are no representations, warranties, or agreements, whether express or implied, or oral or written, with respect to the subject matter hereof, except as expressly set forth herein.

 

 

[signature page to follow]

 

  

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             IN WITNESS WHEREOF, the Executive and the Corporation have executed this Agreement as of the date set forth in the first paragraph.

 

	  	  
	
COYOTE RESOURCES, INC.

	
EXECUTIVE

	  
	
By:  /s/ Earl Abbott                     

	
By:     /s/ Earl Abbot                         

	       Earl Abbott	
        Earl Abbott                                                                   

	
Its:  President

	  
	  	  

 

 

6chcn_ex101.htm

 

Exhibit 10.1

 

CAPITAL STOCK PURCHASE AGREEMENT

 

THIS CAPITAL STOCK PURCHASE AGREEMENT ("Purchase Agreement") is entered into by and among Robert D. Rochell ("Seller"), CORE Health Care Network, Inc. or its designee ("Purchaser") and MEDTECH CORPORATION, Inc. ("Corporation" and Seller, Purchaser and Corporation, collectively, the "Parties") a corporation organized and existing under the laws of the State of Nevada and domesticated in the state of Oklahoma, as of the 10th day of January, 2011, ("Effective Date").

 

WHEREAS, Seller owns or controls one-hundred percent (100%) of all capital stock (shares) to include but not limited to; common and preferred classes of MEDTECH CORPORATION, Inc.

 

WHEREAS, Purchaser desires to purchase and Seller desires to sell one hundred percent (100%) of all capital stock (shares) to include but not limited to; common and preferred classes of Corporation ("Shares");

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the Parties hereby covenant and agree as follows

 

1.   Purchase and Sale.   Seller shall sell to Purchaser, and Purchaser shall purchase from Seller, the Shares under the terms and conditions set forth herein.

 

2.   Earnest Money.   As of the Effective Date, Purchaser shall pay to Seller TEN AND 00/100 DOLLARS ($10.00) ("Earnest Money") to be held by Purchaser pending Closing (as such term is defined below). In the event the Closing does not occur by the Closing Date and an amendment to extend the Closing has not been executed by the Parties, Purchaser shall retain the Earnest Money, the Purchase Agreement will be void and there will be no further force and effect to the Parties.

 

3.   Time and Place of Closing.   The consummation of the transactions contemplated by this Agreement (the "Closing") shall take place in Oklahoma City, Oklahoma at a location to be determined on or before January 28, 2011 (the "Closing Date") assuming all "Conditions Precedent to Closing" listed in Section 9 have been satisfied at the sole discretion of Purchaser.

 

4.   Purchase Price.   The purchase price ("Purchase Price") for the Shares shall be ONE MILLION FIVE HUNDRED THOUSAND (1,500,000) Shares of Common Stock of CORE Health Care Network, Inc.

 

5.   Tender of Shares.   Simultaneously with the tender of CORE Healthcare Network Inc., Common Stock, Seller shall deliver to Purchaser a Stock Power transferring one hundred (100%) of the total Shares of Corporation authorized to Purchaser.

 

  

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6.   Seller's Warranties.   Seller represents and warrants, to the best of Seller's knowledge, that:

 

a.   Organization and Authority. Corporation is duly organized and validly existing under the laws of Nevada; Corporation is duly qualified to conduct business in all jurisdictions where it is required to qualify; Seller has the authority to execute, deliver and perform this Purchase Agreement and any other agreement or document executed by Seller under or in connection with this Purchase Agreement; and Seller has taken all necessary action to authorize the execution, delivery, and performance of the Purchase Agreement and any other agreement or document.

 

b.   Binding Obligation.  This Purchase Agreement constitutes, and any such other agreement or document when executed will constitute, the legal, valid and binding obligations of Seller enforceable against Seller in accordance with their respective terms.

 

c.   No Violation or Adverse Effect. Neither the execution nor delivery of this Purchase Agreement nor the transactions contemplated herein, nor compliance with the terms and conditions of this Purchase Agreement will:

 

(i)    contravene any provision of law or any statute, decree, rule, or regulation binding upon Seller or contravene any judgment, decree, franchise, order or permit applicable to Seller or Corporation: or

 

(ii)    conflict with or result in any breach of any terms, covenants, conditions or provisions of, or constitute a default (with or without the giving of notice or passage of time or both) under the Articles of Incorporation or By-Laws of Corporation or material agreement or other instrument to which Seller or Corporation is a party or by which either is bound, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the assets, rights, contracts or other property of Corporation.

 

d.   Authorizations, Consents and Approvals. All authorizations, consents or approvals of, or exemptions by, any governmental, judicial or public body or authority, if any, required to authorize, or required in connection with (i) the execution, delivery and performance of this Purchase Agreement by Seller, or (ii) any of the transactions contemplated by this Purchase Agreement, or (iii) any of the certificates, instruments, or agreements executed by Seller in connection with this Purchase Agreement, or (iv) the taking of any action by Seller, have been obtained and will be in full force and effect.

 

e.   Corporate Documentation. True and complete copies of the Articles of Incorporation and By-Laws of Corporation are attached to Schedule 6.e hereto, and the same have not been amended and are and shall be in full force and effect at Closing.

 

  

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f.   Financial Statements. As of the date of the last financial statements and accounts payable reports and ledgers provided to Purchaser ("Financial Statements") Corporation did not have any liabilities (contingent or otherwise) or assets which are not disclosed in the Financial Statements or, in the case of liabilities, reserved against therein. Since the dates of the Financial Statements (i) there have been no materially adverse changes in the business or financial condition of Corporation, and Corporation has conducted its business in accordance with its normal and past practices; (ii) Corporation has not incurred any additional obligations or liabilities except trade debts in the ordinary course or business, and (iii) all judgments against or in favor of Corporation within the last ten (10) years are identified on Schedule 6.f.

 

g.            Potential Litigation or Claims. Seller has no knowledge of any (i) threatened litigation; (ii) material, unasserted claims (considered by management to be probable of assertion); and (iii) potential, material adverse claims.

 

h.            Dividends, Distributions or Redemption. Corporation has not declared or paid any dividend or made or agreed to make any other distribution or payment in respect of any of its Shares or otherwise to any of its shareholders, and Corporation has not purchased or redeemed or agreed to purchase or redeem any of its outstanding Shares.

 

i.             Employees. With respect to the business of Corporation:

 

(1)   except for Seller, no employee of Corporation (i) has any present intention to terminate his or her employment, or (ii) is a party to any confidentiality, non-competition, proprietary rights or other such agreement between such employee and any person besides Corporation that would be material to the performance of such employee's duties, or the ability of Corporation or Purchaser to conduct the business of Corporation;

 

(2)   there are no pending, and during the past three (3) years there have been no workman's compensation claims or liability.

 

(3)   there is no employment-related charge, complaint, grievance, investigation, inquiry or obligation of any kind, pending or threatened in any forum, relating to an alleged violation of breach by Corporation (or its officers or directors) of any law, regulation

or contract;

 

(4)   no employee or agent of Corporation has committed any act or omission giving rise to material liability for any violation or breach identified in subsection (3) above;

 

(5)   Except as set forth on Schedule 6.i, (i) there are no employment contracts or severance agreements with any employees of Corporation, and (ii) there are no written personnel policies, rules, or procedures applicable to employees of Corporation. True and complete copies of all such documents have been provided to Purchaser prior to the date of this agreement; and

 

  

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j.   Employee Benefit Plans. With respect to the business of Corporation:

 

(1)   Schedule 6.j to this Purchase Agreement lists each Employee Benefit Plan (as such term is defined in 3(3) of the Employment Retirement Income Security Act of 1974 ("ERISA")) that Corporation maintains, to which Corporation contributes or has any obligations to contribute, or with respect to which Corporation has any liability.

 

(2)   Each such Employee Benefit Plan (and each related trust, insurance contract, or fund) has been maintained, funded and administered in accordance with the terms of such Employees Benefit Plan and complies in form and in operation in all respects with the applicable requirements of ERISA, the Code, and other applicable laws.

 

(3)   All required reports and descriptions (including Form 5500 annual reports, summary annual reports and summary plan descriptions) have been timely filed and/or distributed in accordance with the applicable requirements of ERISA and the Code (as such term is defined below) with respect to each such Employee Benefit Plan.

 

(4)   Each such Employee Benefit Plan that is intended to meet the requirements of a "qualified plan" under Code 401(a) has received a determination from the IRS that such Employee Benefit Plan is so qualified, and nothing has occurred since the date of such determination that could adversely affect the qualified status of any Employee Benefit Plan. All such Employee Benefit Plans have been timely amended for the requirements of the federal tax legislation commonly know as "GUST" and "EGTRRA" and have been or will be submitted to the IRS for a favorable determination letter on the GUST and EGTRRA requirements within the applicable remedial amendment period.

 

(5)   The have been no Prohibited Transactions (as such term is defined in ERISA 406) with respect to any such Employee Benefit Plan or any Employee Benefit Plan maintained by an ERISA Affiliate. No Fiduciary (as such term is defined in ERISA 3(21) has any liability for breach of fiduciary duty or other failure to act or comply in connection with the administration or investment of assets of any such Employee Benefit Plan. No action, suit, proceeding, hearing, or investigation with respect to the administration or the investment of the assets of any such Employee Benefit Plan (other than routine claims for benefits) is pending or threatened. None of the Seller, the directors, or officers (and employees with responsibility for employee benefits matters) of Corporation has any actual knowledge, or should know, of any basis of any such action, suit, proceeding, hearing, or investigation.

 

  

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(6)    The Corporation does not maintain, contribute to or have an obligation to contribute to, or have any liability with respect to, any Employee Welfare Benefit Plan (as such term is defined in ERISA 3(1)) providing health or life insurance or other welfare-type benefits for the current or future retired or terminated, directors, officers, employees (or any spouse or other dependent thereof) of Corporation or of any other person other than in accordance with COBRA.

 

k.   Taxes.

 

(1)    The Corporation has duly filed (and until Closing will so file) all tax returns required to be filed in respect of any United States federal, state, local, or foreign Taxes and have duly paid (and until the Closing will so pay) all such taxes due and payable. All tax returns filed by Corporation are true, correct, and complete. The Corporation has established (and until the Closing will establish) on its books and records reserves that are adequate for the payment of all taxes incurred, but not yet due and payable, in respect of the Corporation through such date. The Corporation is not a party to, and does not have any liabilities under, any tax sharing agreements or similar agreements.

 

(2)    None of the Tax Returns of the Corporation have been audited by the Internal Revenue Service, or any other United States federal, state, local or foreign Governmental Authority within the past six years. There are no audits or other proceedings presently pending or expected nor any other disputes pending or expected with respect to, or claims asserted for, taxes upon Corporation, nor regarding the application of any statue of limitations with respect to any taxes or tax returns, There are no liens for taxes upon Corporation Assets, excepts liens for taxes due but not yet payable for which adequate accruals have been made (as determined in accordance with GAAP). Seller has complied (and until the Closing will comply) in all respects with the applicable laws relating to the payment and withholding of taxes.

 

(3)    The Corporation (i) has not requested any extension of time within which to file any tax return which tax return has not since been timely filed; (ii) is not a party to any agreement providing for the indemnification, allocation or sharing of taxes; (iii) is not required to include in income any adjustment by reason of a voluntary change in accounting method initiated by Corporation (nor has an governmental authority proposed any such adjustment or change of accounting method); (iv) has not filed a consent with any governmental authority pursuant to which Corporation has agreed to recognize gain (in any manner) relating to or as a result of this Purchase Agreement or the transactions contemplated hereby; and (v) has not been a member of an affiliated group.

 

  

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l.   Property.  Schedule 6.1 attached hereto sets forth all of the property and assets of Corporation, including, but not limited to, all real and personal property, and all intellectual property of any kind, including, but not limited to, patent applications, patents, copyrights, trademarks, service marks, and technical information disclosures of Corporation, or other assets of any kind, wherever located (all the foregoing being "Property", and the Property together with the Materials Contracts ( as defined below), the "Corporation Assets"). All information concerning Corporation Assets contained in Schedule 6.1 is true and correct. Corporation owns all the rights in and to Corporation Assets. Apart from Corporation Assets and other assets set forth in the financial statements, Corporation has no assets, rights or other property.

 

m.   Material Contracts. Schedule 6.m sets forth a list of all of the material contracts to include but not limited to Medicare and Private Insurance to which Corporation is a party ("Material Contracts"). The contracts set forth in Schedule 6.m are in full force and effect, are enforceable in accordance with their terms, and no material default by any party thereto, or event which with the giving of notice or passage of time or both would constitute a material default, exists thereunder. No amounts due and owning under said contracts are past due: and none of said contracts and none of the rights of Corporation thereunder has been sold, assigned, encumbered or transferred in any way. Corporation is not a party to any other material contract.

 

n.   Title to Corporation Assets. Other than those listed on Schedule 6.n, none of the rights in or to any Corporation Assets has been sold, leased, assigned, encumbered or transferred in any way, and there are no rights, options or privileges outstanding with respect to any Corporation Assets. All leases, assignments, encumbrances, options or privileges outstanding will be satisfied at Closing and Seller will convey clear title of all Corporation Assets.

 

o.   No Litigation; Compliance with Applicable Law. There is no pending litigation or arbitration or administrative proceeding or material claim asserted, pending or threatened respecting or involving Corporation, the business of Corporation or any Corporation Assets or other assets of Corporation. There is no order, writ, injunction or decree of any court, government or governmental agency or any arbitration award against Corporation or any Corporation Assets other than those disclosed on Schedule 6.0. Corporation and its assets and operations are in material compliance with all applicable laws, rules, regulations and ordinances.

 

p.   Bank Accounts. Schedule 6.p hereto contains a list of all the banks which Corporation has accounts, the account numbers of such accounts and the authorized signatories on such accounts.

 

q.   Insurance. Schedule 6.q hereto contains a description of all insurances maintained by Corporation; no default exists with respect to any insurances and all of such insurances are in full force and effect.

 

  

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r.   Shares. Seller is the sole owner and or controls 100% of the Shares and of all rights in and to the Shares; all Shares are represented by one or more share certificates, and Seller may sell the Shares to Purchaser pursuant to this Purchase Agreement without the consent or approval of any person, corporation, partnership, governmental authority, or other entity; the Shares are fully paid and non-assessable and, except as provided in this Purchase Agreement, Seller has not sold, transferred or assigned any of its rights in or to any of the Shares; the Shares when conveyed at Closing will be free and clear of any liens, claims, encumbrances, and restrictions, of any kind except for the approvals noted above.

 

s.   Unissued Shares. There is no option, warrant, privilege, or right outstanding with respect to any unissued Shares of Corporation.

 

t.   Licenses and Permits. The business operates as a Durable Medical Equipment Company (DME) and is licensed by the State of Oklahoma. Seller will continue to keep all licenses and permits (including Medicare) in good standing and in force and effect at all times.

 

7.    Purchaser's Warranties.  Purchaser represents and warrants, to the best of Seller's knowledge, that:

 

Organization and Authority. Corporation is duly organized and validly existing under the laws of Nevada; Corporation is duly qualified to conduct business in all jurisdictions where it is required to qualify; Purchaser has the authority to execute, deliver and perform this Purchase Agreement and any other agreement or document executed by Purchaser under or in connection with this Purchase Agreement; and Purchaser has taken all necessary action to authorize the execution, delivery, and performance of the Purchase Agreement and any other agreement or document.

 

  

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b.   Binding Obligation.  This Purchase Agreement constitutes, and any such other agreement or document when executed will constitute, the legal, valid and binding obligations of Purchaser enforceable against Purchaser in accordance with their respective terms.

 

c.   No Violation or Adverse Effect. Neither the execution nor delivery of this Purchase Agreement nor the transactions contemplated herein, nor compliance with the terms and conditions of this Purchase Agreement will:

 

(i)           contravene any provision of law or any statute, decree, rule, or regulation binding upon Purchaser or contravene any judgment, decree, franchise, order or permit applicable to Purchaser or Corporation: or

 

(ii)           conflict with or result in any breach of any terms, covenants, conditions or provisions of, or constitute a default (with or without the giving of notice or passage of time or both) under the Articles of Incorporation or By-Laws of Corporation or material agreement or other instrument to which Purchaser or Corporation is a party or by which either is bound, or result in the creation or imposition of any lien, security interest, charge or encumbrance upon any of the assets, rights, contracts or other property of Corporation.

 

d.   Authorizations, Consents and Approvals. All authorizations, consents or approvals of, or exemptions by, any governmental, judicial or public body or authority, if any, required to authorize, or required in connection with (i) the execution, delivery and performance of this Purchase Agreement by Purchaser, or (ii) any of the transactions contemplated by this Purchase Agreement, or (iii) any of the certificates, instruments, or agreements executed by Purchaser in connection with this Purchase Agreement, or (iv) the taking of any action by Purchaser, have been obtained and will be in full force and effect.

 

e.   Corporate Documentation. Articles of Incorporation and By-Laws of Corporation are attached to Schedule 7.e hereto, and the same have not been amended and are and shall be in full force and effect at Closing.

 

f.   Financial Statements. As a publicly registered Company, Purchaser may only disclose financial information in its quarterly 10-Q filing. Financial Information is available via the Securities and Exchange Commission (SEC) website. Purchaser has attached to Schedule 7.f the 10-Q for September 30, 2010.

 

g.   Potential Litigation or Claims. Seller has no knowledge of any (i) threatened litigation; (ii) material, unasserted claims (considered by management to be probable of assertion); and (iii) potential, material adverse claims.

 

  

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8.   Survival of Warranties.  All warranties herein shall survive the delivery of the Shares sold hereunder for three (3) years following the date hereof.

 

9.   Conditions Precedent to Closing:

 

a.   Compliance. Satisfactory determination that the acquisition and prospective business operations by Purchaser of Seller's business will comply with all applicable laws and regulations, including license, antitrust and competition laws.

 

b.   Delivery of Legal Opinions. Customary legal opinions must be delivered, the content of which shall be mutually agreed upon.

 

c.   Environmental. An environmental inspection by a licensed environmental inspection firm contracted by Purchaser must show the assets of Seller to be free from significant environmental liabilities. Purchaser shall be given access to the property of Seller and documents as necessary for Purchaser and its agents to conduct the inspection and prepare the reports at the Purchaser's cost. Seller shall represent and warrant as a condition of closing that to the best of their knowledge there are no material adverse environmental liabilities associated with the Seller or the property it owns.

 

d.   Real Property Lease. Seller will cause Corporation to maintain a real property lease for office space currently occupied by the  business (a square footage amount to be determined). The lease will be a Gross Lease (all real property and grounds maintenance  and repairs, property taxes, and insurance - excluding utilities) for  a term of five (5) years with monthly lease payments to be determined but not to exceed comparable gross lease rates for  medical or commercial office space within the market area. Purchaser will have the option to renew the lease at market rate at the end of the lease term. If the Property has been pledged under a  mortgage Seller will remove or make the Property owner (if owned  by a different entity) remove any provisions in the mortgage that could make the lease invalid or require an increase of rent and decrease in term including but not limited to any Due on Sale provisions. In the event of a sale, or refinance of the Property prior to the end of the lease term the Seller will force by contract the  new Property owner or Mortgagee to be bound by the rate, terms and conditions of the lease.

 

e.   Accounts Receivable, Payable, and Cash. All cash and accounts receivable and accounts payable will remain property of the Corporation.

 

f.   Power of Attorney. List on Schedule 9.f all outstanding Powers of Attorney.

 

  

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g.   Officer or Employee Loans. List on Schedule 9.g a description of amounts and other terms of any indebtedness or other obligations of or to the Company to or from any of its officers, directors, employees, consultants or other insiders.

 

h.           Employment and Compensation Agreements. List on Schedule 9.h a description and copy of all written and oral employment agreements by which the Company is bound or affected including but not limited to, bonus, deferred compensation, stock option, stock purchase and annuity plans, of or covering employees of the Company. Use of Corporation assets (facility, automobiles, office equipment, etc.)

 

i.    Consulting Agreements. List of Schedule 9.i all consulting and management agreements and arrangements of the Company.

 

j.   Insurance Claims. List on Schedule 9.j a description of insurance claims history of the Company since its organization, including date of claim, nature of loss, payment and/or reserve, and description of experience under workers' compensation, including cost.

 

k.   Contingent Agreement. This Agreement is contingent upon satisfactory Due Diligence at the sole discretion of Purchaser. Due Diligence to be completed on or before January 28, 2011 unless extended in writing by both Parties. Upon completion of Due Diligence should Purchaser desire to move toward Closing a Letter of Satisfaction will be delivered to Seller with a Closing date and time.

 

10.           Conditions Subsequent to Closing.

 

a.   Officer and Director Resolution. As of the effective date hereof, Purchaser and Seller shall select new Officers and Directors to conduct the business of the Corporation. The board will comprise three seats. Purchaser will retain two seats and Seller one seat.

 

b.   Employment Contracts. As of the effective date all officer and employee contracts shall be reviewed for reinstatement or termination.

 

c.   Seller Employment Contract. As of the Closing date Seller will enter into a five-year (5) employment agreement as Chief Executive Officer. Annual compensation will be $75,000 plus two percent (2%) of the Corporation's gross revenue in excess of $500,000 annually.

 

11.   Acquisition and Broker Fees. Seller and Purchaser warrant that there were no Brokers or Intermediaries involved in the transaction other than those listed on Schedule 11 a.

 

  

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12.   Covenant Not to Complete; Non-solicitation; and Confidential Information.   As a material inducement to sign this Purchase Agreement, Seller agrees that he will not, directly or indirectly, Compete with Corporation for a five (5) year period following the date hereof. "Compete" and "Compete with Corporation" both mean to engage in the same or similar business as Corporation in any manner whatsoever, including competing as a proprietor, partner, investor, stockholder, director, officer, employee, consultant, independent contractor, or otherwise, within a geographic area within one hundred (100) miles of any of the facilities in which Corporation is operating as of the date hereof except as a partner, stockholder, investor, or manager with or for Purchaser. A "Customer" of Corporation is any person for whom Corporation has performed or attempted to perform services or sold or attempted to sell any products or service, whether or not for compensation, and regardless of the date of such rendition, sale, or attempted rendition or sale. Seller recognizes that Corporation has spent significant amounts of time and money developing a list of its customers, which list is not available to the general public or Corporation's ordinary employees, and that this list contains other information about the customers not available to the general public and that Seller has been privileged to the list. Seller also acknowledges that Corporation's competitors could not recreate this list without substantial efforts, and Corporation's business would be irreparably and greatly damaged by the use of this information other than for its benefit. Therefore, as a material inducement to signing this Purchase Agreement, Seller will not solicit or do business with, or attempt to solicit or do business with any of Corporation's Customers during the five (5) year period following the date hereof except as a partner, stockholder, investor, or manager with or for Purchaser. Seller has had access to and is aware of the confidential information an trade secrets including Customer data, files, and business techniques not generally available to the public, and this confidential information has been compiled by Corporation at great expense and over a great amount of time. The Parties acknowledge that this confidential information gives Corporation a competitive advantage over other businesses in its field of endeavor and the Corporation's business will be greatly and irreparably damaged by the release or use of this confidential information outside of its own business. Therefore, as a material inducement to signing this Purchase Agreement, Seller will not, during five (5) years following the date hereof, either disclose or divulge this confidential information to anyone or use this confidential information in any manner to Compete with Corporation.

 

13.   Interpretation - No Presumption. It is acknowledged by the Parties that this Purchase Agreement is the result of negotiated suggestions of all Parties, and therefore, no presumptions shall arise favoring any Party by virtue of the authorship of any of the provisions herein or the modification, addition, or deletion of provisions in prior drafts hereof.

 

14.   Indemnity. Seller shall indemnify Purchaser against all loss, damage, costs, and expenses (including any reasonable cost of legal representation) reasonably determined to be a consequence of a breach of any provision, covenant, or warranty in this Purchase Agreement. Seller and Purchaser agree to treat any indemnity payment made pursuant to this Purchase Agreement as an adjustment to the Purchase Price for all income tax purposes. If, not withstanding the treatment required by the preceding is determined to be taxable to Purchaser by any taxing authority, Seller shall also indemnify Purchaser for any taxes incurred by reason of the receipt of such payment and any losses incurred by Purchaser in connection with such Taxes (or any asserted deficiency, claim, demand, action, suit, proceeding, judgment, or assessment, including the defense or settlement thereof, relating to such taxes).

 

  

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15.   Governing Law. This Purchase Agreement shall be governed and interpreted under the internal laws of the state of Nevada.

 

16.   Binding Effect. This Purchase Agreement shall be binding upon and shall inure to the benefits of the parties hereto and assigns.

 

17.   Survival. The terms and provisions of this Purchase Agreement shall survive the Closing.

 

18.   Counterpart. This Purchase Agreement may be executed in one or more counterparts, each of which shall be considered an original, and all of which together shall be considered one and the same document.

 

19.   Affidavit.  Attached as Schedule 19.a.

 

(signatures on next page)

  

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IN WITNESS WHEREOF, the Parties have executed this Purchase Agreement as of the Effective Date.

 

 

 

 

 

 

  

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