Document:

tec_ex101-80207.htm

    Exhibit
10.1

     

    PROMISSORY
NOTE

    

    
      	
              $50,000

            	
              February
      1, 2008

            

    

    

    FOR VALUE
RECEIVED, Torrent Energy Corporation, a Colorado corporation ("Maker"), promises to pay to John D.
Carlson, an individual ("Payee"), in lawful money of the United
States of America, the principal sum of Fifty Thousand Dollars ($50,000),
together with interest in arrears on the unpaid principal balance at an annual
rate equal to 8.0%, in the manner provided below. Interest shall be calculated
on the basis of a year of 365 days, and charged for the actual number of days
elapsed. Each determination by Payee of an interest rate under this Note will be
conclusive and binding for all purposes, absent manifest error.

    

    1.           Payments

    

    1.1           Principal
and Interest

    

    The
principal amount ofthis Note shall be due and payable in one payment commencing
no later than the third business day following the completion and funding of a
new financing of at least $100,000. This payment shall be in the amount
necessary to pay in full the unpaid principal amount and all interest then
accrued on this Note. Any payment under this Note, at the option of the Payee,
may be applied first to any costs and expenses payable by the Maker under this
Note, then to interest then accrued under this Note, and then to
principal.

    

    1.2           Manner
of Payment

    

    All
payments of principal and interest on this Note shall be made by the Maker's
company check, certified or bank cashier's check delivered to the Payee, or at
such other place in the United States of America as Payee shall designate to
Maker in writing or by wire transfer of immediately available funds to an
account designated by Payee in writing. If any payment of principal or interest
on this Note is due on a day which is not a Business Day, such payment shall be
due on the next succeeding Business Day, and such extension of time shall be
taken into account in calculating the amount of interest payable under this
Note. "Business Day" means any day other than a Saturday, Sunday or legal
holiday in the State of Colorado.

    

    1.3           Prepayment

    

    Maker
may, without premium or penalty, at any time and from time to time, prepay all
or any portion of the outstanding principal balance due under this Note. Any
partial prepayments may be applied first to any costs and expenses payable by
the Maker under this Note, then to interest then accrued under this Note, and
then to installments of principal in inverse order of their
maturity.

    

     

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    2.           Defaults

    

    2.1           Events
of Default

    

    The
occurrence of anyone or more of the following events with respect to Maker shall
constitute an event of default hereunder ("Event of
Default"):

    

    (a)     If Maker
shall fail to pay when due any payment of principal or interest on this Note and
such failure continues for ten (10) days after Payee notifies Maker thereof in
writing.

    

    (b)     If, pursuant
to or within the meaning of the United States Bankruptcy Code or any other
federal or state law relating to insolvency or relief of debtors (a "Bankruptcy Law"), Maker shall
(i) commence
a voluntary case or proceeding; (ii) consent to the entry of an order for relief
against it in an involuntary case; (iii) consent to the appointment of a
trustee, receiver, assignee, liquidator or similar official; (iv) make an
assignment for the benefit of its creditors; or (v) admit in writing its
inability to pay its debts as they become due.

    

    (c)     If a court of
competent jurisdiction enters an order or decree under any Bankruptcy Law that
(i) is for relief against Maker in an involuntary case, (ii) appoints a trustee,
receiver, assignee, liquidator or similar official for Maker or substantially
all of Maker's properties, or (iii) orders the liquidation of Maker, and in each
case the order or decree is not dismissed within sixty-one (61)
days.

    

    2.2           Notice
By Maker

    

    Maker
shall notify Payee in writing within five (5) days after the occurrence of any
Event of Default of which Maker acquires knowledge.

    

    2.3           Remedies

    

    Upon the
occurrence of an Event ofDefault hereunder (unless all Events of Default have
been cured or waived by Payee), Payee may, at its option, (i) by written notice
to Maker, declare the entire unpaid principal balance of this Note, together
with all accrued interest thereon, immediately due and payable regardless of any
prior forbearance, and (ii) exercise any and all rights and remedies available
to it under applicable law, including, without limitation, the right to collect
from Maker all sums due under this Note.

    

    2.4           Collection
Expenses

    

    Maker
agrees to reimburse Payee on demand for all legal fees and other costs and
expenses incurred in collecting or enforcing this Note, together with interest
at the default rate specified in Section 2.5. Without limitation, such costs and
fees shall include fees, costs, and expenses incurred with or without suit and
in any appeal, any proceedings under any present or future Bankruptcy Law, and
any post-judgment collection proceedings.

    

    
 

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    2.5           Default
Interest

    

    Any
amount of principal or interest hereof that is not paid when due shall bear
interest from the day when due until said principal or interest amount is paid
in full, payable on demand, at an annual rate equal to twelve percent
(12.0%).

    

    3.           Miscellaneous

    

    3.1           Waiver

    

    The
rights and remedies of Payee under this Note shall be cumulative and not
alternative. No waiver by Payee of any right or remedy under this Note shall be
effective unless in writing signed by Payee. Neither the failure nor any delay
in exercising any right, power or privilege under this Note will operate as a
waiver of such right, power or privilege. No single or partial exercise of any
such right, power or privilege by Payee will preclude any other or further
exercise of such right, power or privilege or the exercise of any other right,
power or privilege. No waiver that may be given by Payee will be applicable
except in the specific instance for which it is given.

    

    Maker
hereby waives presentment, demand, protest and notice of dishonor and protest.
In addition, Maker hereby waives the benefit of every statute conferring upon
Maker any right or privilege or exemption, stay of execution, or the relief from
the enforcement of a judgment.

    

    3.2           Notices

    

    Any
notice to Maker under this Note shall be addressed to Torrent Energy
Corporation, 1 SW Columbia Street, Suite 640, Portland, Oregon, Attention: Chief
Financial Officer, or to such other address as Maker shall designate to Payee in
writing and shall be deemed to have been given on the date delivered in the case
of personal delivery or delivery via courier or, if mailed, one day after
deposited in first class or certified mail.

    

    3.3           Limitation
of Interest and Charges

    

    Interest,
fees, and charges collected or to be collected under this Note shall not exceed
the maximum amounts permitted by any applicable law. If any interest, fee, or
charge would exceed the maximum, the interest, fee, or charge shall be reduced
by the excess and any sums already collected from Maker which exceed the maximum
will be refunded. Payee may choose to make the refund either by treating the
excess as prepayments of principal or by making a direct payment to
Maker.

    

    3.4           Severability

    

    If any
provision in this Note is held invalid or unenforceable by any court of
competent jurisdiction, the other provisions of this Note will remain in full
force and effect. Any provision of this Note held invalid or unenforceable only
in part or degree will remain in full force and effect to the extent not held
invalid or unenforceable.

    

     

    

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    3.5           Governing
Law; Jurisdiction; Venue

    

    This Note
will be governed by the laws ofthe State of Colorado without regard to conflicts
of laws principles. If a lawsuit is commenced in connection with this Note,
venue for any such action shall lie in Portland, Oregon, and Maker
agrees, upon Payee's request, to submit to the jurisdiction of the state and
federal courts therein.

    

    3.6           Parties
in Interest

    

    This Note
shall bind Maker and its successors and assigns. This Note shall not be assigned
or transferred by Payee without the express prior written consent of Maker,
except by operation of law.

    

    3.7           Section
Headings, Construction

    

    The
Section headings in this Note are provided for convenience only and will not
affect its construction or interpretation. All references to "Section" or
"Sections" refer to the corresponding Section or Sections of this Note unless
otherwise specified.

    

    All words
used in this Note will be construed to be of such gender or number as the
circumstances require. Unless otherwise expressly provided, the words "hereof”
and “hereunder" and similar references refer to this Note in its entirety and
not to any specific section or subsection hereof.

    

    IN
WITNESS WHEREOF, Maker has executed and delivered this Note as of the date first
stated above.

    

     

    
      
        	 	TORRENT ENERGY
      CORPORATION	 
	 	 	 	 
	
                  

              	
                By:
      

              	/s/ William
      Lansing	 
	 	Name: 	William
      Lansing	 
	 	Title:	Chariman
      of Board 	 
	 	 	 	 

      

     

    

     

    

     

    

     

    -4-SHARE EXCHANGE AGREEMENT

BY AND BETWEEN

NITCHES, INC.

AND

JENNIFER MULL, THE STOCKHOLDER
OF

BACKWOODS EQUIPMENT COMPANY
CORPORATION

  

Dated February 1,
2008

 

 

 

SHARE EXCHANGE
AGREEMENT

     THIS
SHARE EXCHANGE AGREEMENT (this "Agreement"), is made and entered into
as of February 1, 2008, by and between Nitches, Inc., a California corporation
("Nitches"), and Jennifer Mull, an individual (“Jennifer”) and the stockholder of
Backwoods Equipment Company Corporation., a Kansas corporation ("Backwoods"), with respect
to the following facts:

     A. Jennifer owns 120,262 shares of the common stock of Backwoods, comprising
100% of the outstanding shares of common stock of Backwoods (the
"Backwoods Shares"). 

     B. Nitches desires to acquire from Jennifer, and Jennifer desires to tender
and transfer to Nitches, all of the Backwoods Shares in exchange for the
issuance and delivery by Nitches to Jennifer of 360,000 shares of Nitches common
stock, no par value (the "Nitches
Shares"), on the terms and conditions set
forth below (the "Exchange"). 

     C. It
is intended that, for federal income tax purposes, the Exchange qualify as an
exchange described in Section 351 of the of the Internal Revenue Code of 1986,
as amended (the "Code") and a reorganization described in Section 368 of the Code.

     NOW,
THEREFORE, in consideration of the foregoing
premises and the covenants and agreements contained herein, and intending to be
legally bound hereby, Nitches and Jennifer agree as follows: 

ARTICLE
I
 
EXCHANGE OF SECURITIES

          Section 1.1
The Exchange. On the terms and subject to the conditions of this Agreement, Nitches
hereby issues and delivers to Jennifer the Nitches Shares and Jennifer hereby
tenders, transfers and delivers to Nitches, the Backwoods Shares. 

          Section 1.2
Deliveries. Concurrently with the execution and delivery of this Agreement, the
parties have made the following deliveries: 

          (a) Nitches has delivered to
Jennifer the following documents: 

               (i) A certificate representing Nitches Shares, duly registered in
the name of Jennifer Mull;

               (ii) Certificate of good standing from the Secretary of State of
the State of California, dated at or about the date hereof, to the effect that
Nitches is in good standing under the laws of said state; 

               (iii) Certified copy of the articles of incorporation of Nitches, as
certified by the Secretary of State of the State of California at or about the
date hereof;

               (iv) A certificate duly executed by Nitches' corporate secretary
attaching and attesting to the accuracy of: (A) the bylaws of Nitches, and (B)
the resolutions of Nitches' board of directors issuing and allotting the Common
Stock to Jennifer subject to the provisions hereof, and approving the
transactions contemplated hereby. 

1 

          (b) Jennifer has delivered to
Nitches the following documents:

               (i) A share certificate representing all of the issued and
outstanding Backwoods Shares, together with an assignment of certificate duly
executed to register the Backwoods Shares into the name of Nitches, Inc., a
California corporation; 

               (ii) Certificate of good standing from the Secretary of State of
the State of Kansas, dated at or about the date hereof, to the effect that
Backwoods is in good standing under the laws of said state; 

               (iii) Certified copy of the certificate of incorporation of
Backwoods, as amended to date certified by the Secretary of State of the State
of Kansas, dated at or about the date hereof; 

               (iv) The original corporate minute books, stock certificates and
stock ledger for Backwoods. 

ARTICLE
II
 
REPRESENTATIONS AND
WARRANTIES OF NITCHES

     Nitches hereby makes the following
representations and warranties to Jennifer: 

          Section 2.1
Organization and
Qualification. Nitches is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization, with the corporate power and authority to own and operate its
business as presently conducted, except where the failure to be or have any of
the foregoing would not have a Material Adverse Effect. Nitches is duly
qualified as a foreign corporation to do business and is in good standing in
each jurisdiction where the character of its properties owned or held under
lease or the nature of their activities makes such qualification necessary,
except for such failures to be so qualified or in good standing as would not
have a Material Adverse Effect.

          Section 2.2
Authorization. Nitches has the requisite corporate power and authority to execute,
deliver and perform its obligations under this Agreement and to consummate the
Exchange.

          Section 2.3
Validity and Effect of
Agreement. This Agreement has been duly and
validly executed and delivered by Nitches and, assuming that it has been duly
authorized, executed and delivered by the other parties hereto, constitutes a
legal, valid and binding obligation of Nitches, enforceable against Nitches in
accordance with its terms except as limited by applicable bankruptcy,
insolvency, reorganization, moratorium, and other laws of general application
affecting enforcement of creditors' rights generally. 

          Section 2.4
No Conflict. Neither the execution and delivery of this Agreement by Nitches nor the
performance by Nitches of its obligations hereunder, nor the consummation of the
Exchange, will: (i) conflict with Nitches' articles of incorporation or bylaws;
(ii) violate any statute, law, ordinance, rule or regulation, applicable to
Nitches or any of the properties or assets of Nitches; or (iii) violate, breach,
be in conflict with or constitute a default (or an event which, with notice or
lapse of time or both, would constitute a default) under, or permit the
termination of any provision of, or result in the termination of, the
acceleration of the maturity of, or the acceleration of the performance of any
obligation of Nitches, or result in the creation or imposition of any Lien upon
any properties, assets or business of Nitches under, any Contract or any order,
judgment or decree to which Nitches is a party or by which it or any of its
assets or properties is bound or encumbered except, in the case of clauses (ii)
and (iii), for such violations, breaches, conflicts, defaults or other occurrences which,
individually or in the aggregate, would not have a Material Adverse Effect on
its obligation to perform its covenants under this Agreement. 

2

          Section 2.5
Required Filings and
Consents. The execution and delivery of this
Agreement by Nitches does not, and the performance of this Agreement by Nitches
will not, require any consent, approval, authorization or permit of, or filing
with or notification to, Governmental Authority with respect to Nitches except:
(i) compliance with applicable requirements of the Securities Act, the Exchange
Act and state securities laws ("Blue Sky
Laws"); and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Nitches, or would not prevent or
materially delay consummation of the Exchange or otherwise prevent the parties
hereto from performing their respective obligations under this
Agreement.

          Section 2.6
Capitalization. The authorized capital stock of Nitches consists of 50,000,000 shares
of Common Stock, no par value per share, of which 5,659,644 shares are issued
and outstanding, and 25,000,000 shares of Series A Preferred Stock, par value
$100 per share, of which 8,820 shares are issued and outstanding. Except for the
transactions contemplated by this Agreement and the 600,000shares of Common
Stock reserved for issuance upon the exercise of options granted by Nitches
under Nitches’ 2006 Equity Incentive Plan, in respect of which options to
purchase 440,000 shares of Common Stock are outstanding as of the date hereof,
there are no other share capital, preemptive rights, convertible securities,
outstanding warrants, options or other rights to subscribe for, purchase or
acquire from Nitches any shares of its capital stock and there are no contracts
or commitments providing for the issuance of, or the granting of rights to
acquire, any shares of capital stock of Nitches or under which Nitches is, or
may become, obligated to issue any of its securities. All shares of capital
stock of Nitches outstanding as of the date hereof have been duly authorized and
validly issued, are fully paid and nonassessable, and are free of preemptive
rights. 

          Section 2.7
Status of Nitches Shares. The Nitches Shares, when issued and allotted in exchange for
Backwoods Shares, will be duly authorized, validly issued, fully paid,
nonassessable, and free of any preemptive rights, will be issued in compliance
with all applicable laws concerning the issuance of securities, and will have
the rights, preferences, privileges, and restrictions set forth in Nitches'
charter and bylaws, and will be free and clear of any Liens of any kind and duly
registered in the name of Jennifer, in Nitches' stockholders ledger.

          Section 2.8
SEC Reports and Financial
Statements. Nitches has timely filed with the
SEC all forms, reports, notices, schedules, statements and other documents and
instruments required to be filed by it under the Exchange Act or the Securities
Act (the "Nitches SEC
Documents"). As of their respective dates or,
if amended, as of the date of the last such amendment, the Nitches SEC
Documents, including any financial statements or schedules included therein (i)
did not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, (ii) were complete and accurate in all material respects,
and (iii) complied in all material respects with the applicable requirements of
the Exchange Act and the Securities Act, as the case may be, and the applicable
rules and regulations of the SEC thereunder.

          Section 2.9
Litigation. There is no Action pending or threatened against Nitches that,
individually or in the aggregate, directly or indirectly, would be reasonably
likely to have a Material Adverse Effect, nor is there any outstanding judgment,
decree or injunction, in each case against Nitches, that, individually or in the
aggregate, has or would be reasonably likely to have a Material Adverse Effect.

3

          Section 2.10
Taxes.
Nitches has filed (or has had timely filed on its behalf) with the appropriate
tax authorities all tax returns required to be filed by it or on behalf of it,
and each such tax return was complete and accurate in all material respects, and
Nitches has timely paid (or has had paid on its behalf) all material Taxes due
and owing by it, regardless of whether required to be shown or reported on a tax
return, including Taxes required to be withheld by it. No deficiency for a
material Tax has been asserted in writing or otherwise, to the Knowledge of
Nitches, against Nitches or with respect to any of its assets, except for
asserted deficiencies that either (i) have been resolved and paid in full or
(ii) are being contested in good faith. There are no material Liens for Taxes
upon Nitches' assets. 

          Section 2.11
Registration. No order revoking the registration of Nitches’ common stock under the
Exchange Act has been issued by any court, securities commission or regulatory
authority in the United States and no proceedings for such purpose are pending
or, to the Knowledge of Nitches, threatened.

          Section 2.12
Tax-Free Exchange. Nitches has not taken any action, nor does Nitches know of
any fact, that is reasonably likely to prevent the Exchange from qualifying as a
"reorganization" within the meaning of Section 351 or 368 of the Code.

          Section 2.13
Brokers and Finders. Neither Nitches, nor any of its officers, directors,
employees or managers, has employed any broker, finder, advisor or consultant,
or incurred any liability for any investment banking fees, brokerage fees,
commissions or finders' fees, advisory fees or consulting fees in connection
with the Exchange for which Nitches has or could have any liability. 

          Section 2.14
Disclosure. As of the Closing Date, there is no known material fact or information
relating to the business, condition (financial or otherwise), affairs,
operations or assets of Nitches and/or its subsidiaries that has not been
disclosed to Jennifer by Nitches. No representation or warranty of Nitches in
this Agreement or any statement or document delivered in connection herewith or
therewith, contained or will contain any untrue statement of a material fact or
fail to state any material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.

ARTICLE
III
 
REPRESENTATIONS AND
WARRANTIES OF JENNIFER

     Jennifer hereby makes the following
representations and warranties to Nitches: 

          Section 3.1
Authority and Validity. Jennifer has all requisite power to execute and deliver, to
perform her obligations under, and to consummate the transactions contemplated
by, this Agreement. Upon the execution and delivery of each document to which
Jennifer is a party (assuming due execution and delivery by each other party
thereto), each such document will be the legal, valid and binding obligations of
Jennifer, enforceable against Jennifer in accordance with their respective terms
except as limited by applicable bankruptcy, insolvency, reorganization,
moratorium, and other laws of general application affecting enforcement of
creditors' rights generally. 

          Section 3.2
Organization and
Qualification. Backwoods is duly organized
and validly existing under the laws of its jurisdiction of organization, with
the corporate power and authority to own and operate its business as presently
conducted, except where the failure to be or have any of the foregoing would not
have a Material Adverse Effect. Backwoods is duly qualified as a foreign
corporation to do business in each jurisdiction where the character of its
properties owned or held under lease or the nature of its activities makes such
qualification necessary, except for such failures to be so qualified as would
not have a Material Adverse Effect. Backwoods has no subsidiaries. 

4

          Section 3.3
No Conflict. Neither the execution and delivery of this Agreement by Jennifer nor
the performance by Jennifer of her obligations hereunder, nor the consummation
of the Exchange, will: (i) conflict with Backwoods' articles of incorporation or
bylaws; (ii) violate any statute, law, ordinance, rule or regulation, applicable
to Backwoods or any of its properties or assets; or (iii) violate, breach, be in
conflict with or constitute a default (or an event which, with notice or lapse
of time or both, would constitute a default) under, or permit the termination of
any provision of, or result in the termination of, the acceleration of the
maturity of, or the acceleration of the performance of any obligation of
Backwoods, or result in the creation or imposition of any Lien upon any
properties, assets or business of Backwoods under, any Material Contract or any
order, judgment or decree to which Backwoods is a party or by which it or any of
its assets or properties is bound or encumbered except, in the case of clauses
(ii) or (iii), for such violations, breaches, conflicts, defaults or other
occurrences which, individually or in the aggregate, would not have a Material
Adverse Effect on its obligation to perform its covenants under this Agreement.

          Section 3.4
Required Filings and
Consents. The execution and delivery of this
Agreement by Jennifer does not, and the performance of this Agreement by
Backwoods will not, require any consent, approval, authorization or permit of,
or filing with or notification to, any Governmental Authority, with respect to
Backwoods, except: (i) compliance with applicable requirements of the Securities
Act, the Exchange Act, and Blue Sky Laws; and (ii) where the failure to obtain
such consents, approvals, authorizations or permits, or to make such filings or
notifications would not, individually or in the aggregate, reasonably be
expected to have a Material Adverse Effect on Backwoods, or materially delay
consummation of the Exchange or otherwise prevent the parties hereto from
performing their obligations under this Agreement. 

          Section 3.5
Capitalization. The authorized capital stock of Backwoods is 720,000 shares of common
stock, of which 120,262 shares are issued and outstanding. There are no other
share capital, preemptive rights, convertible securities, outstanding warrants,
options or other rights to subscribe for, purchase or acquire from Backwoods any
shares of its capital stock and there are no contracts or commitments providing
for the issuance of, or the granting of rights to acquire, any shares of capital
stock of Backwoods or under which Backwoods is, or may become, obligated to
issue any of its securities. All shares of capital stock of Backwoods
outstanding as of the date hereof have been duly authorized and validly issued,
are fully paid and nonassessable, and are free of preemptive rights. 

          Section 3.6
Title.
The Backwoods Shares delivered by Jennifer in connection with the transactions
contemplated herein are owned, of record and beneficially, solely by Jennifer,
free and clear of any Lien and represent Jennifer's entire ownership interest in
Backwoods.

5

          Section 3.7
Financial Statements. Backwoods has previously furnished to Nitches true and
complete copies of (i) the consolidated balance sheet of Backwoods for the
fiscal year ended January 31, 2007 and the related statements of operations,
stockholders equity and cash flows for the year then ended and (ii) the
consolidated balance sheet of Backwoods for the eleven month period ended
December 31, 2007 and the related statements of operations, stockholders equity
and cash flows for such period (all of such financial statements of Backwoods
collectively, the "Backwoods Financial
Statements"). The Backwoods Financial
Statements (including the notes thereto) present fairly in all material respects
the financial position and results of operations and cash flows of Backwoods at
the date or for the period set forth therein, in each case in accordance with
GAAP applied on a consistent basis throughout the periods involved (except as
otherwise indicated therein). The Backwoods Financial Statements have been
prepared from and in accordance with the books and records of Backwoods.

          Section 3.8
No Undisclosed Liabilities. Except as disclosed in the Backwoods Financial Statements,
Backwoods has no material liabilities, indebtedness or obligations, except those
that have been incurred in the ordinary course of business, whether absolute,
accrued, contingent or otherwise, and whether due or to become due, and there is
no existing condition, situation or set of circumstances that could reasonably
be expected to result in such a liability, indebtedness or obligation.

          Section 3.9
Properties and Assets. Backwoods has good and marketable title to, valid leasehold
interests in, or the legal right to use, all of the assets, properties and
leasehold interests reflected in the most recent Backwoods Financial Statements,
except for those sold or otherwise disposed of since the date of such Backwoods
Financial Statements in the ordinary course of business consistent with past
practice. 

          Section 3.10
Litigation. There is no Action pending or threatened against Jennifer or Backwoods
that, individually or in the aggregate, directly or indirectly, would be
reasonably likely to have a Material Adverse Effect, nor is there any
outstanding judgment, decree or injunction, in each case against Jennifer or
Backwoods, that, individually or in the aggregate, has or would be reasonably
likely to have a Material Adverse Effect. 

          Section 3.11
Taxes.
Backwoods has timely filed (or has had timely filed on its behalf) with the
appropriate tax authorities all tax returns required to be filed by it or on
behalf of it, and each such tax return was complete and accurate in all material
respects, and Backwoods has timely paid (or has had paid on its behalf) all
material Taxes due and owing by it, regardless of whether required to be shown
or reported on a tax return, including Taxes required to be withheld by it. No
deficiency for a material Tax has been asserted in writing or otherwise, to the
Knowledge of Backwoods, against Backwoods or with respect to any of its assets,
except for asserted deficiencies that either (i) have been resolved and paid in
full or (ii) are being contested in good faith. There are no material Liens for
Taxes upon Backwoods' assets. 

          Section 3.12
Compliance. Backwoods is in compliance with all federal, state and local laws and
regulations of any Governmental Authority applicable to its operations or with
respect to which compliance is a condition of engaging in the business thereof,
except to the extent that failure to comply would not, individually or in the
aggregate, have a Material Adverse Effect. Backwoods has not received any notice
asserting a failure, or possible failure, to comply with any such law or
regulation, the subject of which notice has not been resolved as required
thereby or otherwise to the satisfaction of the party sending the notice, except
for such failure as would not, individually or in the aggregate, have a Material
Adverse Effect. Backwoods holds all permits, licenses and franchises from
Governmental Authorities required to conduct its business as it is now being
conducted, except for such failures to have such
permits, licenses and franchises that would not, individually or in the
aggregate, have a Material Adverse Effect. 

6

          Section 3.13
Absence of Certain Changes. Since the date of the most recent Backwoods Financial
Statements, (i) there has been no change or development in, or effect on,
Backwoods that has or could reasonably be expected to have a Material Adverse
Effect, (ii) Backwoods has not sold, transferred, disposed of, or agreed to
sell, transfer or dispose of, any material amount of its assets other than in
the ordinary course of business, (iii) Backwoods has not paid any dividends or
distributed any of its assets to any of its stockholders, (iv) Backwoods has not
acquired any material amount of assets except in the ordinary course of
business, nor acquired or merged with any other business, (v) Backwoods has not
waived or amended any of its respective material contractual rights except in
the ordinary course of business, and (vi) Backwoods has not entered into any
agreement to take any action described in clauses (i) through (v) above.

          Section 3.14
Inventory. All inventory of Backwoods that are reflected on the Backwoods
Financial Statements or on the accounting records of Backwoods is recorded at
the lower of cost or fair market value, and to Jennifer’s Knowledge is good and
saleable in the ordinary course of business for not less than the value
reflected on Backwoods Financial Statements.

          Section 3.15
Product and Service
Warranty. To Jennifer’s Knowledge, each
service performed or provided by Backwoods, and product manufactured, sold,
leased or delivered by Backwoods has been in conformity with all applicable
contractual commitments and all express and implied warranties, and Backwoods
has no liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Backwoods giving rise to any liability) for re-performance of a service, or
replacement or repair of a product, or other damages in connection therewith,
subject only to the reserve for service warranty and product warranty claims
taken into account in preparing the Backwoods Financial Statements as adjusted
for the passage of time through the date hereof in accordance with the past
custom and practice of Backwoods, except in each case to the extent it would not
reasonably be expected to result in a Material Adverse Effect. Jennifer has made
available to Nitches complete and accurate copies of the written warranties,
guaranties and promises of indemnity by Backwoods currently in effect with
respect to its products and/or services, and Backwoods has not made any other
material oral or other warranty, guaranty or promise of indemnity with respect
to its products and/or services. 

          Section 3.16
Product and Service
Liability. To Jennifer’s Knowledge, Backwoods
has no liability (and there is no basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim or demand against
Backwoods giving rise to any liability) arising out of any injury to individuals
or property as a result of the performance of any service or ownership,
possession or use of any product manufactured, sold, leased or delivered by
Backwoods, including claims arising out of the defective or unsafe nature of its
services or products, except to the extent any such liabilities would not
reasonably be expected to result in a Material Adverse Effect.

          Section 3.17
Suppliers. No suppliers of goods or services to Backwoods that has made sales or
provided services representing, individually or in the aggregate, more than
$500,000 in payments or commitments by Backwoods within the twelve months ended
June 30, 2007 has (i) ceased, or to Jennifer’s Knowledge indicated any intention
to cease, doing business with Backwoods, or (ii) changed, or to Jennifer’s
Knowledge indicated any intention to change, any material terms or conditions
for future supply or sale of products or services from the terms and conditions
that existed with respect to the supply or sale of such products or services
from those in effect as of December 31, 2007.

7 

          Section
3.18 Intellectual Property Rights.
 

               (a) Backwoods owns, or is licensed or otherwise possesses legally enforceable
rights to use, all patents, trademarks, common law trademarks, trade names,
trade secrets (including customer lists), service marks and copyrights, and any
applications for and registrations of such patents, trademarks, service marks,
and copyrights and all processes, formulas, methods, schematics, technology,
know-how, computer software programs, data or applications and tangible or
intangible proprietary information or material that are used in its business,
free and clear of all liens, claims or encumbrances (all of which are referred
to as the "Backwoods Intellectual Property
Rights"). The foregoing representation as it
relates to all licenses, sublicenses and other agreements to which Backwoods is
a party and pursuant to which Backwoods is authorized to use any third party
technology, trade secret, know-how, process, patent, trademark or copyright,
including software ("Licensed Intellectual
Property") is limited to the interests of
Backwoods pursuant to licenses from third parties, each of which is in full
force and effect, is valid, binding and enforceable and grants Backwoods such
rights to such intellectual property as are used in the business as currently
conducted.

               (b) Neither Jennifer nor Backwoods has (i) received notice of a claim of
infringement of any patent, trademark, service mark, copyright, trade secret or
other proprietary right of any third party or (ii) any Knowledge of any claim
challenging or questioning the validity or effectiveness of any license or
agreement relating to any Backwoods Intellectual Property Rights or Licensed
Intellectual Property. Backwoods has at all times used reasonable efforts to
protect its proprietary information and to prevent such information from being
released into the public domain.

          Section 3.19
Material Transactions or
Affiliations. Except for employment
agreements with have been disclosed to Nitches, there is no contract, agreement
or arrangement between Backwoods and any person who was, at the time of such
contract, agreement or arrangement, an officer, director or person owning of
record, or known by Backwoods to own beneficially, five percent or more of its
issued and outstanding common stock or preferred stock and which is to be
performed in whole or in part after the date hereof. Backwoods has no
commitment, whether written or oral, to lend any funds to, borrow any money from
or enter into any other material transactions with, any such affiliated person.

          Section 3.20
Employees. Backwoods is in compliance with all currently applicable laws and
regulations respecting terms and conditions of employment, except where any
failure to comply would not constitute a Material Adverse Effect. There are no
proceedings pending or, to the Knowledge of Jennifer or Backwoods, reasonably
expected or threatened, between Jennifer or Backwoods, on the one hand, and any
or all of its current or former employees, on the other hand. There are no
claims pending, or, to the Knowledge of Jennifer or Backwoods, reasonably
expected or threatened, against Backwoods under any workers' compensation or
long term disability plan or policy. Backwoods has no unsatisfied obligations
that would have a Material Adverse Effect on Backwoods to any employees, former
employees, or qualified beneficiaries pursuant to any employee benefit plans,
COBRA, HIPAA, or any state law governing health care coverage extension or
continuation.

          Section 3.21
Material Contracts. Each Backwoods Material
Contract (i) is legal, valid, binding and enforceable and in full force and
effect with respect to Backwoods, and to the Knowledge of Jennifer and
Backwoods, is legal, valid, binding, enforceable and in full force and effect
with respect to each other party thereto, in either case subject to the effect
of bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and except as the availability of
equitable remedies may be limited by general principles of equity; and (ii) will
continue to be legal, valid, binding and enforceable and in full force and
effect immediately following the Exchange in accordance with the terms thereof
as in effect prior to the Exchange, subject to the effect of bankruptcy,
insolvency, moratorium or other similar laws affecting the enforcement of
creditors' rights generally and except as the availability of equitable remedies
may be limited by general principles of equity. Neither Backwoods nor, to the
Knowledge of Jennifer or Backwoods, any other party, is in breach or default,
and no event has occurred which with notice or
lapse of time would constitute a breach or default by Backwoods or, to the
Knowledge of Jennifer or Backwoods, by any such other party, or permit
termination, modification or acceleration, under the Backwoods Material
Agreement.

8

          Section 3.22
Brokers and Finders. Neither Jennifer nor Backwoods has employed any broker,
finder, advisor or consultant, or incurred any liability for any investment
banking fees, brokerage fees, commissions or finders' fees, advisory fees or
consulting fees in connection with the Exchange for which Jennifer or Backwoods
has or could have any liability. 

          Section 3.23
Tax-Free Exchange. Jennifer has not taken any action, nor does Jennifer know of
any fact, that is reasonably likely to prevent the Exchange from qualifying as a
"reorganization" within the meaning of Section 351 or 368 of the Code.

          Section 3.24
Disclosure. There is no known material fact or information relating to the
business, condition (financial or otherwise), affairs, operations or assets of
Backwoods that has not been disclosed to Nitches by Jennifer or Backwoods. No
representation or warranty of Jennifer in this Agreement or any statement or
document delivered in connection herewith or therewith, contained or will
contain any untrue statement of a material fact or fail to state any material
fact necessary in order to make the statements made, in light of the
circumstances under which they were made, not misleading. 

          Section 3.25
Investor Status. Jennifer is an "accredited investor" as that term is defined in Rule
501(a) of Regulation D under the Securities Act and has properly completed the
form attached hereto as Schedule
II. 

          Section 3.26
Investment Intent. The Nitches Shares are being acquired by Jennifer for
Jennifer's own account for investment purposes only, not as a nominee or agent
and not with a view to the resale or distribution of any part thereof, and
Jennifer has no present intention of selling, granting any participation in or
otherwise distributing the same. Jennifer further represents that Jennifer does
not have any contract, undertaking, agreement or arrangement with any person to
sell, transfer or grant participation to such person or third person with
respect to any of the Nitches Shares. 

          Section 3.27
Restrictions on Transfer. Jennifer understands that the Nitches Shares have not been
registered under the Securities Act or registered or qualified under any foreign
or state securities law, and may not be, directly or indirectly, sold,
transferred, offered for sale, pledged, hypothecated or otherwise disposed of
without registration under the Securities Act and registration or qualification
under applicable state securities laws or the availability of an exemption
therefrom. Jennifer acknowledges that she is able to bear the economic risks of
an investment in the Nitches Shares for an indefinite period of time, and that
her overall commitment to investments that are not readily marketable is not
disproportionate to her net worth. 

          Section 3.28
Legends. Jennifer understands that the certificates representing the Nitches
Shares will have endorsed thereon the following legend, and stop transfer
instructions reflecting that these restrictions on transfer will be placed with
the transfer agent for Nitches’ common stock:

9

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933. THEY MAY NOT BE OFFERED OR
TRANSFERRED BY SALE, ASSIGNMENT, PLEDGE OR OTHERWISE UNLESS (I) A REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933 IS IN EFFECT, (II)
THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL, WHICH OPINION IS SATISFACTORY TO
THE COMPANY, TO THE EFFECT THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE
SECURITIES ACT OF 1933.” 

ARTICLE IV
 
CERTAIN
COVENANTS

          Section 4.1
Confidentiality; No
Solicitation. Each party shall hold, and
shall cause its respective Affiliates and representatives to hold, all
Confidential Information made available to it in connection with the Exchange in
strict confidence, shall not use such information except for the sole purpose of
evaluating the Exchange and shall not disseminate or disclose any of such
information other than to its directors, officers, managers, employees,
stockholders, interest holders, Affiliates, agents and representatives, as
applicable, who need to know such information for the sole purpose of evaluating
the Exchange (each of whom shall be informed in writing by the disclosing party
of the confidential nature of such information and directed by such party in
writing to treat such information confidentially). The above limitations on use,
dissemination and disclosure shall not apply to Confidential Information that
(i) is learned by the disclosing party from a third party entitled to disclose
it; (ii) becomes known publicly other than through the disclosing party or any
third party who received the same from the disclosing party, provided that the
disclosing party had no Knowledge that the disclosing party was subject to an
obligation of confidentiality; (iii) is required by law or court order to be
disclosed by the parties; or (iv) is disclosed with the express prior written
consent thereto of the other party. The parties shall undertake all necessary
steps to ensure that the secrecy and confidentiality of such information will be
maintained. In the event a party is required by court order or subpoena to
disclose information which is otherwise deemed to be confidential or subject to
the confidentiality obligations hereunder, prior to such disclosure, the
disclosing party shall: (a) promptly notify the non-disclosing party and, if
having received a court order or subpoena, deliver a copy of the same to the
non-disclosing party; (b) cooperate with the non-disclosing party, at the
expense of the non-disclosing party, in obtaining a protective or similar order
with respect to such information; and (c) provide only that amount of
information as the disclosing party is advised by its counsel is necessary to
strictly comply with such court order or subpoena. 

          Section 4.2
Further Assurances. Each of the parties hereto agrees to use commercially
reasonable efforts on and after the date hereof to take or cause to be taken all
such further actions as may be necessary or appropriate to carry out the
Exchange and the agreements contemplated herein, including, but not limited to:
(i) making all filings with, and obtain all consents, approvals and
authorizations that are required to be obtained from, Governmental Authorities,
(ii) defending of any lawsuits or other legal proceedings, whether judicial or
administrative, challenging this Agreement or the performance of the obligations
hereunder; and (iii) executing and delivering such instruments, and taking such
other actions, as the other party hereto may reasonably require to carry out the
intent of this Agreement. 

          Section 4.3
Public Announcements. Nitches, Jennifer and Backwoods shall consult with each
other before issuing any press release or otherwise making any public statements
with respect to the Exchange or this Agreement, and shall not issue any other
press release or make any other public statement without prior consent of the
other parties, except as may be required by law or, with respect to Nitches, by obligations pursuant to rule or regulation of the
Exchange Act, the Securities Act, any rule or regulation promulgated thereunder
or any rule or regulation of the Nasdaq Capital Market. 

10

          Section 4.4
Notification of Certain
Matters. Each party hereto shall promptly
notify the other party in writing of any events, facts or occurrences that would
result in any breach of any representation or warranty or breach of any covenant
by such party contained in this Agreement. 

          Section 4.5
Tax-Free Exchange Status. The parties hereto shall take (or refrain from taking) any
and all actions necessary to ensure that, for United States federal income tax
purposes: (i) the Exchange shall qualify as a reorganization within the meaning
of Sections 368(a)(1)(B) of the Code, and (ii) that the tax consequences to the
stockholders of both companies are minimized.

          Section 4.6
Waiver of Claims. Jennifer for herself and her heirs, executors,
administrators, attorneys and assigns, hereby releases and acknowledges full
accord, satisfaction, discharge and settlement of, and further irrevocably and
unconditionally forever releases, remises, and acquits Backwoods and any of its
present or former officers, directors, stockholders, employees, agents,
affiliates, parents, subsidiaries, predecessors, successors, attorneys and
assigns (the "Backwoods Released
Parties") of and from any and all manner of
actions, causes of action, arbitrations, controversies, expenses, damages,
liabilities, demands, claims, counterclaims, cross-claims, obligations, losses,
costs, promises, covenants, agreements, and suits of any kind or nature, whether
known or unknown, whether contingent or fixed, whether developed or undeveloped,
in law or equity, in tort or in contract from the beginning of time through the
date of the full execution of this Agreement, which she may have or claim to
have against Backwoods Released Parties, except for accrued wages and vacation
and reimbursement of expenses consistent with prior practice and immaterial in
amount. Jennifer expressly acknowledges that such claims released and discharged
by this Section include any and all other claims of any kind and nature arising
prior to execution of this Agreement which relate in any way to Backwoods. This
release shall extend to all claims, known and unknown. Jennifer is aware of, and
specifically waives the provisions of Section 1542 of the Civil Code of the
State of California, which states as follows: 

"A general release does not extend to claims which the
creditor does not know or suspect to exist in his or her favor at the time of
executing the release, which if known by him or her must have materially
affected his or her settlement with the debtor." 

ARTICLE
V
 
INDEMNIFICATION 

          Section
5.1 Indemnification between the Parties.

          (a) Notwithstanding any other indemnification provision hereunder, each party
(the “Indemnifying Party”) shall indemnify and hold harmless the other (including the
other party’s directors and officers, the “Indemnified Party”) from and against
any and all demands, claims, actions or causes of action, judgments,
assessments, losses, liabilities, damages or penalties and reasonable attorneys'
fees and related disbursements (collectively, "Claims") suffered by such Indemnified
Party resulting from or arising out of (i) any inaccuracy in or breach of any of
the representations or warranties made by such party at the time they were made,
and, except for representations and warranties that speak as of a specific date
or time (which need only be true and correct as of such date or time), on and as
of the date hereof, or (ii) any breach or nonfulfillment of any covenants or
agreements made by such party.

11

          (b) In the event any Indemnified Party should have an indemnification Claim
against the Indemnifying Party under this Agreement that does not involve a
claim by a third party, the Indemnified Party shall promptly deliver notice of
such claim to the Indemnifying Party in writing and in reasonable detail. The
failure by any Indemnified Party to so notify the Indemnifying Party shall not
relieve the Indemnifying Party from any liability that it may have to such
Indemnified Party, except to the extent that Indemnifying Party has been
actually prejudiced by such failure. If the Indemnifying Party does not notify
the Indemnified Party within fifteen (15) Business Days following its receipt of
such notice that the Indemnifying Party disputes such claim, such claim
specified by the Indemnifying Party in such notice shall be conclusively deemed
a liability of the Indemnifying Party under this ARTICLE V and the Indemnifying
Party shall pay the amount of such liability to the Indemnified Party on demand,
or in the case of any notice in which the amount of the claim is estimated, on
such later date when the amount of such claim is finally determined. If the
Indemnifying Party disputes its liability with respect to such claim in a timely
manner, Backwoods and the Indemnified Party shall proceed in good faith to
negotiate a resolution of such dispute and, if not resolved through
negotiations, such dispute shall be resolved pursuant to Section 6.55.

          Section
5.2 Indemnification Procedures for Third Party Claims.

          (a) Upon obtaining knowledge of any Claim by a third party which has given
rise to, or is expected to give rise to, a claim for indemnification hereunder,
the Indemnified Party shall give written notice ("Notice of Claim") of such claim or
demand to the Indemnifying Party, specifying in reasonable detail such
information as the Indemnified Party may have with respect to such
indemnification claim (including copies of any summons, complaint or other
pleading which may have been served on it and any written claim, demand,
invoice, billing or other document evidencing or asserting the same). No failure
or delay by the Indemnified Party in the performance of the foregoing shall
reduce or otherwise affect the obligation of the Indemnifying Party to indemnify
and hold the Indemnified Party harmless, except to the extent that such failure
or delay shall have actually adversely affected the Indemnifying Party's ability
to defend against, settle or satisfy any Claims for which the Indemnified Party
entitled to indemnification hereunder. 

          (b) The Indemnifying Party shall have fifteen (15) days after the date on
which Notice of Claim is given to notify Indemnified Party in writing of their
election to defend such third party claim or demand on behalf of the Indemnified
Party. If the Indemnifying Party elects to defend such third party claim or
demand, Indemnified Party shall make available to the Indemnifying Party and its
agents and representatives all records and other materials that are reasonably
required in the defense of such third party claim or demand and shall otherwise
cooperate with, and assist the Indemnifying Party in the defense of, such third
party claim or demand, and so long as the Indemnifying Party is defending such
third party claim in good faith, the Indemnified Party shall not pay, settle or
compromise such third party claim or demand. If the Indemnifying Party elects to
defend such third party claim or demand, the Indemnified Party shall have the
right to participate in the defense of such third party claim or demand, at such
Indemnified Party's own expense. In the event, however, that such Indemnified
Party reasonably determines that representation by counsel to the Indemnifying
Party of both the Indemnifying Party and such Indemnified Party could reasonably
be expected to present counsel with a conflict of interest, then the Indemnified
Party may employ separate counsel to represent or defend it in any such action
or proceeding and the Indemnifying Party will pay the fees and expenses of such
counsel. If the Indemnifying Party does not elect to defend such third party
claim or demand or do not defend such third party claim or demand in good faith,
the Indemnified Party shall have the right, in addition to any other right or
remedy it may have hereunder, at the Indemnifying Party's expense, to defend
such third party claim or demand; provided, however, that (i) such Indemnified
Party shall not have any obligation to participate in the defense of, or defend,
any such third party claim or demand; (ii) such Indemnified Party's defense of
or its participation in the defense of any such third party claim or demand
shall not in any way diminish or lessen the
obligations of the Indemnifying Party under the agreements of indemnification
set forth in this ARTICLE V; and (iii) such Indemnified Party may not settle any
claim without the consent of the Indemnifying Party, which consent shall not be
unreasonably withheld or delayed. 

12

          (c) The Indemnifying Party and the other Indemnified Parties, if any, shall
cooperate fully in all aspects of any investigation, defense, pre-trial
activities, trial, compromise, settlement or discharge of any claim in respect
of which indemnity is sought pursuant to this ARTICLE V, including, but not
limited to, by providing the other party with reasonable access to employees and
officers (including as witnesses) and other information.

          Section
5.3 Limitations on Indemnification.

          (a) The representations and warranties contained herein shall survive
execution of this Agreement and shall thereupon terminate two (2) years from the
date hereof. All covenants and agreements contained herein which by their terms
contemplate actions following the date hereof shall survive the date hereof and
remain in full force and effect in accordance with their terms. Any Claim for
indemnification hereunder must be brought, if at all, within two years from the
date hereof. 

          (b) No claim for indemnification under this ARTICLE V may be asserted by, and
no liability for such indemnify may be enforced against, the Indemnifying Party
to the extent the Indemnified Party has theretofore received indemnification or
otherwise been compensated for such Claim. If an Indemnified Party later
collects any such amounts recovered under insurance policies with respect to any
Claim for which it has previously received payments under this ARTICLE V from
the Indemnifying Party, such Indemnified Party shall promptly repay to the
Indemnifying Party such amount recovered.

ARTICLE
VI
 
MISCELLANEOUS

          Section 6.1
Entire Agreement. This Agreement and the agreements and documents referred to
herein contain the entire agreement between the parties and supersede all prior
agreements and understandings, both written and oral, between the parties with
respect to the subject matter hereof. 

          Section 6.2
Amendment and
Modifications. This Agreement may not be
amended, modified or supplemented except by an instrument or instruments in
writing signed by the party against whom enforcement of any such amendment,
modification or supplement is sought. 

          Section 6.3
Successors and Assigns. This Agreement is binding upon and inures to the benefit of
the parties hereto and their respective successors and assigns, provided,
however, that no party hereto may assign its rights or delegate its obligations
under this Agreement without the express prior written consent of the other
party hereto. Except as provided in ARTICLE V, nothing in this Agreement is
intended to confer upon any person not a party hereto (or their successors or
assigns), any rights, remedies, obligations or liabilities under or by reason of
this Agreement. 

          Section 6.4
Governing Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of California, without regard to the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

          Section 6.5
Consent to Jurisdiction. Any action, suit or other legal proceeding which is
commenced to resolve any matter arising under or relating to any provision of
this Agreement must be commenced only in a state
or federal court of competent jurisdiction the State of California, County of
San Diego, and the parties hereto each consents to the jurisdiction of such a
court.

13

          Section 6.6
Counterparts. This Agreement may be executed in two or more counterparts, each of
which will be deemed to be an original, but all of which together will
constitute one and the same agreement. 

          Section
6.7 Certain Definitions. As used
herein: 

          (a) "Affiliate" has the meanings ascribed to such term in Rule 12b-2 of the Exchange
Act; 

          (b) "Business Day" means any day other than a Saturday, Sunday or a day on
which federally chartered financial institutions are not open for business in
the City of San Diego, California; 

          (c) "Confidential
Information" means the existence and contents
of this Agreement and the Schedules and Exhibits hereto, and all proprietary
technical, economic, environmental, operational, financial and/or business
information or material of one party which, prior to or following the date
hereof, has been disclosed by Backwoods, on the one hand, or Nitches, on the
other hand, in written, oral (including by recording), electronic, or visual
form to, or otherwise has come into the possession of, the other; 

          (d) "Contract" means any oral, written or implied contracts, agreements, licenses,
instruments, indentures leases, powers of attorney, guaranties, surety
arrangements or other commitments of any kind;

          (e) "Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations promulgated thereunder; 

          (f) "GAAP" means generally accepted accounting principles in the United States as
in effect on the date or for the period with respect to which such principles
are applied; 

          (g) "Governmental Authority" means any nation or government, any state, municipality or
other political subdivision thereof and any entity, body, agency, commission or
court, whether domestic, foreign or multinational, exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any executive official thereof; 

          (h) "Knowledge" means (i) with respect to an individual, knowledge of a particular fact
or other matter, if such individual is aware of such fact or other matter, and
(ii) with respect to a Person that is not an individual, knowledge of a
particular fact or other matter if any individual who is serving, or who has at
any time served, as a director, officer, partner, executor, or trustee of such
Person (or in any similar capacity) has, or at any time had, knowledge of such
fact or other matter; 

          (i) "Lien" means any security or other property interest or right, claim, lien,
pledge, option, charge, security interest, contingent or conditional sale, or
proxy, pre-emptive rights, first refusal rights, participation rights, or other
title claim or retention agreement, interest or other right or claim of third
parties, whether perfected or not perfected, voluntarily incurred or arising by
operation of law, and including any agreement (other than this Agreement) to
grant or submit to any of the foregoing in the future;

14

          (j) "Material Adverse
Effect" means any adverse effect on the
business, condition (financial or otherwise) or results of operation of the
applicable entity; 

          (k) "Material Contract" means any Contract, other than equipment and furniture
leases entered into in the ordinary course of business, where the liabilities or
commitments associated therewith exceed $100,000 individually or $250,000 in the
aggregate;

          (l) "Person" means any individual, corporation, partnership, association, trust or
other entity or organization, including a governmental or political subdivision
or any agency or institution thereof;

          (m) "SEC" means the Securities and Exchange
Commission; 

          (n) "Securities Act" means the Securities Act of 1933, as amended, and the rules
and regulations promulgated thereunder; and 

          (o) "Taxes" means all taxes (whether U.S. federal, state, local or other non-U.S.)
based upon or measured by income and any other tax whatsoever, including,
without limitation, gross receipts, profits, sales, levies, imposts, deductions,
charges, rates, duties, use, occupation, value added, ad valorem, transfer,
franchise, withholding, payroll and social security, employment, excise, stamp
duty or property taxes, together with any interest, penalties, charges or fees
imposed with respect thereto. 

     IN
WITNESS WHEREOF, each of the parties has caused this Agreement to be signed by
their respective officers hereunto duly authorized, all as of the date first
written above. 

	 	            
    	 
	NITCHES, INC.  	 	  
	  
	  
	By:  
     	/s/ Steven P. Wyandt  		/s/ Jennifer Mull  
	  	Steven Wyandt 
    		Jennifer Mull 
    
	  	Chairman  		Stockholder 
    

15

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