Document:

EXHIBIT 10.1

 

FOCUS ENHANCEMENTS, INC.

AMENDED 2004 STOCK INCENTIVE PLAN

 

1.             Purpose.  This Stock Incentive Plan, to be known as the
2004 Stock Incentive Plan (hereinafter, this “Plan”), is intended to promote
the interests of Focus Enhancements, Inc. (hereinafter, the “Company”) by
providing an inducement to obtain and retain the services of qualified persons
to serve as employees of the Company or members of its Board of Directors (the “Board”).

 

2.             Available
Shares.  The total number of shares
of common stock, par value $0.01 per share, of the Company (the “common stock”)
for which options or restricted stock may be granted under this Plan shall not
exceed 5,952,000 shares, subject to adjustment in accordance with paragraph 2
of this Plan.  Shares subject to this
Plan are authorized but unissued shares or shares that were once issued and
subsequently reacquired by the Company. 
If any options or restricted stock granted under this Plan are
surrendered or forfeited before exercise or lapse without exercise, in whole or
in part, the shares reserved therefore shall continue to be available under
this Plan.

 

In the event
of any change in the outstanding shares of common stock or other securities
then subject to the Plan by reason of any stock split, reverse stock split,
stock dividend, recapitalization, merger, consolidation, combination or
exchange of shares or other similar corporate change, or if the outstanding
securities of the class then subject to the Plan are exchanged for or converted
into cash, property or a different kind of security, or if cash, property or
securities are distributed in respect of such outstanding securities (other
than a regular cash dividend), then, unless the terms of such transaction shall
provide otherwise, such equitable adjustments shall be made in the Plan and the
awards thereunder (including, without limitation, appropriate and proportionate
adjustments in (i) the number and type of shares or other securities that
may be acquired pursuant to awards theretofore granted under the Plan; (ii) the
maximum number and type of shares or other securities that may be issued
pursuant to awards thereafter granted under the Plan; (iii) the number of
shares of restricted stock that are outstanding; and (iv) the maximum
number of shares or other securities with respect to which awards may
thereafter be granted to any Participant in any Plan Year) as the Committee
determines are necessary or appropriate, including, if necessary, any
adjustment in the maximum number of shares of common stock available for
distribution under the Plan as set forth in this Section 3. Such
adjustments shall be conclusive and binding for all purposes of the Plan.

 

3.             Administration.  This Plan shall be administered by the by the
Compensation Committee, which consists of two or more members of the Board,
each of whom shall be both a “Non-Employee Director,” as that term is defined
in Rule 16b-3(b)(3)(i) of the Exchange Act, and an “outside director”
within the meaning of Section 162(m) of the Code. The Committee
shall, subject to the provisions of the Plan, have the power to construe this
Plan, to determine all questions hereunder, and to adopt and amend such rules and
regulations for the administration of 

 

 

this Plan as it may deem desirable.  No member of the Board or the Committee shall
be liable for any action or determination made in good faith with respect to
this Plan or any option granted under it.

 

4.                                       Grant
of Options or Restricted Shares / Eligibility.  Subject to the availability of shares under
this Plan, the Committee may make grants of options and/or restricted shares to
employees of the Company and/or members of the Board under this Plan from time
to time in accordance with the terms of the Plan.

 

5.                                       Stockholder
Approval.  Anything in this Plan to
the contrary notwithstanding, the effectiveness of this Plan and of the grant
of all options or restricted stock hereunder is in all respect subject to this
Plan and options or restricted stock granted under it shall be of no force and
effect unless and until the approval of this Plan by the vote of the holders of
a majority of the Company’s shares of common stock present in person or by
proxy and entitled to vote at a meeting of stockholders at which this Plan is
presented for approval.

 

6.                                       Options.  (a) Option Price.  The purchase
price of the stock covered by an option granted pursuant to this Plan shall be
100% of the fair market value of such shares on the day the option is
granted.  The option price will be subject to adjustment in accordance
with the provisions of paragraph 2 of this Plan.  For purposes of
establishing the exercise price and for all other valuation purposes under the
Plan, the fair market value of a share of common stock on any relevant date
will be the closing sales price of the common stock in the case where the
common stock is traded on a national securities exchange, the NASDAQ Capital
Market or NASDAQ National Market.  Alternatively, fair market value shall
be determined by the average between the highest and lowest sales price quoted
(on that date) by an established quotation service if the common stock is
quoted on the over-the-counter bulletin board (the “OTCBB”).   If
the common stock is not publicly traded on a national securities
exchange, the Nasdaq Capital Market, Nasdaq National Market or OTCBB, “fair
market value” shall be deemed to be the fair value of the common stock as
determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the common stock in private transactions negotiated at arm’s length.

 

(b)           Period
of Option.  Unless sooner terminated
in accordance with the provisions of paragraph 6(e) of this Plan, an
option granted hereunder shall expire on the date set by the Board or the
Committee in its discretion but in no case shall such expiration date exceed
ten (10) years after the date of grant.

 

(c)           Vesting
of Options and Non-Transferability of Options.  Options granted under this Plan shall not be
exercisable until they become vested. 
Options granted under this Plan shall vest in the optionee and thus
become exercisable in accordance with the vesting schedule as determined by the
Committee from time to time in a option grant letter, or upon the occurrence of
a specified event or performance criteria (including certain performance
criteria similar to that set forth in paragraph 7(b)(4)), provided, however,
the optionee has continuously served as a member of the Board, as an employee
of the Company, or in another advisory role to the Company.

 

The number of shares as to which options may
be exercised shall be cumulative, so that 

 

 

once the
option shall become exercisable as to any shares it shall continue to be
exercisable as to said shares, until expiration or termination of the option as
provided in this Plan; provided however, any option granted under this
Plan shall in no event be exercised unless and until this Plan has been
approved by the Company’s stockholders, but upon such approval the vesting
shall become effective as of the date of the grant.

 

(d)           Non-transferability.  Any option granted pursuant to this Plan
shall not be assignable or transferable other than by will or the laws of
descent and distribution or pursuant to a domestic relations order and shall be
exercisable during the optionee’s lifetime only by him or her.

 

(e)           Termination
of Option Rights.

 

(1)           Except
as otherwise specified in the agreement relating to an option, in the event an
optionee ceases to be an employee of Company or a member of the Board, as the
case may be, for any reason other than death or permanent disability, any then
unexercised portion of options granted to such optionee shall, to the extent
not then vested, immediately terminate and become void; except as set forth in
paragraphs 6(b) and 6(c), any portion of an option which is then vested
but has not been exercised at the time the optionee so ceases to be a member of
the Board or an employee may be exercised, to the extent it is then vested by
the optionee within ninety days after such event.

 

(2)           Notwithstanding
the foregoing, in the event any optionee who is a member of the Board of
Directors (i) ceases to be a member of the Board of Directors at the
request of the Company, (ii) is removed without cause, or (iii) otherwise
does not stand for nomination or re-election as a director of the Company at
the request of the Company, then any portion of any Option granted to such
optionee may be exercised, to the extent it is then vested by the optionee
within one year after such event.

 

(3)           Notwithstanding
anything to the contrary herein, in no event shall any option be exercised if
the optionee is dismissed from employment or removed from the Board of
Directors for any one of the following reasons: 
(i) disloyalty, gross negligence, dishonesty or breach of fiduciary
duty to the Company; or (ii) the commission of an act of embezzlement,
fraud or deliberate disregard of the rules or polices of the Company which
results in loss, damage or injury to the Company, whether directly or
indirectly; or (iii) the unauthorized disclosure of any trade secret or
confidential information of the Company; or (iv) the commission of an act
which constitutes unfair competition with the Company or which induces any
customer of the Company to break a contract with the Company; or (v) the
conduct of any activity on behalf of any organization or entity which is a
competitor of the Company (unless such conduct is approved by a majority of the
members of the Board of Directors).

 

(4)           In
the event that an optionee ceases to be an employee of the Company or a member
of the Board, as the case may be, by reason of his or her 

 

 

death or permanent disability, any option granted to such optionee
shall be immediately and automatically accelerated and become fully vested and
all unexercised options shall be exercisable by the optionee (or by the
optionee’s personal representative, heir or legatee, in the event of death) for
a period of one year thereafter.

 

(f)            Exercise
of Option.  Subject to the terms and
conditions of this Plan and the option agreements, an option granted hereunder
shall, to the extent then exercisable, be exercisable in whole or in part by
giving written notice to the Secretary of the Company by mail or in person
addressed to FOCUS Enhancements, Inc., 1370 Dell Avenue, Campbell,
California 95008, at its principal executive offices, or other such address as
optionee may be informed from time to time, stating the number of shares with
respect to which the option is being exercised, accompanied by payment in full
for such shares.  Payment may be (a) in
United States dollars in cash or by check, (b) in whole or in part in
shares of the common stock of the Company already owned by the person or
persons exercising the option or shares subject to the option being exercised
(subject to such restrictions and guidelines as the Board may adopt from time
to time), valued at fair market value determine in accordance with the
provisions of paragraph 6 or (c) consistent with applicable law, through
the delivery of an assignment to the Company of a sufficient amount of the
proceeds from the sale to the broker or selling agent to pay that amount to the
Company, which sale shall be at the participant’s direction at the time of
exercise.  Notwithstanding the foregoing,
the Committee shall have the authority, in their absolute discretion to settle
options that are exercised by way of the “cashless exercise” method described
in (c) of this paragraph 9 through an issuance of the “net shares,” where
the term “net shares” is the number of shares that is equivalent in value to
the fair market value of the underlying stock on the exercise date, as
determined in accordance with the provisions of paragraph 5, less the exercise
price.  The Company’s transfer agent
shall, on behalf of the Company, prepare a certificate or certificates
representing such shares acquired pursuant to exercise of the option, shall
register the optionee as the owner of such shares on the books of the Company
and shall cause the fully executed certificate(s) representing such shares
to be delivered to the optionee as soon as practicable after payment of the
option price in full.  The holder of an
option shall not have any rights of a stockholder with respect to the shares
covered by the option, except to the extent that one or more certificates for
such shares shall be delivered to him or her upon the due exercise of the
option.

 

7.             Restricted
Stock.  Restricted stock awards under
the Plan shall consist of grants of shares of common stock of the Company
subject to the terms and conditions hereinafter provided.

 

(a)           Grant
of Awards.  The Committee shall (i) select
the officers and key employees to whom restricted stock may from time to time
be granted, (ii) determine the number of shares to be covered by each
award granted, (iii) determine the issue price; (iv) determine the
terms and conditions (not inconsistent with the Plan) of any award granted
hereunder, and (v) prescribe the form of the agreement, legend or other
instrument necessary or advisable in the administration of awards under the
Plan.  Restricted stock may be granted to
Board members in lieu of Board fees.

 

 

(b)           Terms
and Conditions of Awards.  Any
restricted stock award granted under the Plan shall be evidenced by a
Restricted Stock Agreement executed by the Company and the recipient, in such
form as the Committee shall approve, which agreement shall be subject to the
following terms and conditions and shall contain such additional terms and
conditions not inconsistent with the Plan as the Committee shall prescribe:

 

(1)           Number of Shares Subject to an Award:  The Restricted Stock Agreement shall specify
the number of shares of common stock subject to the Award.

 

(2)           Restriction Period: 
The period of restriction applicable to each Award shall be established
by the Committee but may not be less than one year, unless the Committee
determines otherwise.  The Restriction
Period applicable to each Award shall commence on the Award Date.

 

(3)           Consideration:  With
respect to employees of the Company, each recipient, as consideration for the
grant of an award, shall remain in the continuous employ of the Company for at
least one year from the date of the granting of such award, or as otherwise
determined by the Committee, and any shares covered by such an award shall
lapse if the recipient does not remain in the continuous employ of the Company
for at least one year from the date of the granting of the award, except as
otherwise determined by the Committee.

 

(4)           Restriction Criteria: 
The Committee shall establish the criteria upon which the Restriction
Period shall be based.  Restrictions
shall be based upon either or both of (i) the continued employment of the
recipient or (ii) the attainment by the Company of one or more of the
following measures of operating performance:

 

	
  a.  Earnings

  
	
   

  
	
  b.  Revenue

  
	
   

  
	
  c.  Operating or net cash flows

  
	
   

  
	
  d.  Financial return ratios

  
	
   

  
	
  e.  Total Stockholder Return

  
	
   

  
	
  f.  Market share

  

 

The Committee shall establish the specific targets for the selected
criteria and, in its judgment, can select additional measures of
performance.  These targets may be set at
a specific level or may be expressed as relative to the comparable measure at
comparison companies or a defined index. 
These targets may be based upon the total Company, one or more business
units of the Company or a defined business unit that the executive has
responsibility for or influence over.  In
cases where objective performance criteria are established, the Committee shall
determine the extent to which the criteria have been achieved and the
corresponding level to which restrictions will be removed from the Award or the
extent to which a participant’s right to receive an Award should be lapsed in
cases where the performance criteria have not been met and shall certify these
determinations in writing.  The Committee
may provide for the determination of the attainment of such restrictions in
installments where deemed appropriate.

 

 

(c)           Terms
and Conditions of Restrictions and Forfeitures.  The shares of common stock awarded pursuant
to the Plan shall be subject to the following restrictions and conditions:

 

(1)           During
the Restriction Period, the participant will not be permitted to sell,
transfer, pledge or assign restricted stock awarded under this Plan.

 

(2)           Except
as provided in Section 7(c)(1), or as the Committee may otherwise
determine, the participant shall have all of the rights of a stockholder of the
Company, including the right to vote the shares and receive dividends and other
distributions provided that distributions in the form of stock shall be subject
to the same restrictions as the underlying restricted stock.

 

(3)           In
the event of a participant’s retirement, death or disability prior to the end
of the Restriction Period for a participant who has satisfied the one year
employment requirement of Section 7(b)(3) with respect to an award
prior to retirement, death or disability, or as otherwise determined by the
Committee, the participant, or the participant’s estate, shall be entitled to
receive that proportion (to the nearest whole share) of the number of shares
subject to the Award granted as the number of months of the Restriction Period
which have elapsed since the Award date to the date at which the participant’s
retirement, death or disability occurs, bears to the total number of months in
the Restriction Period.  The participant’s
right to receive any remaining shares shall be canceled and forfeited and the
shares will be deemed to be reacquired by the Company.

 

(4)           In
the event of a participant’s retirement, death, disability or in cases of
special circumstances as determined by the Committee, the Committee may, in its
sole discretion when it finds that such an action would be in the best
interests of the Company, accelerate or waive in whole or in part any or all
remaining time based restrictions with respect to all or part of such
participant’s restricted stock.

 

(5)           Upon
termination of employment for any reason during the Restriction Period, subject
to the provisions of paragraph (3) above or in the event that the
participant fails promptly to pay or make satisfactory arrangements as to the
withholding taxes as provided in the following paragraph, all shares still
subject to restriction shall be forfeited by the participant and will be deemed
to be reacquired by the Company.

 

(6)           A
participant may, at any time prior to the expiration of the Restriction Period,
waive all rights to receive all or some of the shares of a restricted stock
Award by delivering to the Company a written notice of such waiver.

 

(7)           Notwithstanding
the other provisions of this Section 7, the Committee may adopt rules that
would permit a gift by a participant of restricted shares to members of the
participant’s immediate family (spouse, parents, 

 

 

children, stepchildren, grandchildren or legal dependants) or to a
trust whose beneficiary or beneficiaries shall be either such a person or
persons or the participant.

 

(8)           Any
attempt to dispose of restricted stock in a manner contrary to the restrictions
shall be ineffective.

 

8.             Acceleration
Upon Change in Control.  The
Committee may, in its discretion, provide that unvested awards will accelerate
upon the occurrence of a Change in Control. 
The terms of such acceleration shall be specifically set out in an
agreement upon the grant of an award or pursuant to an employment, severance or
similar agreement.

 

“Change in
Control” shall mean any of the following occurrences:

 

(a) any “person,”
as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Company or any trustee or other fiduciary holding securities
under an employee benefit plan of the Company), is or becomes the “beneficial
owner” (as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of securities of the Company representing 50% or more of the
combined voting power of the Company’s then outstanding securities;

 

(b) during
any period of two consecutive years, individuals who at the beginning of such
period constitute the Board of Directors, and any new director (other than a
director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (a), (c) or (d) of
this definition) whose election by the Board of Directors or nomination for
election by the Company’s stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute at
least a majority thereof;

 

(c) the
stockholders of the Company approve a merger or consolidation of the Company
with any other entity, other than (i) a merger or consolidation which
would result in the voting securities of the Company outstanding immediately
prior thereto continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity) more than 50%
of the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or consolidation or (ii) a
merger or consolidation effected to implement a recapitalization of the Company
(or similar transaction) in which no “person” (as hereinabove defined) acquires
more than 50% of the combined voting power of the Company’s then outstanding
securities; or

 

(d) the
stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company’s assets.

 

9.             Legend
on Certificates.  The certificates
representing restricted shares or shares issued pursuant to the exercise of an
option granted hereunder shall carry such appropriate legend, and such written
instructions shall be given to the Company’s transfer agent, as may be deemed
necessary or advisable by counsel to the Company in order to comply with the
requirements of the Securities Act of 1933 or any state securities laws.

 

 

10.           Representations
of Optionee.  If requested by the
Company, the optionee shall deliver to the Company written representations and
warranties upon exercise of the option that are necessary to show compliance
with Federal and state securities laws, including representations and
warranties to the effect that a purchase of shares under the option is made for
investment and not with a view to their distribution (as that term is used in
the Securities Act of 1933).

 

11.           Agreement.  Each option or restricted stock award granted
under the provisions of this Plan shall be evidenced by an agreement, which
agreement shall be duly executed and delivered on behalf of the Company and by
the grantee to whom such award is granted. 
The agreement shall contain such terms, provisions and conditions not
inconsistent with this Plan as may be determined by the committee and the
officer executing it.

 

12.           Termination
and Amendment of Plan.  Awards may no
longer be granted under this Plan after May 27, 2014, and this Plan shall
terminate when all options granted or to be granted hereunder are no longer outstanding.  The Board may at any time terminate this Plan
or make such modification or amendment thereof as it deems advisable; provided,
however, that if stockholder approval of the Plan is required by law,
the Board may not, without approval by the affirmative vote of the holders of a
majority of the shares of common stock present in person or by proxy and voting
on such matter at a meeting, (a) increase the maximum number of shares for
which awards may be granted under this Plan (except by adjustment pursuant to Section 8),
(b) materially modify the requirements as to eligibility to participate in
this Plan, (c) materially increase benefits accruing to option holders
under this Plan or (d) amend this Plan in any manner which would cause Rule 16b-3
under the Securities Exchange Act (or any successor or amended provision
thereof) to become inapplicable to this Plan Termination or any modification or
amendment of this Plan shall not, without consent of a participant, affect his
or her rights under an option previously granted to him or her.

 

13.           Reorganization
or Liquidation of the Company.  In
the event of (a) the complete liquidation of the Company, (b) a
merger, reorganization, or consolidation of the Company with any other
corporation (other than a Subsidiary of the Company) in which the Company is
not the surviving corporation, or (c) the sale of all or substantially all
of the Company’s assets, any unvested restricted stock and unexercised options
then outstanding shall be deemed canceled as of the effective date of such
event unless the surviving corporation in any such merger, reorganization or
consolidation or the acquiring corporation in any such sale elects to assume
the unvested restricted stock and unexercised options under the Plan or to
issue substitute unvested restricted stock and options in place thereof.  Notwithstanding anything in this Plan or any
option agreement to the contrary, the Company shall not be deemed to have been
liquidated by reason of the merger or consolidation of the Company with or into
a Subsidiary of the Company in a transaction in which the Company is not the
surviving corporation.  The Company shall
give each optionee at least thirty (30) days prior written notice of the
anticipated effective date of any such liquidation, merger, reorganization,
consolidation or sale.  Notwithstanding
anything in this Plan or in any Stock Option Agreement to the contrary, (i) all
Option exercises effected during the 30-day period prior to the effective date
of any such merger, reorganization , consolidation or sale, shall be deemed to
be effective immediately prior to the closing of such liquidation, merger,
reorganization, consolidation or sale and (ii), if the Company abandons or
otherwise fails to close any such liquidation, merger, reorganization,
consolidation or sale, then (a) all exercises during 

 

 

the foregoing 30-day period shall cease to be
effective ab initio and (b) the outstanding options shall be exercisable
as otherwise determined under the applicable option agreement and without
consideration of this paragraph 12 or the corresponding provisions of any
option agreement.

 

14.           Withholding
of Income Taxes.  The Company shall
make appropriate provisions for the payment of any Federal, state or local
taxes or any other charges that may be required by law to be withheld by reason
of a grant or the issuance of shares of common stock pursuant to the Plan.    At the election of the optionee or
restricted stockholder, the withholding obligation may be satisfied: (a) through
payment in United States dollars in cash or check, (b) through the
optionee’s or restricted stockholder’s surrender of shares of common stock that
the optionee or restricted stockholder had owned for more than six (6) months
prior to the date of such transfer, (c) by authorizing a Company-approved
third party to sell the shares (or a sufficient portion of the shares) acquired
upon exercise of the option and remit to the Company a sufficient portion of
the sale proceeds to pay any tax withholding resulting from such exercise, and (d) through
the Company’s retention of shares of common stock which would otherwise be
issued as a result of the exercise of the option or the award of the restricted
stock.  Notwithstanding the foregoing, in
the case where optionee elects tax withholding alternative (c), the Committee
shall have the authority, in their absolute discretion to satisfy the employer
tax withholding holding through the Company’s retention of shares of common
stock which would otherwise be issued as a result of the exercise of the
option.

 

15.           Compliance
with Regulations.  It is the Company’s
intent that the Plan comply in all respects with Rule 16b-3 under the
Securities Exchange Act of 1934 (or any successor or amended provision thereof)
and any applicable Securities and Exchange Commission interpretations
thereof.  If any provision of this Plan
is deemed not to be in compliance with Rule 16b-3, the provision shall be
null and void.

 

16.           Governing
Law.  The validity and construction
of this Plan and the instruments evidencing options shall be governed by the
laws of the State of Delaware, without giving effect to the principles of
conflicts of law thereof.

 

Approved by Board of Directors of the
Company, as amended: October 22, 2007.Exhibit
10.1

 

AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS

 

 

By And Between

 

1443 CORP. INC

a Colorado Corporation,
Seller

 

and

 

STOUT RESTAURANT CONCEPTS, INC.

a Colorado Corporation,
Buyer

 

 

Dated December 5, 2007

 

AGREEMENT FOR THE PURCHASE AND SALE OF ASSETS

 

                THIS AGREEMENT, made and entered into this
5th day of December, 2007, (“Effective Date”) by and between the
Seller, 1443 Corp, Inc., a
Colorado Corporation dba La Boheme, and Stout
Restaurant Concepts, Inc., a Colorado Corporation, Buyer.

 

                WHEREAS, Seller
wishes to sell its assets as defined in Section 1 below located at 1443
Stout St., City and County of Denver, Colorado; and

 

                WHEREAS, Buyer
wishes to purchase said assets; and

 

                WHEREAS, the
parties hereto acknowledge that the transfer of the liquor and adult cabaret
licenses as aforesaid are subject to the prior approval of the Liquor Licensing
Authorities for the City and County of Denver and State of Colorado; and

 

                NOW THEREFORE, in
consideration of the mutual promises, covenants and conditions hereinafter set
forth, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, it has been and is hereby agreed as follows:

 

1.                             ASSETS
BEING ACQUIRED.

 

                                Subject
to the terms and conditions hereinafter set forth, Seller agrees to sell to
Buyer and the Buyer agrees to purchase:

 

1

 

A.                                            Those
operating assets of the Seller, currently owned by Seller and utilized by it in
the conduct of a tavern and adult cabaret business at the above-referenced
location.  “Exhibit A” to be
attached hereto, signed and dated by the parties and incorporated herein
constitutes the complete, final, conclusive, and entire listing of said
assets.  Leased items shall be separately
scheduled (“Exhibit A-1”) and the leases assigned to Buyer as
permitted.  Seller shall provide copies
of any leases for Buyer’s review and approval within seven (7) days of the
execution of this agreement. The food and beverage inventory shall be in an amount
equal to three weeks normal usage.  The
cash on hand, including funds in the ATM, shall be at least Twenty Thousand
Dollars ($20,000).

 

B.                                            Seller
hereby consents to the transfer of its liquor and adult cabaret licenses to
Buyer and the issuance of a “temporary permit” to Buyer;
the latter only effective upon closing, subject in all respects to the prior
approvals of the licensing authorities in and for the City and County of Denver
and State of Colorado.  It is understood
and agreed that Seller’s consent to the transfer of such license shall
terminate if this Agreement does not close on or before December 21, 2007.

 

C.                                            The
Buyer acknowledges that all of the assets to be transferred by the operation of
this Agreement are used.  The parties
agree that all of the assets will be in good working condition.

 

2

 

D.                                            Those
proprietary rights of the Seller, currently owned by Seller and utilized by it
in the conduct of a tavern and adult cabaret business at the above-referenced
location.  “Exhibit A-2 to be
attached hereto, signed and dated by the parties and incorporated herein
constitutes the complete, final, conclusive, and entire listing of said
proprietary rights.

 

E.                                             Seller
agrees to sell to the Buyer and the Buyer agrees to purchase a “Covenant Not to
Compete” which shall prohibit shareholders of Seller who own 10% or more of the
outstanding capital of Seller, and Seller, from engaging in an adult cabaret
business within a radius of fifteen (15) miles from the location
above-referenced for a three (3) year period from the date of
Closing.  The form of said “Covenant Not
to Compete” shall be that reasonably acceptable to the attorney for the
Buyer.  Seller shall provide upon
execution of this Agreement, a letter acknowledging the list of shareholders
and their respective percentage of ownership.

 

2.                             BASE PURCHASE PRICE AND PAYMENT THEREOF.

 

                The
Base Purchase Price to be paid by the Buyer to the Seller for all of the assets
above-referenced, shall be a total of Three Million Five Hundred Thousand
Dollars ($3,500,000).  The Base Purchase
Price shall be payable as follows:

 

3

 

A.                                            Earnest
money in the amount of three percent (3%) of the sales price ($105,000) to be
held by the law firm of Brownstein Hyatt Farber Schreck, P.C., in their trust
account, to be delivered in the form of a cashier’s check or certified funds on
the Effective Date.  These funds shall be
held pursuant to the terms of this Agreement.

 

B.                                            Cash or certified funds in the
amount of Three Million, Three Hundred Ninety Five Thousand Dollars
($3,395,000) payable at Closing.

 

3.                             ALLOCATION OF PURCHASE PRICE.

 

                                The
purchase price provided for in paragraph No. 2 hereof, shall be allocated
to the assets acquired herein by the parties pursuant to a separate schedule
that shall be marked as Exhibit B to this Agreement and incorporated
herein.  Said schedule shall be
consistent with the allocations contained herein.

 

	
  A.

  	
   

  	
  All Furniture and
  Equipment

  	
   

  	
  $

  	
  72,900

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  B.

  	
   

  	
  Covenant Not to Compete

  	
   

  	
  $

  	
  100,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  C.

  	
   

  	
  Leasehold

  	
   

  	
  $

  	
  200,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  D.

  	
   

  	
  Goodwill

  	
   

  	
  $

  	
  3,062,100

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  E.

  	
   

  	
  Inventory

  	
   

  	
  $

  	
  45,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  F.

  	
   

  	
  Cash

  	
   

  	
  $

  	
  20,000

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TOTAL

  	
   

  	
  $

  	
  3,500,000

  	
   

  

 

4

 

4.                             ADDITIONAL PAYMENTS.

 

                                In
addition to the Base Purchase Price as aforesaid, the parties agree to make the
additional payments as follows in order to accomplish the Closing of this
transaction:

 

A.                                            All
applicable taxes shall be prorated through the Closing date and paid as due
before or at Closing by the responsible party.

 

B.                                            Seller
is responsible for paying any and all taxes of the business accruing through
Closing, but not thereafter, including but not limited to, state and local sales
and use taxes, unemployment taxes, workmen’s compensation, state and federal
withholding taxes, and income taxes.  At
the time of Closing, Seller will produce evidence, satisfactory to Buyer, that
its portion of all applicable taxes which are due have been or will be
paid.  In addition, Seller will execute
an agreement to hold Buyer harmless from any taxes which may be due and owing
arising from any time that Seller operated the business, through and including
Closing, but not thereafter.

 

C.                                            As
an inducement to Buyer to enter into this Agreement, Seller covenants to
cooperate in good faith and without qualification, in order to assure Buyer
that any and all charges, including taxes, which are or could become a lien or
other charge upon the property which is the subject of this Agreement, have

 

5

 

been or will be paid.  In this regard, Seller agrees to execute and
deliver any and all documents authorizing Buyer or Buyer’s attorney to confirm
the status of any and all accounts of Seller, including sales tax and use tax
accounts, relating to any governmental authority whatsoever.

 

D.                                            Buyer
will pay when due the sales and use taxes on the first  Two Hundred Fifty Thousand Dollars ($250,000)
of taxable property which may become payable as a result of this
transaction.  Seller agrees to pay any
remaining amount which is due and owing.

 

E.                                             Buyer
shall be responsible for any and all charges of any nature relating to the
operation of the premises which accrue after the Closing and are based upon
Buyer’s operation of the business.

 

5.                             CONDITIONS
PRECEDENT.

 

                                The
consummation of the transaction set forth in this Agreement is expressly
conditioned upon the satisfaction of the following conditions precedent:

 

A.                                            There
are no obligations of the Seller pertaining to the operation of the premises
which would be a direct or indirect obligation of the Buyer, other than as
disclosed in this Agreement.

 

B.                                            The
issuance by the  Local Licensing
Authorities of a temporary permit for of the Tavern class liquor and adult
cabaret licenses to the Buyer.  Time is
of the essence, Buyer or its assignee shall make application for 

 

6

 

the transfer of said
licenses, and diligently seek such approvals upon the execution hereof and
Seller shall cooperate with Buyer or its assignee in such endeavor.  The parties will use their best efforts to
close the transaction on or before December 21, 2007, or as soon
thereafter as possible.

 

C.                                            The
representations and warranties of the Seller contained in this Agreement and
the certificates and documents to be delivered pursuant hereto, shall be true,
complete, and correct when made, and as of the Closing Date, and will not
contain any untrue statement of a material fact required to make the statements
herein or therein not misleading.  Seller
shall have performed and satisfied all the covenants, agreements, and
conditions required by this Agreement to be performed and satisfied by it hereunder
except as such may be waived by Buyer in writing.

 

D.                                            In
the event that Buyer has not approved and executed an assignment of the Lease
for the Premises prior to Closing, then this Agreement shall be automatically
null and void.  Buyer acknowledges the
Assignment of Lease must contain a release of Seller and all the present
guarantors of the Lease from all liability under the lease.

 

E.                                             The
complete approval of the Buyer, in its sole and unfettered discretion, relating
to the accounting materials of the Seller, including, without limitation, the
balance sheets, income tax returns and sales tax returns of the 

 

7

 

Seller for calendar years
2004, 2005, 2006 and 2007 (to the extent available).    Buyer shall have seven (7) days from
the receipt of the materials to indicate in writing (“Accounting Disapproval
Notice”) disapproval of the accounting materials of the Seller, or this
condition will be deemed to have been satisfied.  In the event that Buyer does disapprove in
writing of the accounting materials within said seven (7) day period, then
this Agreement shall be null and void and the Buyer’s Earnest Money Deposit
shall be returned.  In the event Buyer
does not timely provide the Accounting Disapproval Notice as provided for
above, then Buyer shall have waived its right to terminate this Agreement under
this paragraph.

 

F.                                             In
addition to the provision of the previously referenced accounting items, after
the Buyer has accepted the initial accounting records of Seller as set forth
within Paragraph E above, the Seller will make available any and all other
accounting records whether in the possession of the company at its premises or
within the possession of its accountant during normal business hours for review
and utilization by the Seller.  Buyer
acknowledges the Seller has certain reporting requirements that will need to be
fulfilled within a short period of time of the closing and it is the intention
of the parties that the Buyer be provided reasonable access to any and all
records in order to prepare the necessary reports.

 

8

 

G.                                            Receipt
of such verification as Buyer shall reasonably require relating to Seller’s
current standing with any and all vendors to the Seller relating to this
location.  Buyer shall have seven (7) days
from the receipt of a list of vendors from Seller to indicate in writing
disapproval of any and all vendor related matters of the Seller, or this
condition will be deemed to have been satisfied.  In the event Buyer does indicate in writing (“Vendor
Disapproval Notice”) of the disapproval of any and all vendor related matters
of the Seller, then this Agreement shall be null and void, all parties shall be
released from any liability and Buyer’s Earnest Money Deposit shall be
returned.  In the event Buyer does not
timely provide the Vendor Disapproval Notice as provided for above, then Buyer
shall have waived its right to terminate this Agreement under this paragraph.

 

H.                                            On
or before December 5, 2007, Buyer shall provide Seller with a list of any
documents that it wants to review that have not been provided in accordance
with paragraphs E, F and G above.  Except
to the extent listed herein, Seller shall be deemed to have waived its approval
of all other documents provided in accordance with paragraphs E, F and G above.

 

I.                                              Buyer
will have the right to review the results of the Site Reconnaisance performed
by Tetra Tech as part of the current Phase I Environmental Report for the
Premises.  The Phase I Report will be
provided to 

 

9

 

Buyer upon receipt.  In the event the Phase I Report is not
available prior to closing, Seller will provide prior to closing certification
from Tetra Tech that any environmental concerns, as determined by the Buyer in
its sole discretion, will have no impact either presently or in the future on
Buyer or its intended operation.  If the
certification is unacceptable to Buyer, the Agreement is null and void and the
Buyers earnest money shall be returned. 
In the event the Phase I Report is received prior to closing, Buyer will
have seven (7) days after receipt to notify the Seller of any unacceptable
environmental condition related to the property.  If any condition contained within the Notice
is not corrected to the satisfaction of Buyer, the Agreement is null and void
and the Buyers earnest money shall be returned. 
Prior to the Effective Date and within seven (7) days thereafter,
Buyer will be provided access to the premises in order to inspect the physical
systems serving the Premises (i.e., electrical, plumbing, heating, ventilation,
and air conditioning systems) and to determine 
that the Premises are currently in compliance with any and all
requirements of applicable governmental authorities, including, but not limited
to health department approval, fire department approval and building department
(“Due Diligence Items”).  In the event
that Buyer does not accept the results of its inspection of the Due Diligence
Items and gives Seller written notice thereof (“Due Diligence Disapproval
Notice”)  within thirty (30) days of the
Effective Date, then this Agreement shall be null and 

 

10

 

void, all parties shall be
released from any liability under this Agreement.  In the event Buyer does not timely provide
the Due Diligence Disapproval Notice as provided for above, then Buyer shall
have waived its right to terminate this Agreement under this paragraph.

 

J.                                             This
Agreement is subject to  approval by the
Seller’s shareholder’s who hold at least fifty-one percent (51%) of the
outstanding capital stock approving the sale of Seller’s assets as set forth in
this Agreement, pursuant to Colorado Statutes (“Seller’s Shareholders’ Approval”).  In the event that Seller’s Shareholders’
Approval is not obtained within ten (10) days of the Effective Date, then
this Agreement shall automatically be null and void, Buyer’s complete Earnest
Money Deposit shall be returned, and all parties shall be released from any
liability under this Agreement.

 

6.                             REPRESENTATIONS AND WARRANTIES OF SELLER.

 

                                As
an inducement to the Buyer to enter into this Agreement, Seller represents and
warrants to Buyer as follows:

 

A.                                            The
Seller has the power to own its properties and assets, and to carry on its
business as now being conducted by it. 
Subject to  obtaining Seller’s
Shareholders’ Approval, the Seller has the power to assign and transfer to
Buyer all of the assets specified in this Agreement which are to be transferred
to the Buyer.

 

11

 

B.                                            The
execution and delivery of this Agreement does not and the consummation of the
transactions contemplated hereby will not violate any provision of the
documents controlling the operation of the Seller, nor violate any provision of
the Articles of Incorporation, By-Laws, lease, lien, agreement, instrument,
order, judgment or decree to which the Seller is a party, or whereby it is
bound, and will not violate any other restriction of any other kind or
character to which the Seller is subject. 
The Seller has taken or will take action required by law, its Articles
of Incorporation and By-Laws, or otherwise, to authorize execution and delivery
of this Agreement and the consummation of the transactions described herein.

 

C.                                            There
are no rights to acquire shares or membership interests of Seller outstanding,
which rights require the holders thereof to approve the execution of this
Agreement or the consummation of the transactions covered hereby.

 

D.                                            Seller
has or will have by date of Closing, good and marketable title and own all of
the assets to be sold hereunder, free and clear of all liens, encumbrances, and
leases whatsoever, except for leased equipment as set forth on Exhibit A-1.

 

E.                                             The
Seller has filed and paid or caused to be filed and paid, all returns for
federal, state and local taxes which are due. 
To the best of Seller’s 

 

12

 

knowledge, there are no
assessments or additional taxes threatened against the Seller or any of its
properties.  The Seller is not delinquent
in the payment of any tax assessment or governmental charge, does not have any
tax deficiencies imposed or assessed against it and has not executed any waiver
of the statute of limitations on the assessment or collection of any tax, which
actions in any manner would affect in any fashion title to any of the property
to be transferred.

 

F.                                             The
property is the subject of a lawsuit entitled Zev, LLC v. City and County of
Denver, 1443 Corporation Inc. et al., Case Number 7-SC-711, presently pending
before the Colorado Supreme Court. 
Except as set forth in the preceding sentence, there are no actions,
suits, or proceedings pending, or to the knowledge of its officers, threatened
against the Seller, or any of its properties or any assets of its business, in
law or in equity, which might result in any judgment, order, injunction or
decree having a material or adverse affect upon its business operations,
properties, assets or financial condition, at this location.

 

G.                                            The
only Officers and Directors of Seller at the time of this transaction are:

 

	
  Lance Migliaccio

  	
   

  	
  President

  
	
   

  	
   

  	
   

  
	
  Ted R. (“Rusty”) Bullard

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
  Lance Migliaccio

  	
   

  	
  Treasurer

  
	
   

  	
   

  	
   

  
	
  Lance Migliaccio

  	
   

  	
  Director

  
	
   

  	
   

  	
   

  
	
  Ted R. (“Rusty”) Bullard

  	
   

  	
  Director

  

 

13

 

H.                                            All
physical systems serving the building will be checked and will be in good
working order at the time of Closing. 
This includes electrical, plumbing, heating, ventilation, and air
conditioning systems.

 

I.                                              Seller
acknowledges that Buyer is owned by companies 
subject to the reporting requirements of the Securities Exchange Act of
1934.  Accordingly, nothing in this
Agreement shall be deemed to prohibit any party hereto from making any
disclosure which its counsel deems necessary or advisable in order to fulfill
such party’s disclosure obligations imposed by law.  The parties agree that other than those
disclosures imposed by various governmental agencies they shall keep the terms
and conditions of this agreement confidential.

 

J.                             The premises are
currently in compliance with any and all requirements of applicable
governmental authorities, including, but not limited to, health department
approval, fire department approval, and building department approval.

 

14

 

7.                             POSSESSION.

 

                                Provided
that the lease for the Premises has been assigned to Buyer as provided in
paragraph 5(d.) above, the Buyer will be entitled to possession of the assets
by virtue of ownership of the assets acquired by the operation of this
Agreement upon Closing.

 

8.                             EMPLOYMENT AGREEMENTS.

 

                                In conjunction
with this Agreement, Buyer may enter into employment/consulting Agreements with
any of the principals and employees of Seller, provied that any such
employment/consulting agreements may only be effective subsequent to the
Closing contemplated herein and subject to the Confidentiality provision in Section 13
below.

 

9.                             TIME
AND PLACE OF CLOSING.

 

                                The
Closing shall take place within three (3) days after the issuance of
temporary permits to the Buyer relating to the sale of alcoholic beverages and
operation of an adult cabaret at the Premises or such other date as Buyer and
Seller may mutually agree upon, provided the other conditions precedent
required by this Agreement have been fulfilled. 
The hour of Closing will be that reasonably designated by Buyer.  The place of Closing will be at that
reasonably designated by Buyer, in the City and County of Denver.

 

15

 

10.                           PERFORMANCE OF CONTRACT AND REMEDIES.

 

                                Time
is of the essence hereof, and if any payment or 
other material condition hereof is not made or performed by either the
Seller or the Buyer as herein provided, then there shall be the following
remedies:

 

A.                                            IF SELLER IS IN DEFAULT:  Buyer may elect to treat this Agreement as
terminated, in which case all payments and things of value received hereunder
shall be returned to Buyer.

 

B.                                            IF BUYER IS IN DEFAULT:  Seller may elect to treat this contract as
terminated, in which case all payments and things of value received hereunder
shall be forfeited and retained on behalf of Seller as Seller’s sole remedy,
and liquidated damages.  The parties
agree this remedy shall be the sole remedy of Seller in any event relating to a
Buyer default.

 

C.                                            In
the event of any litigation arising out of this contract, the court may award
to the prevailing party all reasonable costs and expenses, including reasonable
attorneys’ fees.

 

11.                           ENVIRONMENTAL LAWS AND REGULATED SUBSTANCES.

 

                                With
respect to Environmental Laws and Regulated Substances (as those terms are
defined in Subparagraph A. below), Seller makes the following covenants,
representations and warranties to Buyer:

 

16

 

                                A.            Definitions.  For purposes of this paragraph, the following
terms are used with the meanings indicated:

 

                                                (i)            “Environmental Law” means any
federal, state or local enactment relating to protection of public health or
the environment, including (by way of illustration rather than by way of
limitation) the Clean Water Act, 33 U.S.C. §1251, et  seq.; the
Clean Air Act, 42 U.S.C. §7401, et  seq.; the Resource
Conservation and Recovery Act, 42 U.S.C. §6901, et  seq.; the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. §9601, et  seq.; the Toxic Substances Control Act, 15
U.S.C. §2601, et  seq.; and the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. §135, et  seq., as well as applicable
state counterparts to such federal legislation and any regulations, guidelines,
directives or other interpretations of any such enactment, all as amended from
time to time.

 

                                                (ii)           “Regulated Substance” means any
substance, the ownership, manufacture, storage, transport, generation, use,
treatment, recycling, disposal or other disposition of which is prohibited or
regulated (including, without limitation, being subjected to notice, reporting,
record-keeping, storage or clean-up requirements) by any Environmental Law.

 

                                B.            No Regulated Substances.  Seller represents and warrants to Buyer for 1
year from the date of closing that:

 

17

 

                                                (i)            To the best of Seller’s knowledge
(without investigation and acknowledging it has not received notice) no
Regulated Substance (other than de minimis amounts of cleaning supplies) is
currently being generated, used, treated, stored or disposed of on or in the
Premises except in a manner complying with Environmental Law;

 

                                                (ii)           Neither Seller nor, to the best of
Seller’s knowledge (without investigation and acknowledging it has not received
notice) any other person, has ever caused or permitted any Regulated Substance
(other than de minimis amounts of cleaning supplies) to be generated, placed,
held, located or disposed of on, under or in the Premises except in a manner
complying with Environmental Law;

 

                                                (iii)          Neither Seller nor, to the best of
Seller’s knowledge (without investigation and acknowledging it has not received
notice) any other person, has ever used any portion of the Premises as a dump
site, permanent or temporary storage site or transfer station for any Regulated
Substance except in a manner complying with Environmental Law;

 

                                                (iv)          To the best of Seller’s knowledge
(without investigation and acknowledging it has not received notice) neither
Seller nor any other person has received notice of, or is aware of, any actual
or alleged violation of any 

 

18

 

Environmental Law affecting the Premises or any activity conducted at
the Premises that would violate any Environmental Law;

 

                                                (v)           To the best of Seller’s knowledge
(without investigation and acknowledging it has not received notice) no action
or proceeding is pending before or appealable from any court, quasi-judicial
body or administrative agency relating to the enforcement of any Environmental
Law affecting the Premises or any activity conducted at the Premises.

 

                                C.            Future Information.  Seller agrees that if, after the date of this
Agreement, Seller (directly or through any of its present or former employees
or affiliates) receives any new or additional information or data of whatever
type as to the existence or presence of any Regulated Substance on, under or in
the Premises, Seller shall provide such 
information to Purchaser within ten (10) days after Seller receives
such information or data.

 

12.                           DESTRUCTION OR DAMAGE PRIOR TO CLOSING AND RISK OF
LOSS.  If before Closing
any of the assets being acquired hereunder or the premises out of which the
Seller presently operates have suffered material loss or damage on account of
fire, flood, accident, or any other cause or event, to an extent which
substantially affects the value of the assets considered as a whole, Buyer
shall either; i) have the right to consummate this Agreement.  In which event, Seller will pay or assign to
Buyer any and all insurance proceeds which 

 

19

 

Seller is entitled to due to said loss or damage; or ii) Buyer shall
have the right to terminate this Agreement by giving Seller written notice on
or before the Closing Date, in which event this Agreement shall be null and
void and all parties shall be released from any liability under this Agreement and
Buyer’s Earnest Money Deposit shall be returned to Buyer in full.

 

13.                           CONFIDENTIALITY.

 

                The parties
agree to keep the terms, conditions and existence of this transaction
confidential until subsequent to the Closing, unless otherwise agreed in writing
by both Buyer and Seller.

 

14.                           ITEMS TO BE DELIVERED AT CLOSING BY SELLER.

 

                At Closing, the
parties shall deliver the following:

 

A.                                            A “Bill of Sale” and any
and all other documents of transfer or conveyance covering all assets described
herein, free and clear of all claims, charges, liabilities, leases, liens and
encumbrances, subject to the disclosures and exceptions made hereinabove,
containing a warranty of title, with Seller’s covenant to fully defend the same
with said assets being transferred in their “AS IS” but good working condition.

 

B.                                            Copies of all financing
statements at the time on file, having been filed by any secured party against
the Seller which would affect the title to any assets being acquired hereunder.

 

20

 

C.                                            Any and all keys,
combinations or other items necessary for proper access to the premises.

 

D.                                            Any and all other
documents as set forth in this Agreement to be delivered by Seller.

 

E.                                             A “Closing Certificate”
to the effect that any and all representations and warranties made in
connection with the execution of this Agreement are true as of the date of
Closing, that all conditions precedent have been fulfilled or waived, and
further, that no material needs to be added to make the same not misleading as
of the date of Closing.

 

15.                           OPERATION OF BUSINESS BY SELLER.

 

                                The
business will be conducted by Seller up to the date of Closing according to,
and conforming with, all laws, rules, and regulations of the applicable City,
County, State and Federal Governments. 
The business will also be operated in a manner that will not violate the
terms of any lease or contract connected with the business, and which will not
result in any increase in the compensation payable to any employee of the
business.

 

                Any and all costs
of operating the business up to the time of closing are the responsibility of
Seller regardless of when any statement is presented for payment and any and
all operational costs incurred after closing are the responsibility of
Buyer.  In the event any claim is brought
against Buyer based 

 

21

 

upon any occurrence, transaction, event or incident, occurring prior to
the date of closing, Seller agrees to indemnify, defend and hold Buyer and its
officers, officers, directors, employees, agents, attorneys, representatives
and successors and assigns harmless from and against any and all demands,
claims, causes of actions, expenses, liabilities, awards, judgments, interest, and
losses whatsoever including without limitation all attorney’s fees, expert
witness fees and costs whether incurred by Buyer or awarded to another party
arising from or related to any event occurring prior to the date of closing.

 

                In the event any
claim is brought against Seller based upon any occurrence, transaction, event
or incident, occurring after the date of closing, Buyer agrees to indemnify,
defend and hold Seller and its officers, officers, directors, employees,
agents, attorneys, representatives and successors and assigns harmless from and
against any and all demands, claims, causes of actions, expenses, liabilities,
awards, judgments, interest, and losses whatsoever including without limitation
all attorney’s fees, expert witness fees and costs whether incurred by Seller
or awarded to another party arising from or related to any event occurring
after the date of closing.

 

16.                           ADDITIONAL DOCUMENTS AFTER CLOSING.

 

                                The
parties hereto agree to execute and deliver any and all other documents necessary
and convenient to effectuate the sale and purchase herein 

 

22

 

provided for, and both the Buyer and the Seller as an inducing
condition, represent that they have the authority to enter into this Agreement
and to make the foregoing commitments for themselves.  In addition, Seller agrees that it will from
time to time at the request and expense of the Buyer, execute and deliver or
cause to be executed and delivered, all such further bills of sale, assignments,
instruments of transfer and agreements that may reasonably be required by the
Buyer in order to vest title or proof of the sale in the Buyer to any and all
of the properties or assets hereby conveyed or intended hereby to be conveyed
or for aiding the assisting in the performance or collection by Buyer of any
such assets or properties.

 

17.                           PAYMENT OF EXPENSES.

 

A.                                            The Buyer and the Seller
are each individually responsible for their own attorneys’ fees incurred in
connection with the preparation of this Agreement and all of the documents
needed to consummate the transactions described herein.

 

B.                                            No brokers have been
utilized by the parties concerning this transaction and no compensation is due
to any broker.  If any claims for
brokerage commissions or finders fees or like payment arise out of or in
connection with the transaction provided herein, and in the event any claim is
made, all such claims shall be defended or paid by the party whose actions or 

 

23

 

alleged commitments form the basis of such claim, at such party’s
option.  Each party whose actions or alleged
commitment form the basis of a claim shall indemnify and hold harmless the
other party from and against any and all claims, demands and expenses,
including but not limited to reasonable attorneys’ fees, with respect to any
brokerage fees or commissions or other compensation asserted by any person,
firm, or corporation in connection with this Agreement or the transaction
contemplated hereby.

 

C.                                            All other items,
including all utility charges, personal property taxes, and all other charges
with respect to the assets being acquired hereby, shall be prorated to and
including Closing, and paid before or at Closing by the respective parties.

 

18.                           LIABILITIES NOT ASSUMED.

 

                                Buyer
agrees to assume only those liabilities listed in this Agreement.  It is expressly understood and agreed that
Buyer shall not be liable for any of the obligations or liabilities of the
Seller, except as otherwise set forth herein.

 

19.                           MISCELLANEOUS.

 

                                The
following miscellaneous provisions shall govern the interpretation and
consummation of the transactions described herein:

 

24

 

A.                                            This Agreement shall be
interpreted and construed in court in accordance with the laws of the State of
Colorado.

 

B.                                            Should any clause or
provision of this Agreement be declared invalid, void, voidable or
unenforceable for any reason in whole or in part, any such invalid, void,
voidable or unenforceable clause or provision shall not affect the whole of
this Agreement, and the balance of the provisions hereof shall remain in full
force and effect to the same extent and in the same manner as if such invalid,
void, voidable or unenforceable clause or provision had been omitted from the
terms and conditions hereof. 
Furthermore, in lieu of such invalid, void, voidable or unenforceable
clause or provision there shall be added automatically as a part of this Agreement
a legal, valid, and enforceable provision as similar in terms to the invalid,
void, voidable or unenforceable provision as may be possible, which shall to
the greatest extent possible effect the original intent of the parties (a “Substantially
Similar Provision”).  Each of the parties
hereto covenants and agrees with each other that it would have executed this
Agreement in accordance with its provisions had such invalid, void, or voidable
clause or provision been omitted herefrom and replaced with a  Substantially Similar Provision.

 

C.                                            Any
notice, demand or communication under or in connection with this Agreement
which either party desires or is required to give to the other, 

 

25

 

shall be deemed delivered when deposited in the United States mail,
postage prepaid, or when personally served upon the other party as follows:

 

	
  If to the Seller:

  	
   

  	
  1443 Corp, Inc., a
  Colorado corporation:

  
	
   

  	
   

  	
  1443 Corp. Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Lance Migliaccio

  
	
   

  	
   

  	
  c/o Steven E. Abelman

  
	
   

  	
   

  	
  410 17th Street, Suite 2200

  
	
   

  	
   

  	
  Denver, CO 80202

  
	
   

  	
   

  	
   

  
	
  If to the Buyer:

  	
   

  	
  Troy Lowrie

  
	
   

  	
   

  	
  STOUT RESTAURANT CONCEPTS
  INC

  
	
   

  	
   

  	
  390 Union St.,
  Suite 540

  
	
   

  	
   

  	
  Lakewood, CO 80228

  
	
   

  	
   

  	
   

  
	
  With a copy to:

  	
   

  	
  Daniel W. Carr, Esq.

  
	
   

  	
   

  	
  DILL DILL CARR
  STONBRAKER & HUTCHINGS, P.C.

  
	
   

  	
   

  	
  455 Sherman Street,
  Suite 300

  
	
   

  	
   

  	
  Denver, CO 80203

  
				

 

20.                           SURVIVAL OF REPRESENTATIONS, WARRANTIES, AND
COVENANTS.  All of the
representations, warranties, covenants and agreements made in this Agreement or
contained in the certificate or documents furnished in connection herewith,
shall survive the Closing date, and shall be applicable and effective,
notwithstanding any investigation to or after the Closing date by the Buyer or
the Seller, or their respective agents or representatives.

 

26

 

21.                           BINDING EFFECT AND CONDITION SUBSEQUENT.

 

                This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns.

 

22.                           ENTIRE AGREEMENT.

 

                                This
Agreement constitutes the entire agreement of the parties hereto with respect
to the subject matter hereof.  All
previous negotiations, and documents relating hereto are deemed by the parties
to be merged in this final writing.

 

23.                           TITLES.

 

                                The
titles of the paragraphs of this Agreement are for convenience of reference
only, and are not to be considered in any fashion in construing or interpreting
this Agreement.

 

24.                           ASSIGNMENT.

 

                                The
rights and obligations of the Buyer pursuant to the terms of this Agreement
shall be freely assignable to a wholly owned subsidiary or entity of VCG
Holding Corp., a Colorado corporation, without any further consent of Seller,
but any other assignment by Buyer shall require the prior written consent of
the Seller.

 

                                DATED
at Denver, Colorado this 5th day of December, 2007.

 

27

 

	
  SELLER:

  
	
   

  	
   

  
	
  1443 CORP, INC.

  
	
  A Colorado Corporation

  
	
   

  	
   

  
	
  By:

  	
  /s/ Lance Migliaccio

  
	
  ,

  
	
  President

  
	
  Date: December 5th, 2007

  
	
   

  	
   

  
	
  BUYER:

  
	
   

  	
   

  
	
  STOUT RESTAURANT CONCEPTS,
  INC

  
	
  A Colorado Corporation

  
	
   

  	
   

  
	
  /s/ Troy Lowrie

  
	
  President

  
	
  Date: December 5th,2007

  
			

 

28

 

	
  STATE OF COLORADO

  	
  )

  
	
   

  	
  ) ss.

  
	
  CITY & COUNTY OF
  DENVER

  	
  )

  

 

                Subscribed and sworn to before me this 5th day of
December, 2007, by Lance Migliaccio, President of 1443 Corp, Inc., a
Colorado Corporation, Seller.

 

WITNESS my hand and official
seal.

 

[S E A L]

 

(Notary Stamp: Rebecca J.
Spencer, Notary Public, State of Colorado)

 

	
   

  	
   

  	
  /s/ Rebecca J.
  Spencer-Keith

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
  January 2, 2010

  

 

	
  STATE OF COLORADO

  	
  )

  
	
   

  	
  ) ss.

  
	
  CITY & COUNTY OF
  DENVER

  	
  )

  

 

                Subscribed and sworn to before me this 5th day of
December, 2007, by Troy Lowrie, President of Stout Restaurant Concepts, LLC, a
Colorado Corporation, Buyer.

 

WITNESS my hand and official
seal.

 

[S E A L]

 

(Notary Stamp: Rebecca J.
Spencer, Notary Public, State of Colorado)

 

	
   

  	
   

  	
  /s/ Rebecca J.
  Spencer-Keith

  
	
   

  	
   

  	
  Notary Public

  
	
   

  	
   

  	
   

  
	
   

  	
  My Commission Expires:

  	
  January 2, 2010

  

 

29

 

“EXHIBIT A”

 

LIST OF ASSETS TO BE PURCHASED

 

30

 

1443 Corp

Asset List

 

	
  Description

  	
   

  	
  Value

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Plasma TV

  	
   

  	
  800

  	
   

  
	
  Micros DVD

  	
   

  	
  3500

  	
   

  
	
  Wireless 2 way
  radios

  	
   

  	
  500

  	
   

  
	
  Stackable Chairs

  	
   

  	
  100

  	
   

  
	
  Table Tops

  	
   

  	
  500

  	
   

  
	
  Wine Cooling
  Unit

  	
   

  	
  300

  	
   

  
	
  VIP
  Room Sculpture

  	
   

  	
  800

  	
   

  
	
  Stage Chairs

  	
   

  	
  600

  	
   

  
	
  Video Camera (2)

  	
   

  	
  800

  	
   

  
	
  Sound Mixer

  	
   

  	
  250

  	
   

  
	
  VIP
  Room Furniture

  	
   

  	
  300

  	
   

  
	
  Fogger

  	
   

  	
  100

  	
   

  
	
  Budda Head and
  Stool

  	
   

  	
  150

  	
   

  
	
  Telephone System

  	
   

  	
  1000

  	
   

  
	
  Tables and
  Chairs

  	
   

  	
  500

  	
   

  
	
  Kitchen
  Equipment

  	
   

  	
  5000

  	
   

  
	
  POS System
  (Hardware)

  	
   

  	
  2000

  	
   

  
	
  POS System
  (Software)

  	
   

  	
  5000

  	
   

  
	
  Security System
  (Hardware)

  	
   

  	
  2000

  	
   

  
	
  Security System
  (Cameras)

  	
   

  	
  1200

  	
   

  
	
  VIP Card Printer

  	
   

  	
  600

  	
   

  
	
  ATM Machine (2)

  	
   

  	
  5000

  	
   

  
	
  Salad Bar

  	
   

  	
  200

  	
   

  
	
  Web Hosting
  Computer

  	
   

  	
  500

  	
   

  
	
  Server Computer

  	
   

  	
  1000

  	
   

  
	
  Computers (3)

  	
   

  	
  1500

  	
   

  
	
  HD LCD 23” TV

  	
   

  	
  300

  	
   

  
	
  Dell 5100CN Printer

  	
   

  	
  200

  	
   

  
	
  Mesh Office
  Chairs (5)

  	
   

  	
  500

  	
   

  
	
  Ice Machine

  	
   

  	
  500

  	
   

  
	
  Office Art

  	
   

  	
  100

  	
   

  
	
  Wireless Credit
  Card Terminal

  	
   

  	
  250

  	
   

  
	
  Office Soffa and
  Chairs

  	
   

  	
  1000

  	
   

  
	
  Office Table

  	
   

  	
  200

  	
   

  
	
  Wireless Remotes
  for Security System

  	
   

  	
  500

  	
   

  
	
  Wireless
  Headsets

  	
   

  	
  500

  	
   

  
	
  Wireless Credit
  Card Terminals (4)

  	
   

  	
  1200

  	
   

  
	
  Lighting
  Equipment

  	
   

  	
  5000

  	
   

  
	
  VIP
  Room Furniture

  	
   

  	
  2500

  	
   

  
	
  Hindu Statues
  for Bars

  	
   

  	
  250

  	
   

  
	
  Sound Equipment

  	
   

  	
  5000

  	
   

  
	
  Tanning Bed

  	
   

  	
  2000

  	
   

  
	
  Manual Cash
  Registers (7)

  	
   

  	
  700

  	
   

  
	
  Bar TV’s (2)

  	
   

  	
  600

  	
   

  
	
  Plasma TV

  	
   

  	
  300

  	
   

  
	
  Lap Dance
  Room Furniture

  	
   

  	
  1000

  	
   

  
	
  All In One
  Machine (Office)

  	
   

  	
  200

  	
   

  
	
  Ail In One
  Machine (Front)

  	
   

  	
  100

  	
   

  
	
  Club Event
  Decorations

  	
   

  	
  4000

  	
   

  
	
  Front Area Side
  Table

  	
   

  	
  300

  	
   

  
	
  Storage Racks
  (Basement)

  	
   

  	
  500

  	
   

  
	
  Lighting
  Lighting\Laser

  	
   

  	
  11000

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  72900

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00134-of-00352.parquet"}]]