Document:

Exhibit 10.1

SHARE EXCHANGE AND REORGANIZATION AGREEMENT, dated as of August 19, 2018 (the  "AGREEMENT"), between Jericho Associates, Inc., a Nevada corporation   (the "Company");   and  VegasWinners, LLC,  a Nevada limited liability company (“VWI”) (which will be reorganized as VegasWinners, Inc. if required by this transaction),  and Wayne Allyn Root, the sole shareholder of VWI (“WAR”).

INTRODUCTION

WHEREAS the Company desires to acquire all of the issued and outstanding shares,, of VWI  capital stock (the "VWI Stock) solely in exchange for an aggregate of 5 shares of authorized,  but heretofore   unissued, shares of common  stock,  par value $0.001 per share,  of the Company (the "Company Shares”); and

WHEREAS, WAR desires  to  exchange  all of his VWI Stock solely for the Company Shares, and .

WHEREAS, prior to the date  hereof,  the  respective  boards  of  directors  of  each  of  the Company  and  VWI  have,  and WAR has, approved and adopted this Agreement.  It is the intent of the parties hereto that the transactions contemplated hereby be structured  so as to qualify as a tax-free  exchange  under  Subchapter C of the Internal  Revenue Code of 1986, as amended (the "CODE"), and the provisions of this Agreement will be interpreted in a manner consistent with this intent.

NOW, THEREFORE,  in consideration of the premises and mutual representations,  warranties and covenants herein contained,  the parties hereby agree as follows:

ARTICLE I

ACQUISITION AND EXCHANGE OF SHARES

Section 1.01 The Agreement.  The parties hereto hereby agree that the Company shall acquire all of the issued and outstanding shares of VWI  solely in exchange for an aggregate of  5 shares of authorized, but heretofore unissued, shares of the Company. The parties hereto agree that at the closing of the transactions contemplated  by  this  Agreement  (the "Closing"):

(a) VWI  will  become a  wholly-owned  subsidiary  of the Company subject to the conditions  and provisions of Section 1.03 hereof;

Section 1.02 Exchange of Shares.

(a) At the Closing,  The Company will cause to be issued and be delivered to WAR,   a stock  certificate representing an aggregate of 5 shares of the Company’s common stock (or 300,000 shares of Concrete Leveling Systems, Inc. (”CLEV”), if the contemplated share exchange between the Company and CLEV has been completed by the Closing Date), in exchange for all of the issued and outstanding shares of VWI  Stock, which VWI shares will be delivered to the Company at the Closing.

(b) All shares of the Company’s common stock to be issued  hereunder  shall be deemed "Restricted Securities" as defined in paragraph (a) of Rule 144 under the Securities Act of 1933, as amended (the  "Securities Act"), and WAR hereby  represents that he is acquiring said shares for investment  purposes only and without the intent to make a further  distribution of such shares.  All shares of the Company’s common stock to be issued under the terms of this Agreement shall be issued pursuant to an exemption from the  registration requirements of the Securities Act, under Section 4(2) of the Securities Act and the rules and regulations promulgated thereunder.  Certificates representing the shares of the Company’s common stock to be issued hereunder  shall bear a  restrictive legend in substantially the following form:

 

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THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED FOR SALE, SOLD, OR OTHERWISE DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE REGISTRATION PROVISIONS OF SUCH ACT OR PURSUANT TO AN  EXEMPTION FROM SUCH REGISTRATION PROVISIONS, THE AVAILABILITY OF WHICH IS TO BE ESTABLISHED TO THE SATIS- FACTION OF THE COMPANY.

Section 1.03 Conditions to Closing.

(a) The Company shall have received a minimum of one million one hundred thousand dollars ($1,100,000) of proceeds (the “Proceeds”) from a receipt of funds from the sale of the Company’s securities, which Proceeds shall be made available to VWI for the purposes set forth in Exhibit 1.03(a) to this Agreement.

(b) VWI shall have commenced and continued its business operations (“Operations”) for a period of not less than 90 days from the date upon which VWI is in receipt of the Loan defined in Section 1.04 below. “Operations” means, the daily business operation of the business of VWI, as described in the Business Plan dated _____, 2018 (a copy of which is attached to this Agreement as Exhibit 103(b) to this Agreement).

Section 1.04 Interim Loan

(a) The Company shall loan to VWI, the sum of $300,000 (the “Loan”) from the first $300,000 of the $1,100,000 set forth in Section 1.03 above.

(b) VWI shall use the proceeds of the Loan for “Start-up Expenses”, in its sole discretion, in connection with the following Start-up Expenses. The amounts and categories of the Start-up Expenses may change, in the sole discretion of VWI, provided the Start-up Expenses are used for the purposes of VWI’s business. VWI will provide Jericho with an updated list of categories and the amounts of the Start-up Expenses expended in connection with each category at Jericho’s request:

	
a. Purchase of Client Data Base and Advertising

	 	
 

	
100,000

	 
	
b. Build the Website

	 	 	
25,000

	 
	
c. Purchase of communications equipment

	 	 	
15,000

	 
	
d. Legal, accounting and licensing

	 	 	
20,000

	 
	
e. Consulting fees and Salary

	 	 	
60,000

	 
	
f. Credit card processing deposit and misc. expenses

	 	 	
60,000

	 

The Loan shall be evidenced by a Secured Promissory Note (the “Note”) and Security Agreement, and shall be secured by all of the assets of VWI.  The Note shall be non-interest bearing and non-recourse to WAR and shall have a Maturity Date of 36 months from the date of this Agreement.

Section 1.05 Closing.  The Closing will take place at a date and time (the "Closing Date") and place to be mutually agreed upon by the parties hereto, and will be subject to the  provisions of this  Agreement.  At the Closing:

(a) WAR will deliver to the Company stock certificates or other evidences representing all of the issued and outstanding shares of VWI Capital Stock, duly endorsed, so as to make the Company the holder thereof, free and clear of all liens, claims and other encumbrances;

(b) The Company will deliver to WAR, a stock certificate representing an aggregate of 5 shares of the Company’s common stock, which certificates will bear a standard restrictive legend in the form customarily used with restricted securities and as set forth in Section 1.02(c) above;

 

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(c) The Company will deliver an Officer’s Certificate, dated the Closing Date, certifying that all representations, warranties, covenants, and conditions set forth herein by the Company are true and correct as of, or have been fully performed and complied with by, the Closing Date; and

(d) VWI will deliver an Officer's Certificate, dated the Closing Date, certifying that all representations, warranties, covenants and conditions set forth herein by VWI are true and correct as of, or have been fully performed and complied with by, the Closing Date;

(e) The Company and WAR shall execute an Employment Agreement, in the form of which is attached to this Agreement as Exhibit 1.05(e).,

Section 1.06 Right of First Refusal. In the event the Company or its successor elects to sell VWI, and the Company or its successor receives a good faith offer from an unrelated third party, WAR shall have the Right of First Refusal (“ROFR”) for a period of (30) days from the date WAR receives a copy of the offer from the Company or its successor, to match the substantive terms of the offer. If the substantive terms of the offer change, the 30 day period for the ROFR shall re-commence upon WAR’s receipt of the revised offer.

ARTICLE II.

REPRESENTATIONS AND WARRANTIES OF VWI and WAR

The VWI and WAR hereby represent and warrant to the Company as follows:

Section 2.01 Organization, Standing, Subsidiaries, Etc.

(a) VWI is a corporation duly organized and existing in good standing under the laws of the State of Nevada and has all requisite power and authority (corporate and other) to carry on its business, to own or lease its properties and assets, to enter into this Agreement and to carry out the terms hereof and thereof. Copies of the Articles of Incorporation and By-Laws of VWI that have been delivered to the Company prior to the execution of this Agreement are true and complete and have not since been amended or repealed.

(b) VWI has no subsidiaries or direct or indirect interest (by way of stock ownership or otherwise) in any firm, corporation, limited liability company, partnership, association or business.

Section 2.02 Qualification. VWI is duly qualified to conduct business as a foreign corporation and is in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the condition (financial or otherwise), properties, assets, liabilities, business operations or results of operations of the VWI taken as a whole (the “ Condition of the VWI”).

Section 2.03 Capitalization of VWi. The authorized capital stock of VWI consists of one hundred(100) shares of VWI Common Stock, of which 100 shares are issued and outstanding. Such outstanding shares of VWI Common Stock are duly authorized, validly issued, fully paid and non-assessable, and none of such shares have been issued in violation of the preemptive rights of any natural person, corporation, business trust, association, limited liability company, partnership, joint venture, other entity, government, agency or political subdivision (each, a “Person”). The offer, issuance and sale of such VWI Common Stock was (a) exempt from the registration and prospectus delivery requirements of the Securities Act of 1933, as amended (the “Securities Act”), (b) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws and (c) accomplished in conformity with all other applicable securities laws. None of the shares of outstanding VWI Common Stock are subject to a right of withdrawal or a right of rescission under any federal or state securities or “Blue Sky” law. Except as otherwise set forth in this Agreement or any Schedule hereto, the VWI has no outstanding options, rights or commitments to issue VWI Common Stock or other Equity Securities (as defined below) of VWI, and there are no outstanding securities convertible or exercisable into or exchangeable for VWI Common Stock or other Equity Securities of the VWI. For purposes of this Agreement, “Equity Security” shall mean any stock or similar security of an issuer or any security (whether stock or Indebtedness for Borrowed Money (as defined below)) convertible, with or without consideration, into any stock or other equity security, or any security (whether stock or Indebtedness for Borrowed Money) carrying any warrant or right to subscribe to or purchase any stock or similar security, or any such warrant or right.

 

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Section 2.04 Indebtedness. Except for the $300,000 indebtedness to the Company as set forth in this Agreement, VWI has no Indebtedness for Borrowed Money. For purposes of this Agreement, “Indebtedness for Borrowed Money” shall mean (a) all Indebtedness in respect of money borrowed including, without limitation, Indebtedness that represents the unpaid amount of the purchase price of any property and is incurred in lieu of borrowing money or using available funds to pay such amounts and not constituting an account payable or expense accrual incurred or assumed in the ordinary course of business of VWI, (b) all Indebtedness (as defined below) evidenced by a promissory note, bond or similar written obligation to pay money or (c) all such Indebtedness guaranteed by VWI or for which VWI is otherwise contingently liable. Furthermore, for purposes of this Agreement, “Indebtedness” shall mean any obligation of VWI which, under generally accepted accounting principles in the United Stated (“GAAP”), is required to be shown on the balance sheet of VWI as a liability. Any obligation of VWI secured by a mortgage, pledge, security interest, encumbrance, lien or charge of any kind (a “Lien”), shall be deemed to be Indebtedness.

Section 2.05 VWI Stockholders. WAR is the beneficial and record owner of all of the outstanding capital stock of VWI, and there are no outstanding warrants, options or other rights to acquire the capital stock of VWI. To the knowledge of VWI and WAR, there is no voting trust, agreement or arrangement among any of the beneficial holders of VWI capital stock affecting the nomination or election of directors or the exercise of the voting rights of VWI capital stock.

Section 2.06 Corporate Acts and Proceedings. The execution, delivery and performance of this Agreement has been duly authorized by the Board of Directors of VWI and has been approved by the requisite vote of the Stockholders, and all of the corporate acts and proceedings required for the due and valid authorization, execution, delivery and performance of this Agreement has been validly and appropriately taken.

Section 2.07 Governmental Consents. All material consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with any federal or state governmental authority on the part of VWI required in connection with the consummation of this Agreement shall have been obtained prior to, and be effective as of, the Closing.

Section 2.08 Compliance with Laws and Instruments. The business, products and operations of VWI have been and are being conducted in compliance in all material respects with all applicable state laws, rules and regulations, except for such violations thereof for which the penalties, in the aggregate, would not have a material adverse effect on the Condition of VWI. The execution, delivery and performance by the VWI under this Agreement and the consummation by VWI of the transactions contemplated by this Agreement: (a) will not cause VWI to violate or contravene (i) any provision of material law, (ii) any rule or regulation of any agency or government, (iii) any order, judgment or decree of any court, or (iv) any provision of the Articles of Incorporation or Bylaws of VWI, (b) will not violate or be in conflict with, result in a breach of or constitute (with or without notice or lapse of time, or both) a default under, any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or other material contract, agreement or instrument to which VWI is a party or by which VWI or any of its properties is bound or affected, except as would not have a material adverse effect on the condition of VWI and (c) will not result in the creation or imposition of any Lien upon any property or asset of VWI. VWI is not in violation of, or (with or without notice or lapse of time, or both) in default under, any term or provision of its Articles of Incorporation or Bylaws or of any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or, except as would not materially and adversely affect the condition of VWI, any other material agreement or instrument to which VWI is a party or by which VWI or any of its properties is bound or affected.

 

Section 2.09 Binding Obligations. When executed and delivered, this Agreement will constitute the legal, valid and binding obligations of VWI and will be enforceable against VWI in accordance with their respective terms, except as such enforcement is limited by bankruptcy, insolvency and other similar laws affecting the enforcement of creditors’ rights generally and by general principles of equity.

Section 2.10 Broker’s and Finder’s Fees. No Person has, or as a result of the transactions contemplated or described herein will have, any right or valid claim against VWI or, to the knowledge of VWI and WAR, any Stockholder for any commission, fee or other compensation as a finder or broker, or in any similar capacity.

 

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Section 2.11 Financial Statements. At the Closing, VWI will provide a balance sheet (the “Balance Sheet”) as of the date of the Closing (the “VWI Balance Sheet Date”). The Balance Sheet (a) is in accordance with the books and records of the VWI and (b) present fairly in all material respects the financial condition of VWI at the date therein specified. Other than initial start-up costs,

Section 2.12 Absence of Undisclosed Liabilities. VWI will have no material obligation or liability (whether accrued, absolute, contingent, liquidated or otherwise, whether due or to become due), arising out of any transaction entered into at or prior to the Closing, except (a) as disclosed in the Balance Sheet, (b) to the extent set forth on or reserved against in the Balance Sheet, (c) current liabilities incurred and obligations under agreements entered into in the usual and ordinary course of business since the VWI Balance Sheet Date, none of which (individually or in the aggregate) has had or will have a material adverse effect on the condition of VWI, (d) by the specific terms of any written agreement, document or arrangement identified in this Agreement or the Schedules hereto, and (e) obligations under this Agreement.

Section 2.13 Assets and Contracts.

(a) Schedule 2.13(a) contains a true and complete list of all real property leased by VWI. All the real property listed in Schedule 2.13(a) is leased by VWI under valid leases enforceable in accordance with their terms, and there is not, under any such lease, any existing default or event of default or, to the knowledge of VWI and WAR, event which with notice or lapse of time, or both, would constitute a default by VWI and which would have a material adverse effect upon VWI, and VWI has not received any notice or claim of any such default by VWI. VWI does not own any real property.

(b) Except as expressly set forth in this Agreement, VWI is not a party to any written or oral agreement not made in the ordinary course of business that is material to VWI. VWI is not a party to any written or oral (i) agreement for the purchase of fixed assets or for the purchase of materials, supplies or equipment in excess of normal operating requirements, (ii) agreement for the employment of any officer, individual employee or other Person on a full-time basis or any agreement with any Person for consulting services, except for the Employment Agreement of WAR (iii) indenture, loan or credit agreement, note agreement, deed of trust, mortgage, security agreement, promissory note or other agreement or instrument relating to or evidencing Indebtedness for Borrowed Money or subjecting any asset or property of VWI to any Lien or evidencing any Indebtedness, (iv) guaranty of any Indebtedness, (v) lease or agreement under which VWI is lessee of or holds or operates any property, real or personal, owned by any other Person, (vi) agreement granting any preemptive right, right of first refusal or similar right to any Person, (vii) agreement or arrangement with any Affiliate (as defined below) or any “associate” (as such term is defined in Rule 405 under the Securities Act) of VWI or any present or former officer, director or stockholder of VWI, (viii) agreement obligating VWI to pay any royalty or similar charge for the use or exploitation of any tangible or intangible property, (ix) covenant not to compete or other material restriction on its ability to conduct a business or engage in any other activity, (x) agreement to register securities under the Securities Act or (xi) collective bargaining agreement. For purposes of this Agreement, an “Affiliate” shall mean any Person that directly or indirectly controls, is controlled by, or is under common control with, the indicated Person.

(c) VWI has made available to the Company. true and complete copies of all agreements and other documents and a description of all applicable oral agreements disclosed or referred to, if any.

Section 2.14 Personnel. VWI has complied in all material respects with all laws relating to the employment of labor, and VWI has encountered no material labor union difficulties. Other than pursuant to ordinary arrangements of compensation to personnel, VWI is not under any obligation or liability to any officer, director, consultant or staff member of VWI. Section 2.15 Tax Returns and Audits.

(a) VWI has not filed any tax returns with any Federal or State Agency since the date of VWI’s date of incorporation, and no such tax returns are due. There are no taxes that are due to any taxing Federal or State Agency.

(b) For purposes of this Agreement, the following terms shall have the meanings provided below:

(i) “Tax” or “Taxes” shall mean (A) any and all taxes, assessments, customs, duties, levies, fees, tariffs, imposts, deficiencies and other governmental charges of any kind whatsoever (including, but not limited to, taxes on or with respect to net or gross income, franchise, profits, gross receipts, capital, sales, use, ad valorem, value added, transfer, real property transfer, transfer gains, transfer taxes, inventory, capital stock, license, payroll, employment, social security, unemployment, severance, occupation, real or personal property, estimated taxes, rent, excise, occupancy, recordation, bulk transfer, intangibles, alternative minimum, doing business, withholding and stamp), together with any interest thereon, penalties, fines, damages costs, fees, additions to tax or additional amounts with respect thereto, imposed by the United States (federal, state or local) or other applicable jurisdiction; (B) any liability for the payment of any amounts described in clause (A) as a result of being a member of an affiliated, consolidated, combined, unitary or similar group or as a result of transferor or successor liability, including, without limitation, by reason of Code section 1.1502-6; and (C) any liability for the payments of any amounts as a result of being a party to any Tax Sharing Agreement or as a result of any express or implied obligation to indemnify any other Person with respect to the payment of any amounts of the type described in clause (A) or (B).

(ii) “Tax Return” shall include all returns and reports (including elections, declarations, disclosures, schedules, estimates and information returns (including partnership returns filed on Form 1065) required to be supplied to a Tax authority relating to Taxes.

 

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Section 2.16 Patents and Other Intangible Assets.

(a) To the knowledge of VWI and WAR, VWI (i) owns or has the right to use, free and clear of all Liens, claims and restrictions, all patents, trademarks, service marks, trade names, copyrights, licenses and rights with respect to the foregoing (collectively, “Intellectual Property”) used in or necessary for the conduct of its business as now conducted without infringing upon or otherwise acting adversely to the right or claimed right of any Person under or with respect to any of the foregoing and (ii) is not obligated or under any liability to make any payments by way of royalties, fees or otherwise to any owner or licensor of, or other claimant to, any patent, trademark, service mark, trade name, copyright or other intangible asset, with respect to the use thereof or in connection with the conduct of its business or otherwise.

(b) To the knowledge of VWI and WAR, VWI owns and has the unrestricted right to use all trade secrets, if any, including know-how, negative know-how, formulas, patterns, programs, devices, methods, techniques, inventions, designs, processes, computer programs and technical data and all information that derives independent economic value, actual or potential, from not being generally known or known by competitors (collectively, “Trade Secrets”) required for or incident to the development, operation and sale of all products and services sold by VWI, free and clear of any right, Lien or claim of others; provided however, that the possibility exists that other Persons, completely independently of VWI or its employees or agents, could have developed Intellectual Property or Trade Secrets similar or identical to that of VWI. VWI and WAR is not aware of any such development of substantially identical trade secrets or technical information by others.

Section 2.17 Employee Benefit Plans; ERISA.

(a) There are no “employee benefit plans” (within the meaning of Section 3(3) of ERISA) nor any other employee benefit or fringe benefit arrangements, practices, contracts, policies or programs of every type other than programs merely involving the regular payment of wages, commissions, or bonuses established, maintained or contributed to by VWI, whether written or unwritten and whether or not funded.

Section 2.19 Condition of Properties. All facilities, machinery, equipment, fixtures and other properties owned, leased or used by VWI are in reasonably good operating condition and repair, subject to ordinary wear and tear, and are adequate and sufficient for VWI’s business.

Section 2.20 Insurance Coverage. There is in full force and effect one or more policies of insurance, insuring VWI and its properties, products and business against such losses and risks, and in such amounts, as are customary for corporations engaged in the same or similar business and similarly situated. VWI has not been refused any insurance coverage sought or applied for, and VWI has no reason to believe that it will be unable to renew its existing insurance coverage as and when the same shall expire upon terms at least as favorable to those currently in effect, other than possible increases in premiums that do not result from any act or omission of VWI. No suit, proceeding or action or, to the knowledge of VWI, threat of suit, proceeding or action has been asserted or made against VWI within the last five years due to alleged bodily injury, disease, medical condition, death or property damage arising out of the function or malfunction of a product, procedure or service designed, manufactured, sold or distributed by VWI.

Section 2.21 Litigation. There is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding pending or, to the knowledge of VWI and WAR, threatened against or affecting VWI or its properties, assets or business, and, to the knowledge of VWI and WAR, there is no incident, transaction, occurrence or circumstance that might reasonably be expected to result in or form the basis for any such action, suit, arbitration or other proceeding. VWI is not in default with respect to any order, writ, judgment, injunction, decree, determination or award of any court or any governmental agency or instrumentality or arbitration authority.

Section 2.22 Licenses. VWI possesses from all appropriate governmental authorities all licenses, permits, authorizations, approvals, franchises and rights necessary for VWI to engage in the business currently conducted by it, all of which are in full force and effect, except where the failure to obtain such license has not had and would not reasonably excepted to have a material adverse effect on the Condition of VWI.

Section 2.24 Questionable Payments. Neither VWI nor any director, officer or, to the knowledge of VWI, any agent, employee or other Person associated with or acting on behalf of VWI, has used any corporate funds for unlawful contributions, gifts, entertainment or other unlawful expenses relating to political activity; made any direct or indirect unlawful payments to government officials or employees from corporate funds; established or maintained any unlawful or unrecorded fund of corporate monies or other assets; made any false or fictitious entries on the books of record of any such corporations; or made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

Section 2.25 Duty to Make Inquiry. To the extent that any of the representations or warranties in this Article II are qualified by “knowledge” or “belief,” VWI represents and warrants that it has made due and reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, diligent inquiry of its directors and executive officers.

 

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Section 2.26 Disclosure. No representation or warranty by VWI and WAR herein and no information disclosed in the schedules or exhibits hereto by VWI contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The Company represents and warrants to VWI as follows:

Section 3.01 Organization and Standing. The Company is a corporation duly organized and existing in good standing under the laws of the State of Nevada. The Company has heretofore delivered to VWI & WAR complete and correct copies of its Articles of Incorporation and Bylaws as now in effect. The Company has full corporate power and authority to carry on its respective businesses as it is now being conducted and as now proposed to be conducted and to own or lease its properties and assets. Except for the Company’s interests in Cobblestone Group LLC and Parable Partners, LLC, the Company has no subsidiaries in any firm, corporation, limited liability company, partnership, association or business.

Section 3.02 Qualification. The Company is duly qualified to conduct business as a foreign corporation and is in good standing in each jurisdiction wherein the nature of its activities or its properties owned or leased makes such qualification necessary, except where the failure to be so qualified would not have a material adverse effect on the condition, properties, assets, liabilities, business operations or results of operations of the Company (the “Condition of the Company”).

Section 3.02 Corporate Authority. The Company has full corporate power and authority to enter into this Agreement and the other agreements to be made pursuant to this Agreement, and to carry out the transactions contemplated hereby and thereby. All corporate acts and proceedings required for the authorization, execution, delivery and performance of this Agreement and such other agreements and documents by the Company has been duly and validly taken or will have been so taken prior to the Closing. This Agreement constitutes a legal, valid and binding obligation of the Company is enforceable against the Company in accordance with its terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization or other similar laws affecting creditors’ rights generally and by general principles of equity.

Section 3.03 Broker’s and Finder’s Fees. No Person is entitled by reason of any act or omission of the Company to any broker’s or finder’s fees, commission or other similar compensation with respect to the execution and delivery of this Agreement, or with respect to the consummation of the transactions contemplated thereby, except as set forth in the Disclosures.

Section 3.04 Capitalization.

(a) The authorized capital stock of the Company consists of (i) 200shares of common stock, of which 105 shares are issued and outstanding The Company has _3.33_ options, rights or commitments to issue shares of common stock, and there are no outstanding securities convertible or exercisable into or exchangeable for shares of the Company’s common stock or any other Equity Security of the Company. There is no voting trust, agreement or arrangement among any of the beneficial holders of the Company’s common stock affecting the nomination or election of directors or the exercise of the voting rights of the Company’s common stock. Each share of the Company’s common stock was duly authorized, validly issued, fully paid and non-assessable, and none of such shares have been issued in violation of the preemptive rights of any Person. The offer, issuance and sale of such shares of the Company’s common stock were (a) exempt from the registration and prospectus delivery requirements of the Securities Act, (b) registered or qualified (or were exempt from registration or qualification) under the registration or qualification requirements of all applicable state securities laws and (c) accomplished in conformity with all other applicable securities laws. None of such shares of the Company are subject to a right of withdrawal or a right of rescission under any federal or state securities or “Blue Sky” law. Except as otherwise set forth in this Agreement or any Schedule hereto, the Company has no outstanding options, rights or commitments to issue the Company’s common stock or other Equity Securities of the the Company, and there are no outstanding securities convertible or exercisable into or exchangeable for the Company’s common stock or other Equity Securities of the Company.

 

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Section 3.05 Validity of Shares. The shares of the Company to be issued at the Closing pursuant to Section 1.02(a) hereof, when issued and delivered in accordance with the terms of this Agreement, shall be duly and validly issued, fully paid and non-assessable. Based in part on the representations and warranties of WAR, and assuming the accuracy thereof, the issuance of the Company’s common stock will be exempt from the registration and prospectus delivery requirements of the Securities Act and from the qualification or registration requirements of any applicable state “Blue Sky” or securities laws.

Section 3.06 Governmental Consents. All material consents, approvals, orders, or authorizations of, or registrations, qualifications, designations, declarations, or filings with any federal or state governmental authority on the part of the Company required in connection with this Agreement shall have been obtained prior to, and be effective as of, the Closing.

Section 3.07 Compliance with Laws and Other Instruments. The execution, delivery and performance by the Company and the other agreements to be made by the Company pursuant to or in connection with this Agreement and the consummation by the Company of the transactions contemplated by this Agreement, will not cause the Company to violate or contravene (a) any provision of law, (b) any rule or regulation of any agency or government, (c) any order, judgment or decree of any court, (d) any provision of its charter or By-laws as amended and in effect on and as of the Closing Date and (e) will not violate or be in conflict with, result in a breach of or constitute (with or without notice or lapse of time, or both) a default under, any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or other material contract, agreement or instrument to which the Company is a party or by which the Company or any of its respective properties is bound or affected, except as would not have a material adverse effect on the Condition of the Company. The Company is not in violation of, or (with or without notice or lapse of time, or both) in default under, any term or provision of its Articles of Incorporation or Bylaws or of any indenture, loan or credit agreement, deed of trust, mortgage, security agreement or, except as would not materially and adversely affect the Condition of the Company, any other material agreement or instrument to which the Company is a party or by which the Company or any of its properties is bound or affected.

Section 3.8 Litigation. There is no legal action, suit, arbitration or other legal, administrative or other governmental proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company or any of its properties, assets or businesses and, to the knowledge of the Company, there is no incident, transaction, occurrence or circumstance that might reasonably be expected to result in or form the basis for any such action, suit, arbitration or other proceeding. The Company is not in default with respect to any order, writ, judgment, injunction, decree, determination or award of any court or any governmental agency or instrumentality or arbitration authority.

Section 3.09 Licenses. The Company possesses from all appropriate governmental authorities all licenses, permits, authorizations, approvals, franchises and rights necessary for the Company to engage in the business currently conducted by it, all of which are in full force and effect.

Section 3.10 Assets and Contracts.

(a) The Company has good title to, or valid leasehold interests in, all of its properties and assets used in the conduct of its business. All such assets and properties, other than assets and properties in which the Company has leasehold interests, are free and clear of all Liens. The Company has complied in all material respects with the terms of all leases to which it is a party and under which it is in occupancy, and all such leases are in full force and effect. The Company enjoys peaceful and undisturbed possession under all such leases.

 

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(b) The Company is not a party to any written or oral agreement not made in the ordinary course of business that is material to the Company except for its contractual arrangements with CLEV. The Company is not a party to or otherwise barred by any written or oral (i) agreement with any labor union, (ii) agreement for the purchase of fixed assets or for the purchase of materials, supplies or equipment in excess of normal operating requirements, (iii) agreement for the employment of any officer, individual employee or other Person on a full-time basis or any agreement with any Person for consulting services, (iv) bonus, pension, profit sharing, retirement, stock purchase, stock option, deferred compensation, medical, hospitalization or life insurance or similar plan, contract or understanding with respect to any or all of the employees of the Company or any other Person, (v) indenture, loan or credit agreement, note agreement, deed of trust, mortgage, security agreement, promissory note or other agreement or instrument relating to or evidencing Indebtedness for Borrowed Money or subjecting any asset or property of the Company to any Lien or evidencing any Indebtedness, (vi) guaranty of any Indebtedness, (vii) lease or agreement under which the Company is lessee of or holds or operates any property, real or personal, owned by any other Person, (viii) lease or agreement under which the Company is lessor or permits any Person to hold or operate any property, real or personal, owned or controlled by the Company, (ix) agreement granting any preemptive right, right of first refusal or similar right to any Person, (x) agreement or arrangement with any Affiliate or any “associate” (as such term is defined in Rule 405 under the Securities Act) of the Company or any present or former officer, director or stockholder of the Company, (xi) agreement obligating The Company to pay any royalty or similar charge for the use or exploitation of any tangible or intangible property, (xii) covenant not to compete or other restriction on its ability to conduct a business or engage in any other activity, (xiii) distributor, dealer, manufacturer’s representative, sales agency, franchise or advertising contract or commitment, (xiv) agreement to register securities under the Securities Act, (xv) collective bargaining agreement or (xvi) agreement or other commitment or arrangement with any Person continuing for a period of more than three months from the Closing Date that involves an expenditure or receipt by the Company in excess of $1,000. The Company maintains no insurance policies or insurance coverage of any kind with respect to the Company, its business, premises, properties, assets, employees and agents. No consent of any bank or other depository is required to maintain any bank account, other deposit relationship or safety deposit box of the Company in effect following the consummation of the Merger and the transactions contemplated hereby.

Section 3.11 Employees. Other than pursuant to ordinary arrangements of employment compensation the Company is not under any obligation or liability to any officer, director, employee or Affiliate of the Company.

Section 3.12 Duty to Make Inquiry. To the extent that any of the representations or warranties in this Article III are qualified by “knowledge” or “belief,” the Company represents and warrants that it has made due and reasonable inquiry and investigation concerning the matters to which such representations and warranties relate, including, but not limited to, diligent inquiry of its directors and executive officers.

ARTICLE IV

CONDUCT OF BUSINESSES PENDING THE CLOSING

Section 4.01 Conduct of Business by the Company Pending the Merger. Prior to the Closing Date, unless the Company shall otherwise agree in writing or as otherwise contemplated by this Agreement:

(a) the business of VWI shall be conducted only in the ordinary course;

(b) VWI shall not (i) directly or indirectly redeem, purchase or otherwise acquire or agree to redeem, purchase or otherwise acquire any shares of its capital stock; (ii) amend its Articles of Incorporation or Bylaws except to effectuate the transactions contemplated by this Agreement or (iii) split, combine or reclassify the outstanding VWI capital stock or declare, set aside or pay any dividend payable in cash, stock or property or make any distribution with respect to any such stock;

 

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(c) VWI shall not (i) issue or agree to issue any additional VWI Common Stock, or options, warrants or rights of any kind to acquire any VWI capital stock; (ii) acquire or dispose of any fixed assets or acquire or dispose of any other substantial assets other than in the ordinary course of business; (iii) enter into any contract, agreement, commitment or arrangement with respect to any of the foregoing or (iv) except as contemplated by this Agreement, enter into any contract, agreement, commitment or arrangement to dissolve, merge, consolidate or enter into any other material business combination;

(d) VWI shall use its commercially reasonable efforts to preserve intact the business organization of VWI, to keep available the service of its present officers and key employees, and to preserve the good will of those having business relationships with it; and

(e) VWI will not, nor will it authorize any director or authorize or permit any officer or employee or any attorney, accountant or other representative retained by it to make, solicit, encourage any inquiries with respect to, or engage in any negotiations concerning, any Acquisition Proposal (as defined below for purposes of this paragraph). VWI will promptly advise the Company orally and in writing of any such inquiries or proposals (or requests for information) and the substance thereof. As used in this paragraph, “Acquisition Proposal” shall mean any proposal for a merger or other business combination involving VWI or for the acquisition of a substantial equity interest in it or any material assets of it other than as contemplated by this Agreement. VWI will immediately cease and cause to be terminated any existing activities, discussions or negotiations with any Person conducted heretofore with respect to any of the foregoing.

ARTICLE V

ADDITIONAL AGREEMENTS

Section 5.01 Access and Information. The Company, on the one hand, and the Company, on the other hand, shall each afford to the other and to the other’s accountants, counsel and other representatives full access during normal business hours throughout the period prior to the Closing Date to all of its properties, books, contracts, commitments and records (including but not limited to Tax Returns) and during such period, each shall furnish promptly to the other all information concerning its business, properties and personnel as such other party may reasonably request, provided that no investigation pursuant to this Section 5.01 shall affect any representations or warranties made herein. Each party shall hold, and shall cause its employees and agents to hold, in confidence all such information other than such information that (a) is already in such party’s possession or (b) becomes generally available to the public other than as a result of a disclosure by such party or its directors, officers, managers, employees, agents or advisors or (c) becomes available to such party on a non-confidential basis from a source other than a party hereto or its advisors, provided that such source is not known by such party to be bound by a confidentiality agreement with or other obligation of secrecy to a party hereto or another party until such time as such information is otherwise publicly available; provided, however, that (i) any such information may be disclosed to such party’s directors, officers, employees and representatives of such party’s advisors who need to know such information for the purpose of evaluating the transactions contemplated hereby (it being understood that such directors, officers, employees and representatives shall be informed by such party of the confidential nature of such information), (ii) any disclosure of such information may be made as to which the party hereto furnishing such information has consented in writing and (iii) any such information may be disclosed pursuant to a judicial, administrative or governmental order or request; provided, further, that the requested party will promptly so notify the other party so that the other party may seek a protective order or appropriate remedy and/or waive compliance with this Agreement and if such protective order or other remedy is not obtained or the other party waives compliance with this provision, the requested party will furnish only that portion of such information that is legally required and will exercise its best efforts to obtain a protective order or other reliable assurance that confidential treatment will be accorded the information furnished. If this Agreement is terminated, each party will deliver to the other all documents and other materials (including copies) obtained by such party or on its behalf from the other party as a result of this Agreement or in connection herewith, whether so obtained before or after the execution hereof.

 

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Section 5.02 Additional Agreements. Subject to the terms and conditions herein provided, each of the parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all action and to do, or cause to be done, all things necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, including using its commercially reasonable efforts to satisfy the conditions precedent to the obligations of such party, to obtain all necessary waivers, and to lift any injunction or other legal bar to the Merger (and, in such case, to proceed with the Merger as expeditiously as possible). In order to obtain any necessary governmental or regulatory action or non-action, waiver, consent, extension or approval, each of VWI and the Company agrees to take all reasonable actions and to enter into all reasonable agreements as may be necessary to obtain timely governmental or regulatory approvals and to take such further action in connection therewith as may be necessary. In case at any time after the Closing Date any further action is necessary or desirable to carry out the purposes of this Agreement, the proper officers and/or directors of VWI and the Company shall take all such necessary action.

Section 5.03 Publicity. No party shall issue any press release or public announcement pertaining to this Agreement that has not been agreed upon in advance by VWI and the Company, except as the Company reasonably determines to be necessary in order to comply with the rules of the Securities & Exchange Commission (the “Commission”)or of the principal trading exchange or market for the Company Common Stock, if applicable

Section 5.04 Appointment of Directors as Advisors. Immediately at the Closing Date the Company shall appoint 2 additional directors to be appointed to the Board of Advisors of VWI.

Section 5.05 Additional Company Information. At the Closing, the Company shall deliver to VWI, written information regarding the Company, its business, properties, liquidity and capital resources, officers, directors, members, material pending litigation and any and all such other matters as VWI shall request (collectively, the “Additional Company Information”) and that the Company may be required to file with the Commission under applicable United States federal securities laws.

ARTICLE VI

CONDITIONS TO PARTIES’ OBLIGATIONS

Section 6.01 Conditions to the Company’s Obligations. The obligations of the Company under this Agreement are subject to the fulfillment, at or prior to the Closing, of the following conditions, any of which may be waived in whole or in part by the Company:

(a) The representations and warranties of VWI under this Agreement (when read without regard to any qualification as to materiality or material adverse effect) shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b) VWI shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by it on or before the Closing Date.

(c) There shall have been no material adverse change in the Condition of VWI.

(d) No action or proceeding before any court, governmental body or agency shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain damages in respect of, this Agreement or the carrying out of the transactions contemplated by the this Agreement.

(e) The Company. shall have received the following:

 

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(i) copies of resolutions of the Board of Directors and the Stockholders, certified by the Secretary of VWI, authorizing and approving the execution, delivery and performance of the this Agreement and all other documents and instruments to be delivered pursuant thereto;

(ii) a certificate of incumbency executed by the Secretary of VWI certifying the names, titles and signatures of the officers authorized to execute any documents referred to in this Agreement and further certifying that the Articles of Incorporation and By-Laws of VWI delivered to the Company. at the time of the execution of this Agreement have been validly adopted and have not been amended or modified;

(iii) evidence as of a recent date of the good standing and corporate existence of the Company issued by the Secretary of State of the State of Nevada and evidence that VWI is qualified to transact business as a foreign corporation and is in good standing in each state of the United States and in each other jurisdiction where the character of the property owned or leased by it or the nature of its activities makes such qualification necessary;

(iv) a certificate, dated the Closing Date, executed by the Chief Executive Officer or other acceptable officer of VWI certifying that he has no knowledge of any plan to issue any securities of VWI, and VWI has not entered into any agreement, written or oral, to issue any securities of VWI except as described in this Agreement; and

(v) such additional supporting documentation and other information with respect to the transactions contemplated hereby as the Company may reasonably request.

(f) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, agreements, instruments and documents mentioned herein or incident to any such transactions shall be reasonably satisfactory in form and substance to the Company. VWI shall furnish to the Company. such supporting documentation and evidence of the satisfaction of any or all of the conditions precedent specified in this Section 6.01 as the Company or its counsel may reasonably request.

Section 6.02 Conditions to the Company’s Obligations. The obligations of the Company under this Agreement are subject to the fulfillment, at or prior to the Closing, of the following conditions, any of which may be waived in whole or in part by VWI:

(a) The representations and warranties of the Company under this Agreement (when read without regard to any qualification as to materiality or material adverse effect) shall be deemed to have been made again on the Closing Date and shall then be true and correct in all material respects.

(b) The Company shall have performed and complied in all material respects with all agreements and conditions required by this Agreement to be performed or complied with by them on or before the Closing Date.

(c) There shall have been no material adverse change in the Condition of the Company.

(d) VWI shall have received the following:

(i) copies of resolutions of the Company’s board of directors, certified by the Secretary of the Company, authorizing and approving, to the extent applicable, the execution, delivery and performance of this Agreement and all other documents and instruments to be delivered by them pursuant thereto;

(ii) a certificate of incumbency executed by the Secretary of the Company, certifying the names, titles and signatures of the officers authorized to execute the documents referred to in this Agreement.

 

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(iii) evidence as of a recent date and within five (5) days of the Closing Date of the good standing and corporate existence of the Company issued by the Secretary of State of the State of Nevada, and evidence that the Company is qualified to transact business as foreign corporations and are in good standing in each state of the United States and in each other jurisdiction where the character of the property owned or leased by them or the nature of their activities makes such qualification necessary; and

(iv) such additional supporting documentation and other information with respect to the transactions contemplated hereby as VWI may reasonably request.

(e) All corporate and other proceedings and actions taken in connection with the transactions contemplated hereby and all certificates, agreements, instruments and documents mentioned herein or incident to any such transactions shall be satisfactory in form and substance to VWI. The Company shall furnish to VWI such supporting documentation and evidence of satisfaction of any or all of the conditions specified in this Section 6.02 as the Company may reasonably request.

(f) No action or proceeding before any court, governmental body or agency shall have been threatened, asserted or instituted to restrain or prohibit, or to obtain substantial damages in respect of, this Agreement or the carrying out of the transactions contemplated by this Agreement.

ARTICLE VII

RELATED MATTERS

Section 7.01 Survival. All representations, warranties, covenants and agreements of the Company and VWI contained in this Agreement or in any certificate delivered pursuant to this Agreement shall survive the Closing and continue in full force and effect for a period of one year.

Section 7.2 Indemnification. The Parties acknowledge and agree:

(a) VWI and WAR severally and jointly indemnify and hold the Company, its successors and assigns harmless from and against all losses, costs, damages, claims, lawsuits and liabilities arising in connection with any third-party claims concerning VWI arising prior to the Closing Date (each, a “VWI Claim”), if the basis of such VWI Claim stems from an act or omission of VWI or WAR prior to the Closing Date. VWI and WAR shall be severally and jointly responsible for all reasonable attorneys’ fees, costs and expenses incurred by the Company in defense of any such Claim. The indemnification obligations set forth herein, shall include by way of example and not limitation, the duty to indemnify and hold the Company harmless from and against any claims, demands, actions, suits, arbitrations, assessments, adjustments, or other proceedings regarding or resulting from any state or federal government tax filing, including amendments to any such filing, on behalf of VWI and WAR, related to the total revenue generated by VWI and reported to the any State’s Department of Revenue and/or the Internal Revenue Service. The Parties agree that VWI’s obligation to defend, indemnify, and hold harmless the Company as described in this Agreement shall equally apply to the Company and to the Company’s , current, and future officers, directors, shareholders, subsidiaries, affiliates, members, managers, principals, partners, agents, successors, and assigns.

(b) The Company shall indemnify and hold VWI and WAR, and their successors and assigns harmless from and against all losses, costs, damages, claims, lawsuits and liabilities arising in connection with any third-party claims concerning the Company arising prior to, or after the Closing Date (each, a “Company Claim”), if the basis of such Company Claim stems from an act or omission of the Company prior to the Closing Date. The Company shall be solely responsible for all reasonable attorneys’ fees, costs and expenses incurred by VWI and WAR in defense of any such Claim. The indemnification obligations set forth herein, shall include by way of example and not limitation, the duty to indemnify and hold VWI and WAR harmless from and against any claims, demands, actions, suits, arbitrations, assessments, adjustments, or other proceedings regarding or resulting from any state or federal government tax filing, including amendments to any such filing, on behalf of the Company. The Parties agree that the Company’s obligation to defend, indemnify, and hold harmless VWI and WAR as described in this Agreement shall equally apply to VWI and WAR and to VWI’s, current, and future officers, directors, shareholders, subsidiaries, affiliates, members, managers, principals, partners, agents, successors, and assigns.

 

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ARTICLE VIII

TERMINATION PRIOR TO CLOSING

Section 8.01 Termination of Agreement. This Agreement may be terminated at any time prior to the Closing:

(a) by the mutual written consent of the Company, and VWI.

(b) by VWI, if the Company. (i) fails to perform in any material respect any of its agreements contained herein required to be performed by it on or prior to the Closing Date, or (ii) materially breaches any of its representations, warranties or covenants contained herein, which failure or breach is not cured by the date VWI has satisfied all of its conditions to Closing.

(c) by the Company, if VWI (i) fails to perform in any material respect any of its agreements contained herein required to be performed by it on or prior to the Closing Date or (ii) materially breaches any of its representations, warranties or covenants contained herein, which failure or breach is not cured by the date VWI has satisfied all of its conditions to Closing;

(d) by either the Company or VWI, if there shall be any order, writ, injunction or decree of any court or governmental or regulatory agency binding on the Company or VWI that prohibits or restrains any of them from consummating the transactions contemplated hereby, provided that the parties hereto shall have used their best efforts to have any such order, writ, injunction or decree lifted and the same shall not have been lifted within ninety (90) days after entry by any such court or governmental or regulatory agency; or

(e) by either the Company or VWI, if the Closing has not occurred on or prior to November 30, 2018, for any reason other than delay or non-performance of the party seeking such termination.

Section 8.02 Termination of Obligations. Termination of this Agreement pursuant to this Article VIII shall terminate all obligations of the parties hereunder, except for the obligations under Sections 5.01, 9.03 and 9.11; provided, however , that termination will not relieve the defaulting or breaching party or parties from any liability to the other parties hereto.

ARTICLE IX

MISCELLANEOUS

Section 9.01 Notices. Any notice, request or other communication hereunder shall be given in writing and shall be served either personally, by overnight delivery or delivered by mail, certified return receipt and addressed to the following addresses:

(a) If to the Company

Jericho Associates, Inc,

Attention : Ronald Tassinari, CEO

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With a copy to:

Stanley Moskowitz, Esq

Bingham & Associates Law Group, APC

1106 Second St.. Suite 195

Encinitas, CA 92024

Ph: 858-523-0100

Email: smoskowitz@san.rr.com

(b) VegasWinners, LLC:

Attention: Wayne Allyn Root, CEO

With a copy to:

Lee Sacks Esq.

Law Offices of Lee Sacks, APC

324 South Beverly Drive, Suite 496

Beverly Hills, California 90212

Tel: (310) 451-3113

Email: SacksAPCLaw@aol.com

Notices shall be deemed received when actually received and confirmed pursuant to an overnight delivery service, email, or by United States Postal Service,

Section 9.02 Entire Agreement. This Agreement, including the Schedules and Exhibits attached hereto and other documents referred to herein, contains the entire understanding of the parties hereto with respect to the subject matter hereof. This Agreement supersedes all prior agreements and undertakings between the parties with respect to such subject matter.

Section 9.03 Expenses. Each party shall bear and pay all of the legal, accounting and other expenses incurred by it in connection with the transactions contemplated by this Agreement.

Section 9.04 Time. Time is of the essence in the performance of the parties’ respective obligations herein contained.

Section 9.05 Severability. Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction.

Section 9.06 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors, assigns and heirs; provided, however, that neither party shall directly or indirectly transfer or assign any of its rights hereunder in whole or in part without the written consent of the others, which may be withheld in its sole discretion, and any such transfer or assignment without said consent shall be void.

Section 9.07 No Third Parties Benefited. This Agreement is made and entered into for the sole protection and benefit of the parties hereto, their successors, assigns and heirs, and no other Person shall have any right or action under this Agreement.

Section 9.08 Counterparts. This Agreement may be executed in one or more counterparts, with the same effect as if all parties had signed the same document. Each such counterpart shall be an original, but all such counterparts together shall constitute a single agreement.

 

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Section 9.09 Recitals, Schedules and Exhibits. The Recitals, Schedules and Exhibits to this Agreement are incorporated herein and, by this reference, made a part hereof as if fully set forth herein.

Section 9.10 Section Headings and Gender. The Section headings used herein are inserted for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement. All personal pronouns used in this Agreement shall include the other genders, whether used in the masculine, feminine or neuter gender, and the singular shall include the plural, and vice versa, whenever and as often as may be appropriate.

Section 9.11 Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the internal laws of the State of Nevada without regard to principles of conflicts of laws. Each of the parties hereto hereby (i) irrevocably consents and submits to the sole exclusive jurisdiction of the Courts of the State of Nevada or the United States District Court for the District of Nevada located in Clark County, Nevada (and of the appropriate appellate courts therefrom) in connection with any suit, action or other proceeding arising out of or relating to this Note, (ii) irrevocably waives, to the fullest extent permitted by law, any objection that it may now or hereafter have to the laying of the venue of any such suit, action or proceeding in any such court or that any such suit, action or proceeding which is brought in any such court has been brought in an inconvenient forum, and (iii) agrees that service of any summons, complaint, notice or other process relating to such suit, action or other proceeding may be effected in the manner provided by Section 9.1

Section 9.12 Neutral Interpretation. The Parties acknowledge and agree that they have both participated in the negotiation of this Agreement and its terms, and have had the opportunity to have this Agreement reviewed by an attorney of their choosing. The Parties agree that no rules of construction or interpretation shall be applied to this Agreement which would favor one Party over the other, and that the Agreement shall be interpreted neutrally.

(Signatures on Next Page)

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement to be binding and effective as of the day and year first above written.

	
JERICHO ASSOCIATES, INC.

	 
	 	 
	 	 
	
By: s/ Ronald Tassinari

	 
	
Name: Ronald Tassinari

	 
	
Title: Acting CEO

	 
	 	 
	 	 
	 	 
	
VEGASWINNERS, INC.

	 
	 	 
	 	 
	
By: s/Wayne Allyn Root

	 
	
Name: Wayne Allyn Root

	 
	
Title: CEO & President

	 
	 	 
	 	 
	
WAYNE ALLYN ROOT

	 
	 	 
	 	 
	
s/Wayne Allyn Root

	 
	
Wayne Allyn Root

	 

17Exhibit 10.2

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is entered into by and between Wayne Allyn Root (“Employee”) and Jericho Associates, Inc., a Nevada corporation (the “Company”), and is effective as of August 19, 2018 (the “Effective Date”).

WHEREAS, the Company desires to establish its right to the services of Employee, in the capacity described below, on the terms and conditions hereinafter set forth, and Employee is willing to accept such employment on such terms and conditions.

NOW, THEREFORE, in consideration of the mutual agreements hereinafter set forth, Employee and the Company have agreed and do hereby agree as follows:

1. EMPLOYMENT. The Company agrees to employ Employee as the Senior Vice President of Marketing, Media, Entertainment and Communications of the Company, and Employee accepts and agrees to such employment. During Employee's employment with the Company, Employee shall perform all services and acts necessary or advisable to fulfill the duties and responsibilities as are commensurate and consistent with Employee's position and shall render such services on the terms set forth herein. Employee shall have such powers and duties with respect to the Company as may reasonably be assigned to Employee by the Board, to the extent consistent with Employee's position and status. Employee agrees to perform the duties of Employee's position in accordance with the Company's policies as in effect from time to time. Employee's principal place of employment shall be the Company's offices located in Las Vegas, Nevada.

2. TERM OF AGREEMENT. The term (“Term”) of this Agreement shall commence on the Effective Date and shall continue through the third anniversary of the Effective Date, unless sooner terminated in accordance with the provisions of Section 1 of the Standard Terms and Conditions attached hereto.

3. COMPENSATION.

(a) BASE SALARY. During the Term, the Company shall pay Employee an annual base salary of (TBD)(the “Base Salary”), payable in equal biweekly installments or in accordance with the Company's payroll practice as in effect from time to time. For all purposes under this Agreement, the term “Base Salary” shall refer to Base Salary as in effect from time to time.

(b)  REIMBURSEMENT FOR INCURRED EXPENSES.  Employee shall receive reimbursement for all reasonable costs of services provided to the Company prior to Effective Date upon submission of expense receipts for such costs.

(c)  INCENTIVE BONUS.  Employee will be eligible to receive an annual cash bonus of $[TBD] (the “Incentive Bonus”), which shall be payable upon achievement of performance goals mutually agreed between Employee and the Company.

(d) BENEFITS. During the Term, from the Effective Date through the date of termination of Employee's employment with the Company for any reason, Employee shall be entitled to participate in any welfare, health and life insurance and pension benefit and incentive programs as may be adopted from time to time by the Company on the same basis as that provided to other executive officers and directors of the Company. Without limiting the generality of the foregoing, Employee shall be entitled to the following benefits:

 

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(i) Reimbursement for Business Expenses. During the Term, the Company shall reimburse Employee for all reasonable expenses incurred by Employee in performing Employee's duties for the Company, on the same basis as other executive officers and directors of the Company and in accordance with the Company's policies as in effect from time to time.

(ii) Vacation. During the Term, Employee shall be entitled to annual paid vacation in accordance with the plans, policies, programs and practices of the Company applicable to similarly situated Employees of the Company generally.

(e) STOCK OPTIONS.

(i) On or immediately following commencement of Employee’s employment, the Company will grant Employee an option to purchase 2 shares of the Company’s Common Stock (the “Initial Option”)(which will be the equivalent of 120,000 shares of common stock upon the share exchange (the “Share Exchange” between the Company and Concrete Leveling Systems, Inc. (“CLEV”).  The Initial Option will have an exercise price of $300,000 per share and will vest at the rate of .1666  Initial Options per month over the first 12 months of the Term (which will be the equivalent of 10,000 shares of common stock of CLEV per month upon the closing of Share Exchange between the Company and CLEV. Vesting will depend on Employee’s continued service with the Company, provided that in the event of Employees resignation, a change in control, Employee’s death, or Employee’s Disability, the Initial Option shall accelerate and become fully vested and exercisable.  In addition the Initial Option shall have a post-termination exercise period of the remainder of the Term for any vested options.

(ii) The Company agrees to issue a total of  5 Options (the “Employment Options”) as follows:  1.666 Employment options at the end of each year of employment (total of 5 Employment Options) based upon performance criteria to be negotiated between the parties. The Employment Options shall have an exercise price of $500,000 per share and shall be exercisable for a period of 3 years from the date upon which the Employee becomes vested for each tranche of the Employment Options.  The Employment Options shall be the equivalent of options to purchase 300,000 shares of common stock of CLEV at an exercise price of $5.00 per share upon the closing of the Share Exchange between the Company and CLEV.

4. ACKNOWLEGMENT.ADD LINE

The Company acknowledges that Employee is engaged in other activities, including but not limited to, radio, television, book publishing and political activities, and that the performance of those activities by Employee will not violate the Employment Agreement with the Company and VegasWinners, Inc. (“VWI”) (a wholly owned subsidiary of the Company), provided such activities will not materially conflict or interfere with the business of VWI and the Company or its successor-in-interest.

5. NOTICES. All notices and other communications under this Agreement shall be in writing and shall be given by overnight delivery by a registered overnight carrier, such as Federal Express or United Parcel Service or hand delivery acknowledged in writing by the recipient personally, and shall be deemed to have been duly given one day after the overnight delivery is made or upon duly acknowledged hand delivery to the respective persons named below:

	
If to the Company:

	
Jericho Associates, Inc.

	 	 
	 	
Attention: Ronald Tassinari

	 	
ADDRESS

	 	 
	
If to Employee:

	
At the most recent address on record for Employee at the Company.

 

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With a cc to:

	 	
Lee Sacks, Esquire

Law Offices of Lee Sacks, APC

324 South Beverly Drive, Suite 496

Beverly Hills, CA 90212

Either party may change such party's address for notices by notice duly given pursuant hereto.

6. INDEMNIFICATION.

(a). Employee will be named as an insured on the director and officer liability insurance policy currently maintained, or as may be maintained by the Company from time to time, and, in addition, Employee will enter into the form of indemnification agreement provided to other similarly situated executive officers and directors of the Company.

(b) The Company shall indemnify Employee, to the fullest extent permitted by law, with respect to services to the Company and activities in connection with his employment hereunder against all obligations to pay money or perform or not perform actions, including without limitation judgments, settlements, penalties, fines, and reasonable Expenses (as defined below) arising from, related to, or connected with any threatened, pending or completed action, suit or proceeding, whether civil, criminal (except for criminal acts outside Company’s relationship to the cannabis industry), administrative, arbitrative or investigative, that involves Employee because Employee now serves or has served (i) as an employee or other service provider of the Company or (ii) at the Company’s written instruction, as an employee or service provider to another legal entity (in each case, a “Claim”).

(c) The Company shall pay Employee’s reasonable attorneys’ fees, costs and expenses (“Expenses”) arising from, related to, or connected with a Claim before the final disposition of the Claim.  The Company shall pay any statement for Employee’s Expenses within 20 days after receipt of the statement; provided, that (a) such statements shall reasonably evidence the Expenses incurred by Employee or on Employee’s behalf and shall include reasonable backup information for all costs and disbursements in excess of $250.00 and (b) any request for payment of attorneys’ and other experts’ fees and costs must be accompanied by a detailed billing statement, redacted only as necessary to preserve any applicable attorney-client or other legally recognized privilege.

7. GOVERNING LAW; JURISDICTION. This Agreement and the legal relations thus created between the parties hereto shall be governed by and construed under and in accordance with the internal laws of the State of Nevada without reference to the principles of conflicts of laws. Any and all disputes between the parties which may arise pursuant to this Agreement will be heard and determined before an appropriate court in the County of Clark, State of Nevada. The parties acknowledge that such courts have jurisdiction to interpret and enforce the provisions of this Agreement, and the parties consent to, and waive any and all objections that they may have as to, personal jurisdiction and/or venue in such courts.

 

8. COUNTERPARTS. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. Employee expressly understands and acknowledges that the Standard Terms and Conditions attached hereto are incorporated herein by reference, deemed a part of this Agreement and are binding and enforceable provisions of this Agreement. References to “this Agreement” or the use of the term “hereof” shall refer to this Agreement and the Standard Terms and Conditions attached hereto, taken as a whole.

9. CONSTRUCTION. This Agreement is the result of negotiation between the Parties and their respective counsel. This Agreement will be interpreted fairly in accordance with its terms and conditions and without any strict construction in favor of either Party. Any ambiguity shall not be interpreted against the drafting Party.

 

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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed and delivered by its duly authorized officer and Employee has executed and delivered this Agreement.

 

  

(Signatures on Next Page)

 

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Jericho Associates, Inc.

	 
	 	 	 
	 	 	 
	 	
By: s/ Ronald Tassinari

	 
	 	
Title: Acting  CEO

	 
	 	 	 
	 	 	 
	 	
Employee:

	 
	 	 	 
	 	 	 
	 	
s/ Wayne Allyn Root

	 
	 	
Wayne Allyn Root

	 

 

  

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STANDARD TERMS AND CONDITIONS

1. TERMINATION OF EMPLOYEE'S EMPLOYMENT.

(a) DEATH. Upon termination of Employee's employment prior to the expiration of the Term by reason of Employee's death, the Company shall pay Employee's designated beneficiary or beneficiaries, within 30 days of Employee's death in a lump sum in cash, (i) Employee's Base Salary and pro-rated Incentive Bonus from the date of Employee's death through the end of the month in which Employee's death occurs and (ii) any Accrued Obligations (as defined in Sections 1(e) and (f) below).

(b) DISABILITY. If, as a result of Employee's incapacity due to physical or mental illness (“Disability”), Employee shall have been absent from the full-time performance of Employee's duties with the Company for a period of six consecutive months and, within 30 days after written notice is provided to Employee by the Company (in accordance with Section [4A] hereof), Employee shall not have returned to the full-time performance of Employee's duties, Employee's employment under this Agreement may be terminated by the Company for Disability. During any period prior to such termination during which Employee is absent from the full-time performance of Employee's duties with the Company due to Disability, the Company shall continue to pay Employee's Base Salary and benefits at the rate in effect at the commencement of such period of Disability, offset by any amounts payable to Employee under any disability insurance plan or policy provided by the Company. Upon termination of Employee's employment due to Disability, the Company shall pay Employee within 30 days of such termination (i) Employee's Base Salary and pro-rated Incentive Bonus through the end of the month in which Employee's termination of employment for Disability occurs in equal biweekly installments, offset by any amounts payable to Employee under any disability insurance plan or policy provided by the Company; and (ii) any Accrued Obligations, and other benefits defined in Sections 1(e) and (f) below, in a lump sum in cash.

(c) TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON. The Company may terminate Employee's employment under this Agreement with or without Cause at any time and Employee may resign under this Agreement with or without Good Reason at any time. As used herein, “Cause” shall mean: (i) the plea of guilty or nolo contendere to, conviction for, or the commission of, a felony offense by Employee that is not in connection with Employee’s duties or services to the Company and which will reasonably be expected to have a material adverse impact on the Company; provided, however, that after indictment, the Company may suspend Employee from the rendition of services, but without limiting or modifying in any other way the Company's obligations under this Agreement; (ii) a willful material breach by Employee of a fiduciary duty owed to the Company or any of its subsidiaries; (iii) a knowing and material breach by Employee of any of the covenants made by Employee in Section 2 hereof; (iv) the willful or gross neglect by Employee of the material duties required by this Agreement; or (v) a knowing and material violation by Employee of any written Company policy pertaining to legal compliance or conflicts of interest provided to Employee that, in the case of the conduct described in clauses (iv) or (v) above, if curable, is not cured by Employee within 30 days after Employee is provided with written notice thereof. Upon Employee's (A) termination of employment by the Company for Cause prior to the expiration of the Term or (B) resignation without Good Reason prior to the expiration of the Term, this Agreement shall terminate without further obligation by the Company, except for the payment of any Accrued Obligations, and other benefits defined in Sections 1(e) and (f) below, in a lump sum in cash within 30 days of such termination.

(d) TERMINATION BY THE COMPANY OTHER THAN RESIGNATION BY EMPLOYEE FOR GOOD REASON. Upon termination of Employee's employment prior to the expiration of the Term by the Company by Employee for Good Reason (as defined below), then:

 

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(i) the Company shall continue to pay Employee the Base Salary through the longer of (x) the end of the Term over the course of the then remaining Term and (y) 12 months (such period, the “Salary Continuation Period” and such payments, the “Cash Severance Payments”), in each case payable in equal biweekly installments and the Company shall pay in cash to Employee (within 10 business days of each applicable monthly period) for each month between the date of termination and the end of the Salary Continuation Period an amount equal to the premiums charged by the Company to maintain COBRA benefits continuation coverage for Employee and Employee's eligible dependents to the extent such coverage is then in place;

(ii) the Company shall pay Employee within 30 days of the date of such termination in a lump sum in cash any Accrued Obligations;

(iii) any compensation awards of Employee based on, or in the form of, Company equity (e.g. restricted stock, restricted stock units, stock options or similar instruments) (“Equity Awards”) that are outstanding and unvested at the time of such termination shall 100% vest (and with respect to awards other than stock options and stock appreciation rights, settle) as of the date of such termination of employment;  provided further that any amount that would vest under this provision but for the fact that outstanding performance conditions have not been satisfied shall vest (and with respect to awards other than stock options and stock appreciation rights, settle) as if such performance conditions had been fully satisfied ; and provided further that if any Equity Awards made subsequent to the Effective Date of this Agreement specifies a more favorable post-termination vesting schedule for such equity, the terms of the award agreement for such Equity Award shall govern; and

(iv) any then vested options of Employee (including options vesting as a result of (iii) above) to purchase Company equity, shall remain exercisable through the time of their exercise period.

The payment to Employee of the severance pay or benefits described in Section 1(d) (other than any Accrued Obligations) is contingent upon Employee signing and not revoking a separation and release of the Company and its affiliates in a form substantially similar to that used for similarly situated executive officers of the Company (the “Release”), and Employee's compliance with the restrictive covenants set forth in Section 2 (other than any non-compliance that is immaterial, does not result in harm to the Company or its affiliates, and, if curable, is cured by Employee promptly after receipt of notice thereof given by the Company). The Release must become effective no later than sixty (60) days following Employee's employment termination date or such earlier date required by the Release (such deadline, the “Release Deadline”). If the Release does not become effective by the Release Deadline, Employee will forfeit any rights to severance. In no event will severance payments or benefits (other than any Accrued Obligations) be paid or provided until the Release becomes effective and irrevocable. Upon the Release becoming effective and irrevocable, any payments delayed from the date Employee terminates employment through the effective date of the Release will be payable in a lump sum without interest as soon as administratively practicable after the Release Deadline and all other amounts will be payable in accordance with the payment schedule applicable to each payment or benefit. In the event the termination occurs at a time during the calendar year where the Release could become effective in the calendar year following the calendar year in which Employee's termination occurs, then any severance payments or benefits that would be considered Deferred Payments (as defined below) will be paid on the first payroll date to occur during the calendar year following the calendar year in which such termination occurs, or, if later, (i) the Release Deadline, (ii) such time as required by the payment schedule provided above that is applicable to each payment or benefit, or (iii) the Delayed Initial Payment Date (as defined below). Employee acknowledges and agrees that the Company's payment of severance pay and benefits (except Accrued Obligations) constitutes good and valuable consideration for such Release.

 

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As used herein, “Good Reason” shall mean the occurrence of any of the following without Employee's prior written consent: (A) the Company's breach of any material provision of this Agreement or the failure to have this agreement assumed by any successor, (B) the material reduction in Employee's duties, reporting responsibilities or level of responsibilities, excluding for this purpose any such reduction that is an isolated and inadvertent action not taken in bad faith or that is authorized pursuant to this Agreement, (C) a reduction in Employee's Base Salary or Employee's total annual compensation opportunity, or (D) the relocation of Employee's principal place of employment more than 100 miles outside the Los Vegas Metropolitan Area or  his residence, provided that in no event shall Employee's resignation be for “Good Reason” unless (x) an event or circumstance set forth in clauses (A) through (D) shall have occurred and  Employee provides the Company with written notice thereof within 30 days after Employee has knowledge of the occurrence or existence of such event or circumstance, which notice specifically identifies the event or circumstance that Employee believes constitutes Good Reason, (y) the Company fails to correct the circumstance or event so identified within 30 days after receipt of such notice, and (z) Employee resigns within 90 days after the date of delivery of the notice referred to in clause (x) above. Notwithstanding the preceding provisions of this Section [1(d)], in the event that Employee is a “specified employee” (within the meaning of Section 409A) on the date of termination of Employee's employment with the Company and the Cash Severance Payments to be paid within the first six months following such date (the “Initial Payment Period”) exceed the amount referenced in Treas. Regs. Section 1.409A-1(b)(9)(iii)(A) (the “Limit”), then (1) any portion of the Cash Severance Payments that is a “short-term deferral” within the meaning of Treas. Regs. Section 1.409A-1(b)(4)(i) shall be paid at the times set forth in Section 1(d), (2) any portion of the Cash Severance Payments (in addition to the amounts contemplated by the immediately preceding clause (1)) that is payable during the Initial Payment Period that does not exceed the Limit shall be paid at the times set forth in Section 1(d) as applicable, (3) any portion of the Cash Severance Payments that exceeds the Limit and is not a “short-term deferral” (and would have been payable during the Initial Payment Period but for the Limit) shall be paid, with Interest, on the first business day of the first calendar month that begins after the six-month anniversary of Employee's “separation from service” (within the meaning of Section 409A) and (4) any portion of the Cash Severance Payments that is payable after the Initial Payment Period shall be paid at the times set forth in Section 1(d). For purposes of this Agreement, “Interest” shall mean interest at the applicable federal rate provided for in Section 7872(f)(2)(A) of the Code, from the date on which payment would otherwise have been made but for any required delay through the date of payment.

(e) ACCRUED OBLIGATIONS. As used in this Agreement, “Accrued Obligations” shall mean the sum of (i) any portion of Employee's accrued and earned but unpaid Base Salary and Incentive Bonus through the date of death or termination of employment for any reason, as the case may be; (ii) any compensation, including all stock options set forth in Paragraph 3€ above, previously earned but deferred by Employee (together with any interest or earnings thereon) that has not yet been paid and that is not otherwise paid at a later date pursuant to any deferred compensation arrangement of the Company to which Employee is a party, if any (provided, that any election made by Employee pursuant to any deferred compensation arrangement that is subject to Section 409A regarding the schedule for payment of such deferred compensation shall prevail over this Section 1(f) to the extent inconsistent herewith); and (iii) other than in the event of Employee's resignation without Good Reason or termination by the Company for Cause (except as required by applicable law), any portion of Employee's accrued but unpaid vacation pay through the date of death or termination of employment.

 

(f) OTHER BENEFITS. Upon any termination of Employee's employment prior to the expiration of the Term, or Employee’s resignation, Employee shall remain entitled to receive any vested benefits or amounts that Employee is otherwise entitled to receive under any plan, policy, practice or program of, or any other contract or agreement with, the Company in accordance with the terms thereof (other than any such plan, policy, practice or program of the Company that provides benefits in the nature of severance or continuation pay).

 

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(g) SECTION 409A. This Agreement is intended to comply with Section 409A of the Internal Revenue Code of 1986, as amended, including any regulations and guidance issued thereunder (“Section 409A”), to the extent Section 409A is applicable to this Agreement. Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted, operated and administered by the Company in a manner consistent with such intention and to avoid the pre-distribution inclusion in income of amounts deferred under this Agreement and the imposition of any additional tax or interest with respect thereto. Without limiting the generality of the foregoing, to the extent required in order to comply with Section 409A, amounts that would otherwise be payable under this Agreement during the six-month period immediately following the date of termination of the Employee's employment shall instead be paid on the first business day after the date that is six months following the Employee's “separation from service” within the meaning of Section 409A.

2. CONFIDENTIAL INFORMATION; DUTY OF LOYALTY; NON-SOLICITATION; NON-COMPETITION; AND PROPRIETARY RIGHTS.

(a) CONFIDENTIALITY. Employee acknowledges that while employed by the Company Employee will occupy a position of trust and confidence. The Company has provided and shall continue to provide Employee with Confidential Information. Employee shall hold in a fiduciary capacity for benefit of the Company and its subsidiaries and affiliates, and shall not, except as may be required to perform Employee's duties hereunder or as required by applicable law, without limitation in time, communicate, divulge, disseminate, disclose to others or otherwise use, whether directly or indirectly, any Confidential Information. “Confidential Information” shall mean information about the Company or any of its subsidiaries or affiliates, and their respective businesses, employees, consultants, contractors, suppliers, clients and customers that is not disclosed by the Company or any of its subsidiaries or affiliates for financial reporting purposes and that was learned by Employee in the course of employment by the Company or any of its subsidiaries or affiliates, including (without limitation) any proprietary knowledge, trade secrets, data, formulae, processes, methods, research, secret data, costs, names of users or purchasers of their respective products or services, business methods, operating procedures or programs or methods of promotion and sale, information relating to accounting or tax strategies and data, information and client and customer lists and all papers, resumes, and records (including computer records) of the documents containing such Confidential Information. For purposes of this Section 2(a), excluded from the definition of Confidential Information are the following:  Confidential Information shall not include information that is (1) generally available to, and known by, the public at the time of disclosure to the Employee, provided that such disclosure is through no direct or indirect fault of the Employee or person(s) acting on the Employee's behalf; or (2) known by the Employee before obtaining access to it under this Agreement; or (3) provided to the Employee by a third party not under an obligation of confidence benefiting the Employer; or (4) independently developed by the Employee without use of the Employer’s Confidential Information; or (5) disclosed by the Employer to a third party without confidentiality obligations comparable to those of this Agreement.  For purposes of this Section 2(a), information shall not cease to be Confidential Information merely because it is embraced by general disclosures for financial reporting purposes or because individual features or combinations thereof are publicly available. Notwithstanding the foregoing provisions, if Employee is required to disclose any such confidential or proprietary information pursuant to applicable law or a subpoena or court order, Employee shall promptly notify the Company in writing of any such requirement so that the Company may seek an appropriate protective order or other appropriate remedy or waive compliance with the provisions hereof. Employee shall reasonably cooperate with the Company to obtain such a protective order or other remedy. If such order or other remedy is not obtained prior to the time Employee is required to make the disclosure, or the Company waives compliance with the provisions hereof, Employee shall disclose only that portion of the confidential or proprietary information which he is advised by counsel that he is legally required to so disclose. Employee acknowledges that such Confidential Information is specialized, unique in nature and of great value to the Company and its subsidiaries or affiliates, and that such information gives the Company and its subsidiaries or affiliates a competitive advantage. Employee agrees to deliver or return to the Company, at the Company's request at any time or upon termination or expiration of Employee's employment, all documents, computer tapes and disks, plans, initiatives, strategies, records, lists, data, drawings, prints, notes and written information (and all copies thereof) created by or on behalf of the Company or its subsidiaries or affiliates or prepared by Employee in the course of Employee's employment by the Company and its subsidiaries or affiliates. As used in this Agreement, “subsidiaries” and “affiliates” shall mean any company controlled by, controlling or under common control with the Company.

 

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Notwithstanding this Paragraph 2(a), the Company acknowledges that Employee is engaged in other activities, including but not limited to, radio, television, book publishing and political activities, and that the performance of those activities by Employee will not violate the Employment Agreement with the Company and VegasWinners, Inc. (“VWI”) (a wholly owned subsidiary of the Company), provided such activities will not materially conflict or interfere with the business of VWI and the Company or its successor-in-interest.

(b) NON-COMPETITION. Provided the Company is not in default hereunder, in consideration of the Company's promise to disclose, and disclosure of, its Confidential Information and other good and valuable consideration provided hereunder, the receipt and sufficiency of which are hereby acknowledged by Employee, Employee hereby agrees and covenants that until the later of the last day of the Term or until the Employee's date of termination of, or resignation from, employment from the Company or any of its subsidiaries or affiliates for any reason, including the expiration of the Term (the “Restricted Period”), Employee shall not, directly or indirectly, engage in, assist or become associated with a Competitive Activity. For purposes of this Section 2(b): (i) a “Competitive Activity” means, at the time of Employee's termination, any business or other endeavor in any jurisdiction conducted by the Company or any of its subsidiaries or affiliates (or demonstrably anticipated by the Company or its subsidiaries or affiliates in any jurisdiction as of the Effective Date or at any time thereafter); and (ii) Employee shall be considered to have become “associated with a Competitive Activity” if Employee becomes directly or indirectly involved as an owner, principal, employee, officer, director, independent contractor, representative, stockholder, financial backer, agent, partner, advisor, lender, or in any other individual or representative capacity with any individual, partnership, corporation or other organization that is engaged in a Competitive Activity. Notwithstanding the foregoing, (i) Employee may make and retain investments during the Restricted Period, for investment purposes only, in less than 5% of the outstanding capital stock of any publicly-traded corporation engaged in a Competitive Activity if stock of such corporation is either listed on a national stock exchange or on the NASDAQ National Market System if Employee is not otherwise affiliated with such corporation is not directly involved with the provision of direction or management of such entity;

(c) NON-SOLICITATION OF EMPLOYEES. Employee recognizes that he will possess Confidential Information about other employees, officers, directors, agents, consultants and independent contractors of the Company and its subsidiaries or affiliates relating to their education, experience, skills, abilities, compensation and benefits, and inter-personal relationships with suppliers to and customers of the Company and its subsidiaries or affiliates. Employee recognizes that the information he or she will possess about these employees, officers, directors, agents, consultants and independent contractors is not generally known, is of substantial value to the Company and its subsidiaries or affiliates in developing their respective businesses and in securing and retaining customers, and will be acquired by Employee because of Employee's business position with the Company. Employee agrees (i) that, during the Restricted Period, Employee will not, directly or indirectly, hire or solicit or recruit the employment or services of (i.e., whether as an employee, officer, director, agent, consultant or independent contractor), or encourage to change such person's relationship with the Company or any of its subsidiaries or affiliates, any employee, officer, director, agent, consultant or independent contractor of the Company or any of its subsidiaries or affiliates provided, however, that a general solicitation of the public for employment shall not constitute a solicitation hereunder so long as such general solicitation is not designed to target, or does not have the effect of targeting, any employee, officer, director, agent, consultant or independent contractor of the Company or any of its subsidiaries or affiliates and (ii) that Employee will not convey any Confidential Information or trade secrets about any employees, officers, directors, agents, consultants and independent contractors of the Company or any of its subsidiaries or affiliates to any other person except within the scope of Employee's duties hereunder.

(d) NON-SOLICITATION OF CUSTOMERS, SUPPLIERS, PARTNERS. Subject to the exclusion to Confidential information set forth in Paragraph 2 above, during the Restricted Period, except as may be required for Employee to perform his services to the Company or its subsidiaries or affiliates, Employee shall not, without the prior written consent of the Company, directly or indirectly, solicit, attempt to do business with, or do business with any customers of, suppliers to, business partners of or business affiliates of the Company or any of its subsidiaries or affiliates (collectively, “Trade Relationships”) on behalf of any entity engaged in a Competitive Activity, or encourage (regardless of who initiates the contact) any Trade Relationship to use the services of any competitor of the Company or its subsidiaries or affiliates, or encourage any Trade Relationship to change its relationship with the Company or its subsidiaries or affiliates.

 

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(e) PROPRIETARY RIGHTS; ASSIGNMENT. All Employee Developments (as defined below) shall be made for hire by Employee for the Company or any of its subsidiaries or affiliates. “Employee Developments” means any idea, discovery, invention, design, method, technique, improvement, enhancement, development, computer program, machine, algorithm or other work or authorship, in each case, (i) that (A) relates to the business or operations of the Company or any of its subsidiaries or affiliates, or (B) results from or is suggested by any undertaking assigned to Employee or work performed by Employee for or on behalf of the Company or any of its subsidiaries or affiliates, whether created alone or with others, during or after working hours and (ii) that is conceived or developed during the Term. All Confidential Information and all Employee Developments shall remain the sole property of the Company or any of its subsidiaries or affiliates. Employee shall acquire no proprietary interest in any Confidential Information or Employee Developments developed or acquired during the Term. To the extent Employee may, by operation of law or otherwise, acquire any right, title or interest in or to any Confidential Information or Employee Development, Employee hereby assigns to the Company all such proprietary rights. Employee shall, both during and after the Term, upon the Company's request, promptly execute and deliver to the Company all such assignments, certificates and instruments, and shall promptly perform such other acts, as the Company may from time to time in its reasonable discretion deem necessary or desirable to evidence, establish, maintain, perfect, enforce or defend the Company's rights in Confidential Information and Employee Developments.

(f) COMPLIANCE WITH POLICIES AND PROCEDURES. During the Term, Employee shall adhere to the written policies and standards of professionalism set forth in the Company's Policies and Procedures, as they may exist from time to time provided to Employee.

(g) REMEDIES FOR BREACH. Employee expressly agrees and understands that Employee will notify the Company in writing of any alleged breach of this Agreement by the Company, and the Company will have 30 days from receipt of Employee's notice to cure any such breach. For any breach by Employee of this Section 2, damages flowing from such breach, are not usually susceptible to being measured in monetary terms. Accordingly, it is acknowledged that upon Employee's violation of any provision of this Section 2, the Company shall be entitled to seek from any court of competent jurisdiction immediate injunctive relief and seek a temporary order restraining any threatened or further breach as well as an equitable accounting of all profits or benefits arising out of such violation. Nothing in this Section 2 shall be deemed to limit the Company's remedies at law or in equity for any breach by Employee of any of the provisions of this Section 2, which may be pursued by or available to the Company.

(h) SURVIVAL OF PROVISIONS. Provided the Company is not in default hereunder, and subject to the terms of this Agreement, the obligations contained in this Section 2 shall, to the extent provided in this Section 2, survive the termination or expiration of Employee's employment with the Company for a period of one (1) year and, as applicable, shall be fully enforceable thereafter in accordance with the terms of this Agreement. If it is determined by a court of competent jurisdiction in any state that any restriction in this Section 2 is excessive in duration or scope or is unreasonable or unenforceable under the laws of that state, it is the intention of the parties that such restriction may be modified or amended by the court to render it enforceable to the maximum extent permitted by the law of that state.

3. MERGER. This Agreement constitutes the entire agreement between the parties and terminates and supersedes any and all prior agreements and understandings (whether written or oral) between the parties with respect to the subject matter of this Agreement. Employee acknowledges and agrees that neither the Company nor anyone acting on its behalf has made, and is not making, and in executing this Agreement, Employee has not relied upon, any representations, promises or inducements except to the extent the same is expressly set forth in this Agreement.

 

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4. ASSIGNMENT; SUCCESSORS. This Agreement is personal in its nature and none of the parties hereto shall, without the consent of the others, assign or transfer this Agreement or any rights or obligations hereunder, provided that, in the event of a transfer of Employee to any entity affiliated with the Company and/or the merger, consolidation, transfer, or sale of all or substantially all of the assets of the Company with or to any other individual or entity, this Agreement shall, subject to the provisions hereof, be binding upon and inure to the benefit of such successor and such successor shall discharge and perform all the promises, covenants, duties, and obligations of the Company hereunder, and all references herein to the “Company” shall refer to such successor.

5. WITHHOLDING. The Company shall make such deductions and withhold such amounts from each payment and benefit made or provided to Employee hereunder, as may be required from time to time by applicable law, governmental regulation or order.

6. HEADING REFERENCES. Section headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. References to “this Agreement” or the use of the term “hereof” shall refer to these Standard Terms and Conditions and the Employment Agreement attached hereto, taken as a whole.

7. WAIVER; MODIFICATION. Failure to insist upon strict compliance with any of the terms, covenants, or conditions hereof shall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or power hereunder at any one or more times be deemed a waiver or relinquishment of such right or power at any other time or times. This Agreement shall not be modified in any respect, or extended beyond expiration of the Term (regardless of continued employment), except by a writing executed by each party hereto.

8. SEVERABILITY. In the event that a court of competent jurisdiction determines that any portion of this Agreement is in violation of any law or public policy, only the portions of this Agreement that violate such law or public policy shall be stricken. All portions of this Agreement that do not violate any statute or public policy shall continue in full force and effect. Further, any court order striking any portion of this Agreement shall modify the stricken terms as narrowly as possible to give as much effect as possible to the intentions of the parties under this Agreement.

 

ACKNOWLEDGED AND AGREED AS OF THE EFFECTIVE DATE:

	 	
Jericho Associates, Inc.

	 	 
	 	 	 	 
	 	 	 	 
	 	
By: s/ Ronald Tassinari

	 	
Date: August 19, 2018

	 	
Title:  Acting CEO

	 	 
	 	 	 	 
	 	
Employee:

	 	 
	 	 	 	 
	 	 	 	 
	 	
s/ Wayne Allyn Root Date:

	 	
August 19, 2018

	 	
Wayne Allyn Root

	 	 

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