Document:

Exhibit 10.1

 

CREDIT SUPPORT AGREEMENT

 

BETWEEN

 

TYCO ELECTRONICS GROUP S.A.

 

AND

 

CROWN SUBSEA COMMUNICATIONS HOLDING, INC.

 

DATED AS OF NOVEMBER 2, 2018

 

 

TABLE OF CONTENTS

 

	
 
    	
 
    	
PAGE
    
	
ARTICLE I
    	
 
    
	
DEFINITIONS
    	
 
    
	
 
    	
 
    
	
Section 1.01.
    	
Certain Defined Terms
    	
1
    
	
 
    	
 
    	
 
    
	
ARTICLE II
    	
 
    
	
EXISTING CREDIT SUPPORT
    	
 
    
	
 
    	
 
    
	
Section 2.01.
    	
Maintenance and Issuance   of Existing TE Support Instruments
    	
9
    
	
 
    	
 
    	
 
    
	
ARTICLE III
    	
 
    
	
NEW CREDIT SUPPORT
    	
 
    
	
 
    	
 
    
	
Section 3.01.
    	
Issuance of New TE   Support Instruments
    	
9
    
	
Section 3.02.
    	
Conditions to Issuance   of the New TE Support Instruments
    	
10
    
	
Section 3.03.
    	
Termination and   Reduction of the New TE Support Instruments Cap
    	
11
    
	
 
    	
 
    	
 
    
	
ARTICLE IV
    	
 
    
	
TE SUPPORT INSTRUMENTS
    	
 
    
	
 
    	
 
    
	
Section 4.01.
    	
Claims Payment
    	
12
    
	
Section 4.02.
    	
Ranking and Collateral
    	
12
    
	
Section 4.03.
    	
Cash Collateralization
    	
12
    
	
Section 4.04.
    	
Contractor Cooperation   to Facilitate Reduction of TE Support Instruments and Occurrence of TE   Support Instrument Termination Dates
    	
12
    
	
Section 4.05.
    	
Support Instrument Fee
    	
13
    
	
Section 4.06.
    	
Facility Fee
    	
13
    
	
 
    	
 
    	
 
    
	
ARTICLE V
    	
 
    
	
CLAIMS MANAGEMENT; DISPUTE RESOLUTION
    	
 
    
	
 
    	
 
    
	
ARTICLE VI
    	
 
    
	
REPRESENTATIONS AND WARRANTIES
    	
 
    
	
 
    	
 
    
	
Section 6.01.
    	
Existence, Compliance   with Law
    	
14
    
	
Section 6.02.
    	
Authorization; No Contravention
    	
14
    
	
Section 6.03.
    	
Governmental   Authorization; Other Consents
    	
15
    
	
Section 6.04.
    	
Binding Effect
    	
15
    
	
Section 6.05.
    	
No Material Adverse   Effect
    	
15
    
	
Section 6.06.
    	
Absence of Termination   Event
    	
15
    
	
 
    	
 
    	
 
    
	
ARTICLE VII
    	
 
    
	
COVENANTS AND UNDERTAKINGS OF THE CONTRACTOR
    	
 
    
	
 
    	
 
    
	
Section 7.01.
    	
Affirmative Covenants
    	
15
    
				

 

i

 

	
Section 7.02.
    	
Negative Covenants
    	
17
    
	
Section 7.03.
    	
Restricted Payments   (Distributions)
    	
18
    
	
 
    	
 
    	
 
    
	
ARTICLE VIII
    	
 
    
	
GENERAL PROVISIONS
    	
 
    
	
 
    	
 
    
	
Section 8.01.
    	
Independent Contractors
    	
19
    
	
Section 8.02.
    	
Treatment of   Confidential Information
    	
19
    
	
Section 8.03.
    	
Rules of   Construction
    	
19
    
	
Section 8.04.
    	
Notices
    	
20
    
	
Section 8.05.
    	
Expenses; Indemnity;   Damage Waiver
    	
20
    
	
Section 8.06.
    	
Severability
    	
21
    
	
Section 8.07.
    	
Assignment
    	
21
    
	
Section 8.08.
    	
No Third-Party   Beneficiaries
    	
21
    
	
Section 8.09.
    	
Entire Agreement
    	
21
    
	
Section 8.10.
    	
Amendment
    	
22
    
	
Section 8.11.
    	
Waiver
    	
22
    
	
Section 8.12.
    	
Governing Law
    	
22
    
	
Section 8.13.
    	
Waiver of Jury Trial
    	
22
    
	
Section 8.14.
    	
Non-Recourse
    	
22
    
	
Section 8.15.
    	
Counterparts
    	
23
    
	
 
    	
 
    	
 
    
	
ARTICLE IX
    	
 
    
	
COMPANY REPRESENTATIONS AND WARRANTIES
    	
 
    
	
 
    	
 
    
	
Section 9.01.
    	
Existence, Compliance   with Law
    	
23
    
	
Section 9.02.
    	
Authorization; No   Contravention
    	
23
    
	
Section 9.03.
    	
Governmental   Authorization; Other Consents
    	
23
    
	
Section 9.04.
    	
Binding Effect
    	
24
    

 

ii

 

CREDIT SUPPORT AGREEMENT

 

This CREDIT SUPPORT AGREEMENT, dated as of November 2, 2018 (as amended, modified or supplemented from time to time in accordance with its terms, this “Agreement”), is made and entered into by and between TYCO ELECTRONICS GROUP S.A., a Luxembourg public limited liability company (Société Anonyme), having its registered office at 17, Bd. Grand-Duchesse Charlotte, L-1331, Luxembourg, and registered with the Luxembourg Register of Commerce and Companies under number B123549 (the “Company”), and CROWN SUBSEA COMMUNICATIONS HOLDING, INC., a Delaware corporation (the “Contractor”).

 

RECITALS

 

A.                                    WHEREAS, the Company and the Contractor entered into that certain Stock Purchase Agreement, dated as of September 16, 2018 (as amended, modified or supplemented from time to time in accordance with its terms, the “Purchase Agreement”);

 

B.                                    WHEREAS, in furtherance of the transactions contemplated by the Purchase Agreement, the Parties (as defined below) desire that the Company shall provide or cause to be provided to the Contractor (and/or one or more Subsidiaries of the Contractor) certain credit support on a transitional basis and in accordance with the terms and subject to the conditions set forth herein; and

 

C.                                    WHEREAS, the Purchase Agreement requires execution and delivery of this Agreement by the Company and the Contractor at or prior to the Closing (as defined in the Purchase Agreement).

 

NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties, intending to be legally bound, agree as follows:

 

ARTICLE I
 DEFINITIONS

 

Section 1.01.                          Certain Defined Terms.

 

(a)                                 Unless otherwise defined herein, all capitalized terms used herein shall have the same meanings as in the Purchase Agreement and/or the Credit Agreement, as applicable.

 

(b)                                 The following capitalized terms used in this Agreement shall have the meanings set forth below:

 

“Agreement” shall have the meaning set forth in the Preamble.

 

“Base Criteria” means the terms contained in Annex I to Schedule A hereto and that the total term of the applicable Supported Obligation (inclusive of construction period and warranty period) does not exceed seven years.

 

 

“Board” means the board of directors (or equivalent governing body) of the Purchaser (as such term is defined in the Purchase Agreement).

 

“Board Observer” shall have the meaning set forth Section 7.01(d).

 

“Business Day” shall have the meaning assigned to such term in the Credit Agreement.

 

“Change of Control” shall have the meaning assigned to such term in the Credit Agreement.

 

“Claimed Amount” shall have the meaning set forth in Section 4.01.

 

“Company” shall have the meaning set forth in the Preamble.

 

“Company Material Adverse Effect” means a material adverse effect on (a) the business, property, operations or financial condition of the Company and its Subsidiaries taken as a whole or (b) the rights or remedies of the Contractor hereunder.

 

“Confidential Information” means information furnished to a Party by the other Party or its representatives irrespective of the form of communication, including oral as well as written and electronic communications (hereinafter collectively referred to as the “Information”), together with any and all analyses, compilations, abstracts, studies, summaries or other documents, reports or records prepared by the applicable Party or its directors, officers, employees, members, managers, partners, attorneys, affiliates, lenders, potential co-investors, advisors, representatives and agents that contain or otherwise reflect, in whole or in part, or are generated from any Information.

 

“Contractor” shall have the meaning set forth in the Preamble.

 

“Credit Agreement” means the Credit Agreement, dated as the date hereof, among, inter alios, the Contractor, the lenders from time to time party thereto and Goldman Sachs Bank USA, as administrative agent.

 

“Customer” means with respect to any Supported Obligation, the counterparty of the Contractor or the applicable Supported Party, as applicable, benefiting from the applicable TE Support Instrument.

 

“Debtor Relief Laws” shall have the meaning assigned to such term in the Credit Agreement.

 

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“Disbursed Amount” shall have the meaning set forth in Section 4.01.

 

“Disposition” or “Dispose” shall have the meaning assigned to such term in the Credit Agreement.

 

“Dispute Period” shall have the meaning set forth in Section 4.01.

 

“Effective Date” means the date of this Agreement.

 

“Excluded New Supported Obligation” shall have the meaning set forth in the definition of “New Supported Obligation”.

 

“Existing Supported Obligation” means each performance, financial and/or other obligation of the Contractor or the applicable Supported Party, as applicable, relating to uncompleted work and/or financial commitments in existence as of the Effective Date (including, without limitation, such obligations with respect to which any Pre-Effectiveness Credit Support Requirement applies) for which the Company is providing credit support (including, without limitation, such obligations pursuant to the agreements listed on Schedule B hereto); it being understood and agreed that the Contractor shall not amend, restate or otherwise modify any Existing Supported Obligation so long as the TE Support Instrument supporting such Existing Supported Obligation remains in effect without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed); provided that, it is understood and agreed that the Company shall be deemed to have acted reasonably in withholding consent to any amendment, restatement or modification that would increase the Contractor’s liability or extend any of the time periods (including, without limitation, the time periods with respect to construction periods, milestones or warranties) under the applicable Existing Supported Obligation.

 

“Existing TE Support Instrument” means each guarantee, surety bond, letter of credit or other credit support provided by the Company (including, without limitation, the guarantees, surety bonds and letters of credit listed on Schedule C hereto), guaranteeing or supporting the performance of any Existing Supported Obligation.

 

“Governmental Authority” shall have the meaning assigned to such term in the Credit Agreement.

 

“GPC Dunant” shall mean the commercial agreement specified as “GPC Dunant” in Schedule B.

 

“Hawaiki” shall mean the commercial agreement specified as “Hawaiki” in Schedule B.

 

“Immaterial Subsidiary” shall have the meaning assigned to such term in the Credit Agreement.

 

“Incorporated Provisions” shall have the meaning set forth in Section 1.02.

 

“Indebtedness” shall have the meaning assigned to such term in the Credit Agreement.

 

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“Investment” shall have the meaning assigned to such term in the Credit Agreement.

 

“Material Adverse Effect” shall have the meaning assigned to the term “Material Adverse Effect”, as set forth in the Credit Agreement; provided that, references to the rights and remedies of the “Administrative Agent” or the “Lenders” shall instead be a reference to the rights and remedies of the Company under the TE Support Documents.

 

“Material Indebtedness” shall mean (a) the Indebtedness evidenced by the Credit Agreement (regardless of the amount outstanding (if any) thereunder) and (b) any other Indebtedness having an outstanding principal amount in excess of the Threshold Amount.

 

“Material Subsidiary” shall mean a Restricted Subsidiary of the Contractor that is not an Immaterial Subsidiary.

 

“Mitigation Obligations” shall have the meaning set forth in Section 4.04.

 

“New Supported Obligation” means each performance, financial and/or other obligation of the Contractor or the applicable Supported Party, as applicable, supported by a New TE Support Instrument; provided that each New Supported Obligation may be any obligation (including any related liquidated damages and/or warranties) of the Contractor or such Supported Party under a commercial contract, which commercial contract (a) conforms to the general standards and guidelines set forth in Schedule A hereto that are applicable to the applicable New Supported Obligation (or such other standards agreed to by the Company), (b) is entered into by the Contractor or such Supported Party after the Effective Date and prior to the Termination Date and (c) governed by and construed in accordance with the laws of the State of New York, the laws of England, in the case the local government is a Customer, the local laws of such government, and the laws of each other jurisdiction that is reasonably acceptable to the Company; provided that, it being understood and agreed that, (x) any New Supported Obligation that is entered into with an existing Customer in substantially the same form as an Existing Supported Obligation with such Customer (including a New Supported Obligation that is entered into with respect to a contract variance under an Existing Supported Obligation) shall be deemed to satisfy the requirements of clauses (a) and (c) above (such New Supported Obligations, a “Excluded New Supported Obligation”) so long as such New Supported Obligation satisfies the Base Criteria and (y) so long as the TE Support Instrument supporting such New Supported Obligation remains in effect, the Contractor shall not (I) prior to the Termination Date, amend, restate or otherwise modify any New Supported Obligation with respect to the items set forth in clauses (a) and (c) hereof to the extent it would not otherwise meet such criteria and be able to satisfy each of the conditions set forth in Section 3.02 at the time of such amendment, restatement or modification if a New TE Support Instrument were being issued in respect of such New Supported Obligation (as reasonably determined by the Contractor in good faith, subject to delivery of a description and written certification as required pursuant to clause (x) of the proviso in Section 3.01(c)), in each case, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed) and (II) after the Termination Date, without the prior written consent of the Company (such consent not to be unreasonably withheld, conditioned or delayed); provided that, it is understood and agreed that the Company shall be deemed to have acted reasonably in withholding consent to any amendment, restatement or modification that would increase the Contractor’s liability or extend any of the time periods (including, without limitation, the time

 

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periods with respect to construction periods, milestones or warranties) under the applicable New Supported Obligation).

 

“New TE Support Instruments” shall have the meaning set forth in Section 3.01.

 

“New TE Support Instruments Cap” means the maximum aggregate amount of obligations of the Company with respect to New TE Support Instruments outstanding hereunder from time to time, as such maximum aggregate amount may be decreased from time to time in accordance with Section 3.03.  As of the Effective Date the New TE Support Instruments Cap is $300,000,000.

 

“Organization Documents” shall have the meaning assigned to such term in the Credit Agreement

 

“Outstanding Amount” shall have the meaning set forth in Section 4.01.

 

“Party” means the Company and the Contractor individually, and “Parties” means the Company and the Contractor collectively, and, in each case, their respective permitted successors and assigns.

 

“Payment Failure Event” shall have the meaning set forth in Section 4.01.

 

“Person” shall have the meaning assigned to such term in the Credit Agreement.

 

“Pre-Effectiveness Credit Support Requirement” means the obligation of the Contractor or the applicable Supported Party pursuant to the terms of an Existing Supported Obligation to obtain (a) an extension in the maturity of an Existing TE Support Instrument or (b) an increase in the aggregate amount of an Existing TE Support Instrument (or issue a new Existing TE Support Instrument) due, in the case of clauses (a) and (b), to the occurrence of an event or other triggering condition prior to the Effective Date (including the occurrence, prior to the Effective Date, of a contract variance related to an Existing Supported Obligation), which event or condition permitted such Customer to demand and/or require, as applicable, extension in the maturity or an increase to (or issuance of) such Existing TE Support Instrument pursuant to such Existing Supported Obligation; provided that any extension of the maturity of an Existing TE Support Instrument to the specified date certain of provisional acceptance or the end of the construction period as required by the applicable Existing Supported Obligation as in effect on the Effective Date (without the requirement for such extension also requiring the occurrence of any other event or other triggering condition) shall be deemed to be a Pre-Effectiveness Credit Support Requirement regardless of when such extension actually occurs; provided, further, that, notwithstanding anything herein to the contrary, any obligation of the Contractor or the applicable Supported Party (x) to provide credit support in respect of GPC Dunant up to an amount not to exceed $105,000,000 shall be a Pre-Effectiveness Credit Support Requirement and (y) to provide credit support during the warranty period under Section 6 of Haiwaki shall be a Pre-Effectiveness Credit Support Requirement.

 

“Purchase Agreement” shall have the meaning set forth in the Recitals.

 

5

 

“Related Parties” means, with respect to any Person, such Person’s Affiliates and the partners, directors, officers, employees, agents, trustees and advisors of such Person and of such Person’s Affiliates.

 

“Responsible Officer” shall have the meaning assigned to such term in the Credit Agreement.

 

“Restricted Payment” shall have the meaning assigned to such term in the Credit Agreement.

 

“Restricted Subsidiary” means any Subsidiary of the Contractor other than an Unrestricted Subsidiary.

 

“Supported Obligation” means an Existing Supported Obligation or a New Supported Obligation.

 

“Supported Party” means a wholly-owned subsidiary of the Contractor that is obligated in respect of a Supported Obligation.

 

“TE Support Documents” means, collectively, (a) this Agreement and (b) any agreement creating or perfecting rights in cash collateral pursuant to the provisions of Section 4.03 of this Agreement.

 

“TE Support Instruments” means, collectively, the Existing TE Support Instruments and the New TE Support Instruments.

 

“TE Support Instrument Termination Date” means, with respect to any TE Support Instrument, the date on which, pursuant to the terms of such TE Support Instrument, the obligations of the Company thereunder terminate or are released.

 

“Termination Date” means the earliest of (a) the third anniversary of the Effective Date, (b) the date the Company provides written notice to the Contractor of the occurrence of the Termination Date after occurrence of a Termination Event and (c) the occurrence of a Termination Event under clause (c)(iii), (e) or (h) of such definition.

 

“Termination Event” means the occurrence of any of the following events:

 

(a)                                 the Contractor fails to pay (x) any Disbursed Amount when due or (y) any fee or other amount payable hereunder or under any other TE Support Document when due and, solely in the case of this clause (y), such failure remains unremedied for a period of five (5) Business Days;

 

(b)                                 any representation, warranty, certification or other statement of fact made or deemed made by or on behalf of the Contractor herein or in any other TE Support Document or any amendment or modification hereof or thereof or waiver hereunder or thereunder or in any certificate, document, report, financial statement or other document furnished by or on behalf of the Contractor under or in connection with this Agreement or any other TE Support Document, proves to have been inaccurate in any material respect on or as of the date made or deemed made

 

6

 

and such incorrect representation, warranty, certification or statement of fact, if capable of being cured, remains so incorrect for thirty (30) days after receipt by the Contractor of written notice thereof by the Company;

 

(c)                                  the Contractor fails to perform or observe any other covenant, term, condition or agreement contained in this Agreement or any other TE Support Document (other than as provided in subsections (a) and (b) of this definition) and (i) in the case of the covenants set forth in Section 7.01, such default shall continue unremedied for a period of thirty (30) days after notice thereof to the Contractor from the Company, (ii) except as set forth in clause (iii) below, in the case of the covenants set forth in Section 7.02, such default shall continue unremedied for a period of fifteen (15) days after notice thereof to the Contractor from the Company and (iii) automatically if the Contractor fails to perform or observe Section 7.03 of this Agreement;

 

(d)                                 the Contractor or any of its Material Subsidiaries shall (i) default in making any payment of any principal of, or interest on, any Material Indebtedness (but excluding the obligations hereunder) beyond the applicable grace period with respect thereto, if any, specified in the agreement or instrument relating to such Material Indebtedness or (ii) default in the observance or performance of any other agreement or condition relating to any such Material Indebtedness or contained in any instrument or agreement evidencing, securing or relating thereto, or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the holder or beneficiary of such Material Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to cause, with the giving of notice if required, such Material Indebtedness to become due prior to its stated maturity or (in the case of any such Indebtedness constituting a Guarantee Obligation) to become payable or to cause any commitment to extend credit thereunder to be terminated; provided that clause (d)(ii) shall not apply to (A) secured Indebtedness that becomes due as a result of the sale, transfer or other disposition (including as a result of a casualty or condemnation event) of the property or assets securing such Indebtedness (to the extent such sale, transfer or other disposition is not prohibited under this Agreement) or (B) termination events or similar events occurring under any Swap Agreement (as defined in the Credit Agreement) (it being understood that clause (d)(i) will apply to any failure to make any payment required as a result of any such termination or similar event); provided, further, that clause (d)(ii) shall not apply if such failure is remedied or waived by the holders of such Material Indebtedness prior to the earlier of (x) the Company giving notice of the Termination Date pursuant to the definition thereof and (y) the requirement to deliver cash collateral pursuant to a request under Section 4.03 (it being agreed that, solely to the extent that the Termination Date shall not have occurred prior to any such remedy or waiver by the holders of such Material Indebtedness, the Company shall release such cash collateral upon such remedy or waiver);

 

(e)                                  an Event of Default under Section 8.1(f) of the Credit Agreement occurs;

 

(f)                                   one or more final judgments or decrees shall be entered against the Contractor or any Restricted Subsidiary (other than an Immaterial Subsidiary) involving in the aggregate a liability (to the extent not covered by independent third party insurance as to which the insurer has been notified of such judgment or order and has not denied coverage) of the Threshold Amount or more, and all such judgments or decrees shall not have been vacated, discharged, stayed or bonded pending appeal within thirty days from the entry thereof;

 

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(g)                                  any material provision of any TE Support Document, at any time after its execution and delivery and for any reason other than as expressly permitted hereunder or thereunder or as a result of acts or omissions by the Company or the satisfaction in full of all the obligations hereunder (other than indemnities and other contingent indemnification and reimbursement liabilities that survive the Termination Date) ceases to be in full force and effect; or any Supported Party contests in writing the validity or enforceability of any provision of any TE Support Document (other than as a result of payment in full of the obligations hereunder (other than indemnities and other contingent indemnification and reimbursement liabilities that survive the Termination Date)); or the Contractor denies in writing that it has any or further liability or obligation under any TE Support Document, or purports in writing to revoke or rescind any TE Support Document (other than as a result of payment in full of the obligations hereunder (other than indemnities and other contingent indemnification and reimbursement liabilities that survive the Termination Date)); or

 

(h)                                 a Change of Control occurs.

 

“Threshold Amount” shall have the meaning assigned to such term in the Credit Agreement.

 

“Unrestricted Subsidiary” shall have the meaning assigned to such term in the Credit Agreement.

 

“Unused TE Support Commitment” shall mean an amount not less than $0, equal to, as determined at any given time: (a) the New TE Support Instruments Cap at such time (as may be decreased in accordance with the terms of this Agreement) minus (b) the sum of (i) the aggregate stated amount of all New TE Support Instruments issued and outstanding at such time and (ii) any Outstanding Amounts (including any Claimed Amount subject to a dispute as set forth in Section 4.01) under any New TE Support Instruments at such time.

 

Section 1.02.  Definitions and Other Incorporated Provisions. Certain defined terms and provisions herein are incorporated by reference from, or defined with reference to, the Credit Agreement (such defined terms and other provisions, collectively, the “Incorporated  Provisions”) solely for the convenience of the parties hereto in documenting this Agreement and the transactions referred to herein. Each such Incorporated Provision shall be incorporated or referred to as though all references herein to the “Agreement” and all references to the “Lenders”, “Required Lenders” the “Borrower” and terms of similar import are references to this Agreement, the Company and the Contractor, respectively, and other changes shall be made (as required by the context) so that the Incorporated Provisions are made solely for the benefit of the Company with respect to this Agreement. No Incorporated Provision shall be amended, waived or otherwise modified for purposes of this Agreement without the prior written consent of the Company, notwithstanding any amendment, waiver or other modification (including any refinancing or replacement thereof) by the parties to the Credit Agreement after the Effective Date, except as expressly contemplated by this Agreement (or through any reference to Material Indebtedness), and without the Company’s prior written consent (not to be unreasonably withheld, conditioned or delayed), such Incorporated Provisions shall remain in effect hereunder as they existed prior to such amendment, waiver or modification. If this Agreement remains in effect after the commitments under the Credit Agreement have been terminated and the loans and other obligations thereunder have been repaid

 

8

 

in full, the Incorporated Provisions shall continue to be incorporated herein by reference, (and without limitation the covenants incorporated herein shall continue to be in full force and effect) as set forth above as such provisions were in effect hereunder on the date of such termination or repayment. The Contractor shall be the entity that is the “Borrower” under the Credit Agreement, and if the Contractor ceases to be the “Borrower” under the Credit Agreement or enters into a merger or consolidation of which it is not the surviving entity or sells all or substantially all of its assets in a transaction that does not constitute a Termination Event, then at the reasonable request of the Company such successor entity shall join this Agreement and assume the obligations of the Contractor hereunder.

 

ARTICLE II
 EXISTING CREDIT SUPPORT

 

Section 2.01.                          Maintenance and Issuance of Existing TE Support Instruments.  The Parties hereby agree that (a) solely with respect to any Pre-Effectiveness Credit Support Requirement, an Existing TE Support Instrument shall, pursuant to a written request provided pursuant to Section 3.01(c), be issued, renewed or modified by the Company, in each case, following the Effective Date in accordance with, and as contemplated by, the applicable Existing Supported Obligation, (b) each Existing TE Support Instrument that is in effect following the Effective Date shall remain in effect as contemplated by the applicable Existing Supported Obligation and (c) the obligations of the Company under each Existing TE Support Instrument shall continue in full force and effect, with such continuance subject to (x) the Mitigation Obligations with respect to such Existing TE Support Instrument and (y) the reduction, termination or release in accordance with the terms of such Existing TE Support Instrument, until the applicable TE Support Instrument Termination Date.

 

ARTICLE III
 NEW CREDIT SUPPORT

 

Section 3.01.                          Issuance of New TE Support Instruments.

 

(a)                                 Upon the written request of the Contractor and subject to the conditions to issuance described in Section 3.02, the Company will provide to the Contractor corporate guarantees (or amend or modify existing corporate guarantees) (the “New TE Support Instruments”) to be used by the Contractor or the applicable Supported Party, as applicable, as support for (i) New Supported Obligations or (ii) any Existing Supported Obligation (other than any Existing Supported Obligation that is the subject of a Pre-Effectiveness Credit Support Requirement); provided that, with respect to an increase in the aggregate amount of an Existing TE Support Instrument, only the increased portion of such TE Support Instrument shall constitute the issuance of a New TE Support Instrument for purposes hereof.

 

(b)                                 Each New TE Support Instruments shall be provided under documentation in the form attached hereto as Exhibit I or with such changes to such form as are reasonably acceptable to the Company; provided that, to the extent the New Supported Obligation is for the benefit of a Customer with an Existing Supported Obligation, the New TE Support Instrument that will be issued may, at the election of the Contractor, be provided in substantially the same form as the applicable Existing TE Support Instrument provided by the Company to such Customer.

 

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(c)                                  To request the issuance of a New TE Support Instrument or the issuance, renewal or modification of an Existing TE Support Instrument to satisfy a Pre-Effectiveness Credit Support Requirement, the Contractor shall deliver to the Company reasonably in advance of the requested date of issuance, renewal or modification (and in no event fewer than seven (7) Business Days or, to the extent that the consent of the Company is required therefor (including, without limitation, as a result of proposed changes to the form attached hereto as Exhibit I or the governing law of the related New Supported Obligation being other than the laws of the State of New York, the laws of England or applicable local law in the case of a government Customer, fifteen (15) Business Days or such longer period as reasonably determined by the Company to the extent necessary to negotiate and execute documentation with the Contractor and the applicable Customer with respect thereto) a written notice requesting the issuance of a New TE Support Instrument or Existing TE Support Instrument: (i) specifying the date of issuance (which shall be a Business Day), (ii) the stated amount of such New TE Support Instrument or Existing TE Support Instrument and (iii) the name and address of the Customer with respect thereto; provided that, (A) solely in the case of a New TE Support Instrument that is issued with respect to a New Supported Obligation (but not with respect to an Excluded New Supported Obligation or Existing Supported Obligation), prior to giving any such written notice, the Contractor or the applicable Supported Party shall have provided to the Company as soon as reasonably practicable after the time of the Contractor’s submission of (x) its applicable initial bid therefor, a reasonably detailed description of the applicable New Supported Obligation demonstrating satisfaction of the attributes and compliance in all material respects with the documentation standards set forth in Schedule A that are applicable to the relevant New Supported Obligation and certifying in writing as to compliance with the factual matters set forth in (I) the proviso to item 1 of Schedule A, (II) items 5, 6 and 7 and (III) items 9 through 17 as well as (y) any relevant updates as are appropriate in the event of the submission of modifications to the applicable initial bid, including copies of the material underlying agreement creating or constituting such New Supported Obligation; it being agreed that any determination and confirmation to the Contractor by the Company of the satisfaction of such New Supported Obligation’s satisfaction of the attributes and compliance with the documentation standards set forth in Schedule A shall not be unreasonably withheld, conditioned or delayed (subject to Annex I to Schedule A) and (B) solely in the case of a New TE Support Instrument that is issued with respect to an Excluded New Supported Obligation or an Existing Supported Obligation prior to giving any such written notice, the Contractor or the applicable Supported Party shall have provided to the Company as soon as reasonably practicable evidence reasonably satisfactory to the Company of such Supported Obligation’s compliance with the Base Criteria.  Any request for a New TE Support Instrument shall be deemed to constitute a representation and warranty by the Contractor of the satisfaction of the conditions set forth in Section 3.02 as of the proposed date of issuance of the New TE Support Instrument.

 

(d)                                 The Parties hereto agree that once issued, any New TE Support Instrument may remain outstanding beyond the Termination Date without requiring any cash collateral or other credit support (except as otherwise expressly contemplated by Section 4.01 or 4.03 of this Agreement).

 

Section 3.02.                          Conditions to Issuance of the New TE Support Instruments.  The obligation of the Company to issue New TE Support Instruments hereunder prior to the Termination Date shall be subject to the following conditions precedent:

 

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(a)                                 The stated amount of a New TE Support Instrument shall not cause the sum of (i) the aggregate stated amount of all New TE Support Instruments  issued and outstanding at such time (after giving effect to the issuance of such New TE Support Instrument) of and (ii) any Outstanding Amounts (including any Claimed Amount subject to a dispute as set forth in Section 4.01) under any New TE Support Instruments at such time to exceed the New TE Support Instruments Cap;

 

(b)                                 With respect to any New TE Support Instrument to be issued to a Customer with existing TE Support Instruments, any default, event of default or termination event (however so described) shall be continuing under any TE Support Document, as a result of TE Support Instruments issued in favor of such Customer;

 

(c)                                  The representations and warranties of the Contractor and each other Supported Party contained in Article VI herein or any other TE Support Document shall be true and correct in all material respects on and as of the date of the issuance of such New TE Support Instrument, except to the extent that such representations and warranties specifically refer to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date; and

 

(d)                                 The applicable New Supported Obligation shall be in full force and effect, and shall be contingent, no default, event of default or termination event (however so described) shall have occurred or be continuing thereunder with respect to the Contractor or the applicable Supported Party, as applicable, and such New Supported Obligation shall not constitute Indebtedness for borrowed money of the Contractor or such Supported Party.

 

Section 3.03.                          Termination and Reduction of the New TE Support Instruments Cap

 

(a)                                 The availability of New TE Support Instruments under this Agreement shall terminate and the New TE Support Instruments Cap shall be reduced to $0 on the Termination Date.

 

(b)                                 The New TE Support Instruments Cap may be reduced at any time and from time to time at the sole option of the Contractor by written notice from the Contractor to the Company.  The Contractor may at its sole option return for cancellation any outstanding New TE Support Instruments.

 

(c)                                  Notwithstanding any reduction of the New TE Support Instruments Cap, the occurrence of the Termination Date and/or the occurrence of a Termination Event, (i) the Company’s obligations with respect to maintaining Existing TE Support Instruments shall continue in full force and effect and (ii) each outstanding TE Support Instrument shall continue in full force and effect in accordance with its terms until the applicable TE Support Instrument Termination Date.  In addition, it is understood and agreed that the issuance and/or cancellation of a New TE Support Instrument shall not reduce the New TE Support Instruments Cap, and the issuance of New TE Support Instruments under this Agreement shall be revolving in nature.

 

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ARTICLE IV
 TE SUPPORT INSTRUMENTS.

 

Section 4.01.                          Claims Payment. Not later than 11:00 a.m. New York City time on (a) the fifth Business Day following the earlier of (i) any date on which any claim against the Company for payment being made under a TE Support Instrument and (ii) any date on which any written claim by a Customer is made that the Contractor or the applicable Supported Party has failed to make a payment to a Customer when such payment is due and payable under the terms of the applicable Supported Obligation, in each case, the Contractor will pay the Company the amount claimed (the “Claimed Amount”); provided that if and for so long as, in the case of this clause (ii), (x) the Contractor or applicable Supporting Party is disputing its liability to the claiming Customer under the applicable Supported Obligation and (y) the Contractor is in compliance with its obligations under Article V of this Agreement with respect to such dispute, then until such disputed liability has been determined by a final non-appealable court judgment or arbitral award or pursuant to a written settlement or admission approved by the Company and the Contractor, the Contractor’s obligation to pay the Claimed Amount to the Company under this Section 4.01 shall not be deemed to have occurred and the Unused TE Support Commitment shall be reduced by an amount equal to the Claimed Amount (the period of such suspension, a “Dispute Period”) and (b) the first Business Day following any payment by the Company of a Claimed Amount under any TE Support Instrument, the Contractor will reimburse the Company the amount paid (the “Disbursed Amount”).  A credit exposure fee will accrue on any Claimed Amount or Disbursed Amount that is not paid by the time required by the preceding sentence (after giving effect to any Dispute Period) (an “Outstanding Amount” and when the Outstanding Amount (excluding Claimed Amounts during a Dispute Period) shall at any time exceed $1,000,000 in the aggregate, a “Payment Failure Event” shall be deemed to have occurred) at a per annum rate equal to the current interest rate determined at the default rate of the funded term loans under the Credit Agreement, which fee shall accrue daily and be payable in cash upon demand.

 

Section 4.02.                          Ranking and Collateral. The obligations of the Contractor or other Supported Party to the Company arising under the New TE Support Instruments shall constitute general, senior and unsubordinated obligations of the Contractor or other Supported Party, as applicable.

 

Section 4.03.                          Cash Collateralization. Upon the earlier of (a) the occurrence of a Termination Event described in clause (c)(iii), (e) or (h) of the definition thereof or (b) within ten (10) Business Days’ of written request by the Company following the occurrence of any other Termination Event, the Contractor shall, with respect to all then issued and outstanding New TE Support Instruments, pledge or deliver to the Company, as collateral for such New TE Support Instruments, cash or deposit account balances or, if the Company shall agree in its sole discretion, other credit support, in each case in an aggregate amount equal to the stated amount of all such New TE Support Instruments pursuant to documentation in form and substance reasonably satisfactory to the Company.

 

Section 4.04.                          Contractor Cooperation to Facilitate Reduction of TE Support Instruments and Occurrence of TE Support Instrument Termination Dates.

 

(a)                                 The Contractor hereby agrees to use commercially reasonable efforts to, as promptly as reasonably practicable following the Effective Date, (x) obtain or confirm the reduction, cancellation, termination and/or return of each TE Support Instrument in accordance with the terms thereof and (y) cause the TE Support Instrument Termination Date with respect to

 

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each TE Support Instrument to occur in a timely manner in accordance with the documentation governing the related Supported Obligation (collectively, the “Mitigation Obligations”), which shall include:

 

(i)                                     using commercially reasonable efforts to complete, fulfill and otherwise discharge the Supported Obligation supported by such TE Support Instrument as soon as practicable following the Effective Date; and

 

(ii)                                  providing written notices, status updates and certifications (including completion certifications) to the Customer with respect to such TE Support Instrument as required by the terms thereof and/or the applicable Supported Obligation or as may be useful to facilitate the reduction, cancelation, termination, return or timely occurrence of the TE Support Instrument Termination Date with respect to such TE Support Instrument.

 

(b)                                 All costs and expenses incurred in connection with the reduction, cancellation, release or return of the TE Support Instruments shall be borne by the Contractor in accordance with Section 8.05.

 

Section 4.05.                          Support Instrument Fee.  The Contractor shall pay to the Company quarterly in arrears (commencing on the last day of the first full fiscal quarter of the Contractor after the Effective Date), in immediately available funds, a guarantee fee with respect to each outstanding New TE Support Instrument equal to 3.00% per annum of the average daily stated amount thereof.

 

Section 4.06.                          Facility Fee.  The Contractor shall pay to the Company quarterly in arrears (commencing on the last day of the first full fiscal quarter of the Contractor after the Effective Date), in immediately available funds, a commitment fee equal to the product of (x) 1.00% per annum and (y) the average daily amount of the Unused TE Support Commitment.

 

ARTICLE V
 CLAIMS MANAGEMENT; DISPUTE RESOLUTION

 

The Contractor shall, and shall cause each applicable Supported Party to, upon the reasonable written request of the Company, keep the Company informed in reasonable detail of any claim in excess of $1,000,000, including any litigation or arbitration, made or threatened in writing to be made by a Customer under any Supported Obligation, including any litigation or arbitration and any material development with respect thereto, any settlement proposal and any interim or final award or decision issued by a court or in an arbitration proceeding.  If so requested by the Company, the Contractor shall direct legal counsel representing it or the applicable Supported Party in connection with such claim, dispute or proceeding to make available to the Company its analysis (or a reasonably detailed summary thereof) of the legal matters relating thereto (other than, for the avoidance of doubt, any analysis relating to any dispute between the Company and the Contractor) on the same basis as such analysis is made available to the Contractor or such Supported Party, in each case subject to Section 8.02; provided that (i) the Contractor shall have the right to redact any portion of any analysis that the Contractor, in its reasonable discretion, determines is proprietary or confidential and which it reasonably believes is

 

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not reasonably required by the Company in order to evaluate or monitor the claim, dispute or proceeding and, in each case, which it has not provided to any letter of credit issuer or surety provider and (ii) to the extent that the Contractor or its counsel shall determine that providing any analysis by the Contractor’s counsel would destroy attorney-client privilege with respect to such analysis, the Company agrees that as a condition to receiving such analysis the Company will enter into a common interest agreement with the Contractor or take such other actions as is reasonably determined by the Contractor (upon advice of counsel) to be necessary to protect the Contractor’s attorney-client privilege with respect to such analysis. The Company shall, upon the reasonable request of the Contractor, cooperate in good faith with the Contractor, and use commercially reasonable efforts, to dispute, mitigate or reduce any Disbursed Amounts (including, in the sole discretion of the Company, by withholding payment of any Claimed Amounts) during a Dispute Period

 

The Contractor shall, and shall cause each Supported Party to, defend (and not settle) any claim under any TE Support Instrument and/or the related Supported Obligation, including through final appeal, unless the Company consents in writing otherwise (not to be unreasonably withheld, delayed or conditioned); provided that, it is agreed that any settlement that (a) includes (x) an unconditional release of the Company  from all liability or claims that are the subject matter of such Proceeding and (y) confidentiality provisions, in each case, in form and substance reasonably satisfactory to the Company, and (b) does not include any statement as to any admission of fault, culpability or failure to act by or on behalf of the Company shall be deemed acceptable to the Company.  In the event a claim is made in writing against the Contractor or the Company during the continuance of a Payment Failure Event or following the Termination Date, the Company shall be entitled to assume the defense of such claim, with legal counsel selected by the Company, upon the delivery to the Contractor of written notice of its election to do so.

 

ARTICLE VI
 REPRESENTATIONS AND WARRANTIES

 

The Contractor represents and warrants to the Company that:

 

Section 6.01.                          Existence, Compliance with Law.  The Contractor and each Supported Party  (a) is duly organized or formed, validly existing and, as applicable, in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law; except in each case (other than with respect to clause (a)), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 6.02.                          Authorization; No Contravention.  The Contractor and each Supported Party has taken all necessary organizational action to authorize the execution, delivery and performance of the TE Support Documents to which it is a party and, in the case of the Contractor, to authorize the issuances of New TE Support Instruments on the terms and conditions of this Agreement and the execution, delivery and performance by the Contractor and each

 

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Supported Party of TE Support Documents to which it is a party, the issuance of New TE Support Instruments hereunder and the use of the proceeds thereof will not (a) contravene the terms of the Organizational Documents of such Person, (b) violate any Requirement of Law or any Contractual Obligation of any Supported Party and (c) will not result in, or require, the creation or imposition of any Lien on any of their respective properties or revenues pursuant to any Requirement of Law or any such Contractual Obligation (other than Liens not prohibited by this Agreement); except with respect to any contravention, or violation referred to in clause (b) to the extent such contravention or violation could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 6.03.                          Governmental Authorization; Other Consents.  No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the issuances of New TE Support Instruments hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the TE Support Documents, except (i) consents, authorizations, filings and notices which have been obtained or made and are in full force and effect and (ii) those consents, authorizations, filings and notices, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

Section 6.04.                          Binding Effect.  This Agreement has been, and each other TE Support Document, when delivered hereunder, will have been, duly executed and delivered by the Contractor and each Supported Party that is party thereto.  This Agreement constitutes, and each other TE Support Document when so delivered will constitute, a legal, valid and binding obligation of such Person, enforceable against each Person that is party thereto in accordance with its terms.

 

Section 6.05.                          No Material Adverse Effect.   Since the Effective Date, there has been no development or event that has had or could reasonably be expected to have a Material Adverse Effect.

 

Section 6.06.                          Absence of Termination Event. No Termination Event, or any event or condition that with the giving of notice or passage of time, or both, would constitute a Termination Event, has occurred and is continuing.

 

ARTICLE VII
 COVENANTS AND UNDERTAKINGS OF THE CONTRACTOR

 

Section 7.01.                          Affirmative Covenants. So long as any TE Support Instruments shall remain outstanding and/or there shall remain outstanding any Unused TE Support Commitment, the Contractor shall, and shall cause each Subsidiary to:

 

(a)                                 Promptly provide (i) the financial statements required by Section 6.1 of the Credit Agreement (subject to the exceptions and qualifications set forth therein), (ii) each certificate and notice required to be provided to the administrative agent or the lenders under the Credit Agreement pursuant to Sections 6.2(b), 6.2(c), 6.2(d), 6.2(f) and [6.2(h)] and 6.7 of the Credit Agreement (subject to the exceptions and qualifications set forth therein) and (iii) written notice to the Company of the occurrence of any Termination Event or the occurrence of any event that, if uncured, with the passage of time would result in a Termination Event.

 

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(b)                                 Commencing with the first full fiscal quarter ending after the Effective Date, if requested by the Company prior to five (5) Business Days prior to the end of each applicable fiscal quarter, the Contractor shall provide written reports to the Company containing an update on the status of any projects related to Supported Obligations, including the percentage completion of such projects at the end of such quarter, the estimated date for project acceptance or such other milestone that would permit the occurrence of the TE Support Instrument Termination Date with respect to any associated TE Support Instruments, any change or expected change in the total valuation of such projects and any expected delays with respect to such projects. Additionally, at the Company’s written request, the Contractor shall promptly (and in no event more than ten Business Days after the date of such request) make available appropriate representatives of the Contractor for a meeting (which may be a conference telephone call) with representatives of the Company to discuss the information contained in such report; provided that the Company may not request more than one such in-person meeting during each fiscal quarter.

 

(c)                                  Promptly (and in no event more than five Business Days after receipt or delivery thereof) provide copies of all material notices and reports (i) received by the Contractor or any of its Subsidiaries under any Supported Obligation or (ii) delivered by the Contractor or any of its Subsidiaries to the Customer under any Supported Obligation;

 

(d)                                 Promptly (a) following (but in no event more than 15 days after) the end of each fiscal quarter of the Contractor, the Contractor shall deliver to the Company a reasonably detailed report setting forth the affirmative steps taken by the Contractor during the preceding fiscal quarter with respect to the Mitigation Obligations, including an update as to the actions discussed during the preceding fiscal quarter’s meeting described in the following sentence and (b) (and in no event more than five Business Days) following the Contractor’s delivery of the report described in clause (a), the Contractor shall make available appropriate representatives of the Contractor for a meeting (which may be a conference telephone call) with representatives of the Company to discuss the information contained in such report and coordinate on the actions taken with respect to the Mitigation Obligations in the current fiscal quarter; and

 

(e)                                  Permit the Company to appoint a representative (such representative, who may not be an employee, director, non-voting observer or Affiliate (for each) of any competitor of the Contractor or its Affiliates, a “Board Observer”) to be present (whether in person or by telephone) in a non-voting, observer capacity at all meetings of the Board (including any special meeting of the Board) and any meeting of any executive (or comparable) committee (other than any compensation committee) of the Board; provided that notwithstanding anything to the contrary in this Agreement, the Contractor shall be entitled to withhold any information or materials and exclude the Board Observers from any meeting, or any portion thereof, as is reasonably determined by the Contractor (upon advice of counsel) if access to such information or materials or attendance at such meeting would (A) adversely affect the attorney-client or work product privilege between the Contractor or its Affiliates, as applicable, and its counsel, (B) result in an actual or potential conflict of interest between the Contractor, any of its Subsidiaries or Affiliates or such Board and the Board Observer and/or the Company or its Affiliates (including as to discussions or materials regarding any Indebtedness or discussions relating to the Company or its Affiliates) or (C) would result in an actual breach of a written agreement with a third party that restricts the sharing of such information (and not entered into in contemplation of the foregoing) (the foregoing restrictions in this proviso collectively, the “Board Observer Restrictions”).  The Contractor shall make

 

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commercially reasonable efforts to notify the Board Observer in advance if the Contractor anticipates the Board Observer will be excluded from a material portion of a Board meeting.  Prior to such appointment, the Board Observer shall cooperate in good faith with the Contractor to enter into a reasonable and customary confidentiality agreement with respect to confidential materials received by the Board Observer in his capacity as such (it being understood and agreed that such confidentiality agreement shall permit the Board Observer to share such confidential information with the Company subject to Section 8.02), and the Company shall instruct the Board Observer to abide by the terms of the Contractor’s insider trading policy or guidelines and other guidelines and confidentiality obligations as if the Board Observer were a member of the Board and the Company shall be responsible for ensuring that the Board Observer diligently observes such policies, guidelines and obligations.  Once appointed, the Contractor shall send the Board Observer all applicable notices, and the Board Observer shall be entitled to receive all information and other materials (including meeting notices and agendas) that are distributed to the members of the Board, all at substantially the same time and in the substantially same manner as such notices, agenda, information and other materials are provided to the members of the Board subject to the Board Observer Restrictions; provided that, in connection with the Board Observer attending any such meetings or receiving such information and materials, the Company hereby agrees that, in addition to the obligations of the Board Observer in their confidentiality agreements noted above and its obligations in Section 8.02, the Company shall not disclose or provide any non-public information to Persons other than Affiliates of the Company, other than disclosures and Persons expressly authorized by the Contractor.  The Contractor shall provide the Board Observer with the same travel and expense reimbursement with respect to the Board Observer’s attendance at Board as is provided to the directors (or equivalent position) of the Contractor.

 

Section 7.02.                          Negative Covenants. So long as any TE Support Instruments shall remain outstanding and/or there shall remain outstanding any Unused TE Support Commitment, the Contractor shall not and shall not permit its Restricted Subsidiaries to:

 

(a)                                 Liens.  Create, incur, assume or suffer to exist any Lien upon any of its property, whether now owned or hereafter acquired, except as permitted by the Credit Agreement.

 

(b)                                 Indebtedness.  Create, issue, incur, assume, become liable in respect of or suffer to exist any Indebtedness, except as permitted by the Credit Agreement.

 

(c)                                  Fundamental Changes. Enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business, except as permitted by the Credit Agreement.

 

(d)                                 Dispositions.  Dispose of any of its property, whether now owned or hereafter acquired, or, in the case of any Restricted Subsidiary, issue or sell any shares of such Restricted Subsidiary’s Capital Stock to any Person, except as permitted by the Credit Agreement.

 

(e)                                  Restricted Investments.  Make, directly or indirectly, any Restricted Investment (as defined in the Credit Agreement), except as permitted by the Credit Agreement.

 

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(f)                                   Transactions with Affiliates.  Enter into any transaction, including any purchase, sale, lease or exchange of property, the rendering of any service or the payment of any management, advisory or similar fees, with any Affiliate (other than Holdings, the Borrower or any Restricted Subsidiary) unless such transaction is permitted by the Credit Agreement (including, without limitation and to the extent permitted under the Credit Agreement, transactions in connection with investment agreements, consulting agreements or employment agreements entered into by the Contractor or any of its subsidiaries with past or current members of Cerberus Operations and Advisory Company (or successor entity thereof) and/or the engagement of any such member as an officer or employee of the Contractor or any of its subsidiaries); provided that the aggregate amount of management, advisory or similar fees payable to such Affiliates (but excluding, for the avoidance of doubt, payment of any reasonable out-of-pocket costs and expenses and indemnities, and payments in respect of services at the actual cost of such services provided by past or current members of Cerberus Operations and Advisory Company (or successor entity thereof)) shall not exceed $1,500,000 in any fiscal year.

 

Section 7.03.                          Restricted Payments (Distributions).  So long as any TE Support Instruments shall remain outstanding and/or there shall remain outstanding any Unused TE Support Commitment, the Contractor shall not and shall not permit its Restricted Subsidiaries to make, directly or indirectly, any Restricted Payment (as defined in the Credit Agreement) (other than a Restricted Investment (as defined in the Credit Agreement)), except as permitted by the Credit Agreement (other than Sections 7.6(g), (h), (j) or (m) of the Credit Agreement; such sections, the “Non-Ordinary Course RP Baskets” and the sections of Section 7.6 of the Credit Agreement other than such sections, the “Ordinary Course RP Baskets”); provided that to the extent that sum of (i) stated amount of all TE Support Instruments issued and outstanding at such time, (ii) the Unused TE Support Commitment and (iii) any Outstanding Amounts (including any Claimed Amount subject to a dispute as set forth in Section 4.01) under any TE Support Instruments at such time is less than $100,000,000, the Contractor shall have the right to make Restricted Payments pursuant to both the Ordinary Court RP Baskets and Non-Ordinary Course RP Baskets.

 

Notwithstanding the foregoing in Sections 7.02 and 7.03, during a Payment Failure Event, the Contractor shall not be able to (i) incur additional Permitted Additional Ratio Debt (as defined in the Credit Agreement) or incur any Indebtedness by utilizing Section 7.2(g) or (u) of the Credit Agreement or incur any Indebtedness for borrowed money by utilizing Section 7.2(p) of the Credit Agreement, (ii) incur Liens pursuant to Section 7.3(p) or (dd) of the Credit Agreement, (iii) make Dispositions that utilize Section 7.5(j) of the Credit Agreement or any Permitted Acquisition or other Restricted Investment (as defined in the Credit Agreement) that utilize the Non-Ordinary Course RP Baskets, (iv) make Restricted Payments (other than a Restricted Investment (as defined in the Credit Agreement)) that utilize the Non-Ordinary Course RP Baskets or (v) enter into any merger, consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution), or Dispose of all or substantially all of its property or business.

 

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ARTICLE VIII
 GENERAL PROVISIONS

 

Section 8.01.                          Independent Contractors.  Nothing in this Agreement shall be deemed in any way or for any purpose to constitute any Party an agent of another unaffiliated Party in the conduct of such other Party’s business.  Each Party shall act as an independent contractor and not as the agent of the other Party, maintaining control over its employees, its subcontractors and their employees and complying with all withholding of income at source requirements, whether federal, state, local or foreign.

 

Section 8.02.                          Treatment of Confidential Information.

 

(a)                                 The Parties shall not, and shall cause all of Representatives not to, disclose to any other Person or use, except for purposes of this Agreement, any Confidential Information of the other Party; provided, however, that each Party may disclose Confidential Information of the other Party, to the extent permitted by Applicable Law: (i) to its Representatives on a need-to-know basis in connection with the performance of such Party’s obligations under this Agreement; (ii) in any report, statement, testimony or other submission to any Governmental Authority having jurisdiction over the disclosing Party; or (iii) in order to comply with Applicable Law or in response to any summons, subpoena or other legal process or formal or informal investigative demand issued to the disclosing Party in the course of any litigation, investigation or administrative proceeding.  Notwithstanding anything to the contrary in the preceding sentence, in the event that a Party becomes legally compelled (based on advice of counsel) by deposition, interrogatory, request for documents subpoena, civil investigative demand or similar judicial or administrative process to disclose any Confidential Information of the other Party, such disclosing Party (to the extent legally permitted) shall provide the other Party with prompt prior written notice of such requirement, and, to the extent reasonably practicable, cooperate with the other Party (at such other Party’s expense) to obtain a protective order or similar remedy to cause such Confidential Information not to be disclosed, including interposing all available objections thereto, such as objections based on settlement privilege.  In the event that such protective order or other similar remedy is not obtained, the disclosing Party shall furnish only that portion of the Confidential Information which it is advised by counsel that it is legally compelled to disclose, and shall exercise its commercially reasonable efforts (at such other Party’s expense) to obtain assurance that confidential treatment will be accorded such Confidential Information.

 

(b)                                 Each Party shall, and shall cause its Representatives to, protect the Confidential Information of the other Party by using the same degree of care to prevent the unauthorized disclosure of such Confidential Information as the Party uses to protect its own confidential information of a like nature.

 

(c)                                  Each Party shall cause its Representatives to agree to be bound by the same restrictions on use and disclosure of Confidential Information as bind the Party pursuant to this Agreement in advance of the disclosure of any such Confidential Information to them.

 

Section 8.03.                          Rules of Construction.  Interpretation of this Agreement shall be governed by the rules of construction set forth in Section 1.2 of the Purchase Agreement (except the Incorporated Provisions shall be governed by the rules of construction set forth in the Credit Agreement as modified by Section 1.02 of this Agreement).

 

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Section 8.04.                          Notices.  All notices and other communications under this Agreement shall be made in accordance with Section 10.1 of the Purchase Agreement.

 

Section 8.05.                          Expenses; Indemnity; Damage Waiver.

 

(a)                                 Costs and Expenses.  The Contractor shall pay (i) all reasonable and documented out-of-pocket expenses incurred by the Company in connection with the issuance of any New TE Support Instrument or any demand for payment under any TE Support Instrument and (ii) all reasonable and documented out-of-pocket expenses incurred by the Company (but limited in the case of legal expenses, to the fees and expenses of one firm of outside counsel), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other TE Support Documents, including its rights under this Section, or (B) in connection with TE Support Instruments.

 

(b)                                 Indemnification by the Contractor.  The Contractor shall indemnify the Company (and any sub-agent thereof) and each of its Related Parties (each such Person being called an “Indemnitee”) against, and hold each Indemnitee harmless from, any and all losses, claims, damages, liabilities and related expenses (but in the case of legal fees, limited to the fees, charges and disbursements of one primary firm of outside counsel for the Indemnitees, taken as a whole) incurred by any Indemnitee or asserted against any Indemnitee by any Person (including the Contractor or any of its Subsidiaries) other than such Indemnitee and its Related Parties arising out of, in connection with, or as a result of (i) the execution or delivery of this Agreement, any other TE Support Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the consummation of the transactions contemplated hereby or thereby, (ii) any TE Support Instrument or the use or proposed use of the proceeds therefrom (including any refusal by the Company to honor a demand for payment under a TE Support Instrument if the documents presented in connection with such demand do not strictly comply with the terms of such TE Support Instrument) or (iii) any claim, litigation, investigation or proceeding relating to any of the foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Contractor or any of its Subsidiaries, and regardless of whether any Indemnitee is a party thereto; provided that such indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Contractor or any of its Subsidiaries against an Indemnitee for breach in bad faith of such Indemnitee’s obligations hereunder or under any other TE Support Document, if the Contractor or such Subsidiary has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction.

 

(c)                                  Waiver of Consequential Damages, Etc.  To the fullest extent permitted by applicable law, the each Party shall not assert, and hereby waives, and acknowledges that no other Person shall have, any claim against any other Party or their Related Persons, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this Agreement, any other TE Support Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any TE Support Instrument or the use of the proceeds thereof.  No Party or their

 

20

 

Related Persons referred to in subsection (b) above shall be liable for any damages arising from the use by others of any information or other materials distributed to such party by such Person through telecommunications, electronic or other information transmission systems in connection with this Agreement or the other TE Support Documents or the transactions contemplated hereby or thereby.

 

(d)                                 Payments.  All amounts due under this Section shall be payable not later than twenty Business Days after demand therefor.

 

(e)                                  Survival.  The agreements in this Section shall survive the termination of this Agreement and the repayment, satisfaction or discharge of all the other obligations of the Contractor hereunder and under the other TE Support Documents.

 

Section 8.06.                          Severability.  If any term or provision of this Agreement is held invalid, illegal or unenforceable in any respect under any Applicable Law, as a matter of public policy or on any other grounds, the validity, legality and enforceability of all other terms and provisions of this Agreement will not in any way be affected or impaired.  If the final judgment of a court of competent jurisdiction or other Governmental Authority declares that any term or provision hereof is invalid, illegal or unenforceable, the Parties agree that the court making such determination will have the power to reduce the scope, duration, area or applicability of the term or provision, to delete specific words or phrases, or to replace any invalid, illegal or unenforceable term or provision with a term or provision that is valid, legal and enforceable and that comes closest to expressing the intention of the invalid, illegal or unenforceable term or provision.

 

Section 8.07.                          Assignment.  This Agreement will be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the Parties.  Neither Party may assign (whether by operation of law or otherwise) this Agreement or any rights, interests or obligations provided by this Agreement without the prior written consent of the other Party (not to be unreasonably withheld or delayed); provided that such consent of the Contractor shall not be necessary with respect to an assignment by the Company to an Affiliate of the Company so long as, such Affiliate (x) has a net worth of at least $1,000,000,000 and (y) assumes all of the rights and obligations of the Company hereunder.

 

Section 8.08.                          No Third-Party Beneficiaries.  This Agreement is for the sole benefit of the Parties and their respective successors and permitted assigns and, nothing in this Agreement shall create or be deemed to create any third-party beneficiary rights in any Person not a party to this Agreement, including any Affiliates of any Party.

 

Section 8.09.                          Entire Agreement.  This Agreement (including the Exhibits and Schedules hereto) and the Purchase Agreement (and all exhibits and schedules thereto) collectively constitute and contain the entire agreement and understanding of the Parties with respect to the subject matter hereof and thereof and supersede all prior negotiations, correspondence, understandings, agreements and contracts, whether written or oral, among the Parties respecting the subject matter hereof and thereof.

 

21

 

Section 8.10.                          Amendment.  This Agreement (including all exhibits and schedules hereto) may be amended, restated, supplemented or otherwise modified, only by written agreement duly executed by each Party.

 

Section 8.11.                          Waiver.  Each Party may (a) waive any breaches or inaccuracies in the representations and warranties of the other Party contained in this Agreement or in any TE Support Document or (b) waive compliance with any covenant, agreement or condition of the other Party contained in this Agreement but such waiver of compliance with any such covenant, agreement or condition shall not operate as a waiver of, or estoppel with respect to, any subsequent or other failure.  Any such waiver shall be in a written instrument duly executed by the waiving Party.  No failure on the part of either Party to exercise, and no delay in exercising, any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of such right, power or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right, power or remedy. The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law (including, without limitation, the declaration of the Termination Date and a request for cash collateral pursuant to Section 4.03).

 

Section 8.12.                          Governing Law.  This Agreement and any Action that may be based upon, arise out of or relate or be incidental to this Agreement, the negotiation, execution, performance or consummation of this Agreement or the inducement of any Party to enter into this Agreement, whether for breach of contract, tortious conduct or otherwise, and whether now existing or hereafter arising (each, a “Dispute”), will be exclusively governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to any law or rule that would cause the laws of any jurisdiction other than the State of New York to be applied.

 

Section 8.13.                          Waiver of Jury Trial.  To the maximum extent permitted by Applicable Law, each Party irrevocably and unconditionally waives any right to trial by jury in any forum in respect of any Dispute and covenants that neither it nor any of its Affiliates or Representatives will assert (whether as plaintiff, defendant or otherwise) any right to such trial by jury.  Each Party certifies and acknowledges that (a) such Party has considered the implications of this waiver, (b) such Party makes this waiver voluntarily and (c) such waiver constitutes a material inducement upon which the other Party is relying and will rely in entering into this Agreement.  Each Party may file an original counterpart or a copy of this Section 8.13 with any court as written evidence of the consent of each Party to the waiver of its right to trial by jury.

 

Section 8.14.                          Non-Recourse.  All claims, obligations, liabilities or causes of action (whether in contract or in tort, in law or in equity or granted by statute) that may be based upon, in respect of, arise under, out or by reason of, be connected with or relate in any manner to this Agreement, or the negotiation, execution or performance of this Agreement (including any representation or warranty made in, in connection with, or as an inducement to, this Agreement), may be made only against (and are expressly limited to) the entities that are expressly identified as Parties to this Agreement.  No Person who is not a Party, including any past, present or future director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney or representative of, and any financial advisor or lender to, any Party or any director, officer, employee, incorporator, member, partner, manager, stockholder, Affiliate, agent, attorney

 

22

 

or representative of, and any financial advisor or lender to, any of the foregoing (“Nonparty Affiliates”), shall have any liability (whether in contract or in tort, in law or in equity or granted by statute) for any claims, causes of action, obligations or liabilities arising under, out of, in connection with or related in any manner to, this Agreement or based on, in respect of or by reason of this Agreement or its negotiation, execution, performance or breach; and, to the maximum extent permitted by Applicable Law, each Party hereby waives and releases all such liabilities, claims, causes of action and obligations against any such Nonparty Affiliates.

 

Section 8.15.                          Counterparts.  This Agreement may be executed in counterparts, each of which will be deemed an original, but all of which when taken together shall constitute one and the same instrument.  Facsimiles, e-mail transmission of .pdf signatures or other electronic copies of signatures shall be deemed to be originals.

 

ARTICLE IX
 COMPANY REPRESENTATIONS AND WARRANTIES

 

The Company represents and warrants to the Contractor that as of the date hereof:

 

Section 9.01.                          Existence, Compliance with Law.  The Company (a) is duly organized or formed, validly existing and, as applicable, in good standing under the laws of the jurisdiction of its organization, (b) has all requisite power and authority, and the legal right, to own and operate its property, to lease the property it operates as lessee and to conduct the business in which it is currently engaged, (c) is duly qualified as a foreign corporation or other organization and in good standing under the laws of each jurisdiction where its ownership, lease or operation of property or the conduct of its business requires such qualification and (d) is in compliance with all Requirements of Law; except in each case (other than with respect to clause (a)), to the extent that failure to do so could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 9.02.                          Authorization; No Contravention.  The Company has taken all necessary organizational action to authorize the execution, delivery and performance of the TE Support Documents to which it is a party and to authorize the issuances of TE Support Instruments on the terms and conditions of this Agreement and the execution, delivery and performance by the Company of TE Support Documents to which it is a party, the issuance of TE Support Instruments hereunder and the use of the proceeds thereof will not (a) contravene the terms of the Organizational Documents of such Person and (b) violate any Requirement of Law or any Contractual Obligation of such Person; except with respect to any contravention, or violation referred to in clause (b) to the extent such contravention or violation could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 9.03.                          Governmental Authorization; Other Consents.  No consent or authorization of, filing with, notice to or other act by or in respect of, any Governmental Authority or any other Person is required in connection with the issuances of TE Support Instruments hereunder or with the execution, delivery, performance, validity or enforceability of this Agreement or any of the TE Support Documents, except (i) consents, authorizations, filings and notices which have been obtained or made and are in full force and effect and (ii) those consents,

 

23

 

authorizations, filings and notices, the failure of which to obtain or make could not, individually or in the aggregate, reasonably be expected to have a Company Material Adverse Effect.

 

Section 9.04.                          Binding Effect.  This Agreement has been, and each other TE Support Document to which it is a party, when delivered hereunder, will have been, duly executed and delivered by the Company.  This Agreement constitutes, and each other TE Support Document when so delivered will constitute, a legal, valid and binding obligation of such Person, enforceable against each Person that is party thereto in accordance with its terms.

 

[REMAINDER OF THE PAGE INTENTIONALLY LEFT BLANK]

 

24

 

IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed on the date first written above by their respective duly authorized officers.

 

 

	
 
    	
TYCO ELECTRONICS   GROUP S.A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Jeanne   M. Quirk
    
	
 
    	
 
    	
Name:   Jeanne M. Quirk
    
	
 
    	
 
    	
Title:   Authorized Representative
    

 

 

	
 
    	
CROWN SUBSEA COMMUNICATIONS HOLDING, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ Thomas M.   Lynch
    
	
 
    	
 
    	
Name: Thomas M.   Lynch
    
	
 
    	
 
    	
Title: Chief   Executive Officer and Presidentex_128152.htm

 

 

Exhibit 10.7

 

 

DEFINITIVE ASSET PURCHASE AGREEMENT

 

by and between

 

 

 

	
			 

			 

			 

			 

			 

			 

			ACACIA DIVERSIFIED HOLDINGS, INC. (ADH)

			 

			(the “BUYER”)

			 

			 

			and

			 

			 

			MEDAHUB OPERATIONS GROUP, INC., 

			and 

			MEDAHUB, INC.

			 

			(Individually, Collectively And Jointly the “MEDAHUB COMPANIES” or the “SELLER”)

			 

			 

			 

			 

			 

			 

			 

			

 

 

 

July 29, 2017

 

(With an Effective Date of July 3, 2017)

 

 

 

 

 

TABLE OF CONTENTS

 

This Table of Contents does not constitute a part of this Agreement or have

any bearing upon the interpretation of any of its terms or provisions.

                                        

	 	 	 	
			Page

			
	 	 	 	 
	
			RECITALS

				
			5

			
	 	 
	
			PROVISIONS

				
			5

			
	 	 
	
			1

				
			Definitions.

				
			6

			
	 	 	 
	
			2

				
			Basic Transaction.

				
			6

			
	 	 	 
	 	
			a.

				
			Purchase and Sale of Assets.

				
			6

			
	 	
			b.

				
			Excluded Assets.

				
			7

			
	 	
			c.

				
			Method of Conveyance.

				
			7

			
	 	
			d.

				
			Purchase Price.

				
			7

			
	 	
			e.

				
			The Closing.

				
			8

			
	 	
			f.

				
			Allocation.

				
			8

			
	 	
			g.

				
			Bulk Sales Laws; Liabilities.

				
			8

			
	 	
			h.          

				
			Assumed Liabilities; Excluded Liabilities

				
			9

			
	 	
			i.           

				
			Seller's Continuing Access to Data

				
			9

			
	 	 	 	 
	
			3

				
			Representations and Warranties of the Seller.

				
			9

			
	 	 	 
	 	
			a.

				
			Organization, Qualification and Corporate Power.

				
			10

			
	 	
			b.

				
			Authorization of Transaction.

				
			10

			
	 	
			c.

				
			Noncontravention.

				
			10

			
	 	
			d.

				
			Title to Purchased Assets; Condition.

				
			10

			
	 	
			e.

				
			Seller's Notices, Disclaimers, Disclosures

				
			11

			
	 	 	 	 
	
			4

				
			Representations and Warranties of the Buyer.

				
			11

			
	 	 	 
	 	
			a.

				
			Organization of the Buyer.

				
			11

			
	 	
			b.

				
			Authorization of Transaction.

				
			11

			
	 	
			c.

				
			Non-contravention.

				
			11

			
	 	
			d.          

				
			Buyer's Notices, Disclaimers, and Disclosures

				
			12

			
	 	 	 	 
	
			5

				
			Pre-Closing Covenants.

				
			13

			
	 	 	 
	 	
			a.

				
			General.

				
			13

			
	 	
			b.

				
			Due Diligence.

				
			13

			
	 	
			c.

				
			Employees.

				
			14

			
	 	
			d.

				
			Buyer's Employment Agreement with Executive

				
			14

			
	 	
			e.

				
			Leases.

				
			15

			
	 	
			f.

				
			Non-Competition Agreement.

				
			15

			
	 	
			g.

				
			Impositions.

				
			15

			
	 	
			h.

				
			Resignation and Appointment of Officers and Directors.

				
			15

			
	 	 	 	 

 

ii

 

 

	
			6

				
			Post-Closing Covenants.

				
			15

			
	 	 	 
	 	
			a.

				
			Trademarks, Trade Names, Servicemarks.

				
			15

			
	 	
			b.

				
			Financial Statements.

				
			16

			
	 	 	 	 
	
			7

				
			Closing Covenants.

				
			16

			
	 	 	 
	 	
			a.

				
			Buyer Covenants.

				
			16

			
	 	
			b.

				
			Seller Covenants.

				
			16

			
	 	 	 	 
	
			8

				
			Conditions Precedent to Obligation to Close.

				
			17

			
	 	 	 
	 	
			a.

				
			Conditions to Obligation of the Buyer.

				
			17

			
	 	
			b.

				
			Conditions to Obligation of the Seller.

				
			17

			
	 	 	 	 
	
			9

				
			Remedies for Breaches of this Agreement.

				
			18

			
	 	 	 
	 	
			a.

				
			Survival of Representations and Warranties.

				
			18

			
	 	
			b.

				
			Indemnification Provisions for Benefit of the Buyer.

				
			18

			
	 	
			c.

				
			Indemnification Provisions for Benefit of the Seller.

				
			18

			
	 	
			d.

				
			Claims; Assumption of Defense.

				
			19

			
	 	
			e.

				
			Other Indemnification Provisions.

				
			19

			
	 	 	 	 
	
			10

				
			Termination.

				
			20

			
	 	 	 
	 	
			a.

				
			Termination of Agreement.

				
			20

			
	 	
			b.

				
			Effect of Termination.

				
			21

			
	 	 	 	 
	
			11

				
			Miscellaneous.

				
			21

			
	 	 	 
	 	
			a.

				
			Entire Agreement.

				
			21

			
	 	
			b.

				
			Assignment.

				
			21

			
	 	
			c.

				
			Applicable Law; Venue.

				
			21

			
	 	
			d.

				
			Waiver.

				
			22

			
	 	
			e.

				
			Captions.

				
			22

			
	 	
			f.

				
			Counterparts.

				
			22

			
	 	
			g.

				
			Further Acts.

				
			22

			
	 	
			h.

				
			Third Party Beneficiaries.

				
			22

			
	 	
			i.

				
			Severability.

				
			22

			
	 	
			j.

				
			Confidentiality.

				
			23

			
	 	
			k.

				
			Notices.

				
			23

			

 

iii

 

 

 

	
			Exhibits

				 	 	 
	 	 	 	 
	
			Exhibit A

				
			-

				
			Definitions

			
	
			Exhibit B

				
			-

				
			Form of Bill of Sale

			
	
			Exhibit C

				
			-

				
			Form of Intangible Asset Assignment

			
	
			Exhibit E        

				
			-

				
			Form of Non-Competition Agreement

			
	
			Exhibit F

				
			-

				
			Form of License and Permit Transfer Documents 

			
	 	 	 	 
	
			Disclosure Schedules

				 
	 	 	 	 
	
			Exhibit M

				
			-

				
			Section  2(a)

				
			Purchased Assets

			
	
			Exhibit N

				
			-

				
			Section  2(a)

				
			Schedule of Contracts and Agreements

			
	
			Exhibit O

				
			-

				
			Section  2(b)

				
			Excluded Assets   

			
	
			Exhibit P

				
			-

				
			Section  2(d)

				
			Listing of Seller Shareholders and shares of ADH to be issued to each

			
	
			Exhibit Q

				
			-

				
			Section  2(f)

				
			Buyer’s Purchase Price Allocation

			
	
			Exhibit R

				
			-

				
			Section  2(g)

				
			Schedule of Liabilities to be Assumed by Buyer

			
	
			Exhibit S

				
			-

				
			Section  3(d)

				
			Security Interests  

			
	
			Exhibit T

				
			-

				
			Section  5(c)

				
			Schedule of Issues   

			
	
			Exhibit U   

				
			-

				
			Section 6 

				
			Sale and Assignment of Invention

			

 

 

 

 

 

iv

 

 

ASSET PURCHASE AGREEMENT

 

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of July 29, 2017, is entered into by and between Acacia Diversified Holdings, Inc., a Texas corporation (“ADH”); and MEDAHUB Operations Group, Inc. (“MEDAHUB Operations”) and MEDAHUB INC (“MEDAHUB, INC.), (individually, collectively and jointly the “Seller Businesses”). ADH is referred to herein as the “Buyer” or the “Company”. MEDAHUB Operations and MEDAHUB Inc. , are individually, jointly and collectively referred to herein as the “ MEDAHUB” or the “Seller”. The Buyer and the Seller are referred to collectively herein as the "Parties," and individually as a "Party."

 

RECITALS

 

WHEREAS, Seller, in pursuit of the acquisition of its assets and businesses by the Buyer, holds good and valuable title to the various assets (the “Assets”) relating to the operations of its various Businesses and Business Operations (collectively the "Seller Businesses," and individually a "Seller Business") from facilities located at and in the vicinities as follows:

 

	 	
			1.

				
			8370 Whispering Oaks Way, West Palm Beach, Florida 33411 (the "MEDAHUB Operations") known as “MEDAHUB Operations Group, Inc.” and sometimes utilizing the trade name “MEDAHUB,” including the business related thereto (the “MEDAHUB Operations Business”) and the business operations associated therewith (the “MEDAHUB Operations Business”);

			

 

	 	
			2.

				
			8370 Whispering Oaks Way, West Palm Beach, Florida 33411 (the MEDAHUB, Inc.") known as “MEDAHUB Inc.” and sometimes utilizing the trade name “MEDAHUB”, including the business related thereto (the “MEDAHUB, Inc. Business”) and the business operations associated therewith (the “MEDAHUN, Inc. Business Operations”);

			

 

WHEREAS, Buyer is a public holding company in the business of acquiring assets and businesses and operating them as revenue-producing subsidiaries and desires to acquire the Seller Assets and Seller Businesses.

 

WHEREAS, Seller wishes to sell and convey to Buyer or a wholly owned subsidiary of the Buyer, and Buyer for itself or its wholly owned subsidiary wishes to purchase and assume from Seller, the rights, title, and interests of Seller to the Purchased Companies and Assets, subject to the terms and conditions set forth herein.

 

WHEREAS, the Parties desire this transaction to be effective at 12:01 Eastern Time on July 3, 2017 (the “Effective Date”), such as to encompass the entire business year 2017 in the purchase and sale of the Purchased Assets.

 

PROVISIONS

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:

 

 

5

 

 

	 	
			1.

				
			Definitions.

			

 

Certain terms used in this Agreement shall have the meanings set forth in Exhibit A – “Definitions”. For ease of identification only, such terms are identified by initial capitals; provided, however, the inadvertent absence of such identifying characteristic shall be ignored in the construction of this Agreement.

 

	 	
			2.

				
			Basic Transaction.

			

 

	 	
			a.

				
			Purchase and Sale of Assets.

			

 

Subject to the terms and conditions set forth herein, at the Closing Seller shall sell, assign, transfer, convey and deliver to the Buyer, and Buyer shall purchase and acquire from Seller, free and clear of any mortgage, pledge, lien, charge, security interest, claim or other encumbrance (each being an “Encumbrance”), all of Seller’s right, title and interest in and to all of the assets, stock certificates, CMS License, properties, and rights (including goodwill) (the “Assets”) and the businesses associated with those assets (the “Seller Businesses”), wherever located, as described below (collectively, the “Purchased Assets”):

 

	 	
			(i)

				
			the Name and Purchased Assets of “MEDAHUB Operations” set forth in Exhibit M as Section 2(a) of the Disclosure Schedules as of the Effective Date;

			

 

	 	
			(ii)

				
			the Name and Purchased Assets of “MEDAHUB, Inc.” set forth in Exhibit N as Section 2(a) of the Disclosure Schedules as of the Effective Date;

			

 

	 	
			(iii)

				
			all of Seller’s Permits and Licenses, Contracts and Agreements, if any, relating to the Name and Purchased Assets, to the extent transferable or assignable to the Buyer. The Form of License and Permit Transfer Documents to be assigned, if any, are listed in Exhibit F;

			

 

	 	
			(iv)

				
			all prepaid expenses and deposits of Seller relating to the Name and Purchased Assets;

			

 

	 	
			(v)

				
			all inventory, raw materials, finished goods and work-in-progress relating to the Name and Purchased Assets;

			

 

	 	
			(vi)

				
			all data, records and information relating to the Purchased Assets, including without limitation financial records and information and data relating to technical support or operations of the Seller Businesses;

			

 

	 	
			(vii)

				
			all technical information, data, customer lists, supplier lists, price lists, process technology, plans and drawings, and all other Intellectual Property (as defined below) relating to the Name and Purchased Assets, including without limitation Seller’s patents,

			

 

6

 

 

patents pending and trade secrets relating to its Technology, any right to use the names of Sellers Business or their trademarks, trade names, or logos using the Sellers Businesses names; and

 

	 	
			(viii)

				
			all claims under warranties, indemnities or other claims or rights against third parties relating to the Name and Purchased Assets, and all insurance benefits and proceeds arising out of the Purchased Assets after the Closing.

			

 

	 	
			b.

				
			Excluded Assets.

			

 

The Name and Purchased Assets to be acquired by the Buyer from the Seller shall include only the Seller Assets, CMS License and Stock certificates and Seller Businesses described in Section 2(a) above and shall exclude all other assets of the Seller, including, without limitation, those listed in Exhibit O as Section 2(b) of the Disclosure Schedules (the “Excluded Assets”); any assets, books, records or data not used in the Business; any other tangible personal property not listed in Exhibit M. Notwithstanding the foregoing, the Purchased Assets shall not include: 

 

(i) all contracts that are not included in the Purchased Assets.

 

	 	
			c.

				
			Method of Conveyance.

			

 

The sale, conveyance, assignment, transfer, and delivery by the Seller of the Name and Purchased Assets to the Buyer in accordance with Section 2(a) shall be effected at the Closing by the Seller's execution and delivery to the Buyer of a Bill of Sale (the "Bill of Sale") in the form of Exhibit B, and an Intangible Asset Assignment (the “Intangible Asset Assignment”) in the form of Exhibit C, and the Purchased Assets to be conveyed at Closing shall be substantially as listed in Exhibit M, F and Exhibit N (the “Purchased Assets”) in accordance with Section 2(a) hereof as of the Effective Date of this Agreement, less normal wear and tear and depreciation through Closing. The assignment of the Licenses, to the extent assignable and to the extent not accomplished by the execution and delivery of the Bill of Sale, shall be accomplished by the execution at or following Closing of any reasonable necessary consent or assignment documents. The assignment of Seller's interest in the Trade Names and domain names, if any, owned by Seller; the Seller has not filed any fictitious names and has not filed for protection any names pursuant to any State or Federal statutes.

 

d. Purchase Price (the “Purchase Price” or the “Consideration”).

 

In exchange for the Company Names and Purchased Assets, Seller and CEO of Buyer agree to at Closing:

 

(i) issue to the holders of MEDAHUB Operations Group, Inc. Common shares, three hundred thousand (300,000) of Buyer’s Restricted Common stock of ADH for distribution as set forth below (the “Primary New Equity Consideration”) and in Exhibit P as the “Listing of MEDAHUB Operations, the Number of New Shares of Acacia Diversified Holdings, Inc. to be Issued to Each”; and

 

7

 

 

(ii) issue to the holders of MEDAHUB, Inc. Common shares, three hundred thousand (300,000) of Buyer’s Restricted Common stock of ADH for distribution as set forth below (the “Primary New Equity Consideration”) and in Exhibit P as the “Listing of MEDAHUB, Inc. the Number of New Shares of Acacia Diversified Holdings, Inc. to be Issued to Each”; and

 

The issuances in accordance with Sections 2(d)(i) and 2(d)(ii) will be equal to an aggregate of Six Hundred Thousand (600,000) new restricted ADH Common shares issued or made available to Michael McLaughlin (“Mr. McLaughlin”) or his designees outlined in Exhibit P.

 

All newly issued Acacia common shares shall bear restrictive legends except in the event Buyer shall be granted appropriate authority to issue free-trading shares in their stead. In the event ADH shall otherwise become successful in filing a subsequent registration statement of its shares, it shall endeavor to include the shares issued to Seller in an effort to remove any restrictions upon those shares, although there can be no assurance ADH will be successful in doing so.

 

	 	
			e.

				
			The Closing.

			

 

Subject to Section 10, the closing of the transactions provided for in this Agreement (the "Closing") shall occur on or before July 29, 2017, or such earlier date as may be agreed to by the Parties and shall take place at such location as is agreed upon by the Parties, and shall have an effective date (the “Effective Date”) of 12:01 AM eastern standard time July 3, 2017. The final Closing date shall be agreed upon by the Parties and set forth in the Bill of Sale and the Intangible Asset Assignment, the forms of which are attached hereto as Exhibit B and Exhibit C, respectively, and shall be deemed effective for all purposes as of the Effective Date.

 

	 	
			f.

				
			Allocation.

			

 

The Parties agree that Buyer shall determine the allocation of the Purchase Price (and all other capitalizable costs) among the Purchased Assets, the Trade Name and the License for all purposes (including financial accounting and tax purposes) as it deems proper and in accordance with the “Buyer’s Purchase Price Allocation Schedule” attached hereto on Exhibit Q as Section 2(f) of the Disclosure Schedules.

 

	 	
			g.

				
			Bulk Sales Laws; Liabilities of Seller.

			

 

The parties hereby waive Seller’s compliance with the provisions of any applicable bulk sales laws. Seller shall hold a sufficient amount in trust to pay all its creditors as and when their claims come due, and hold and save Buyer harmless against any loss, damage or expense, including reasonable attorneys’ fees and court costs, incurred by Buyer as a result of or attributable to the parties’ failure to comply with such provisions.

 

Seller has paid or will pay or fully provide for all federal and state income and other taxes which relate to the conduct of its business through the date of Closing. There is no pending tax claim or dispute on taxes which might result in a lien against Seller’s Assets.

 

8

 

 

All of Seller’s liabilities or obligations which are either not expressly disclosed or not expressly assumed by Buyer herein or as set forth in Exhibit R as Section 2(g) of the Disclosure Schedules (the “Schedule of Liabilities to be Assumed by Buyer”) shall remain the Seller’s responsibility.

 

h.     Assumed Liabilities; Excluded Liabilities. 

 

(i) As part of the consideration for the Trade Name and Purchased Assets, subject to the terms and conditions set forth herein, Buyer shall assume and agree to pay, perform and discharge only the liabilities and obligations arising after the Closing under the Assigned Contracts, but only to the extent that such liabilities and obligations do not relate to any breach, default or violation by Seller on or prior to the Closing (the “Assumed Liabilities”) as set forth in Exhibit R as Schedule 2(g) of the Disclosure Schedules.

 

(ii) Other than the Assumed Liabilities, Buyer shall not assume any liabilities or obligations of Seller or the Seller Businesses of any kind, whether known or unknown, contingent, matured or otherwise, whether currently existing or hereinafter created. Seller shall, and shall cause each of its Companies to, pay and satisfy in due course all liabilities and obligations which they are obligated to pay and satisfy. All liabilities and obligations of the Seller other than the Assumed Liabilities are sometimes referred to as the “Excluded Liabilities.”

 

	 	
			i.

				
			Seller’s Continuing Access to Data.

			

 

Buyer shall provide to Seller at all times following the Closing and for four full calendar years thereafter complete and unhindered access to Seller’s data and related information, being all data of the Seller Businesses and the Business Operations from the inception up to and including the date of the last transactions of Seller in the winding down of Seller’s Businesses and Business Operations and information associated therewith. Buyer shall provide continuing and unfettered physical and electronic on-site access to the data and information located within Seller’s programs at all times and Buyer shall additionally provide unfettered and unlimited electronic access to Seller’s data and information via virtual private networking (“VPN”) or through such other media as Seller may elect to utilize for that purpose. Seller shall provide Buyer with one login and one associated password granting full access to all aspects of the programs, information, and data associated and included therewith.

 

	 	
			3.

				
			Representations and Warranties of the Seller. 

			

 

The Seller represents and warrants to the Buyer that the statements contained in this Section 3 are correct and complete as of the Effective Date and will be correct and complete as of the Closing (as though the Closing were substituted for the date of this Agreement throughout this Section 4), except as set forth in the disclosure schedules delivered by the Seller to the Buyer on the date hereof and as may be updated as of the

 

9

 

 

Closing (the "Disclosure Schedules"). The Seller will give prompt written notice to the Buyer of any development causing a breach of any of the representations and warranties in Section 3.

 

Seller acknowledges the notices, disclaimers, and disclosures set forth by Seller in Section 4(d) of this Agreement.

 

This Agreement shall be, when duly executed and delivered, a legal and binding obligation of Seller, enforceable in accordance with its terms.

 

	 	
			a.

				
			Organization, Qualification and Corporate Power.

			

 

The Seller Businesses are corporations duly organized, validly existing, and in full force and effect under the laws of the State of Florida. The Seller has full entity power and authority necessary to own the Purchased Assets. The Seller is not in default under or in violation of any provision of its Articles of Incorporation or Articles of Organization, as amended.

 

	 	
			b.

				
			Authorization of Transaction.

			

 

The Seller has full power and authority (including full entity power and authority) to execute and deliver this Agreement and to perform its obligations hereunder upon approval of a majority of its Shareholders by a Written Consent and Notice to Shareholders after the Joint Written Consent reviewed by Buyer or other action of shareholders in compliance with Seller’s Articles of Incorporation and/or Articles or Organization. Without limiting the generality of the foregoing, the Board of Directors of the Seller Businesses by Joint Written Consent has duly authorized the execution, delivery, and performance of this Agreement by the Seller in with shareholder approval. Based on the Joint Written Consent and Notice to Shareholders after the Joint Written Consent reviewed by the Buyer this Agreement constitutes the valid and legally binding obligation of Seller, enforceable in accordance with its terms and conditions.

 

c. Noncontravention.

 

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will, upon appropriate shareholder approval, violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Seller is subject or any provision of its Articles of Incorporation or Articles of Organization, as amended.

 

d. Title to Assets; Condition.

 

The Seller has good and transferable title to and unrestricted possession of, the Purchased Assets, free and clear of all Security Interests, except for the Security Interests listed in Exhibit S (“Security Interests”) of Section 3(d) of the Disclosure Schedule, which Security Interests shall be released at Closing. Except as expressly set forth in Section 3(e) this agreement or otherwise, the company name and assets are being transferred to the buyer "as-is" in their entirety. Seller makes no other warranties, express or implied, including, but not limited to, the warranty of merchantability, fitness for a particular purpose or that the assets sold hereunder do not infringe upon any intellectual property rights held by third parties. Seller further makes no representations or warranties as to the condition or suitability for

 

10

 

 

any particular purpose of the leased premises, including any appurtenances thereto for use of Buyer.

 

	 	
			e.

				
			Seller’s Notices, Disclaimers, Disclosures

			

 

Seller disclaims any warranty, either implied or expressed, in the assets transferred hereby except as to the condition thereof at time of sale. Seller has identified to Buyer in this agreement any known defects or deficiencies in the Purchased Assets to be conveyed hereby.

 

	 	
			4.

				
			Representations and Warranties of the Buyer.

			

 

Buyer represents and warrants to the Seller that the statements contained in this Section 4 are correct and complete as of the Effective Date and will be correct and complete as of the Closing (as though the Closing were substituted for the date of this Agreement throughout this Section 4).

 

Buyer has formed its own opinion as to the value of Seller’s Assets being purchased hereunder. The Parties agree that Seller’s warranties include only the express written warranties that are contained in this Agreement.

 

Buyer acknowledges the notices, disclaimers, and disclosures set forth by Seller in Section 3(d) and 3(e) of this Agreement.

 

This Agreement shall be, when duly executed and delivered, a legal and binding obligation of Buyer, enforceable in accordance with its terms.

 

	 	
			a.

				
			Organization of the Buyer.

			

 

The Buyer consists of a corporation that is duly organized and validly existing and in good standing under the laws of the State of Texas, and one or more subsidiary corporations organized in the State of Florida to take possession of and title to the Purchased Assets to be conveyed and transferred from Seller hereby.

 

	 	
			b.

				
			Authorization of Transaction. Authority to Act.

			

 

The Buyer represents and warrants that it has full power and authority (including full organizational power and authority if applicable) to execute and deliver this Agreement and to perform its obligations hereunder. This Agreement constitutes the valid and legally binding obligations of the Buyer, enforceable in accordance with its terms and conditions. The execution, delivery, and performance of this Agreement and all other agreements contemplated hereby have been duly authorized by the Buyer.

 

	 	
			c.

				
			Non-contravention.

			

 

Neither the execution and the delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will violate any constitution, statute, regulation, rule, injunction, judgment, order, decree, ruling, charge, or other restriction of any government, governmental agency, or court to which the Buyer is subject or any provision of its Articles of Incorporation, as amended. The Buyer does not need to give any notice to, make any filing with, or obtain any authorization, consent, or approval of any government or governmental agency in order for the Parties to consummate the transactions contemplated by this

 

11

 

 

Agreement except as may be required by the United States Securities and Exchange Commission and the Texas Business Organizations Code.

 

	 	
			d.

				
			Buyer’s and Seller’s Notices, Disclaimers, Disclosures 

			

 

NOT AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITY

 

THIS AGREEMENT AND ANY RELATED BUSINESS PLAN, PROPOSAL, EXECUTIVE SUMMARY OR OTHER RELATED INFORMATION IS NOT A PART OF ANY PROSPECTUS OR PRIVATE PLACEMENT MEMORANDUM AND DOES NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY SECURITY. ANY OFFER IS MADE ONLY BY THE PROSPECTUS OR PRIVATE PLACEMENT MEMORANDUM. ANY INFORMATION OR STATEMENTS RELATED TO CONSIDERATION TO ENTER INTO THIS OR ANY OTHER AGREEMENT WITH BUYER IS PROVIDED FOR CONVENIENCE AND REFERENCE ONLY. SHOULD ANY CONFLICT ARISE WITH THE INFORMATION CONTAINED IN THIS AGREEMENT OR OTHER RELATED INFORMATION AND THE INFORMATION CONTAINED IN ANY PROSPECTUS OR PRIVATE PLACEMENT MEMORANDUM OF THE BUYER’S COMPANY, THE OFFEREE MUST RELY SOLELY UPON THE STATEMENTS AND FACTS CONTAINED IN THE PROSPECTUS OR MEMORANDUM IN MAKING ANY DECISIONS.

 

SAFE HARBOR STATEMENT

 

Certain statements included in these materials and/or other reference materials related to the information upon which Seller or its agents may have relied in making a decision to enter into this Agreement and related agreements, including but not limited to any references or statements incorporated therein by reference, includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements, including information and statements regarding anticipated financial results, potential success of anticipated acquisitions, business combinations or operations, product marketing and potential market opportunities are subject to certain risks, trends, and uncertainties that could cause actual results to differ materially from those projected, expressed or implied by such forward-looking statements. This Agreement, including any business proposals and any related presentations may include certain past and future performance results and projections based upon actual but unaudited financial information. Reliance upon this past performance information provides no assurance that future performance will not differ materially from the historical results or operating projections shown. The statements are based on assumptions about important factors, including general business conditions; market trends; competition; weather; trends in product sales and sales of other diverse offerings; business development activities, including acquisitions; economic conditions, including exchange rate and interest rate fluctuations; federal, state, and local laws; litigation developments and other risk factors. Many of these risk factors are outside of the Buyer’s 

 

12

 

 

control, and as such, they involve risks which are not currently known to the Buyer that could cause actual results to differ materially from forecasted results. The forward-looking statements in any documents provided to Seller and those attached to, associated with, or related thereto are made as of the date of publication hereof, and the Company does not undertake to update its forward-looking statements.

 

NO LEGAL OR FINANCIAL ADVICE BEING GIVEN

 

Acacia Diversified Holdings, Inc. and/or its officers or directors (the "Buyer") has effected certain legal and financial research at its own expense in an attempt to facilitate certain understandings that are or appear to be relevant to any transaction proposed or effectuated hereby. The understandings gained by Buyer as a result of these investigations, including certain understandings and information provided by Seller, may be reflected in portions of this Agreement and/or any information provided to Seller, including but not limited to any proposals relative to this Agreement (the “Information”), but are not intended to be relied upon by Seller as accurate or to take the place of proper due diligence and legal, financial, and other professional advice ("Advice"). The Seller in this transaction is and has been advised to seek its own Advice and to satisfy itself as to any considerations contained in this Agreement or the related Information, including but not limited to the status of any of the Buyer’s tax loss carryforward.

 

Buyer takes no responsibility for legal, accounting, or other advice upon which the Seller may rely to determine the suitability of this transaction for its own purposes, and Seller agrees to hold Buyer harmless in all regards.

 

	 	
			5.

				
			Pre-Closing Covenants.

			

 

The Parties agree as follows with respect to the period between the execution of this Agreement and the Closing:

 

	 	
			a.

				
			General.

			

 

Each of the Parties will use commercially reasonable efforts to take all actions and to do all things necessary, proper, or advisable in order to consummate and make effective the transactions contemplated by this Agreement (including satisfaction, but not waiver, of the closing conditions set forth in Section 8).

 

	 	
			b.

				
			Due Diligence.

			

 

Prior to Closing and execution of this Agreement, the Seller has allowed the Buyer access to the Premises and the facilities located thereon in order that the Buyer may have a full opportunity to conduct a reasonable investigation of such Premises and facilities and the business operating records relevant to this transaction (the “Access”) during the due diligence process (the "Due Diligence Process"). Buyer hereby acknowledges that it has enjoyed full Access for the purposes of the Due Diligence Process at all reasonable times since the execution of the Revised Letter of Intent by the Parties on April 22, 2017. Buyer has conducted such Due Diligence Process Buyer felt necessary.

 

13

 

 

Similarly, prior to Closing and execution of this Agreement, the Buyer has allowed the Seller Access to the Premises and the facilities located thereon in order that the Seller may have a full opportunity to conduct a reasonable investigation of such Premises and facilities and the business operating records relevant to this transaction during the Due Diligence Process. Seller hereby acknowledges that it has enjoyed full Access for the purposes of the Due Diligence Process at all reasonable times since the execution of the Letter of Intent by the Parties on April 22, 2017. Seller has conducted such Due Diligence process Seller felt necessary.

 

	 	
			c.

				
			Employees.

			

 

Seller shall be responsible for all severance obligations (including obligations to provide health or retirement benefits), if any, related to the Seller’s employees that arise (i) as a result of Seller's actions on or before the Effective Date or (ii) as a result of the termination of employment in connection with Closing.

 

Seller has no pension, profit sharing, annuity, savings, 401(k), matching funds programs, or similar or related retirement plan for any of its employees.

 

Seller does not have any obligation under any collective bargaining agreement or any other contract with a labor union and is not a party to any executive or employees’ compensation plan or agreement or compensatory plan or agreement with any independent contractors, or its employees or agents, including, without limitation, any pension, retirement, profit sharing, stock purchase, stock option, bonus, or savings plan.

 

To the best of Seller’s knowledge, and except as expressly set forth on Exhibit T (the “Schedule of Issues”) annexed hereto, no strike, picketing, or similar action is pending or threatened against Seller by its employees or any labor union. Seller further represents that to the best of its knowledge and belief, it is not engaged in any unfair labor practices in connection with the operation of the business. Seller will not be responsible for any violations arising or determined subsequent to Closing which have been caused by any act of, or failure to act by Buyer. Seller represents that, to its knowledge and belief, it has not had any solicitation by any labor organization within the preceding three years.

 

All of Seller’s employment-related liabilities accrued as of the date of Closing, including Seller’s accrued obligations for vacation, personal time off, sick pay, retirement benefits, employer portion of taxes, and all other benefits or obligations unsatisfied as of the date of Closing and due to or on behalf of any employee of Seller, whether or not continuing forward as an employee of Buyer, shall be the sole responsibility of Seller, and Buyer assumes no responsibility therefor. Seller shall pay or allow as a credit to Buyer any such benefits accrued to its employees at Closing.

 

	 	
			d.

				
			Buyer’s Employment Agreement With Executive. 

			

 

Seller acknowledges that the CEO of Buyer, Richard K. Pertile (“Mr. Pertile”), has heretofore been retained under an Employment Agreement dated February 20th, 2017 and is currently retained under an Employment Agreement dated February 20, 2017, those events will be reported in their entirety by the Company on upcoming Reporting. On May 15th, 2016 the board of directors and the shareholders of the Company authorized and approved the current Employment Agreement by and

 

14

 

 

between the Company and Mr. Pertile until December 31, 2019. That extended Employment Agreement contains certain provisions that may be triggered by actions contemplated in this Agreement, and which could have a negative economic impact on the Company.

 

	 	
			e.

				
			Leases.

			

 

At Closing, Seller if allowed shall further assign any interest it holds in any equipment and/or operating leases, contracts, and/or agreements pertaining to its Business in Exhibit N (“Schedule of Contracts and Agreements”) insofar as Buyer shall accept the assignments thereof.

 

	 	
			f.

				
			Non-Competition Agreement.

			

 

The Buyer and the Seller will enter into a non-competition agreement (the "Non-Competition Agreement") in the form attached hereto as Exhibit E, which will prohibit the Seller and Buyer and any of their employees, officers, directors, agents, or contractors from, directly or indirectly, engaging in the Business within 500 miles of: Tampa, Florida; for a period of three (3) years commencing from the Closing. In the event Buyer or Seller shall employ or otherwise contract Seller, Buyer or any of Seller’s or Buyer’s agents or assigns to perform services in Buyer’s business operations, Buyer shall thereupon release them as to such employment from the obligations of any Non-Competition Agreement during the period of any such employment or contract to perform services, insofar as and such that Seller, Buyer or Seller’s or Buyer’s agents or assigns may perform tasks only for Buyer without violating the terms of the Non-Competition Agreement.

 

g. Impositions

 

All taxes and assessments, general and special, and all other impositions, ordinary and extraordinary, of every kind and nature whatsoever, which may be levied, assessed, charged or imposed upon Seller for periods that extend from prior to Closing until after the Closing shall be paid by Seller.

 

	 	
			h.

				
			Resignation and Appointment of Officers and Directors 

			

 

Prior to Closing, the Board of Directors of Buyer shall approve by resolution all the terms and conditions of this Agreement and may recommend the ratification thereof to the shareholders of the Company. Effective with the Closing, the remaining directors of ADH, being Mr. Richard Pertile, Neil Gholson, Gary Roberts, Jr. and Danny R. Gibbs, may appoint Michael McLaughlin and Michael McLaughlin may accept a position as a Director of the Company and Chair of a few committees of the Board of Directors. All Directors shall serve until the election and qualification of their successors. Until the expiration and fulfillment of the terms all nominees for directorships of the Company other than Mr. Pertile shall be nominated to serve for terms no less than one year.

 

	 	
			6.

				
			Post-Closing Covenants.

			

 

	 	
			a.

				
			Trademarks, Trade Names, Service Marks.

			

 

At Closing, Seller shall grant to Buyer the use of all its Trademarks, Trade Names, Service Marks, if any, and variations thereof. Within thirty (30) days following the Closing, the Seller shall change the names of its various entities making such other change or designation thereto so as not to utilize the current Trade Names or any

 

15

 

 

confusingly similar names. Any such change of name(s) of Seller shall not preclude or abridge Seller’s right to continue to wind up the affairs of its business in the most efficient and commercially reasonable manner, nor shall it preclude Buyer from using in its newly-structured business operations, in any manner as it shall deem appropriate, those same assigned names of Seller. In this regard, Seller shall provide to Buyer any affidavits, waivers, or other documentation required for the assignment of any such trade names to Buyer for its own use. Buyer shall make a best-efforts basis to assist Seller in the prompt and efficient collection of all Seller’s outstanding receivables related to the Seller Businesses, and shall regularly and promptly deposit to Buyer’s bank accounts all funds that have been collected for Seller’s accounts. The collected receivables, as Assets, shall inure to the benefit of Buyer under the various terms contained in this Agreement. Financial Statements.

 

	 	
			b.

				
			Financial Statements

			

 

Seller shall provide at Closing or within 45 days thereafter the corporate tax returns for 2015, 2016 and the stub period of January 1, 2017 to the closing date (July 3, 2017) reflecting its financial operations for all fiscal years ended since its formation. Seller shall ascertain that there have been no material changes in its financial condition since issuance of the tax return information. Pending receipt of the tax return information, Seller shall remain available to Buyer at all times to provide any and all relevant information at sellers expense, in the form presently existing, , requested by Buyer in support of the financial information relative to this transaction, including but not limited to additional financial information required of Seller by the United States Securities and Exchange Commission (the “SEC”).

 

	 	
			7.

				
			Closing Covenants.

			

 

a. Buyer Covenants.

 

At Closing, the Buyer shall be required to take the following actions:

 

	 	
			(i)

				
			deliver the Purchase Price as specified in Section 2(d) hereto

			

 

	 	
			(ii)

				
			accept the Bill of Sale;

			

 

	 	
			(iii)

				
			accept the Intangible Asset Assignment;

			

 

	 	
			(iv)

				
			accept the assignment of the Seller's interest in the Trademarks, Trade Names and patents, to the extent not accomplished by the Bill of Sale;

			

 

	 	
			(v)

				
			accept the assignment of the Seller's interest in the Licenses, to the extent assignable and to the extent not accomplished by the Bill of Sale; and,

			

 

	 	
			(vi)

				
			accept the assignment of all leases and contracts as set forth in Exhibit N.

			

 

	 	
			b.

				
			Seller Covenants.

			

 

At Closing, the Seller shall be required to take the following actions:

 

	 	
			(i)

				
			accept the delivery of the Purchase Price as specified in Section 2(d) hereof;

			

 

	 	
			(ii)

				
			execute and deliver the Bill of Sale;

			

 

16

 

 

	 	
			(iii)

				
			execute and deliver the Intangible Asset Assignment;

			

 

	 	
			(iv)

				
			execute and deliver the Non-Competition Agreement;

			

 

	 	
			(vii)

				
			execute and deliver any reasonable necessary consent or assignment documents related to the Seller's interest in the Trademarks and Trade Names to the extent not accomplished by the execution and delivery of the Bill of Sale; and

			

 

	 	
			(viii)

				
			execute and deliver any reasonable necessary consent or assignment documents related to the Seller's interest in the Permits and Licenses, to the extent assignable and to the extent not accomplished by the execution and delivery of the Bill of Sale, the forms of which are listed in Exhibit F (the “Forms of License and Permit Transfer Documents”).

			

 

	 	
			(ix)

				
			execute and deliver any reasonable necessary consent or assignment documents related to assignment of leases and contracts listed in Exhibit N.

			

 

	 	
			8.

				
			Conditions Precedent to Obligation to Close.

			

 

	 	
			a.

				
			Conditions to Obligation of the Buyer.

			

 

The obligation of the Buyer to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

	 	
			(i)

				
			the representations and warranties of Seller set forth in Section 3 shall be true and correct in all material respects at and as of the Closing;

			

 

	 	
			(ii)

				
			the Seller's covenants set forth in Section 8(b) shall have been performed; and

			

 

	 	
			(iii)

				
			no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would: (a) prevent consummation of any of the transactions contemplated by this Agreement; (b) cause any of the transactions contemplated by this Agreement to be rescinded following consummation; or (c) materially and adversely affect the right of the Buyer to own the Purchased Assets (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect).

			

 

The Seller may waive any condition specified in this Section 8(a) if it executes a writing so stating at or prior to the Closing. 

 

	 	
			b.

				
			Conditions to Obligation of the Seller.

			

 

The obligation of the Seller to consummate the transactions to be performed by it in connection with the Closing is subject to satisfaction of the following conditions:

 

	 	
			(i)

				
			the representations and warranties of Buyer set forth in Section 4 shall be true and correct in all material respects at and as of the Closing;

			

 

17

 

 

	 	
			(ii)

				
			the Buyer's covenants set forth in Section 8(a) shall have been performed;

			

 

	 	
			(iii)

				
			no action, suit, or proceeding shall be pending or threatened before any court or quasi-judicial or administrative agency of any federal, state, local, or foreign jurisdiction or before any arbitrator wherein an unfavorable injunction, judgment, order, decree, ruling, or charge would: (a) prevent consummation of any of the transactions contemplated by this Agreement; or (b) cause any of the transactions contemplated by this Agreement to be rescinded following consummation; and (c) materially and adversely affect the right of the Seller to sell, transfer, and convey the Purchased Assets (and no such injunction, judgment, order, decree, ruling, or charge shall be in effect).

			

 

The Buyer may waive any condition specified in this Section 8(b) if it executes a writing so stating at or prior to the Closing.

 

	 	
			9.

				
			Remedies for Breaches of this Agreement.

			

 

	 	
			a.

				
			Survival of Representations and Warranties.

			

 

All of the representations and warranties of the Parties contained in this Agreement, and the rights to indemnity for any breach thereof, shall survive the Closing and continue in full force and effect for a period of one (1) year following Closing.

 

	 	
			b.

				
			Indemnification Provisions for Benefit of the Buyer. 

			

 

The Seller shall indemnify and defend the Buyer and its officers, directors, shareholders, members, employees, agents and Affiliates (collectively, the "Buyer Indemnified Parties") against, and hold the Buyer Indemnified Parties harmless from, any and all Adverse Consequences incurred or suffered by any of them resulting from:

 

(i) any breach of any representation or warranty of the Seller in this Agreement;

 

(ii) any breach of any covenant or obligation of the Seller in this Agreement; and

 

(iii) any third party claims asserted against the Buyer Indemnified Parties arising out of the ownership of the Assets or the operation of the Business by the Seller prior to the Effective Date. Any claim for indemnification against the Seller shall be brought within one (1) year following the Closing.

 

	 	
			c.

				
			Indemnification Provisions for Benefit of the Seller.

			

 

The Buyer shall indemnify and defend the Seller and its officers, managers, shareholders, members, employees, agents and Affiliates (collectively, the "Seller Indemnified Parties") against, and hold the Seller Indemnified Parties harmless from, any and all Adverse Consequences incurred or suffered by any of them resulting from:

 

(i) any breach of any representation or warranty made by the Buyer in this Agreement;

 

18

 

 

(ii) any breach of any covenant or obligation of the Buyer in this Agreement; and

 

(iii) any third party claims asserted against the Seller Indemnified Parties arising out of the ownership of the Assets or the operation of the Business Operations by the Buyer following the Closing. Any claim for indemnification against the Seller shall be brought within one (1) year following the Closing.

 

	 	
			d.

				
			Claims; Assumption of Defense.

			

 

As soon as is reasonably practicable after becoming aware of a claim for indemnification under this Agreement (including a claim or suit by a third party), the Indemnified Party shall promptly give written notice to the Indemnifying Party of such claim, which notice shall specify in reasonable detail the facts relating to the claim. The Indemnifying Party may, at its own expense, (i) participate in the defense of any claim, suit, action or proceeding and (ii) upon notice to the Indemnified Party at any time during the course of any such claim, suit, action or proceeding, assume the defense thereof, including selecting counsel for the matter; provided, however, that counsel selected by the Indemnifying Party is reasonably satisfactory to the Indemnified Party. If the Indemnifying Party assumes such defense, the Indemnified Party shall have the right to participate in the defense thereof and to employ counsel, at its own expense, separate from the counsel employed by the Indemnifying Party. Counsel selected by the Indemnifying Party shall have the lead role in any subsequent litigation. Whether or not the Indemnifying Party chooses to assume the defense of any such claim, suit, action or proceeding, all of the Parties hereto shall cooperate in the defense or prosecution thereof.

 

	 	
			e.

				
			Other Indemnification Provisions.

			

 

The foregoing indemnification provisions are in addition to any other remedies provided by law for a breach of any representation, warranty, or covenant contained in this Agreement or otherwise relating to the transactions contemplated by this Agreement.

 

	 	
			10.

				
			Termination.

			

 

	 	
			a.

				
			Termination of Agreement.

			

 

Certain of the Parties may terminate this Agreement as provided below:

 

	 	
			(i)

				
			the Buyer and the Seller may terminate this Agreement by mutual written consent at any time prior to the Closing;

			

 

	 	
			(ii)

				
			the Buyer may terminate this Agreement by giving written notice to the Seller at any time prior to the Closing:

			

 

(a) in the event the Seller has breached any representation, warranty, or covenant contained in this Agreement in any material respect, the Buyer has notified the Seller in writing of the breach, and the breach has continued without cure for a period of thirty (30) days after the notice of breach or

 

19

 

 

(b) if the Closing shall not have occurred on or before July 29, 2017 (unless otherwise extended by mutual written consent of the Parties hereto), by reason of the failure of any condition precedent under Section 8(a) (unless the failure results primarily from the Buyer itself breaching any of its representations, warranties, or covenants contained in this Agreement or the Buyer has waived any condition specified in a writing so stating at or prior to Closing);

 

	 	
			(iii)

				
			the Seller may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing:

			

 

(a) in the event the Buyer has breached any representation, warranty, or covenant contained in this Agreement in any material respect, the Seller has notified the Buyer in writing of the breach, and the breach has continued without cure for a period of thirty (30) days after the notice of breach or

 

(b) if the Closing shall not have occurred on or before July 29, 2017 (unless otherwise extended by mutual written consent of the Parties hereto), by reason of the failure of any condition precedent under Section 8(b) (unless the failure results primarily from the Seller breaching any of its representations, warranties, or covenants contained in this Agreement, or the Seller has waived any condition specified in a writing so stating at or prior to Closing);

 

	 	
			(iv)

				
			the Buyer may terminate this Agreement if the Seller or any Affiliate shall

			

 

(a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property,

 

(b) be unable, or admit in writing its inability, to pay its debts generally as they mature,

 

(c) make a general assignment for the benefit of its creditors or any one of them,

 

(d) be dissolved or liquidated,

 

(e) become insolvent (as such term may be defined or interpreted under any applicable statute),

 

(f) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or

 

(g) take any action for the purpose of effecting any of the foregoing; and

 

	 	
			(v)

				
			the Seller may terminate this Agreement by giving written notice to the Buyer at any time prior to the Closing: if the Buyer or any Affiliate shall

			

 

20

 

 

(a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property,

 

(b) be unable, or admit in writing its inability, to pay its debts generally as they mature,

 

(c) make a general assignment for the benefit of its creditors or any one of them,

 

(d) be dissolved or liquidated,

 

(e) become insolvent (as such term may be defined or interpreted under any applicable statute),

 

(f) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it, or

 

(g) take any action for the purpose of effecting any of the foregoing.

 

	 	
			b.

				
			Effect of Termination.

			

 

If any Party terminates this Agreement pursuant to Section 10(a), all rights and obligations of the Parties shall terminate without any Liability of any Party to any other Party, except for any Liability of any Party then in breach.

 

	 	
			11.

				
			Miscellaneous.

			

 

	 	
			a.

				
			Entire Agreement.

			

 

This Agreement, together with the attached Exhibits and the Disclosure Schedules, constitute the entire understanding of the Parties with respect to the subject matter hereof and supersedes all prior negotiations, discussions, undertakings, and agreements between the Parties. This Agreement may be amended or modified only by a writing executed by the Parties. With the same formalities as this Agreement was signed.

 

	 	
			b.

				
			Assignment.

			

 

This Agreement and any of its rights, interests, and obligations hereunder may not be assigned or transferred in whole or in part by any Party. Any purported assignment without the express written consent of the other Party is void.

 

	 	
			c.

				
			Applicable Law; Venue.

			

 

This Agreement shall be governed by and construed in accordance with the laws of the State of Florida as to all matters, including, but not limited to, matters of validity, construction, effect, and performance. Any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction may be brought in the following order:

 

(i) in the courts of Pinellas County, Florida; or,

 

(ii) if it has or can acquire jurisdiction, in the United States District Court for the Southwest District of Florida in Clearwater, Florida; or,

 

21

 

 

(iii) if the United States District Court in Tampa is not available, then in the United States District Court for District of Florida in Tampa, Florida or such other venue as the Parties may agree to in writing.

 

Each of the parties irrevocably submits to the exclusive jurisdiction of each such court in the order given in any such Proceeding, waives any objection it may now or hereafter have to venue or to convenience of forum, agrees that all claims in respect of the Proceeding shall be heard and determined only in any such court, and agrees not to bring any Proceeding arising out of or relating to this Agreement or any Contemplated Transaction in any other court. The parties agree that either or both of them may file a copy of this paragraph with any court as written evidence of the knowing, voluntary, and bargained agreement between the parties irrevocably to waive any objections to venue or to convenience of forum. Process in any Proceeding referred to in the first sentence of this Section 10(c) may be served on any party anywhere in the world.

 

	 	
			d.

				
			Waiver.

			

 

Any waiver under this Agreement must be in writing. Any waiver of a particular default shall constitute a waiver of such default only and not of any other default by the non-waiving Party. Any waiver of a specific right or remedy under this Agreement shall constitute a waiver of such right or remedy only and not of any other right or remedy of the waiving Party.

 

	 	
			e.

				
			Captions.

			

 

The subject headings of the various sections of this Agreement are included for purposes of convenience only and shall not affect the construction or interpretation of any of its provisions.

 

	 	
			f.

				
			Counterparts.

			

 

This Agreement may be executed in one or more counterparts, including by facsimile or email transmission of pdf documents with request for assurance of receipt in a manner typical with respect to communications of that type, all of which shall be considered one and the same agreement, binding on all Parties, notwithstanding that all Parties are not signatories to the same counterpart.

 

	 	
			g.

				
			Further Acts.

			

 

Consistent with the terms and conditions hereof, each Party shall execute and deliver all instruments, certificates, and other documents and shall perform all other acts which any other Party may reasonably request in order to carry out this Agreement and the transactions contemplated hereby.

 

	 	
			h.

				
			Third Party Beneficiaries.

			

 

Nothing herein expressed or implied is intended or shall be construed to confer upon or give any Person other than the Parties, and their permitted successors and assigns, any rights or remedies under or by reason of this Agreement.

 

	 	
			i.

				
			Severability.

			

 

The Parties agree that if any part, term, or provision of this Agreement shall be found illegal and unenforceable by any court of law, the remaining provisions shall be severable, valid, and enforceable in accordance with their terms so long as the

 

22

 

 

legal and economic terms of this Agreement remain the same. The Parties in good faith shall attempt to replace any term found illegal and unenforceable and if they cannot, a court of competent jurisdiction shall provide a substitute term for the term found to be illegal or unenforceable.

 

	 	
			j.

				
			Confidentiality.

			

 

Except as otherwise required by law including, without exception, Federal Securities laws, the Parties agree to keep the existence and content of this Agreement and the transactions contemplated herein confidential.

 

	 	
			k.

				
			Notices.

			

 

Notice from one Party to another relating to this Agreement shall be deemed effective if made in writing and delivered to the recipient's address or facsimile number set forth below by any of the following means:

 

(i) hand delivery,

 

(ii) registered or certified mail, postage prepaid, with return receipt requested,

 

(iii) Fed Ex or like overnight courier service, or

 

(iv) facsimile, or other wire transmission with request for assurance of receipt in a manner typical with respect to communications of that type.

 

Notice made in accordance with this Section shall be deemed delivered on receipt if delivered by hand or wire transmission, upon receipt of return receipt if mailed by registered or certified mail, or the next business day after deposit with an overnight courier service if delivered for next day delivery. The Parties agree that electronic mail shall not constitute a permitted form of notice under this Section.

 

	 	
			(i)

				
			If to the Seller, addressed to:

			

 

MEDAHUB, Inc. and MEDAHUB Operations Group, Inc.

ATTN: Michael McLaughlin, President / Owner

8370 Whispering Oaks Way STE 1

West Palm Beach, FL. 33411

 

	 	
			(ii)

				
			If to the Buyer, addressed to:

			

 

Acacia Diversified Holdings, Inc.

Attn: Richard K. Pertile, CEO

13575 58th Street North #138

Clearwater, FL. 33760

 

With a copy to:

 

Howard P. Ross, Esq., B.C.S.

Battaglia, Ross, Dicus & McQuaid, P.A.

 

23

 

 

5858 Central Avenue

St Petersburg, FL 33707

 

Any Party may, from time to time, by written notice to the other Party, designate a different address, which shall be substituted for the one specified above for such Party.

 

 

 

 

[Signature pages follows]

 

 

 

 

 

24

 

 

IN WITNESS WHEREOF, the Parties have executed this Asset Purchase Agreement on the date first above written.

 

 

	
			SELLER:  

				
			 

				
			WITNESS AS TO MEDAHUB, INC.

			
	
			 

				
			 

				
			 

			
	
			MEDAHUB, INC. (“Michael McLaughlin”)                    

			A Florida corporation

				
			 

				
			  /s/ Rya C. Tewis                                     

			
	
			 

				
			 

				
			Signature

			
	
			By:  /s/ Michael McLaughlin                    

				
			 

				
			 

			
	
			Michael McLaughlin 

				
			 

				
			  Rya C. Tewis                                           

			
	
			 

				
			 

				
			Printed Name

			
	
			 

				
			 

				
			 

			
	
			Its:     President and Owner                      

				
			 

				
			  Tallahassee, FL 32303                             

			
	
			 

				
			 

				
			City, State, Zip

			
	
			 

				
			 

				
			 

			
	
			 

				
			 

				
			 

			
	
			SELLER: 

				
			 

				
			WITNESS AS TO MEDAHUB O.G. Inc:

			
	
			 

				
			 

				
			 

			
	
			MEDAHUB Operations Group,. Inc.

			(“Michael McLaughlin”)   

				
			 

				
			 

			
	
			 

				
			 

				
			  /s/ Rya C. Tewis                                         

			
	
			 

				
			 

				
			Signature

			
	
			By:  /s/ Michael McLaughlin                    

				
			 

				
			 

			
	
			Michael McLaughlin

				
			 

				
			  Rya C. Tewis                                             

			
	
			 

				
			 

				
			Printed Name

			
	
			 

				
			 

				
			 

			
	
			Its:       President / Owner                         

				
			 

				
			  Tallahassee, FL 32303                               

			
	
			 

				
			 

				
			City, State, Zip

			

 

 

 

 

25

 

 

EXHIBIT A

 

DEFINITIONS

 

 

"Adverse Consequences" means all actions, suits, proceedings, hearings, investigations, charges, complaints, claims, demands, injunctions, judgments, orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid in settlement, Liabilities, Security Interests, obligations, Taxes, liens, losses, expenses, and fees, including court costs and reasonable attorneys' fees and expenses.

 

"Affiliate" means, with respect to any Person, any other Person controlling, controlled by, or under common control with the first Person, or, with regard to a Person who is an individual, a member of such Person's family, whether by blood or marriage. As used in this definition, the term "control" means (a) with respect to any corporation or other entity having voting shares or the equivalent and elected directors, managers, or Persons performing similar functions, the ownership or power to vote more than 50% of shares or the equivalent having the power to vote in the election of such directors, managers, or Persons performing similar functions, and (b) with respect to any other entity, the ability to direct its business and affairs.

 

"Agreement" has the meaning set forth in the preface to the Agreement.

 

“Access” has the meaning set forth in Section 5(b) of the Agreement.

 

"Assets" has the meaning set forth in the Recitals of the Agreement and in Section 2(a) and Exhibit M and M1 of the Agreement.

 

"Bill of Sale" has the meaning set forth in Section 2(c) and Exhibit B of the Agreement.

 

"Business" has the meaning set forth in the Recitals of the Agreement.

 

“Business Operations” has the meaning set forth in the Recitals of the Agreement

 

"Buyer" has the meaning set forth in the preface of the Agreement.

 

"Buyer Indemnified Parties" has the meaning set forth in Section 9(b) of the Agreement.

 

"Closing" has the meaning set forth in Section 2(e) of the Agreement.

 

"Data" has the meaning set forth in Section 2(a)(iii) of the Agreement.

 

"Disclosure Schedule" has the meaning set forth in Section 3 and Section 4 of the Agreement.

 

"Due Diligence Process" has the meaning set forth in Section 5(b) of the Agreement.

 

"Effective Date" has the meaning set forth in the preface of the Agreement and as of the date specified in the Bill of Sale and the Intangible Asset Assignment.

 

A-1

 

 

“Excluded Assets” has the meaning set forth in Section 2(b) of the Agreement and in Exhibit O of the Agreement.

 

"Indemnified Party" means the Person entitled to, or claiming a right to, indemnification under Section 9 of the Agreement.

 

"Indemnifying Party" means the Person claimed by the Indemnified Person to be obligated to provide indemnification under Section 9 of the Agreement.

 

"Intangible Asset Assignment" has the meaning set forth in Exhibit C of the Agreement.

 

"Lease" has the meanings set forth in Section 5(d) of the Agreement.

 

"Liability" means any liability or obligation of whatever kind or nature (whether known or unknown, whether asserted or unasserted, whether absolute or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, and whether due or to become due), including any liability for Taxes.

 

"License" has the meaning set forth in Section 2(a)(iv) of the Agreement.

 

"Loan Documents" has the meaning set forth in Section 2(d)(ii) of the Agreement

 

"MEDAHUB, Inc.", and MEDAHUB Operations Group, Inc.”, have the meanings set forth in the Recitals of the Agreement.

 

"Non-Competition Agreement" has the meaning set forth in Section 5(e) of the Agreement.

 

"Party" and "Parties" have the meanings set forth in the preface of the Agreement.

 

"Person" means an individual, a proprietorship, a partnership, a corporation, a limited liability company, an association, a joint stock company, a trust, a joint venture, an unincorporated organization, or any other business enterprise or any governmental entity (or any department, agency or political subdivision thereof).

 

"Premises" has the meaning set forth in the Recitals of the Agreement.

 

"Purchased Assets" has the meaning set forth in the Recitals of the Agreement and in Section Exhibit M as Section 2(a) of the Disclosure Schedules of the Agreement

 

"Purchase Price" has the meaning set forth in Section 2(d) of the Agreement.

 

"Security Interests" means any mortgage, pledge, lien, encumbrance, charge, hypothecation, claim, restriction on use, or other security interest of any kind, or any rights of others, however

evidenced or created (including any agreement to give any of the foregoing, any conditional sale or other title retention agreement, any lease in the nature thereof, and the filing of any agreement to give any financing statement under the lien notice records or other similar legislation of any jurisdiction).

 

A-2

 

 

"Seller" has the meaning set forth in the preface of the Agreement.

 

"Seller Business" and "Seller Businesses" has the meaning set forth in the Recitals of the Agreement.

 

"Seller Indemnified Parties" has the meaning set forth in Section 9(c) of the Agreement.

 

“Trademark” and "Trade Name" has the meaning set forth in Section 2(a)(vii) of the Agreement.

 

 

 

 

A-3

 

 

EXHIBIT B

 

FORM OF AS-IS BILL OF SALE 

 

The MEDAHUB OPERATIONS GROUP, INC. (the "Seller"), does hereby sell, transfer, assign and convey AS-IS unto Acacia Diversified Holdings, Inc. and any of its subsidiaries (the "Buyer"), the Purchased Assets, Seller's interest in the Trademarks, Company Name, Trade Names, if any, and, to the extent assignable, the License, each as defined in a certain Asset Purchase Agreement entered into by and between the Buyer and the Seller dated July 29, 2017 with an effective date of July 3, 2017 (the “Effective Date”) (the "Agreement"), in consideration of payment by the Buyer of the Purchase Price (as defined in the Agreement), the receipt and sufficiency of which the Seller does hereby acknowledge.

 

The terms of the Agreement, including, but not limited to, the Seller's representations, warranties, covenants, agreements and indemnities relating to the Purchased Assets, are incorporated herein by this reference.

 

The Seller hereby covenants that the Seller will do such further acts and execute and deliver all such transfers, assignments, conveyances, powers of attorney, and assurances reasonably requested by the Buyer, from time to time, for better conveying and confirming unto the Buyer the entire right, title and interest of the Seller in the Purchased Assets, the License and Seller's interest in the Company Name, and Trade Name hereby sold, transferred, assigned and conveyed to the Buyer.

 

It is understood that the Seller, contemporaneously with the execution and delivery of this Bill of Sale, may be further executing other instruments of transfer, the purpose of which is to supplement, facilitate, or otherwise implement the transfers intended hereby.

 

IN WITNESS WHEREOF, the undersigned has executed and delivered this Bill of Sale this 29th day of July, 2017, with the Effective Date of the 3rd day of July, 2017.

 

 

SELLER:

 

 

MEDAHUB, INC.

A group of Florida corporations

 

By:  /s/ Michael McLaughlin                           

       Michael McLaughlin

       Its: President, CEO, and owner

 

 

B-1

 

 

EXHIBIT C

 

FORM OF INTANGIBLE ASSET ASSIGNMENT

 

THIS INTANGIBLE ASSET ASSIGNMENT AGREEMENT (the “Assignment”) is made and entered into as of the 29th day of July, 2017 with an effective date of July 3, 2017 (the “Effective Date”) by and between MEDAHUB, a consortium of entities located in the State of Florida (“Assignor”) and Acacia Diversified Holdings, Inc., a Texas corporation (“Assignee”). This Assignment is made pursuant to the Asset Purchase Agreement (the “Agreement”) dated as of the date hereof by and between Assignor, Assignee, and certain other parties. Any capitalized term used but not defined in this Assignment shall have the meaning, if any, set forth in the Agreement.

 

WHEREAS, prior to the Effective Date hereof, Assignor was the sole owner, either in its own name or as the sole owner of its wholly-owned Corporations of the entire right, title and interest in and to all intangible assets designated as owned by Assignor on Schedule 1.01 of the Disclosure Schedules to the Agreement and any other intangible assets (including, without limitation, Intellectual Property) owned by Assignor which are part of the Purchased Assets under the Agreement (the “Intangible Assets”), and Assignor has agreed to transfer all of its right, title, and interest in and to the Intangible Assets to Assignee pursuant to the Agreement.

 

NOW, THEREFORE, as per the terms of the Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Assignor hereby transfers and assigns to Assignee its entire worldwide right, title and interest in and to the Intangible Assets, including all registrations and applications therefore, as well as all renewals and extensions of registrations that are or may be secured by Assignee, its successors, assigns or other legal representatives, for Assignee’s own use and enjoyment, and for the use and enjoyment of Assignee’s successors, assigns or other legal representatives.

 

Assignor agrees to take all other appropriate actions and execute any additional future documents required to implement and effectuate the assignment and transfer of the Intangible Assets to Assignee, including the rights to administer the web site associated with any domain names included in the Intangible Assets (the “Domain Names”). Assignor agrees to cooperate with Assignee and follow Assignee’s instructions in order to transfer the Domain Names and the related administration rights to Assignee in a timely manner. Assignor will promptly prepare and transmit the necessary documentation and/or correspond with the appropriate domain name registration authority, Internet service provider and/or governmental entities to authorize transfer of the Domain Names. Assignor further agrees to cooperate as necessary with Assignee to finalize transfer of the Domain Names.

 

This Assignment shall inure to the benefit of, and be binding upon the parties, their successors and assigns.

 

This Assignment may be executed in one or more counterparts, each of which will be deemed an original but all of which together will constitute one and the same agreement. The parties may deliver an executed copy of this Assignment or any other document contemplated by this Assignment by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Assignment or such other document.

 

 

[Signature page follows]

 

C-1

 

 

IN WITNESS WHEREOF, the parties have executed this Assignment as of the date first above written.

 

 

	Assignor:   	 	Assignee:
	 	 	 
	The MEDAHUB Companies, et al 	 	Acacia Diversified Holdings, Inc.  
	 	 	 
	 	 	 
	By:   /s/ Michael McLaughlin                                	 	By:   /s/ Richard K. Pertile                        
	Name: Michael McLaughlin 	 	Name: Richard K. Pertile
	Title:   President / CEO / Owner	 	Title:   Chief Executive Officer

                           

 

        

 

 

 

C-2

 

 

EXHIBIT E

 

FORM OF NON-COMPETITION AGREEMENT

 

 

 

 

 

 

 

[see attached on following page]

 

 

 

 

 

 

 

 

 

 

 

E-1

 

 

Non-Competition Agreement

 

This Non-Competition And Restrictive Covenant Agreement (this “Agreement”), is made and entered into as of July 29, 2017, with an effective date (the “Effective Date”) of July 3, 2017 between Acacia Diversified Holdings, Inc., a Texas corporation (together with its subsidiaries and affiliates, “Acacia” or the “Company”), and Michael McLaughlin, a Florida resident (“McLaughlin”).

 

WHEREAS, the execution and delivery of this Agreement by the Company and McLaughlin is a condition to the closing of the transaction contemplated by the Definitive Asset Purchase Agreement dated as of the date hereof, by and among the Company (as “Buyer”) and the MEDAHUB (as “Seller”) (the “Purchase Agreement”).

 

WHEREAS, McLaughlin has acquired, through his ownership and management of the MEDAHUB COMPANIES and his relationship as a director, officer, Owner and/or employee thereof, intimate knowledge regarding the business, customers, suppliers, information and processes of or relating to the Seller.

 

WHEREAS, McLaughlin will benefit from the closing of the transactions contemplated in the Purchase Agreement, which benefits constitute adequate and sufficient consideration for the covenants and obligations made in this Agreement.

 

WHEREAS, McLaughlin and the Company desire to enter into this Agreement on the terms and conditions hereafter set forth.

 

NOW THEREFORE, in consideration of the covenants and promises contained herein, and given pursuant to the Purchase Agreement, the parties hereto agree as follows:

 

1.     ACKNOWLEDGEMENT; INCORPORATION OF RECITALS. McLaughlin hereby acknowledges receipt of adequate and sufficient consideration from the Company for the covenants and agreements made in this Agreement. The recitals set forth above are, by this reference, incorporated into and deemed a part of this Agreement.

 

2.     NON-COMPETE AND NON-SOLICITATION

 

(a)     Non-Competition. During the Restricted Term, McLaughlin agrees that neither he nor any of his Related Persons will, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person other than the Company, invest in, own, manage, operate, finance, control, advise, render services to or guarantee the obligations of any Person engaged in or planning to become engaged in the Business as hereafter defined (“Cannabis Business”).

 

(b)     Non-Solicitation. During the Restricted Term, McLaughlin agrees that neither he nor his Related Persons, in any manner, anywhere in the Restricted Territory, directly or indirectly, on behalf of himself or any other Person will (i) solicit the business of any Person who is a customer or demonstrably identified potential customer of the Seller or the Company (individually and collectively the “Joint Parties”) for the products or services then provided or sold by the Joint Parties in any manner that could be likely to result in such Person curtailing or canceling any business or contracts that such Person has or may come to have with the Joint Parties or in any way interfere with the relationship between the Joint Parties and such Person; (ii) cause, induce or attempt to cause or induce any actual or potential customer, supplier, employee, consultant or other business relation of the Joint Parties to cease doing business with the Company, to deal with any competitor of the Company, or in any way interfere with its relationship with the Company; or (iii) hire, employ, engage, retain or attempt to hire, employ, engage or retain any employee or independent contractor of the Company or in any way interfere with the relationship between the Company and any of its employees or independent contractors.

 

E-2

 

 

3.     CONFIDENTIAL INFORMATION.

 

(a)     Confidential Information; Restriction. McLaughlin recognizes and acknowledges that certain assets of the Joint Parties, including without limitation information regarding customers, pricing policies, methods of operation, proprietary computer programs, sales, products, profits, costs, markets, key personnel, formulae, product applications, technical processes, potential acquisition or joint venture candidates and trade secrets which may have been made available to McLaughlin, whether in writing, in computer form, reduced to a tangible form in any medium, or conveyed orally, and which gives the Company a competitive advantage over other individuals or companies which do not have access to this information (hereinafter called “Confidential Information”) are valuable, special, and unique assets of the Company. McLaughlin acknowledges that the Company is the owner of the Confidential Information and agrees not to dispute, contest or deny any such ownership rights of the Company. McLaughlin shall not use, divulge, reproduce, distribute, reverse engineer or disclose (in any way or in any manner) any Confidential Information to any person, firm, corporation, association, or any other entity for any reason or purpose whatsoever, directly or indirectly, except as may be required by law, unless and until such Confidential Information becomes publicly available other than as a consequence of the breach by McLaughlin of his confidentiality obligations hereunder. McLaughlin agrees to take all reasonable precautions to prevent the inadvertent disclosure of the Confidential Information to any unauthorized person; agrees not to transport or cause to be transported the Confidential Information outside the premises of the Company, except as necessary or desired to carry out McLaughlin’s duties as prescribed by the Company; agrees not, without the Company’s express authorization, to participate directly or indirectly in the development, marketing, sale, licensing or other exploitation of software or other products or services which embody or are derived from Confidential Information; and agrees that in the event McLaughlin becomes aware that any Person is taking or threatens to take any action which would compromise the Confidential Information or violate any of the foregoing provisions were that Person subject to the provisions of this Section 3, promptly advise the Company of all facts concerning such action or threatened action. McLaughlin expressly agrees that the disclosures prohibited hereby include disclosure of similarities or possible similarities between the Confidential Information and the work product of another person or company.

 

(b)     Protective Order. In the event that McLaughlin is required to disclose any Confidential Information pursuant to an order, regulation, ruling, governmental request, summons or subpoena, McLaughlin shall promptly notify the Company of such pending disclosure and reasonably cooperate in assisting the Company (at the Company’s expense) in seeking a protective order or in objecting to such request, summons or subpoena with regard to the Confidential Information.

 

(c)     Cooperation. McLaughlin agrees to reasonably cooperate with the Company in the prosecution or defense of all threatened claims or actual litigation in which the Company is or may become a party, whether now pending or hereafter brought, in which McLaughlin has knowledge of relevant facts or issues. McLaughlin shall be promptly reimbursed reasonable out-of-pocket expenses incurred by him due to his cooperating with the prosecution or defense of any litigation for the Company as applicable, including but not limited to reasonable attorney’s fees incurred in the furtherance of those actions, provided that he provides the Company with reasonable documentation of such expenses.

 

4.     ASSIGNMENT. McLaughlin hereby assigns and transfers to the Company any right, title or interest in any inventions, designs, discoveries, works of authorship, creations, ideas, developments, improvements, trade secrets (including, without limitation, trade secrets relating to the POS cannabis technology and tracking systems) or software relating to the Business (collectively, “Inventions”), that McLaughlin may have as of the date hereof or may have acquired on or before the date hereof, in whole or in part. This obligation is limited to any Inventions that relate to the Company’s Business or demonstrably anticipated business, whether or not the Inventions were created, originated, developed or conceived of by McLaughlin solely or jointly with others and whether or not the Inventions are protected or protectable under applicable patent, trademark, service mark, copyright or trade secret laws. McLaughlin hereby

 

E-3

 

 

transfers McLaughlin’s rights in such Inventions free of all encumbrances and restrictions, and will promptly take any action, including executing and delivering any documentation, deemed necessary by the Company to effectuate the transfer or prosecution of ownership rights in the United States and any other country as the Company may request. McLaughlin acknowledges and agrees that the Inventions will be considered part of the Confidential Information.

 

5.     INJUNCTIVE RELIEF; REMEDIES. McLaughlin acknowledges and agrees that any breach or threatened breach by McLaughlin of Section 2, Section 3 or Section 4 of this Agreement will cause irreparable harm and continuing damages to the Company and that the remedy at law for any such breach or threatened breach will be inadequate. Accordingly, in addition to any other remedies that may be available to the Company at law or in equity in such event, the Company shall be entitled to seek and obtain, from any court of competent jurisdiction, an injunction or injunctions, without bond or other security and without having to show that money damages will be inadequate or impossible to determine, enjoining and restricting the breach or threatened breach. McLaughlin acknowledges, however, that no specification in this Agreement of a specific legal or equitable remedy may be construed as a waiver of or prohibition against pursuing other legal or equitable remedies in the event of a breach of this Agreement by McLaughlin.

 

6.     SEVERABILITY AND JUDICIAL MODIFICATION. If any clause, term or provision of this Agreement or the application thereof to any person or circumstance shall to any extent be held invalid or unenforceable, the remainder of this Agreement and the application of such clause, term or provision to persons or circumstances other than those to which it is invalid and unenforceable, shall not be affected thereby, and each clause, term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. If any court of competent jurisdiction refuses to enforce any clause, term, or provision of this Agreement as written, the other clauses, terms, and provisions shall stand, and the court shall modify the clause, term, or provision at issue to the minimum extent necessary to make it enforceable under applicable law, and shall enforce it as so modified.

 

7.     GENERAL.

 

(a)     Waivers. No delay or omission by either party hereto in exercising any right, power or privilege hereunder shall impair such right, power or privilege, nor shall any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. No waiver of any provision of this Agreement shall in any event be effective unless the same shall be in writing, executed by the party against whom enforcement of such waiver is sought, and any waiver so given shall be effective only in the specific instance and for the specific purpose for which given.

 

(b)     Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The parties may deliver an executed copy of this Agreement or any other document contemplated by this Agreement by facsimile or other electronic transmission to the other parties, and such delivery will have the same force and effect as the delivery of an original signed copy of this Agreement or such other document.

 

(c)     Governing Law; Waiver of Jury Trial. This Agreement shall be construed in accordance with and governed by the laws of the State of Florida applicable to agreements made and to be performed wholly within such jurisdiction, without regard to principles of conflicts of laws. Each of the parties hereto hereby irrevocably and unconditionally waives any and all right to trial by jury of any claim or cause of action in any suit arising out of or related to this Agreement or the transactions or events contemplated hereby or any course of conduct, course of dealing, statements (whether verbal or written) or actions of any party hereto. The parties hereto each agree that any and all such claims and causes of action shall be tried by the court without a jury. Each of the parties hereto further waives any

 

E-4

 

 

right to seek to consolidate any such lawsuit in which a jury trial has been waived with any other lawsuit in which a jury trial cannot or has not been waived.

 

(d)     No Strict Construction. The language used in this Agreement will be deemed to be the language chosen by McLaughlin and the Company to express their mutual intent, and no rule of strict construction will be applied against McLaughlin or the Company.

 

(e)     Headings. The section and subsection heading of this Agreement are included for purposes of convenience only, and shall not affect the construction or interpretation of any of its provisions.

 

8.     DEFINITIONS. For purposes of this Agreement, the following definitions shall apply:

 

“Business” means any business the same or similar to that of the Company, including but not limited to the business of growing, cultivating, managing, acquiring, processing, or selling industrial or medical grade hemp or cannabis or oils extracted therefrom; processing, combining packaging, transporting or selling the extracted oils or medications, dietary supplements, pharmaceuticals or nutraceuticals derived therefrom; transporting products, cash or persons for hire or for internal use; and all related processes, systems, POS and tracking and technology.

 

“Control” of an entity includes service as a director, officer, partner, manager, executor or trustee (or in a similar capacity) or beneficial ownership of 10% or more of the outstanding equity (or the right to vote or receive profits, dividends or distributions).

 

“Person” means an individual, partnership, corporation, business trust, limited liability company, limited liability partnership, joint stock company, trust, unincorporated organization, association, joint venture or other entity or a governmental body.

 

“Related Person”

 

(a)     in the case of a natural person, each member of such Person’s immediate family, by blood or by marriage, including spouses, parents, step-parents, siblings, children, and step-children;

 

(b)     any Person that, directly or indirectly Controls, is Controlled by or is under common Control with, a Person.

 

“Restricted Term” means the period commencing on the date hereof and ending five (5) years thereafter.

 

“Restricted Territory” means anywhere within 300 miles of any location the Company or any of its subsidiaries does business.

 

IN WITNESS WHEREOF, and intending to be legally bound hereby, the parties hereto have caused this Non-Compete and Restrictive Covenant Agreement to be duly executed as of the date and year first above written.

 

 

 

[Signature page follows]

 

 

 

E-5

 

 

ACACIA DIVERSIFIED HOLDINGS, INC.

 

By:   /s/ Richard K. Pertile                         Date: June 23, 2017 

Name: Richard K. Pertile

Its: President and CEO

 

 

Michael McLaughlin

By:  /s/ Michael McLaughlin                      Date: June 23, 2017 

Name: Michael McLaughlin

Address: 8370 Whispering Oaks

West Palm Beach, FL. 33411

 

 

 

 

 

 

 

E-6

 

 

EXHIBIT F

 

 

   FORM OF LICENSE AND PERMIT TRANSFER DOCUMENTS

 

 

 

 

 

 

Acacia Needs a copy of License and transfer papers

 

 

 

 

 

 

 

 

 

 

F-1

 

 

EXHIBIT M

 

DISCLOSURE SCHEDULE

 

 

SECTION 2(a)

Purchased Assets

 

 

MEDAHUB OPERATIONS GROUP, INC.

 

 

 

	 	
			●

				
			Center for Medicare and Medicaid Services (CMS) Clinical Laboratory Improvement Amendments (CLIA) CLIA Florida Certificate since November 2011

			

	 	
			●

				
			 

			

	 	
			o

				
			Clinical Laboratory Improvement Amendments (CLIA) of 1988 are United States federal regulatory standards that apply to all clinical laboratory testing performed on humans in the United States, except clinical trials and basic research.

			

	 	
			o

				
			The Clinical Laboratory Improvement Amendments (CLIA) regulate laboratory testing and require clinical laboratories to be certificated by their state as well as the Center for Medicare and Medicaid Services (CMS) before they can accept human samples for diagnostic testing.

			

	 	
			o

				
			 

			

	 	
			●

				
			HIPAA Compliancy

			

	 	
			●

				
			Founded in April of 2012, Debt Free and 100% owned by seller

			

 

 

 

 

 

 

M-1

 

 

SECTION 2(a)

 

Purchased Assets

 

 

 

MEDAHUB, INC.

 

 

 

MEDAHUB, INC (Asset Summary)

 

	 	
			●

				
			MEDAHUB Service Cloud Platform

			

	 	
			o

				
			Software Libraries 

			

	 	
			o

				
			Databases

			

	 	
			o

				
			APP Front End

			

	 	
			o

				
			CORE Database

			

	 	
			o

				
			Database Core Engine

			

	 	
			o

				
			Universal APIs

			

	 	
			o

				
			UNI INDEX Engine

			

	 	
			o

				
			HL7 HIPAA Compliancy

			

	 	
			o

				
			Formulation Engine

			

	 	
			o

				
			GEOTRAC RFI

			

	 	
			o

				
			Virtual Surveillance

			

	 	
			o

				
			LAB OPEN API 

			

	 	
			o

				
			MEDAHUB URLs

			

	 	
			o

				
			ASP Core UNI API Interface

			

	 	
			●

				
			5 Major Patent Applications to be Filed in 2017

			

	 	
			●

				
			Founded in October of 2011, Debt Free and 100% owned by seller

			

 

 

 

 

M-2

 

 

EXHIBIT N

 

DISCLOSURE SCHEDULE

 

SECTION 2(a)

Schedule of Contracts and Agreements

 

Seller represents this listing to be all contracts, services, equipment or vehicle leases, service providers and other general business obligations of the Seller Business that are to be assigned and/or transferred to Buyer.

 

Service providers and vendors:

 

	
			Contract, Lease, or Agreement

				 	
			Assignment Accepted by Buyer

			
	 	 	 
	
			The obligations created after the closing of the asset purchase transaction:

				 	 
	 	 	 
	
			Michael McLaughlin will provide for one full year beginning the effective date, 15 hours per month (180 hours cumulative) at no additional charge and at the discretion of the Company, support, guidance and direction for implementing this technology, including sourcing. To have production platform set up and fully operational at no additional cost on production server.

				 	
			Buyer will hold 50% - 300,000 of the restricted common shares of Acacia Diversified Holdings, Inc. until software is on production server and fully operation and a moinimum of six (6) months has past since the closing date and 90 hours of support has been exhausted.

			
	 	 	 
	
			Seller will present the software that will be on a final production sever to the state of Florida with the company as the companies internal fully owned software technology.

				 	 

 

 

 

 

N-1

 

 

EXHIBIT O

 

DISCLOSURE SCHEDULE

 

Section 2(b)

EXCLUDED ASSETS

 

The following assets are specifically excluded from this sale transaction:

 

1.     Any and all assets not specifically described in Section 2(a) of the Agreement, and all assets not listed in Exhibit M as Section 2(a) of the Disclosure Schedules.

 

2.     Any assets, books, records or data not required to be used in the business.

 

3.     Any of Seller's leasehold improvements as would inure to the benefit of the landlord of the premises in the normal course.

 

 

 

 

 

 

 

 

O-1

 

 

EXHIBIT P

 

DISCLOSURE SCHEDULE

 

SECTION 2(d)

Listing of the Number of New Restricted

Shares of Acacia Diversified Holdings, Inc. to be Issued.

 

 

 

 

 

 600,000 restricted shares of Acacia Diversified Holdings, Inc. to:

 

 Michael McLaughlin

Address: 8370 Whispering Oaks Way

 West Palm Beach, FL. 33411

 

 

 

 

 

 

P-1

 

 

EXHIBIT Q

 

DISCLOSURE SCHEDULE

 

SECTION 2(f)

Buyer’s Purchase Price Allocation

 

 

 

All shares of MedaHub, Inc. and MedaHub Operations Group, Inc. shall be exchanged for six hundred thousand (600,000) new restricted common shares in Acacia Diversified Holdings, Inc.

 

 

 

 

 

 

 

 

 

 

 

Q-1

 

 

EXHIBIT R

 

DISCLOSURE SCHEDULE

 

SECTION 2(g)

Schedule of Liabilities to be Assumed by Buyer if any?

 

 

 

 

NONE

 

 

 

 

 

 

 

 

R-1

 

 

EXHIBIT S

 

DISCLOSURE SCHEDULE

 

SECTION 3(d)

Security Interests

 

 

At Closing and thereafter, Buyer shall be responsible for assuming the following security interests or obligations on certain leases, operating agreements, vendor agreements and contracts, and other trade obligations directly related to the operation of the Seller Businesses as assigned and/or transferred from Seller to Buyer in the Schedules in Exhibit N hereof and as set forth below:

 

 

 

 

 

NONE

 

 

 

 

 

 

 

S-1

 

 

EXHIBIT T

 

DISCLOSURE SCHEDULE

 

Section 5(c)

SCHEDULE OF ISSUES

 

 

 

None are known as of this date.

July 29, 2017

 

 

 

 

 

 

T-1

 

 

EXHIBIT “U”

 

SALE AND ASSIGNMENT OF INVENTION

 

Whereas, Michael McLaughlin, a United States citizen residing at [8370 Whispering Oaks, West Palm Beach, FL. 33411] (the “Inventor”) who is the sole inventor of an invention for a computer software platform and source code for pharmaceutical production, processing, and manufacture of pharmaceuticals, including product tracking, transportation, HIPPA compliance, cyber security, revenue generation and tracking [Service point Cloud based GEOTRAK seed to sale, with POS, HIPAA compliant, software technology including all codes] (the “Invention”), and desires to sell and assign the full right, title, and interest in the Invention to Assignee by this Sale and Assignment; and

 

Whereas Michael McLaughlin will provide for one full year beginning the effective date, 15 hours per month (non-cumulative) at no additional charge and at the discretion of the Company, support, guidance and direction for implementing this technology, including sourcing and have production platform set up and fully operational at no additional cost.

 

Whereas Assignee desires to acquire the full right, title, and interest in the Invention from Inventor.

 

Therefore, for good and valuable consideration:

 

The Inventor does sell, assign, and transfer unto the Assignee the full, complete, and exclusive right, title, and interest in the Invention. This Sale and Assignment includes the transfer of all rights relating to and concerning the Invention and conveys to Assignee ownership of the Invention worldwide. This Invention Sale and Assignment is inclusive of all intellectual property rights appurtenant thereto, including the exclusive right to use, license, assign, manufacture, import and export, and offer for sale the Invention, including all those rights secured by letters patent under the laws of the United States and that of foreign countries, including the right to seek redress in law and equity, including those of the Inventor prior to this Sale and Assignment. Inventor retains no interest in the Invention unto himself. Inventor expressly warrants that Inventor is the sole inventor of the Invention and has granted no other person or entity any right or interest whatsoever as security, license, assignment, or otherwise in or to the Invention, and that Inventor holds the full lawful title and the right to transfer the Invention to Assignee. Assignee is assigned the right to record this Sale and Assignment with the appropriate governmental recording authorities as notice of Assignee’s ownership by assignment. Inventor shall execute all papers necessary for Assignee to perfect the Invention as letters patent in the United States and worldwide.

 

U-1

 

 

In the event that Inventor is unwilling or unable to execute any papers necessary for Assignee to patent the Invention, Inventor grants power of attorney to Assignee through its designated authorized representatives to execute such papers in lawful pursuit and perfection of any patents worldwide.

 

Wherefore the parties do agree.                                

Effective Date: July 3, 2017

 

 

  /s/ Michael McLaughlin                         

Signature of Inventor

Michael McLaughlin

 

SWORN TO and SUBSCRIBED before me this     23rd     day of July 2017, by Michael McLaughlin who is personally known by me or who produced identification and who took an oath that all representations herein are accurate to the best of his knowledge and belief.

 

 

  /s/ Natalie Sheffield                   

NOTARY PUBLIC

 

Seal:

 

 

 

 

U-2

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